Putting The Toothpaste Back Into The Tube

You know, I’m really going to be disappointed if there isn’t more to all these cut-backs in our beloved Broadcast and Music Industries than just “budget-cuts”. While most sectors of the economy are using lay-offs in order to keep pace with the worsening economy, the Broadcast Industry is eliminating positions by the hundreds!

A “lay-off” is when people are temporarily furloughed—and when business begins to return, people are called back and/or re-hired. That’s not what is happening in the Radio and Music Industries: these are permanent position eliminations.

So, what happens when the advertising revenues return? You know they will—just as soon as the retail sector begins showing signs of returning to health. And that will come when, whatever the Stimulus package will eventually be, begins to put people back to work and consumers begin spending money again.

What is Radio’s plan for that? Will the Industry begin re-hiring the pros they put on the street? Or is the downsized version of radio the way of the future?

In last week’s M-Street Journal, it was noted that there are 1,249 construction permits outstanding—that means we’re still adding stations to this already crowded market place. And these construction permits are bought at auction! Apparently somebody thinks we need more radio stations, not less.

Then there’s the story about the FM Station originally licensed to the Portland metro that they want to move to Tiger Mountain, where most of the Seattle FM stations are located, effectively making the station another Seattle station. Next time you’re in the Seattle area, hit the scan button on your radio and see how far it gets—probably only one-step up the band and you’re on another station. Does anybody think Seattle needs another radio station?

Some say Internet Radio is the next big thing. Anybody with a computer can have his or her own station. So, with no regulation whatsoever, we could easily see 250,000 stations broadcasting over the internet. Wouldn’t you love to be in the room when somebody tries to sell advertising on one of those stations: “Well, we have 5 AQH Persons 25-54, if you include my wife, my cousin and my pet gerbil.” Can you imagine pitching that cost-per-point? I’d call that “More Is Less”.

Then there’s the whole Wall Street debacle. Anybody priced Broadcast stocks lately? They’re down now, but will they stay down? What if they come back? What will we do then?

A lot of blood has been spilled in the past year in the Radio and Music Industries. And we’re told to prepare for more. Sure, the projections are scary…but what happens when things improve? How do we get the toothpaste back into the tube?

Perhaps the larger question is this: where’s the “Radio Revitalization Plan”? We do have one, don’t we?

Like I said, I’m going to be really disappointed if that’s all there

is.

The Next Demo—Radio’s Gateway To Greatness

Here’s a scenario that plays out millions of times each day in America: Mary’s alarm clock goes off at 5AM (instantly turning on a radio station). She’ll complete a strenuous exercise regime 6 days a week listening to her iPod. She plays golf (full 18-holes) 3 or 4 times a week and eats in restaurants—for business and personal enjoyment, several times a week. Even though her business, Real Estate, has fallen on tough times, she’s still her company’s top producer.

She and her husband, Jim, share a beautiful home in an upscale subdivision. They travel extensively. Jim owns a computer consulting company, which because of his iPhone and notebook computer, he can operate from just about anywhere in the world. He enjoys skydiving, is a private pilot who owns his own plane and spends a great deal of his week on a golf course with his wife and their business associates. Their social calendar keeps them keeps active 7-days a week. Their children are grown making them “empty nesters”. Together, they earn over $350,000 a year with a net worth of nearly $2.5 Million.

Oh yes, Mary is 56 and Jim is 58.

They represent the fastest-growing segment of the US population. And they’re solidly a part of the growing influential 35-64 demo. Their lives are well-ordered; they are healthy, happy and active. They are not inclined to consider retiring anytime soon.
And this trend is only just beginning! Every single day since Y2K, 10,000 Americans have celebrated their 50th birthdays. That’s every day for past 8-years!
Run the math: in the past 48-months, over 14.5-million Americans have become the center of the 35-64 demographic group. They are The Next Demo.

They are the best-educated group in U.S. history—consisting of more college graduates that any generation since the U.S. Census began. Unlike any generation before them, they have had access to the best healthcare in the history of mankind. They’ve invested in regular exercise and enjoyed lifelong sports. They’re going to live—on the average—30 or 40 more years. And they have the financial resources to live and live well.

They’ll continue to buy sporty cars, high-tech gadgets, food and all the necessities of life. They have grandchildren who want Nintendo’s, skateboards and Wii’s. And what’s more, they can afford these things.

Now, here’s what we should all know about these people: they listen to radio. But that is changing, too. Because radio is not listening to them!
Radio continues to do everything in its power to disenfranchise people over 35. Why? Because marketers (and their advertising agencies) just don’t “get” these highly-influential, well-informed and affluent people, so radio doesn’t either.

Somewhere in America, there is a radio station that will step up to the plate and go after 35-64 year olds. That station will assemble a staff of broadcast professionals who will do what no other radio station will do: entertain these mature, savvy and connected listeners. Many of these broadcast professionals have been “consolidated out”, but they still know how to reach and entertain an audience. Some are the sales super-stars of the 90’s, who made a name for themselves selling great radio advertising to local businesses. These pros saw their perceived value (and their commissions) drop when big-ticket national advertisers scooped all the station’s avails.

Many of the broadcast pros who can bring it all together are sitting on the beach just looking for a way to get back into the game they made famous.

Make no mistake about it: these pros are available and they want to work. But they’ll need a leader who can lead, not just manage; leaders who understand how to motivate rather than dictate. And finally—Programmers whose GM’s will have enough confidence in them to allow their air personalities to entertain people rather than market the station.

And that radio station will instantly become a ratings monster—sold by a group of Account Executives (as opposed to Sales Reps) who will educate their clients and show them how to reach this important group of potential customers.

It will happen. It must happen. Radio cannot withstand another 2008. Cutting expenses further just won’t cut it.

Radio needs innovation to create new audiences and new clients using better tactics to nimbly go where radio must go. That’s Radio’s bright future and it begins the moment one CEO of one Broadcast Group says so.

Radio's Audience: Ours To Lose

Radio is running scared! Let’s admit it! With its cousins, the Recording Industry, Radio has forgotten that it is King of the Hill and has all but abdicated its throne without a whimper, let alone a fight!

The reality is that every high-tech new media outlet would love to have 10% of radio’s audience—an audience that radio appears to be ready to just give away!

With the onslaught of hi-tech goodies, radio stations are sounding desperate to link themselves with the Internet, iPods, Satellite Radio and every other hi-tech toy that comes out, including HD Radio. Let’s put all this in perspective.

Internet Radio is at least 5 years for any kind of portability. The “pipe” (amount of data that can be transmitted) needs to double in size and processors need to increase in speed several times before any wireless internet will be of any kind of a threat to radio. At the present time, the best wireless is just slightly faster than a dial-up telephone line. And the second band needed for any kind of internet connectivity will have to expand far beyond America’s largest metro areas.

iPods are expensive! And at 99-cents a (legal) song download, a thousand songs costs $1000! At that rate, keeping up with the new music gets downright expensive. And Jammie Thompson’s “test case” has proven that illegal downloads and file sharing can be very expensive and dangerous! What’s more, we’re beginning to see “iPod Fatigue”. What we perceived as a trend could, in fact, be only a fad.

Satellite Radio has been a reality for over half a decade and their audience is only a fraction of Terrestrial Radio’s...a fraction! While nobody is entirely sure why this is, one thing is certain: even if they double their audience in the next half-decade, they’ll still have only a fraction of radio’s default audience.

On-Demand technology is still another half-decade from being anything but slow and clunky. America’s cable systems have invested heavily in fiber-optic wiring, but customers aren’t stampeding to subscribe to digital cable…and without digital cable, On-Demand never reaches the cosumer. The software development continues to be difficult and runs slowly while the systems are confusing to most users.

Cell Phones, as a music delivery system, are more of a threat to iPods than to radio. High-speed connectivity issues will keep internet radio off cell phones for at least another half-decade.
While HD Radio technology presents many wonderful opportunities for radio, it is still very much in the future—probably a decade before enough receivers will be in consumers’ hands to compete with our current audience levels. Radio sounds desperate to convert listeners to their HD1 Channels.

Yes, radio’s audience is deteriorating and record sales, outside of the superstar projects, have declined to levels that threaten the entire industry. But an effective case can be made showing that the damage is more self-inflected than the product of technology. Please consider the following:

1. For the first time in its history, radio—especially FM—is aimed at less than half the population. For its first half-century, radio aimed its programming at the largest segment of the US population. Now, it seems that every station on the FM dial is aimed at the younger, highly fragmented demos. Persons over 50—over half the US population are literally disenfranchised from FM radio. And this is the audience that made FM radio the success it has became. The Records Industry hasn’t created any hit music for persons over 50 for decades.

2. Radio, like all media, is sorely lacking in content. Open a mainstream magazine and count the number of pages that don’t have some sort of marketing message. When you watch your favorite sports team broadcast on television, how many advertising/marketing messages are you bombarded with per minute? Don’t forget the scoreboard, stats and other overlays. Then, listen to your station. Outside of the morning show, how many times per hours do your air personalities say anything NOT related to a marketing/positioning message? Between image voices, jingles and positioning/marketing statements and or course, commercials, there’s shockingly little content on most radio stations.

3. Air Personalities aren’t allowed to be personalities. There’s precious little time for them to say anything that isn’t scripted marketing statements. And they’re not accessible to their audiences. With voice tracking, studio lines are busied out—for obvious reasons. Street teams have replaced air personalities’ interaction with the public. After all, we want “beautiful people” on the streets representing our stations, don’t we? What does that say to our efforts to be “real”?

4. Radio stations appear desperate to attach themselves to the internet. While a station’s website presents a whole new way to add non-traditional revenue, we should be careful that our message isn’t perceived as an endorsement of other media—Internet Radio.

5. Just about every station’s presentation sounds like “CHR-something”. Air personalities don’t talk without a drum machine or beat mix playing underneath them. And the push for more “energy” has levels bordering on yelling instead of communicating. Where’s the uniqueness in any particular station presentation?

Between image voices, jingles, music-tonnage statements, drum machines/beat mix and artist/song migration from format to format, the listener can be downright confused…if not completely bored!

Radio has at least 5 years to reverse this trend before the hi-tech toys are even ready to become a serious threat. This is no time for sameness and decades-old formulas. It’s time for creativity, research and development and risk-taking. Once the new media takes over, it’ll be too late.