New car dealers generally make more profit on their used car lots than in new car sales. That is also why they tout post-sales service so strongly. It is also why they tend to carry multiple makes and/or have ownership of dealers who specialize in multiple car marques. New car dealers make most of their new car profits on add-on's (paint and fabric protectors, window tint, anti-theft etching, tire/wheel insurance and pay-backs from finance organizations etc.).
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Deeper Issues?
- Thread starter SirRoxalot
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New car dealers generally make more profit on their used car lots than in new car sales. That is also why they tout post-sales service so strongly. It is also why they tend to carry multiple makes and/or have ownership of dealers who specialize in multiple car marques. New car dealers make most of their new car profits on add-on's (paint and fabric protectors, window tint, anti-theft etching, tire/wheel insurance and pay-backs from finance organizations etc.).
Yes, they're hot real estate investment right now. And maybe stations and groups would have been smarter to hold onto that real estate in order to have some cash flow. But are the younger demographics we used to target listening in to the signals broadcast from those real estate investments? Hmm...I work for a tech company now, and there are a lot of my co-workers under the age of 30. When I tell them I used to work in radio, I hear things like "cool, my dad used to listen to the radio all the time."
As someone mentioned earlier, there are companies who understand, but IMO the industry as a whole is still focused on the broadcast signal first, with the online presence as a secondary concern, and to my mind, the proverbial horse has already left the barn. Again, the younger demos don't even think of the thing in the middle of their car's dashboard as a "radio." It's the infotainment, and the most important question is "does it have Apple Car Play and Android Auto?"
The deeper issues with regards to these younger demos are two-fold. First off, the radio industry as a whole has long since stopped targeting them for the most part. Used to be, your CHR station would target the younger listeners, like having the night jock call out high schools, show up at events in the schools, and do other things to cultivate that audience. Yes, they were teenagers, but in a few years you'd have an 18-34 listener, and hopefully a P1. Then when they settled into the 25-54 demo, you'd have a built-in listener for your Hot AC or Classic Hits station. Radio has stopped being a long-term "get 'em while they're young, keep them for life" proposition.
The other side of the equation is that with most small and medium market stations being all tracked (except perhaps the ones with the morning show that's been there 25 years), the talent pool is looking pretty shallow. The "wow, my dad used to listen to the radio" crowd isn't considering radio as a career or even a hobby. If they want an outlet for their talent, it's as an "influencer" or having lots of followers on Tik Tok and social media.
With a few exceptions, radio is way behind the curve in both cultivating the next generation of listeners, and appealing to them as a potential platform for whatever content they may create. Trying to squeeze a few extra dollars in rent from the towers is nice, but it's not a solution to the deeper issues.
Young people have phones and tablets, all connected via cell/pcs providers. As I mentioned; several rural communities are not allowing new permits for new or larger cell towers. It's stupid, because most of those same city and county planners against any new towers, probably own a smartphone. Cell/PCS carriers are scrambling to find vertical real estate, and are paying top dollar. What used to be only broadcast towers, are already there.
And yet, they probably listen to the radio if in the car, or when the Uber driver has it on. They know what radio is. It's just not cool to admit you listen to something OG.
12-17 maybe, but 18-34 is a very sought after demo. The industry already knows 12-17 year old's are only using their smartphones.
That's because smartphones, streaming, and the ability to create your own custom playlist was part of it. You act like radio abandoned and audience. The fact is; radio is no longer the only game. Smartphone users left radio because of a new and more convenient device.
As BigA already pointed out, larger markets still have live morning talent. Drive times are still a very important live portion of the day.
That's true, because there are so many different forms of media they can get on a phone. Radio is just one, and requires a separate device which may or may not get a signal.
Radio is still roughly 90% of the listening audience. It's had to adapt to consumers, because consumers don't adapt to just one form of media when there are so many available on a single device.
It's called business diversification. Being a one trick pony isn't a good business strategy anymore.
Question from the peanut gallery: Does absolutely every person, every ethnicity, every demographic and every location have a "true" unlimited data and/or broadband plan for all their audio needs? (I mean no throttling after a certain amount of data).
However in point of fact, those things have replaced the cassette or CD player.
Radio didn't do nearly enough to keep that audience. Faced with a quickly growing amount of competition from streaming services and smartphones, radio largely handed off their digital presence to an already overworked staff member (APD, MD, promotions) and continued to focus on the stuff that comes out of the towers.
Whatever the reason, the truth is that smartphone users, younger demos, etc are all leaving radio. Can the industry survive on occasional listening in an Uber and revenue from renting towers out to cell phone providers? Can it keep going on the strength of some young folks who listen but won't admit to liking the "OG" media? It's trying to adapt, but to me it seems too little, too late.
It is not the only choice for content, and it is slipping further and further down the ranks as far as choice for the next generation of listeners. If we were comparing it to search engines, radio used to be the Google of audio content providers. It's now at best the Yahoo. If it sticks on its current trajectory, it will eventually be Alta Vista.
As for the point about large markets still having drive time talent that's live (and maybe local), the thing I was trying to get across is that there's a rapidly shrinking pool of talent. Fewer and fewer "up and coming" folks who can or would even want to replace the "Weenie and the Butt" show when they age out of the demo or retire.
Obviously everyone doesn't have such a thing. But 30 hours a month of streaming music only accumulates about 2GB of data usage.
The base plan from StraightTalk Wireless is $35 a month, with unlimited calls and SMS, and 10GB data. So it's not uneconomical, especially if the person already has a mobile phone.
Just a reminder: "Radio" is not one thing. There is no Minister of Radio, who directs what radio does.
Mel Karmazin considered digital to be the competition. He didn't even want his stations to have web sites. Then when he got fired, he changed his mind. Although then he got provincial about keeping satellite on the satellite, instead of recognizing the value of streaming. Then he got fired from Sirius.
Speaking of satellite, remember HD Radio? It was (in no small part) the radio industry's answer to satellite. Instead of just one signal, you could have an HD2 and an HD3 channel! All people would have to do is buy a new radio!
There was a massive ad campaign promoting the new thing. Instead of just a handful of stations on your car radio, there would be dozens! Specialty channels! The classic hits station would have a sister 70s channel, and an 80s channel. The country station would have a classic country channel to compliment their mainstream one, or perhaps a "rebel" country signal that played southern rock and "outlaw" country. Plus CD quality sound! The possibilities were endless!
"Radio," as an industry, got behind it...at least as far as promoting the thing was concerned. But there was never any revenue behind it, and so there was no effort at the local level. Yeah, you could buy an HD radio at Best Buy, but when you tuned in to the HD2 channel, you got a station that was "programmed" by the assistant to the APD/MD who pumped out months of music logs at a time. It could have been a thing, but they forgot to put any effort into creating all these new and exciting channels.
It was an afterthought, and for many years, the industry (a few forward thinkers excepted) treated the digital presence of their brands in the same way. You had a big sales staff, but one lone Digital Sales Manager trying to generate revenue from the online side of the station that was run by the midday jock/APD/MD that also drove Uber on the weekends because he needed to make extra money.
That campaign, however, never seemed to reach the general public or even auto dealerships very well. I remember reading an article in an industry publication a number of years back where someone went to a number of auto dealerships and asked about satellite radio and most all the salespeople knew exactly what it was and they were happy to promote it. Then they asked about HD radio and while a few seemed to understand it, others seemed to somehow think it was just existing stations with better audio quality, while others gave a blank stare or a shoulder shrug. Another time they went to an electronics store to buy a home or tabletop receiver. They were able to find just a few, but few if any staff knew much about them, and certainly weren't advocating the technology in any way.
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There actually was, but it didn't matter because the electronics industry wasn't behind it. It took years before the Best Buy deal happened. All they had were these audiophile table radios, similar to the Bose FM radio. We needed portables, we needed it in dashboards, we needed it in other devices that people use. None of that happened. If an invention was based on getting the product in the hands of consumers, this was a failure. It was a failure because of iBiquity. Compare it to the Walkman. Compare it to how things worked when radio companies actually made radios, like RCA and GE. That should have been the model.
When you depend on another industry for your business, you set yourself up to fail.
That, and station groups who were behind HD Radio, like Clear Channel, completely botched promoting it. "Discover stations inside the stations" Huh? What's that supposed to mean?
Cryptic use of already open inventory, wasn't enough.
Carriers are always pushing discounted 'unlimited' plans, but in reality they will severely 'throttle' data speeds after you use a gigabyte of data. If your smartphone is set up to switch between the cell system data and WiFI at home, Starbucks, whatever, that data used doesn't count against your cell plan.
But once again, if you don't have an HD radio, how can you discover anything? You don't market a product that people can't find. It pisses them off. Then when the product is finally in the store, they've already moved on to streaming. Missed opportunity.
Radio quite targeting teens in the late 70s. Top 40 stations actually began going after 18-34 or 25-44 women, not kids. And that is because, about 40-some years ago, advertisers stopped making teen buys.
The money is in over the air radio because that is where the advertisers still go first. And the portion of our listening done via smart devices and phones is still too expensive to be profitable without the income from over the air ads.
Yet in 18-34, close to 90% of persons use radio weekly.
You are putting the cart before the horse. Radio does not program to 55 and over or 17 or younger because there is no ad revenue there. We are not subscriber supported but advertiser supported.
That's not true. There are 10,000 stations that are not owned by the big groups. They are owned by smaller groups or local owners in smaller markets. Many have live talent where needed.
Others, as they have done since the late 60's, use syndicated programming. First, it came on tape. Then it came by satellite and finally it arrives on the Internet.
Things have not changed that much in 40 to 50 years. But, that said, the Internet has standardized music tastes nationally. So we will see more and more national networked shows, just like in most of the rest of the world.
Radio is concentrating where a profit can be made. Streaming of music content can't be profitable for ad supported media right no due to fees and royalties but OTA radio can be. And, of course, Podcasts can do music profitably for anyone.
Radio had not cultivated teen audiences for 40 years. Nothing to see here, let's move on.
The HD Alliance was a committee formed by Ibiquity and all the investors, not just Clear Channel. It even included HBC where I was the delegate. After seeing how they wanted to avoid competition with "main" stations on the HD channels, we left the group and did not support it.
I also thought that the "stations between the stations" concept was horrendously bad. I had suggested we do research among consumers to find what would motivate them to get HD gear. That was never done.
And, when Ibiquity presented us with the concept well before the launch, I asked "will there be portables and boom boxes?" and got no answer. I found that the power draw by the DAC was so great that it would drain batteries too quickly.
Yeah. The "Stations Between the Stations" didn't mean squat to me back then. It wasn't until sometime well after the HD introduction and a bunch of research on my own that I finally understood what that meant - and then it was only because one of my local stations that I wanted to hear went digital.
Bingo! We agree on something. Insert smile icon here: _____________
Of course we may just be two broken clocks, right twice a day for one minute.
My only point on this thread is radio has changed. I think we may all agree with that. In the mid and late 70’s most radio stations had local content and local announcers 24/7. This is not what we have today. Even the biggest markets run syndicated programming. Local radio is a lost cause. Yes, there are a few markets where local radio exists, but it is not the norm. I’m not sure why some insist this isn’t a trend because it most definitely is.
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