This post appeared on these boards three years ago, the author is unknown. It's a long read, but worthwhile. As 2007 enters the home stretch, it seems relevant. What do you think? Has the business improved, remained the same or slipped a few notches?
RADIO: IT’S KILLING ITSELF!
Those of us who compete in radio against other stations know that the best way to beat the competition is have them implode from the inside. That is exactly what the people running this country’s radio stations are doing. Usually a medium as resilient as radio can survive an onslaught from listeners, or employees, or government, or technology, or industry associations, and even advertisers. Radio can’t survive an assault FROM EVERYONE! At the same time! Management, no, senior management are killing this business from every angle. Sure you read about Lowery, Mel, Bob, Jeff, Mark, David , Lou, Farid, Joel, John, and others who are visionaries, taking radio into the 21st century.
Consider that outright baloney!
These selfish leaders are lining their pockets and the pockets of Wall Street and the legal community without any consideration for the future of the medium, the people who work in it, or the listeners and advertisers that draw from the creativity that radio once was. This is not a commentary from some old phart longing for the good old days where KHJ & WABC had more listeners than the population of most major cities. This is from someone who has been to the front line, and doesn’t like what is seen there.
Consider the business side of the business
Remember the days when radio was “recession proof”? Not anymore. Why? Because we have turned radio into a commodity. We believed the hype that we created. How did it happen? Here’s how,
The industry leaders convinced Wall Street and themselves that this is a growth industry. True radio can and does grow, steady in revenues each year. But can it grow at 10, 15, 20%? Get real! With the exception of the dot com bubble, there is simply not the growth in the business. But our industry leaders convinced lending institutions and fund managers that they can grow at that rate year after year.
Why?
So they can sell stock to investors who don’t know the difference between radio stations from radio telescopes. By running the “growth myth” they can feed at the trough of untold riches and fame. These CEO’s better cash out soon. The growth myth is becoming reality. The reality is no growth. They killed the growth. The flame of passion that heats the consistent single digit predictable cash flow of old is being extinguished. Frankly, from what we’ve seen , they don’t care. They got paid, we got screwed.
Too many pigs at the trough, and you’re not one of them. Radio is not in a position to grow in the next few years. We have cut off the very avenues that can allow us to grow. What are they? Let’s see,
Your Industry Leaders Don’t Care About Growing Audience
That’s right! You want proof? Just when new technologies like digital downloads, iPods, Zune, Satellite radio (though financially weak), streaming, broadband, ripping CD’s and other forms of radio’s content are becoming available. Radio is adding too many commercials. Despite Clear Channel’s “less is more,” listeners and insiders aren’t deceived.
Developing new talent?
The days of training new people on overnight or weekends has gone to voicetracking or syndication. Playing new or deeper music? OK, give stations like Jack, The Mountain, The Lake and The River some credit, but the reality is the same music can be heard from New York City to Los Angeles. Where are the new “ears” in this business being developed?
Creativity in the production room is a delight to hear but it’s rare due to the frenzy in sales and programming which puts more weight on the shoulders of production and creative directors.
Developing new formats has always been a follow-the-leader game. In this regard, not much has changed since McLendon and Storz “invented” Top 40. But it’s 2007. Can you name one format in the last few years that is not a recycle of another format? Active Rock? Jammin’ oldies? Alice? Jack? Stop, please!
How about formatics and execution?
Not telling the listeners the name of the songs (every programmer worth a damn knows this, yet ignores the pleas of the listeners), running as many as 10 units in stop sets. The jocks have trouble listening through ten minutes of commercials, even when they’re the production talent! Companies and management are working the remaining people in the stations so hard they have no time to even think about it.
Our industry leaders couldn’t care less about the threats facing the medium. What will they do about it? They’ll pull “a Hollander” and throw a hundred bodies under the bus as atonement for the egregiously bad decisions made by CEO’s and COO’s. Beyond that, they won’t do anything about addressing the real issues facing radio because it costs money and they’d rather treat the symptoms rather than the disease.
It costs money to treat cancer… money that comes out of their golden parachutes as they trip over a quarter to pick up a penny. There is less money going into research and development of radio product. Marketing budgets, research budgets, promotion budgets, creative production budgets and talent budgets have been cut, drastically in some cases.
The result? No growth of radio listening in this country. The figures are right in front of us. Ask anyone under the age of 25 how important radio is in their life. You know the answer. You refuse to hear it. But wait! When those 25 year olds become 35 & 45 & 55 year olds, radio will be a memory blip of a generation gone by.
Do today’s radio CEO’s care? Hell no! By then they’ll be retired in Boca Raton or Naples, Florida (lot’s of them are there now, they cashed out in the last 10 years) fighting for tee times and making sure they make the 4 o’clock specials at the restaurant while their kids fight over who will get the jewelry after they’re gone. They got the assets. You got boned up the assets.
Industry Leaders Don’t care About Growing People
Consider the lowly department head in a typical radio cluster; Program Director, Sales Manager, Chief Engineer, Business Manager. Ten years ago they could focus on one or two stations. They had time to think about their department and how to make it better. They could train the next generation because they had time. It was not that long ago when the department head at a radio station had only THAT station to grow. They could nurture talent on the air or in sales. They could take the time to think about the audience or the client and what is best for them. The Chief learned why quality was so important to the ears of a listener and trained his or her assistant like they were trained. Don’t get me wrong, it was not always a bed of roses.
Today’s middle managers have no time to grow anything but the bottom line, and that string is running out. Simple math tells the story, for example, in 1994, one program director thought about one radio station x 60 hours per week = 60 hours of creative thinking per station per week.
In 2007, one program director thinks about five radio stations x 60 hours per week = 12 hours of creative thinking per station per week. Twelve hours of creative thinking per station in this day of increased productivity may work, but more than likely it won’t. Our CEO’s believe they have more talented people than the days of old and they may, but how long does it take for creativity and desire to burn out and wring out even the most gifted and talented PD? Add 30% more spots, subtract marketing money, subtract research, subtract air talent, add new competition from the internet, iPod, Zune, etc. Add commercials for Satellite radio, colon blow infomercials, subtract raises, subtract training, and add more administrative duties (HR & legal paperwork) and you have: Minimal if not zero growth!
But Wait! There’s More!
The worst job in radio today may be that of the cluster General Manager. Seriously. These people are tired, embarrassed, scared, confused and lucky to have a job at all!
Sure, they’re paid very thick six figure salaries, but everything come with a price. Think there are a lot of jocks out of work? There are an equal number of ex-GM’s who are looking for work. Some of them deserve to be out of work. Others don’t.
On the surface GM’s put on the game face and hoist the company flag. Underneath, they are sad and disappointed that the industry they’ve chosen has become such a mess. A shrink would have a field day with these people. Ten years ago there were about 15 of this species in a typical market. They did their job (some better than others) and built a life for their staffs, a product for their listeners, traffic for their advertisers and a name in the community. Today “fifteen” has been pared to five. And those 5 are under attack like never before.
Why?
Because company CEO’s have just figured out in the last 24 months that General Managers are a dime a dozen. The new opportunity for bottom line growth is the GM. In a no grow revenue environment, GM’s represent the next place for the corporate execs to cut. And cut they will as witnessed by CBS and Mr. Hollander and a few months earlier by the Cumulus suits when they bought Susquehanna. No bonuses, no raises, more stations, unrealistic goals and less support from above make the GM job in today’s radio market the bane of the industry. They know it. They’re scared. They won’t tell the average jock or sales guy this, of course. Tony Robins says that would be the sign of a poor leader and a losing attitude. Other than striving to be the company CEO, GM’s don’t know what to do about the erosion, because unlike their bosses they know there’s no significant expansion and growth remaining in the business. Any gains that can be made are stolen from their competition. Station X flips format to compete with station Y, which will lose some of its listeners to station X. If it’s a significant loss, station X changes format to compete with station Z… and on and on it goes in the circle game.
Consider what GM’s have been through in the last few years. They’ve had to cut staff, add units and cut marketing, all the while growing the top line 12% when the market is growing at a pace of 3% at best. Seen the revenue numbers from market #1? How much growth is there? GM’s are the ones that have to sacrifice long term growth & development for short term Wall Street expectations. They are the ones that have to compromise everything they know is right for the good of the company. Be a good player. Take one for the team.
The CEO’s answer? So What! If they don’t like it the GM can leave. Let them go across the street. It’s no better over there. There are plenty more where they came from. Loyalty? Forget it! Because of consolidation there is no loyalty. If GM’s could leave and find another industry to work in they would. But they can’t, so they suck it up and press on, knowing full-well that the stations, the cluster, the company, is not in a position to achieve 12% growth.
In many cases, GM’s are tired, beaten. They need of compassion and like some respect, but they won’t be getting much of it. They know it. Their chosen field has hit a pothole. Like an automobile that lacks proper maintenance, the front end of the radio business is out of alignment, eventually the motor, transmission, tires will wear out. Remember the commercial, “You can pay me now or pay me later?”
The GM’s see what’s happening. They live it everyday. They watch their fearless leaders give guidance to Wall Street knowing full well they can’t do the numbers.
They watch as the Captains of radio are hauled before Senate Sub-committees expressing “shock and surprise” at their content when all the while collecting millions of dollars on the very same indecent broadcasts that for years fueled the outrageous compensation they enjoyed. Lately, they’re seeing share prices nosedive.
We all watch. But the industry leaders won’t be listening They are so far removed from the reality of the business today that it is impossible for them to ever grasp the severity of the situation. The listeners, employees, advertisers, government officials, and this publication are shouting it. But the CEO’s are flying at 35,000 feet. They can’t hear us. The roar of the private jet is too loud. Naples and Boca await.
Originally posted, 2004.
RADIO: IT’S KILLING ITSELF!
Those of us who compete in radio against other stations know that the best way to beat the competition is have them implode from the inside. That is exactly what the people running this country’s radio stations are doing. Usually a medium as resilient as radio can survive an onslaught from listeners, or employees, or government, or technology, or industry associations, and even advertisers. Radio can’t survive an assault FROM EVERYONE! At the same time! Management, no, senior management are killing this business from every angle. Sure you read about Lowery, Mel, Bob, Jeff, Mark, David , Lou, Farid, Joel, John, and others who are visionaries, taking radio into the 21st century.
Consider that outright baloney!
These selfish leaders are lining their pockets and the pockets of Wall Street and the legal community without any consideration for the future of the medium, the people who work in it, or the listeners and advertisers that draw from the creativity that radio once was. This is not a commentary from some old phart longing for the good old days where KHJ & WABC had more listeners than the population of most major cities. This is from someone who has been to the front line, and doesn’t like what is seen there.
Consider the business side of the business
Remember the days when radio was “recession proof”? Not anymore. Why? Because we have turned radio into a commodity. We believed the hype that we created. How did it happen? Here’s how,
The industry leaders convinced Wall Street and themselves that this is a growth industry. True radio can and does grow, steady in revenues each year. But can it grow at 10, 15, 20%? Get real! With the exception of the dot com bubble, there is simply not the growth in the business. But our industry leaders convinced lending institutions and fund managers that they can grow at that rate year after year.
Why?
So they can sell stock to investors who don’t know the difference between radio stations from radio telescopes. By running the “growth myth” they can feed at the trough of untold riches and fame. These CEO’s better cash out soon. The growth myth is becoming reality. The reality is no growth. They killed the growth. The flame of passion that heats the consistent single digit predictable cash flow of old is being extinguished. Frankly, from what we’ve seen , they don’t care. They got paid, we got screwed.
Too many pigs at the trough, and you’re not one of them. Radio is not in a position to grow in the next few years. We have cut off the very avenues that can allow us to grow. What are they? Let’s see,
Your Industry Leaders Don’t Care About Growing Audience
That’s right! You want proof? Just when new technologies like digital downloads, iPods, Zune, Satellite radio (though financially weak), streaming, broadband, ripping CD’s and other forms of radio’s content are becoming available. Radio is adding too many commercials. Despite Clear Channel’s “less is more,” listeners and insiders aren’t deceived.
Developing new talent?
The days of training new people on overnight or weekends has gone to voicetracking or syndication. Playing new or deeper music? OK, give stations like Jack, The Mountain, The Lake and The River some credit, but the reality is the same music can be heard from New York City to Los Angeles. Where are the new “ears” in this business being developed?
Creativity in the production room is a delight to hear but it’s rare due to the frenzy in sales and programming which puts more weight on the shoulders of production and creative directors.
Developing new formats has always been a follow-the-leader game. In this regard, not much has changed since McLendon and Storz “invented” Top 40. But it’s 2007. Can you name one format in the last few years that is not a recycle of another format? Active Rock? Jammin’ oldies? Alice? Jack? Stop, please!
How about formatics and execution?
Not telling the listeners the name of the songs (every programmer worth a damn knows this, yet ignores the pleas of the listeners), running as many as 10 units in stop sets. The jocks have trouble listening through ten minutes of commercials, even when they’re the production talent! Companies and management are working the remaining people in the stations so hard they have no time to even think about it.
Our industry leaders couldn’t care less about the threats facing the medium. What will they do about it? They’ll pull “a Hollander” and throw a hundred bodies under the bus as atonement for the egregiously bad decisions made by CEO’s and COO’s. Beyond that, they won’t do anything about addressing the real issues facing radio because it costs money and they’d rather treat the symptoms rather than the disease.
It costs money to treat cancer… money that comes out of their golden parachutes as they trip over a quarter to pick up a penny. There is less money going into research and development of radio product. Marketing budgets, research budgets, promotion budgets, creative production budgets and talent budgets have been cut, drastically in some cases.
The result? No growth of radio listening in this country. The figures are right in front of us. Ask anyone under the age of 25 how important radio is in their life. You know the answer. You refuse to hear it. But wait! When those 25 year olds become 35 & 45 & 55 year olds, radio will be a memory blip of a generation gone by.
Do today’s radio CEO’s care? Hell no! By then they’ll be retired in Boca Raton or Naples, Florida (lot’s of them are there now, they cashed out in the last 10 years) fighting for tee times and making sure they make the 4 o’clock specials at the restaurant while their kids fight over who will get the jewelry after they’re gone. They got the assets. You got boned up the assets.
Industry Leaders Don’t care About Growing People
Consider the lowly department head in a typical radio cluster; Program Director, Sales Manager, Chief Engineer, Business Manager. Ten years ago they could focus on one or two stations. They had time to think about their department and how to make it better. They could train the next generation because they had time. It was not that long ago when the department head at a radio station had only THAT station to grow. They could nurture talent on the air or in sales. They could take the time to think about the audience or the client and what is best for them. The Chief learned why quality was so important to the ears of a listener and trained his or her assistant like they were trained. Don’t get me wrong, it was not always a bed of roses.
Today’s middle managers have no time to grow anything but the bottom line, and that string is running out. Simple math tells the story, for example, in 1994, one program director thought about one radio station x 60 hours per week = 60 hours of creative thinking per station per week.
In 2007, one program director thinks about five radio stations x 60 hours per week = 12 hours of creative thinking per station per week. Twelve hours of creative thinking per station in this day of increased productivity may work, but more than likely it won’t. Our CEO’s believe they have more talented people than the days of old and they may, but how long does it take for creativity and desire to burn out and wring out even the most gifted and talented PD? Add 30% more spots, subtract marketing money, subtract research, subtract air talent, add new competition from the internet, iPod, Zune, etc. Add commercials for Satellite radio, colon blow infomercials, subtract raises, subtract training, and add more administrative duties (HR & legal paperwork) and you have: Minimal if not zero growth!
But Wait! There’s More!
The worst job in radio today may be that of the cluster General Manager. Seriously. These people are tired, embarrassed, scared, confused and lucky to have a job at all!
Sure, they’re paid very thick six figure salaries, but everything come with a price. Think there are a lot of jocks out of work? There are an equal number of ex-GM’s who are looking for work. Some of them deserve to be out of work. Others don’t.
On the surface GM’s put on the game face and hoist the company flag. Underneath, they are sad and disappointed that the industry they’ve chosen has become such a mess. A shrink would have a field day with these people. Ten years ago there were about 15 of this species in a typical market. They did their job (some better than others) and built a life for their staffs, a product for their listeners, traffic for their advertisers and a name in the community. Today “fifteen” has been pared to five. And those 5 are under attack like never before.
Why?
Because company CEO’s have just figured out in the last 24 months that General Managers are a dime a dozen. The new opportunity for bottom line growth is the GM. In a no grow revenue environment, GM’s represent the next place for the corporate execs to cut. And cut they will as witnessed by CBS and Mr. Hollander and a few months earlier by the Cumulus suits when they bought Susquehanna. No bonuses, no raises, more stations, unrealistic goals and less support from above make the GM job in today’s radio market the bane of the industry. They know it. They’re scared. They won’t tell the average jock or sales guy this, of course. Tony Robins says that would be the sign of a poor leader and a losing attitude. Other than striving to be the company CEO, GM’s don’t know what to do about the erosion, because unlike their bosses they know there’s no significant expansion and growth remaining in the business. Any gains that can be made are stolen from their competition. Station X flips format to compete with station Y, which will lose some of its listeners to station X. If it’s a significant loss, station X changes format to compete with station Z… and on and on it goes in the circle game.
Consider what GM’s have been through in the last few years. They’ve had to cut staff, add units and cut marketing, all the while growing the top line 12% when the market is growing at a pace of 3% at best. Seen the revenue numbers from market #1? How much growth is there? GM’s are the ones that have to sacrifice long term growth & development for short term Wall Street expectations. They are the ones that have to compromise everything they know is right for the good of the company. Be a good player. Take one for the team.
The CEO’s answer? So What! If they don’t like it the GM can leave. Let them go across the street. It’s no better over there. There are plenty more where they came from. Loyalty? Forget it! Because of consolidation there is no loyalty. If GM’s could leave and find another industry to work in they would. But they can’t, so they suck it up and press on, knowing full-well that the stations, the cluster, the company, is not in a position to achieve 12% growth.
In many cases, GM’s are tired, beaten. They need of compassion and like some respect, but they won’t be getting much of it. They know it. Their chosen field has hit a pothole. Like an automobile that lacks proper maintenance, the front end of the radio business is out of alignment, eventually the motor, transmission, tires will wear out. Remember the commercial, “You can pay me now or pay me later?”
The GM’s see what’s happening. They live it everyday. They watch their fearless leaders give guidance to Wall Street knowing full well they can’t do the numbers.
They watch as the Captains of radio are hauled before Senate Sub-committees expressing “shock and surprise” at their content when all the while collecting millions of dollars on the very same indecent broadcasts that for years fueled the outrageous compensation they enjoyed. Lately, they’re seeing share prices nosedive.
We all watch. But the industry leaders won’t be listening They are so far removed from the reality of the business today that it is impossible for them to ever grasp the severity of the situation. The listeners, employees, advertisers, government officials, and this publication are shouting it. But the CEO’s are flying at 35,000 feet. They can’t hear us. The roar of the private jet is too loud. Naples and Boca await.
Originally posted, 2004.
