Do you want to save this business or not?

[SirRoxalot]

So, radio builds an audience for Tom Kent, Blair Garner, Delilah, John Tesh, and dozens of other "generic content providers".

What does radio do when they no longer need radio to distribute their product? When it's available on your Wi-Fi enabled cell phone for free, at the touch of an iPhone button? Oh, wait, that time is ALREADY HERE. As free Wi-Fi and reasonably-priced high-speed cellular access become more available, the distributors won't need radio.

There is a digital divide. There are a lot of places - especially rural areas - where the Internet means dial-up, and cell phone access is spotty at best. There is significant pressure on telecom companies to provide a minimum level of relatively cheap, high-speed Internet access throughout most of the country. As that occurs, syndication and centralized programming become less and less effective as RADIO programming simply because people won't need radio to access it, and likely will be able to access it on-demand - an option that radio doesn't offer.

What will local radio stations do at that point? Accept orders for local commercial inserts on the network radio feed via a website interface for advertisers? Boy, will THEY be motivated to log in an buy time, huh? After all, the audience won't need radio to get the content anyway.

Look down the road. Radio NEEDS content that can't be duplicated by centralized operations and distributed by the Internet. The real question is:

"What kind of content will radio need in order to establish itself as a media that has ANY interest for an audience?"

It sure can't be generic, good-anywhere-anytime content because that will ALREADY be readily available.

Of course, maybe the big companies are thinking that the government will let them sell off bandwidth for big chunks of money, or perhaps stop broadcasting in analog and establish 2-way digital channels - a complete paradigm shift in use of the electromagnetic spectrum. Perhaps, it they show that radio is no longer a viable medium, they'll get their hands on that bandwidth to do as they please...

Do you really think that the government is going to let YOU cash in when the government ITSELF can sell that bandwidth for BILLIONS? Remember, you don't OWN that bandwidth, you're a LICENSEE - and licenses get revoked.

 

[jackandcoke]

So, radio builds an audience for Tom Kent, Blair Garner, Delilah, John Tesh, and dozens of other "generic content providers".

What does radio do when they no longer need radio to distribute their product? When it's available on your Wi-Fi enabled cell phone for free, at the touch of an iPhone button? Oh, wait, that time is ALREADY HERE. As free Wi-Fi and reasonably-priced high-speed cellular access become more available, the distributors won't need radio.

There is a digital divide. There are a lot of places - especially rural areas - where the Internet means dial-up, and cell phone access is spotty at best. There is significant pressure on telecom companies to provide a minimum level of relatively cheap, high-speed Internet access throughout most of the country. As that occurs, syndication and centralized programming become less and less effective as RADIO programming simply because people won't need radio to access it, and likely will be able to access it on-demand - an option that radio doesn't offer.

What will local radio stations do at that point? Accept orders for local commercial inserts on the network radio feed via a website interface for advertisers? Boy, will THEY be motivated to log in an buy time, huh? After all, the audience won't need radio to get the content anyway.

Look down the road. Radio NEEDS content that can't be duplicated by centralized operations and distributed by the Internet. The real question is:

"What kind of content will radio need in order to establish itself as a media that has ANY interest for an audience?"

It sure can't be generic, good-anywhere-anytime content because that will ALREADY be readily available.

Of course, maybe the big companies are thinking that the government will let them sell off bandwidth for big chunks of money, or perhaps stop broadcasting in analog and establish 2-way digital channels - a complete paradigm shift in use of the electromagnetic spectrum. Perhaps, it they show that radio is no longer a viable medium, they'll get their hands on that bandwidth to do as they please...

Do you really think that the government is going to let YOU cash in when the government ITSELF can sell that bandwidth for BILLIONS? Remember, you don't OWN that bandwidth, you're a LICENSEE - and licenses get revoked.

Rox, you're on the right track. Somewhere in the past few months I heard or read some radio guru using this specific phrase: "Original compelling content that WE own."

Not Dial Global or Premiere or Citadel/ABC or Air America, or anyone else. Or Sony Music Entertainment or EMI.

Original compelling content that WE own. That can take a lot of forms, but the most obvious would seem to be something in the general realm of locally-based news or talk of one sort or another. "Locally-based" applies to all size markets, from New York to York, PA... from Los Angeles to Los Alamos, NM. "News" applies to all kinds of information (pick up a "newspaper" for reference)--from fires & plane crashes to football games & weather forecasts. "Talk" applies to conversation on an extremely wide range of topics (the mind reels).

Jocks spinning discs? Probably not.

On the other hand, folks on this board are really, really way ahead of the game in suggesting that the death of "radio" (as opposed to audio from whatever other sources) is anywhere close to happening.

It's just not happening, guys. The masses are still listening to plain ol' radio, everyday, and we're still making a shitload of money doing it this way. For the millionth time, you're all getting way too wrapped up in the handful of big consolidators with lender problems.

Sort of like predicting that you'll lose your own house because some idiot on the next block just got foreclosed on. Just because they're stupid doesn't mean that you are automatically stupid, too.

 

[Surfer]

You know, when I started this thread I was trying to find a way to help this business. Now I'm certain that the only way to help radio is to help radio find a new identity. When radio started, nobody knew what to do with the thing. You'd hear everything from the local farm report to some 4 year old kid singing Yankee Doodle. Then, radio discovered (I think, in a large part due to Orson Wells) it had the potential to become a "theater of the mind". Next think you know, everything was about entertainment. Radio comedy, mysteries, drama, soaps, children's programming...EVERYTHING WAS CONTENT! Content drove advertising dollars. Now, everybody's so over-leveraged and debt-ridden that if content isn't cheap, advertising dollars can't pay for it. It seems that the only way for radio to survive it for radio to pay it's debts. Then, and only then, it can focus on providing excellent content to, once again, drive advertising dollars. Sadly, I fear radio may collapse before anyone ever can get the debt paid off. What a waste! :'(

 

[jackandcoke]

You know, when I started this thread I was trying to find a way to help this business. Now I'm certain that the only way to help radio is to help radio find a new identity. When radio started, nobody knew what to do with the thing. You'd hear everything from the local farm report to some 4 year old kid singing Yankee Doodle. Then, radio discovered (I think, in a large part due to Orson Wells) it had the potential to become a "theater of the mind". Next think you know, everything was about entertainment. Radio comedy, mysteries, drama, soaps, children's programming...EVERYTHING WAS CONTENT! Content drove advertising dollars. Now, everybody's so over-leveraged and debt-ridden that if content isn't cheap, advertising dollars can't pay for it. It seems that the only way for radio to survive it for radio to pay it's debts. Then, and only then, it can focus on providing excellent content to, once again, drive advertising dollars. Sadly, I fear radio may collapse before anyone ever can get the debt paid off. What a waste! :'(

"Now, everybody's so over-leveraged and debt-ridden that if content isn't cheap, advertising dollars can't pay for it."

That's overstating the case, just a bit. Yes, there are some companies that are over-leveraged, including some very prominent ones, but there are a lot of us who are not. In fact, given the sheer number (thousands) of companies in the U.S. that are licensees, it may be safe to say that the majority of us are not "debt-ridden."

GRC may have hit the nail on the head a day or two ago when he said that each of us is coming at this from the perspective of our own personal experience with radio--our own market, our own stations--and there is actually SO MUCH diversity on the radio dial (most of which we don't personally want to hear) that it becomes hard "to see the forest for all of those trees."

So be careful about making those sweeping generalizations.

 

[mleach]

Sadly, I fear radio may collapse before anyone ever can get the debt paid off. What a waste! :'(

I doubt we will see radio as a whole collapse. Sure ( and sadly ) we may see some once popular radio stations go dark. Now really would the Buffalo, New York market really miss WWKB ( WKBW ) 1520 if they would go dark? But most stations will survive this thought they may have to do some serious changes inculding the way they do business and attitudes too. I have always believe that a lot of radio stations are looking at a full color world through black & white glasses. Most people don't work 9 to 5 Monday thur Fridays anymore nor is it that most 25 year olds are married with kids either. However the way I have heard some consultants speak in in recent years..EVERYONE still works 9 to 5, have the weekends off and are married by age 25. Blacks listening to country music? White teens digging hip hop? Christians who follow the teachings of Jesus Christ and yet they also listen to AC/DC, KISS, Metallica and Linkin Park? There are many consultants out there who really believe that those people simply do not exist even though its not hard to prove them wrong, yet a good many of radio stations still listen to these jokers. I have often wondered what radio would be like if many stations simply stopped listening to consultants? Myabe the results could be postitive.

 

[Goat Rodeo Cowboy]

You know, when I started this thread I was trying to find a way to help this business. Now I'm certain that the only way to help radio is to help radio find a new identity.

Surfer, you started a good thread. And as threads go that try to discuss this topic in general, it has been a civil discussion. Some of us who find ourselves banging each other over the head sometimes found that we had a lot of visions that overlapped.

Jackandcoke is right. There are broadcasters out there in great shape. So we have people everywhere in between the down and out, and the up and coming.

Some times I jump on the "woe is me" bandwagon that radio as we know it is about obsolete so what new, creative, inventive things are we going to do next. Sometimes some pretty silly suggestions are offered. Sometimes the silly suggestion comes from me. But that is part of brainstorming. I learned long ago in business to once in a while I should "spice up" a staff meeting with an idea that no one was going to buy into. Someone in the room would jump in and say in response: "That will never work, but we could do this: ...... )

It's called being a catalyst. Let's assume that the good operators who are healthy and doing well today read through all this flotsam and pick up a good idea now and then to add to their already healthy radio station making it even better, and keeping the industry perking right along.

Surfer: Thanks for a great thread-starter.

Now. Where did I put that blankety-blank mp3 player. Let's see if I can win today's battle. I could reprogram someones station automation machine easier that outmarting this little gizmo! ???

 

[adma]

I have always believe that a lot of radio stations are looking at a full color world through black & white glasses. Most people don't work 9 to 5 Monday thur Fridays anymore nor is it that most 25 year olds are married with kids either. However the way I have heard some consultants speak in in recent years..EVERYONE still works 9 to 5, have the weekends off and are married by age 25.

And interestingly enough, such demos are more prevalent in realms where radio still "works" the way it used to, such as country, Christian, and "ethnic"--and maybe there's also a pathological explanation for conservative talk, whose aging audience is of the sort that likely wishes it were still a 9-to-5, married-by-25 world out there...

 

[TheBigA]

So, radio builds an audience for Tom Kent, Blair Garner, Delilah, John Tesh, and dozens of other "generic content providers".

No you've got it wrong. Tom Kent, Delilah, etc build audience for their client affiliates, and help them make more money than they could with a local host. Because it costs these stations spots (which translates to money) to run the syndicated show. And if you do the math, the loss is spots us more than double the cost of the salary they replace. So running syndication basically requires a station to make MORE than with a local show, because they give up money.

What does radio do when they no longer need radio to distribute their product?

First of all, the companies that own those radio stations also own the syndication companies. Clear Channel owns Premiere. Citadel owns ABC Radio. So the syndicators don't want radio to fail. It is in their own self-interest to SUPPORT on air, and not deprive their owned stations of exclusive content.

Second of all, have you checked the difference in spot price between on air and online? The online stations WISH they had on air stations to work with. There is MUCH more money to be made on air than online. And it will be the case for the forseeable future. It's why even though ABC, NBC, CBS and Fox own several cable channels, they STILL own broadcast TV.

You're inventing a problem that does not exist. Stick with real problems. And try to solve them, rather than play the blame game.

 

[TheBigA]

EVERYTHING WAS CONTENT! Content drove advertising dollars. Now, everybody's so over-leveraged and debt-ridden that if content isn't cheap, advertising dollars can't pay for it. It seems that the only way for radio to survive it for radio to pay it's debts. Then, and only then, it can focus on providing excellent content to, once again, drive advertising dollars.

You ignore a very important fact: Content no longer drives advertising dollars. Why? Because free content is everywhere. That's why no one buys music any more. They can get it for free. They don't buy newspapers because they can read it for free. They skip commercials on radio and TV because there's always something else on. So there is no captive audience for advertising. THAT is the real problem. THAT is why these companies are having trouble paying their debts, and why the entire content business is in trouble.

 

[SirRoxalot]

Since the syndicated shows generally AREN'T bringing in increased ratings, you're saying that more syndication means less revenue. Gee, the big consolidators are leaning more and more on syndication, and revenues are continuing to drop. See a link there?

Logically, the loss of local talent is causing reduced revenue. Yet these guys continue to insist on MORE syndication?

 

[TheBigA]

Look down the road. Radio NEEDS content that can't be duplicated by centralized operations and distributed by the Internet. The real question is:

"What kind of content will radio need in order to establish itself as a media that has ANY interest for an audience?"

It sure can't be generic, good-anywhere-anytime content because that will ALREADY be readily available.

You're inventing rules about content. There are no rules. People want what they want what they want when they want it. 40 million people all watch American Idol on broadcast TV. That is fed by a centralized operation. And it's also available via internet.

The real problem now is that local ad rates aren't keeping up with the rise of basic operational costs. My electric bill went up 10% last year, and my sales are down 20%. Ignore all the debt and other crap you like to harp on. Just dealing with the rise of electric rates and drop in ad sales is enough to cost three salaries right off the bat. Do the math. Something has to give. Even if I had no debt, I'd be in the hole. Costs go up, prices go down, people get fired. That's all there is. Content has nothing to do with it. There is nothing a programmer can do on the content side to make up for the increase in operating costs. There is no local content you can create than can make my electric bill go down.

But look...you think it's easy to come up with original local content that stations will want to carry at a price they can afford. So do it. Create the next multi-million dollar idea that will make everyone rich. Just be sure to service mark it. No one's stopping you. There are lots of out-of-work people who'd love to help. Stop complaining and start doing. In the days since this thread began, I've already launched and sold a bunch of original ideas. What have you done?

 

[TheBigA]

Since the syndicated shows generally AREN'T bringing in increased ratings, you're saying that more syndication means less revenue.

No, because the syndicated shows, for the most part, ARE bringing in increased ratings. You see the ads all the time. They brag about them. Otherwise, the stations would go back to live & local. Let me say this again: Stations give up spots to run syndication. That is money. Some also pay additional cash. There obviously is a reason, and it's not to save money. The goal is to MAKE money, not save it.

Gee, the big consolidators are leaning more and more on syndication, and revenues are continuing to drop. See a link there?

No because as I said, companies like Cox that hate syndication are ALSO losing money. So there is no link.

Logically, the loss of local talent is causing reduced revenue. Yet these guys continue to insist on MORE syndication?

No. The loss of advertising is causing reduced revenue. Advertising is how radio makes money, in case you don't know. There is an advertising depression. It is killing ALL ad-supported media, not just radio. The industries that used to buy advertising are going bankrupt. Don't you follow the news?

You really need to get out more. See the world beyond your own biases. Lots of things going on. Not just radio.

 

[bk77]

For the last 30 minutes or so I was reading the comments that were made here and while most everyone made a good point, I am a bit surprised that nobody has brought this up. The fact the fewer people today TRUST radio !!!! Who can blame them? Take Michael Savage for example? Over the years on his radio program he speaks out against gays..YET..Michael Savage and his son Russ are the brains behind Rockstar Energy Drinks. If Michael Savage is so against gay rights, then why does he or his son allow Rockstar to sponsor such events as Indianapolis Pride? Denver's Front Range Bears? Or Chicago's "International Gay Leather Pride"? Or Roanoke, Virginia's "Mountain Bear/Cub Madness"? Tv's Logo channel showed clips of some these events not too long ago and when I saw ads for Rockstar in the background I almost choked on my dinner !!! At least the restaurant chain Chick-Fil-A thanks to their religious beliefs, well at least they don't sponsor any gay pride events. Ah..you really cannot have it both ways.

Rush Limbaugh..I can remember a few times in the past where he spoke out against drugs on his own show..YET..he had a drug problem himself.

Also many of today's young people, if it is not online on You Tube/My Space/Facebook or any other website, many of them simply will not believe it. Just recently I had received an email from Roadfood.com, their webmaster told me that if anyone post a quote on their site something that their have heard on their radio..their post will be deleted. On the other hand, quotes from TV or from other websites, that is OK but not radio. As the webmaster told me "radio lies".

I grew up listening to local radio in Pennsylvania. hearing local djs saying that they "knew" this big movie star or that they "hung out" with that sports star. Back then we believed them and they go away with it if in reality they really did NOT know such people but for us we really didn't care. Today's young people aren't that foolish.

Now maybe the idea of radio stations going back to local, that would be a good idea in the short run..but once those under 25 or so become older and they are the ones who grew up with the internet, I have doubts many of them would trust what they have heard on the radio when they could get the "truth" elsewhere. For many of those people I just don't think radio can correct that problem in reguards to "trust".

 

[SirRoxalot]

Who's the one "inventing rules for content"?

You're correct that people won't generally pay for content that they can get for free. The caveat to that is that the content has to be easily obtainable. "Time is money" is more true now than ever. People pay for content all the time IF they consider that content to be priced fairly, and it's easier to obtain that seeking it out from myriad original sources. They also indirectly pay for content through on-line advertising, adding themselves to SPAM lists, etc.

I don't know about other markets, but ratings for syndicated shows in our market over the last two years are generally either flat, or lower than the local jocks. Giving up avails is actually COSTING money - more money that the jocks were being paid, including benefits. Are there exceptions? Of course, but those exceptions cut both ways. Some syndicated shows are being beaten like a drum.

One other problem with syndication is the inability to feature an advertiser. Are you going to get Delilah to do a live read about "Bob's Home & Garden", talking about how "Bob helped her find the right solution to her problem"? Many sponsors eat that stuff up. They pay extra for it. They get better results than they get from a generic :60 produced under enormous time pressure by an overburdened skeleton staff.

Results bring advertisers back to the medium more often. THAT'S as big a part of the problem as the "advertising recession". In the past, radio rode out recessions with MUCH less impact than we're seeing now. People shifted money TO radio because it was more cost-effective. That's becoming less true every day, with every staff cut on the local level.

People watch American Idol on broadcast TV because it's NOT easy to watch on-line, and on-line lacks the sense of drama, the sense of immediacy. It's a destination program. People go there because it's a shared experience that they'll be discussing with friends, acquaintances, and co-workers - often DURING the show via social networking sites.

I'd bet that for most consolidators, the electric bill is a small fraction of their debt service. The consolidators screwed up - they ignored the fact that recessions happen. They created the bubble on station values, and were surprised when it burst. Anyone who ignored that fact that energy prices were rising, that taxes continue to rise, that ALL expenses rise over time isn't a very good manager, right? Isn't that a big part of what management is paid to do - look FORWARD?

What do we do about it now? I do it every day - "more with less". More hours of programming while trying desperately to maintain the quality that earned top ratings. More visits with sponsors, more spots produced faster than is reasonable, more hours for less salary, more cuts in benefits. What does corporate do about it? Demand more from the people in the trenches, while GIVING THEMSELVES BONUSES. BONUSES? For what? Driving the company toward bankruptcy?

There's a simple answer. Stop paying the people that screwed up. Declare bankruptcy, restructure, liquidate if necessary, take your lumps, and get back to producing content that people WANT, not what they'll TOLERATE.

You really need to get out of your office more. See the world beyond your own biases. Lots of things going on. Not just radio.

 

[Questor]

You're inventing rules about content. There are no rules. People want what they want what they want when they want it.

You're so very right. This is part of a much bigger trend seen everywhere. Consumers do want more control, especially as more technology comes their way enabling them to do that. We see that with PC's, mobile devices, etc.

I remember seeing this in the video games industry. I used to work in the coin-op business. It used to be that to get a really special experience, you had to go to the arcades. Then PC's and consoles became a lot better with graphics and playability. You didn't have to plop quarters into a machine any more. (How many malls still have amusement centers?)

If you observe some games now, what's become even more popular are levels that players invent for one another. The game manufacturer can put out the basic title. After gamers learn the basics of the game, they want to try something else. And those people who come up with new levels get a kind of high seeing somebody else play their levels.

However, there is one drawback to this ability to create "original local content." It does exist a lot in one form -- it's free!

There is the technology to do it. It's why things like YouTube have become so popular. When it is so easy to publish something, you may end up with some good hits. That's if you're patient enough to wade through all the crap out there.

This is where I think we'll see some reversing of "It's Your Thing, Do What You Want to Do" (Isley Brothers reference.) Some consumers are getting very sick of wasting hour after hour on something that was supposed to be direct like Google. You used to find things fast there, now you have to wade through link after link. Some people are discovering that their time to them is more important. If somebody else has selected and produced good content, they're glad to delegate that to them.

I guess the question still, whether we're talking video games or radio is Money (O'Jays, Pink Floyd, Abba, your choice.)

 

[Questor]

[American Idol] is a destination program. People go there because it's a shared experience that they'll be discussing with friends, acquaintances, and co-workers - often DURING the show via social networking sites.

Ever read Robert Cialdini? He's one of my gods in Marketing.

He would summarize this as "Social Proof." It's an extremely powerful concept. It works in several ways:
1. Possibility -- hey, look, other people are trying this. It must be pretty good. Go ahead and try it yourself.

2. Necessity -- everybody's using this. Your neighbor's using it. All your friends are using it. Even Grandma's using it. You're not, and you're gonna miss out on a lot. Can you afford to look stupid and out of it?

Me, personally, I never got into the American Idol thing. Parts of it to me are a disgrace to music. I could never insult an up-and-coming musician the way Simon Cowell does. When he does that, it's like taking a sledgehammer and a chainsaw to a piano (even if it's out of tune.)

Still, something about it draws numbers exponentially exceeding state, local and national elections combined. Isn't that shocking, that a show that really can't affect your daily life gets a lot more turnout than events that'll have rippling effects on your taxes and ordinances?

I've always liked Cialdini's "Social Proof" and lately I've gotten to like the negatives. Sometimes I author campaigns with negatives, building on times of hopelessness and despair. I'd like to give one to radio, hoping it inspires everyone to get their act together (beginning with me!)

 

[TheBigA]

You're correct that people won't generally pay for content that they can get for free. The caveat to that is that the content has to be easily obtainable.

Anything a DJ does is already easily obtainable on demand in other ways: Weather, traffic, emergency info, school closings, humor, interaction, immediacy, friendship, and music information. All for free, and quite often delivered directly to you, either as an email or text message.

Are you going to get Delilah to do a live read about "Bob's Home & Garden", talking about how "Bob helped her find the right solution to her problem"?

Have you asked? I bet you can. And imagine being a local sponsor who gets his ad copy read by a national celebrity.

I've heard the Premium Choice hosts all must read local ad copy for no fee.

I'd bet that for most consolidators, the electric bill is a small fraction of their debt service.

The consolidators don't pay the electric bill. That's paid by the local station out of their operating budget. That's the budget that pays for local staffing, rent, utilities, and anything else that comes up. So as I said, even if you have no debt, costs are going up, and sales are going down. How do you reconcile that situation? You can't print money.

There's a simple answer. Stop paying the people that screwed up. Declare bankruptcy, restructure, liquidate if necessary, take your lumps, and get back to producing content that people WANT, not what they'll TOLERATE.

You don't seem to understand: It's THEIR money, and they can do what they want. And they don't want to declare bankruptcy, restructure, liquidate, or anything else YOU want them to do. It's THEIR money, not yours. You want to spend on producing content? Spend your own money. Then you can do what you want.

 

[pocket-radio]

"You ignore a very important fact: Content no longer drives advertising dollars. Why? Because free content is everywhere" Uh??? If that's the case might as well just unplug the transmitters! The reason people listen is content, without content there wouldn't be anything! I agree free music once only available on radio is everyplace and the internet is going to be in every car. So playing music alone won't qualify has content.

Advertisers pay to reach people who listen for something, maybe it's content?

 

[TheBigA]

Advertisers pay to reach people who listen for something, maybe it's content?

That's an oversimplification. The word "content" is a catch all. People don't listen for some general thing called content. They listen for something very specific. They listen for what they want. Whatever that is.

Content is everywhere, and everyone has it. But only a FEW people have the content large audiences want. The game is trying to figure what that is.

But if all you're giving them is "content," you're wasting your time.

 

[aunti-terrestrial]

This thread is now eight pages long.