"Maybe Holland Cooke can enlighten us on the cost benefit ratio"
Saying "Erie" isn't like saying "Detroit," but this could be one of those canary-in-the-coal-mine moments.
The conversation regarding Rush Limbaugh's Return-on-Investment (ROI) is WELL-underway, at lots of stations.
You'll hear Clear Channel GMs complain least-loudly, if they're smart. But they feel the pain too, because they have to pay.
If you saw Talkers magazine publisher Michael Harrison speak at the NAB Radio Show in Austin (or have seen his session streaming @
www.podjockey.com), you've heard him observe that
"Radio can't afford to do radio any more."
Erie is showing us this.
In 2008, Rush Limbaugh and Sean Hannity made deals that radio can't afford.
Sean's was so big that Citadel couldn't afford to do it alone.
But this isn't just a radio problem.
Somebody will also have to pay for Mark Teixeira, whom the Yankees just smothered in do-re-mi.
The Yanks' ROI calculation comes at-a-time-when:
a.) they've got all those new luxury boxes to sell,
b.) so do the Mets, and
c.) executives at big New York firms who buy luxury boxes are on-the-ledge.
So Teixeira = sizzle, and there'll be even MORE visible advertiser logos, and audibly late re-joins.
Somebody has to pay for Rush and Sean, and here's who's paying:
Stations, via:
1. Cash fees, which Limbaugh's handlers have always calculated very carefully. They know -- right-down-to-FICA -- how much a station would have to pay a local host instead.
2. Out-of-program spots, i.e., Rush Morning Update, which is either:
a.) subtracted-from the station's morning inventory (costing them cash); or
b.) added-to the station's morning inventory (costing them tune-out).
3. Additional in-program inventory, which -- although not-subtracted-from station inventory -- adds to the-number-of-spots-we're-asking-listeners-to-sit-through.
4. Weekend re-runs, which costs stations time-more-profitably-allocated to specialty how-to shows which -- PROPERLY PROGRAMMED/PROMOTED/SOLD -- can be:
a.) BIG business ; and
b.) appointment listening.
NO, weekend programming doesn't have to be tear gas.
Even WELL-DONE brokered shows attract a loyal following.
Arguably listeners also have to pay.
OR DO THEY?
There's a fatigue factor to weekend re-runs which, until PPM, was less-measurable.
Two reasons automotive, home improvement, health & fitness, consumer electronics, lawn & gardening, etc. shows do well on the weekend:
1. It's not the same-old-same-old that Talk Radio carped about during-the-week. Enough already.
2. How-to shows can synch-up with what-listeners-are-up-to on the weekend. Home Depot, home improvement.
This has been profitable programming, and seemed logical...until PPM came-along.
Now, we KNOW how important weekend programming is.
The PD of one Great Big Station I know told me "it was like we had shut off the transmitter" when bogus weekend stuff aired.
What's downright sad about what's happening, and no-less-than self-destructive from a perceptual standpoint, is that
the-two-biggest-shows-in-radio are now FORCING stations to air re-runs. TOO LATE! Rush is already selling them more-convenient-re-runs, Rush 24/7, which he uses affiliates' air to advertise so relentlessly.
And what a dangerous message to send listeners WHILE some stations are desperate/stupid-enough to be airing those Howard Stern Sirius XM spots that diss radio.
Please note: All-of-the-above is apolitical. I, personally, am agnostic, when it comes to what-Rush-and-Sean are preaching-out so repetitively. Although it was hard not to wince this month when, as Rush was telling us Climate Change is a hoax, it snowed in Las Vegas and Hawaii. But I digress.
I have two playbooks.
If my client station is the Rush Limbaugh affiliate, he's the biggest star on Talk Radio.
If my client station is the Rush Limbaugh competitor, he's the biggest buffoon on Talk Radio.
Rush isn't my client, the station is.
Our goal is making-the-most of:
a.) OUR assets, and
b.) THE COMPETITION'S liabilities.
For years, I have advised -- and written, here and elsewhere -- that "I'd rather play WITH Rush than AGAINST him."
These new fee hikes and cram-downs are testing his ROI.
My experience parallels what-others-have-posted-here: Rush tends to be "a loss leader." At too many stations he's the Mount Everest on the hour-by-hour ratings graph (which mornings SHOULD be), so he's helping these stations' in the rankers from-which transactional business has flowed. But:
a.) That's the business that has dried-up; so stations are focused on "local direct retail."
b.) Rush affiliates tend not to have as much Rush-specific sponsorship business as you might think.
But Rush (whom I don't know, and who refuses to record station promos) and Sean (whom I do know, and who has been EXTREMELY helpful and responsive to me and my clients) are important to me personally, for the same reason they're important to their affiliates. And for the same reason that The Eagles and Barry Manilow were important to me and these-very-same stations back-when-these-stations-were-playing-music, when I was a DJ in the 70s: Rush and Sean are source material.
Prediction: Dave Ramsey will become an-even-BIGGER-star in 2009.
If you've read his Affiliation Agreement, you know why.
It could also be a good year for Dr. Laura.
People are coping.
Not just people-running-radio-stations.
HC
www.HollandCooke.com
PS: Stocking stuffer:
http://getonthenet.com/radio-info.pdf