Ruining Radio Is Just Part of The Bankers' Plans to Re-Shape The World

[aaronread]

You can't sell banks on something that isn't true.

Sure you can. Just make sure there's enough zeroes ahead of the decimal point. Isn't that how we got the mortgage/housing crisis?

 

[TheBigA]

Isn't that how we got the mortgage/housing crisis?

Not exactly. The banks were the ones calling the shots in that situation. Try and get a similar loan from a bank now.

 

[bmcglynn]

But here's the most frustrating thing about it: Radio is a business, and the giuy who owns the business is allowed to run it however he wants. If that means running it cheaply, then that what it means. We can discuss this all day, and it doesn't matter. The operation of radio stations is left to the owners. And owners like to run businesses on the cheap. That's just how it is.

This is bang-on. The challenge we face in getting financing for radio is that business in general is a growth oriented endeavor. For banks - financing is about security. Radio is basically a license with no tangible asset value. If you default on a radio loan, what is left is just the value of the frequency on the dial and the brand you created. This is high risk for a bank compared to loaning money to an ice cream stand chain that has commodity capital assets that could be liquidated to recover the loss.

This leaves investor financing as the model. For investors, bringing in dollars requires providing a return with competitive growth compared to other options. For example, if I had $1M in cash, would I more likely get a return on investment of 2X over 5 years in Radio or a tech-company (say Apple?).

Radio as we know it today is a mature medium. How do you grow profits 2x, 5x, 10x like you can in other industries? The quick-hit, short sighted way is to buy stations just to cut costs. Managing by the bottom line versus the top line will yield this behavior. To grow top line, you need to take share from competitors (which is tough since the radio "pie" is not growing) or to innovate the model.

WTOP is a great example of innovation. They rewrote the radio sales model, invested in Digital, and are bringing in non-tradional advertisers to the fold.

We'll see a continued focus on cost removal as a means of showing investor "growth" until we see an innovation trend in the medium.

Brian

 

[JustPastBuffalo]

Isn't that how we got the mortgage/housing crisis?

Not exactly. The banks were the ones calling the shots in that situation. Try and get a similar loan from a bank now.

Actually, this is only partially true. Although 'the banks' were actively complicit (and should be held accountable beyond TARP regulations) in the policy that fomented the housing debacle. Congress, comprised of both parties, created the environment through laws which were influenced by massive amounts of money and policy that was written by the mortgage industry which included companies such as Countrywide and banks such as Citi and Bank of America, to say nothing of financial houses such as Lehman Brothers. I hate to sound like a conspiracy theorist, but this was indeed a conspiracy.

Once the Glass-Steagull Act disappeared (thanks to Congress and Clinton), all sense of control went by the wayside. The mortgage mess (bundled, toxic mortgages, zero down mortgages, wildly inflated home prices, speculative buying and selling) brought down the economy in 2008. Sound familiar? The Telecom and Broadcasting industries essentially wrote the Telecommunications Act of 1996. Speculators went nuts buying on margin. The chickens came home to roost, the suits won, the people in the trenches got screwed. I'll concede that owners have a right to run stations as they see fit. If that's on the cheap, fine. But these same owners and operators would be wise to understand that their business decisions are in large part responsible for millions of listeners seeking alternate sources of entertainment and information and heading to the doors. Unfortunately, the owners' hubris often prevents them from making this concession. Semper mediocris.

Mortgages and money are indeed harder to come by these days, as lenders require buyers to have more skin in the game.

 

[TheBigA]

But these same owners and operators would be wise to understand that their business decisions are in large part responsible for millions of listeners seeking alternate sources of entertainment and information and heading to the doors. Unfortunately, the owners' hubris often prevents them from making this concession.

I wasn't aware that broadcasting companies were responsible for the invention of the computer and cell phone, or the establishment of satellite radio. Wow!

The truth is that listeners were seeking alternate sources of entertainment before the 96 Act, and the creation of new devices just made it even easier. And the one common factor about the new sources of entertainment was that they DIDN'T have local talent or local information. So perhaps the motivating factor was to escape those two things, not business decisions made by radio owners.

 

[jas2525]

But these same owners and operators would be wise to understand that their business decisions are in large part responsible for millions of listeners seeking alternate sources of entertainment and information and heading to the doors. Unfortunately, the owners' hubris often prevents them from making this concession.

I wasn't aware that broadcasting companies were responsible for the invention of the computer and cell phone, or the establishment of satellite radio. Wow!

The truth is that listeners were seeking alternate sources of entertainment before the 96 Act, and the creation of new devices just made it even easier.

Programming-on-the-cheap made it even easier for people to defect to those other audio sources. Replacing good shows with bad canned shows (that are cheaper) diminished the product overall.

And the one common factor about the new sources of entertainment was that they DIDN'T have local talent or local information. So perhaps the motivating factor was to escape those two things, not business decisions made by radio owners.

LOL. So now people are fleeing local talent and info. That's right folks, the less a station can relate to it's community, the better!

That's a good one. You had me for a second.

What a card.

 

[TheBigA]

Programming-on-the-cheap made it even easier for people to defect to those other audio sources. Replacing good shows with bad canned shows (that are cheaper) diminished the product overall.

No matter how cheap OTA radio gets with its programming, it's still spending more than other audio sources. The cost has no relation to quality or audience. People like what they like, regardless of cost.

 

[SirRoxalot]

No matter how cheap OTA radio gets with its programming, it's still spending more than other audio sources. The cost has no relation to quality or audience. People like what they like, regardless of cost.

You keep saying that, but you've yet to show any kind of study or ratings that agree with you. Almost every study I've seen says that people value content relevant to them, which pretty much excludes most station promotional announcements. In almost every market, the leading stations are the ones with the most live and local content. The #1 money-making station in the country is a news station - where it's ALL about quality programming that costs a lot to deliver.

Maybe if you can point us to a study or research that indicates that your point is true, we'll have to believe you. So far, that's not what most of us are seeing in the real world.

(Cue "TheBigA" saying "I don't care what you believe.")

 

[TheBigA]

Almost every study I've seen says that people value content relevant to them, which pretty much excludes most station promotional announcements.

Station promotional announcements typically involve the audience. A chance for them to win something, attend a cool event, or be part of something.

What you simply will never understand is that the audience doesn't need PDs, MDs, or DJs to tell them what to like. They already know. And the audience is just waiting for the opportunity to become involved with their local radio station. Here's one example: We reward our listeners for doing reports for us from concerts or news events. They send us a story, we use it on the air, we thank them or even use their voice on the air, and we send them a CD or shirt. They love it, we're involved with our community, and it builds relationships. So why would we pay some guy a salary and benefits to do news or cover events when our listeners will do the same thing for free? THIS is what I'm talking about. To you, it's being cheap. To our listeners, it's great. So spending money is a waste when it doesn't involve the audience. When the audience does the work, it's FAR more relevant to them than having some old man telling them what happened. And it costs NOTHING.

 

[JustPastBuffalo]

I wasn't aware that broadcasting companies were responsible for the invention of the computer and cell phone, or the establishment of satellite radio. Wow!

Fun wow! Actually, Clear Channel was an early investor in XM and Harris dabbled in computer systems. Surely you remember that.

 

[TheBigA]

Actually, Clear Channel was an early investor in XM and Harris dabbled in computer systems. Surely you remember that.

Actually I know, because I was also an early investor in it. In fact I attended the satellite radio hearings on Cap Hill that led to something called USA Radio. It ultimately became XM.

 

[jas2525]

Programming-on-the-cheap made it even easier for people to defect to those other audio sources. Replacing good shows with bad canned shows (that are cheaper) diminished the product overall.

No matter how cheap OTA radio gets with its programming, it's still spending more than other audio sources. The cost has no relation to quality or audience. People like what they like, regardless of cost.

Original content costs money, but has the potential to be much better than one-size-fits-all programming.

Saying there is no correlation between how much you invest in the product and the quality of the product, is absurd. While spending more doesn't guarantee you better ratings, you certainly have a better chance of getting better numbers if you're willing to invest in better talent, on air and off. I happily pay money to Sirius/XM because of their personalities, talk and entertainment. Most is better than what I hear for free on OTA radio. Good talent costs money.

It is always interesting to see to what degree you'll try to be the contrarian. I suspect we've not seen your limit on this yet.

 

[TheBigA]

Original content costs money, but has the potential to be much better than one-size-fits-all programming.

No it doesn't. Read my earlier post. You need to get your head out of the past. It's a new century. We all have ways to do things that don't cost money. And the audience doesn't care about quality. That's why they all eat at McDonalds. You keep talking about quality as though that's a requirement. The ratings prove every day that it isn't.

Read this:

We reward our listeners for doing reports for us from concerts or news events. They send us a story, we use it on the air, we thank them or even use their voice on the air, and we send them a CD or shirt. They love it, we're involved with our community, and it builds relationships. So why would we pay some guy a salary and benefits to do news or cover events when our listeners will do the same thing for free? THIS is what I'm talking about. To you, it's being cheap. To our listeners, it's great. So spending money is a waste when it doesn't involve the audience. When the audience does the work, it's FAR more relevant to them than having some old man telling them what happened. And it costs NOTHING.

I happily pay money to Sirius/XM because of their personalities, talk and entertainment. Most is better than what I hear for free on OTA radio. Good talent costs money.

I have no problem spending money for good talent, but it's interesting that you're satisfied with non-local talent. If I could run hundreds of local stations with one staff of talent in one studio, I'd gladly do it. Right now, no radio company, including CC or Cumulus does this. Instead they pay hundreds of local talent at individual stations. But you say the national people are better. Thanks for agreeing with me.

 

[jas2525]

Original content costs money, but has the potential to be much better than one-size-fits-all programming.

No it doesn't. Read my earlier post. You need to get your head out of the past. It's a new century. We all have ways to do things that don't cost money. And the audience doesn't care about quality. That's why they all eat at McDonalds. You keep talking about quality as though that's a requirement. The ratings prove every day that it isn't.

One day you'll learn. One day the gravy train will end and you'll have to fend for yourself without someone else paying you a salary and benefits. We'll see how you survive. I've found the answer. And so has just about everyone else.

The audience does care about quality. They're just not used to getting it from OTA radio anymore. Saying they don't care about quality is ignorant and short-sighted, as much as you're trying to be a pseudo-visionary.

If you only knew as much as you pretend to know, you'd be too rich and busy to be trying to get the last word in every thread you participate in.

 

[SirRoxalot]

Station promotional announcements typically involve the audience. A chance for them to win something, attend a cool event, or be part of something.

In that case, there must be 5 or 6 giveaways an hour on most stations. You really don't listen to radio, do you? Mostly those announcement are the "clutter" that people complain about and attribute to "disk jockeys". PPM may reduce the need for all the repetitive positioning statements, but Buffalo isn't a PPM market.

What you simply will never understand is that the audience doesn't need PDs, MDs, or DJs to tell them what to like. They already know. And the audience is just waiting for the opportunity to become involved with their local radio station. Here's one example: We reward our listeners for doing reports for us from concerts or news events. They send us a story, we use it on the air, we thank them or even use their voice on the air, and we send them a CD or shirt. They love it, we're involved with our community, and it builds relationships. So why would we pay some guy a salary and benefits to do news or cover events when our listeners will do the same thing for free? THIS is what I'm talking about. To you, it's being cheap. To our listeners, it's great. So spending money is a waste when it doesn't involve the audience. When the audience does the work, it's FAR more relevant to them than having some old man telling them what happened. And it costs NOTHING.

And how does this content from listeners get on the air, and programmed? And who picks the music that's played? Who sends out that CD or shirt? Who decides which content gets played back, and which content doesn't make it because it's simply bad quality, incoherent, or contains illegal material? The listeners build relationships with WHO?

C'mon, we'd dearly love to sample your wares. Or at least something similar. Unless you're soooo cutting edge that it's not possible for you to maintain your anonymity. OTOH, if you're that good, why remain anonymous?

 

[TheBigA]

C'mon, we'd dearly love to sample your wares. Or at least something similar. Unless you're soooo cutting edge that it's not possible for you to maintain your anonymity. OTOH, if you're that good, why remain anonymous?

I could ask you the same.

I don't post here to drum up business. I'm doing just fine, thanks.

 

[SirRoxalot]

What, no comment on the rest of the questions asked? Typical. Avoid the real meat of the discussion.

 

[TheBigA]

What, no comment on the rest of the questions asked? Typical. Avoid the real meat of the discussion.

You want to know who does my fulfillment? Interns. College kids. Volunteers. But I know stations that outsource all the stuff. There are companies that provide it for barter. It's a business that some on-the-beach radio folks could do. If they had the energy and imagination.

 

[chas108]

It's so easy to romanticize the past, and I'm as guilty as anyone here.

But I contend that much of the radio being replaced with Premium Choice dog food and the like is due to the simple fact that for too many years in too many markets...this is what constituted personality:

"at home, in the car, on the job, we're the station you can take anywhere. 96.7, WSTD".

My perception is that Buffalo avoided this type of radio better than most markets...but this was the status quo in too many places. In de-cluttering the presentation, all the personality was removed too.

Or was there that much personality to begin with?

'KB was special...I maintain - and have stated before on this board - that they were an exception...that in reality, a lot of what is glorified as great radio in those days was actually either mindless "what a sunny day!" drivel or Bill Drake with all the personality wrung out of it.

Not all of it...but more than we'd like to think.

I love the analogies brought up in jock meetings as PPM was replacing the diary in my market. Like the one of you as the jock sitting in the car talking with the listener for four hours as you drive along. Maybe the party analogy is better...behaving on-air like that person people gravitate to at a party. (And, in contrast, the person reading liner cards is like the lout always talking about themselves - or something else equally irrelevant - who ends up alone by the punch bowl)

Almost every study I've seen says that people value content relevant to them, which pretty much excludes most station promotional announcements.

Station promotional announcements typically involve the audience. A chance for them to win something, attend a cool event, or be part of something.

Listeners perceive most promos (and liners and most other diary reinforcement tools) as "me me me" content - and react to it like they react to the above-mentioned long winded lout at the party...

UNLESS (!)

You make that content about the listener. Which requires personality and the ability to emotionally connect with the listener. And that's where a good PD or airstaff comes in. Someone who knows the target and what's on their mind.

What you simply will never understand is that the audience doesn't need PDs, MDs, or DJs to tell them what to like. They already know. And the audience is just waiting for the opportunity to become involved with their local radio station. Here's one example: We reward our listeners for doing reports for us from concerts or news events. They send us a story, we use it on the air, we thank them or even use their voice on the air, and we send them a CD or shirt. They love it, we're involved with our community, and it builds relationships. So why would we pay some guy a salary and benefits to do news or cover events when our listeners will do the same thing for free? THIS is what I'm talking about. To you, it's being cheap. To our listeners, it's great. So spending money is a waste when it doesn't involve the audience. When the audience does the work, it's FAR more relevant to them than having some old man telling them what happened. And it costs NOTHING.

I love the use of listener audio. Although I'd argue that great jock content - live, local, well-prepared and most importantly in the moment - takes that connection to a level where you turn listeners into fans.

For me, it's the combination...and we live that combination at my station anytime we can.

I'm not letting the investment bankers, Lew Dickey or any of the other latter-day Mama Carlsons ("it's all about pluses and pluses, depending on where you put the minuses") off the hook. They've done a lot of damage...I'm merely stating (in my usual long-winded way) my belief that in many cases the stage for failure was already set by stations failing to pay attention to the human component.

The totem pole of content...

Live content beats canned...but great canned content beats live.
Great live, local, in-the-moment trumps it all. Bean counters mess with that kind of radio at their own peril...and sadly, they do.

 

[JustPastBuffalo]

Chas, I enjoyed reading your screed and you made some good points, particularly about "putting listeners on the air," which relates (and reinforces) Rox's points about "who" does the work and who makes the decisions.

You clearly do the work and make the decisions. You do the work, contribute as an artist, performer, producer... and what you do, when you do it, directly relates to how well your daypart performs and how well your radio station performs. You take pride in your craft because it is a direct reflection of who you are as a professional and a performer.

In return for your expertise, using your skills, time talent, decision-making ability... all of which derive from your experience and desire to prove yourself... you get a paycheck because your employer values your expertise and contributions to the radio station when it sells air time to clients that want to reach listeners.

About a month ago, I talked to a certain former PD who made KB the station you and countless others listened to, the PD that created the magic that shaped your radio being, whether you listened to the morning guy, the midday jock or the (not ready for prime time) overnight guy. What JK has to say about radio these days would fill a chapter. And he certainly isn't living in the past. I got into a friendly argument with him (actually baited him just to hear him get revved up) and what he said about the state of radio today would make you laugh, think and p*ss you off because you'd know it to be the truth.

I've tried to register JK for these boards, which he's occasionally read (and always blames me for upsetting him), but he has no interest because he thinks that some of what he reads comes from people "who don't know sh*t from Shinola." The guy's voice is a bit tarnished, but his mind is sharp and his observations are pure gold.

BTW, I try not to eat at "Billions Sold." Nothing against Mickey D. I'd just rather eat at a good Buffalo corner pizza or restaurant. There's more personality and the food is always better.