What's In YOUR Radio?

[JustPastBuffalo]

I have to admit, this made me stop and ponder the question. From Taylor On Radio (1/19/11):

Apple’s Steve Jobs may be stepping into the background, but the latest earnings were up 78%.

> Me: Seventy eight per cent!? (Use the inflection Casey Kasem used when he was reading the station liner promoting his show at 1 a.m.)

Apple showed a 78% jump in fiscal Q1 profit, up from $3.4 billion a year ago to $6 billion – and that’s a lot of iPads, iPods, iPhones and Macs. The earnings of $6.43 a share are considerably better than the analysts’ consensus of about $5.45.

> Mannnn, that's a lot of brey-ud! Talk about 'beating the Street!'

But Wall Street should’ve learned by now that Apple likes to surprise investors. Quarterly sales were $26.7 billion, thanks to the sales of 16.2 million iPhones, 19.5 million iPods, 4.1 million Macs and 7.3 million of the new iPads.

> This is stunning. 19,500,000 iPods and 16,200,000 iPhones. I suspect this is a global account. Still, on top of all the existing MP3's, iPods and other alternative listening-entertainment platform already in the hands of consumers, the number is impressive. As much of a proponent of over-the-air radio that I am, these numbers makes me ponder the value of a ten share in radio is these days, to say nothing of the value of TV ratings. How many commercials have you blown through while watching your DVR or your throwback VCR?

Despite the near-blowout quarterly numbers, Apple stock (“AAPL”) slipped a bit, down 2% to $340.65 a share.

> You just can't please some investors, but as the speculation goes...

That may be the Steve Jobs Effect, with the company failing to add any info beyond what it revealed on Monday – that its CEO and resident visionary is taking another medical leave, this one for an indefinite period. Jobs insists he’ll still be involved in major strategic decisions, but says he needs to focus on his health, following a 2009 liver transplant and a 2004 encounter with pancreatic cancer.

> We wish him well but can't help wonder if he'd give up his wealth and fame in exchange for good health. And as to good health, what's radio's future in light of these figures?

 

[Savage]

Ummm.....three AAAs. That reminds me - I oughta pop 'em out and check 'em....

 

[chas108]

Jim, as a car enthusiast as much as I am a radio junkie, I see a great parallel between Steve Jobs and legendary General Motors designer Harley Earl - a cautionary tale for Apple at the very least.

Earl invented the idea of automotive styling and design, and by the 50's pretty much ruled the roost at GM, almost as if he'd founded the place. His philosophy was to design a product with advanced styling and new features, that exceeded your expectations and made you happy...that is, until the next model came out. Of course the next model had to be better than the last one, to make you want the new one.

Yes, I know I've just described "planned obsolescence", but isn't that exactly what Apple has been pulling off with each new iPhone, iPod etc?

Harley Earl retired in 1958. His successor, Bill Mitchell, was "Earl's guy" in many ways but like in most businesses, the design and accounting departments were always at odds...and Mitchell's ascendancy to head of GM design was the bean counters' foot-in-the-door to have the final word. Over the ensuing years, design driving profits turned into profits driving design, to the point that circa-1990, some GM wonk actually made a public statement that their first and foremost business was making money. Building cars was just how they happened to go about it.

See any parallels to today's radio in that utterance? And I'm sure everyone reading this is familiar enough with GM's bankruptcy - and how it got there - that I won't digress any further.

I know nothing about the inner workings at Apple...but if I held their stock I'd be more than a little concerned. Apple may roll right on but without Jobs' day-to-day presence, I wouldn't be surprised to see "design driving profits" turn into "profits driving design". Then the stage is set for a downfall - and it won't take decades to unfold for Apple the way it did for GM.

So how does this affect radio? Or do we take it as a given that it won't, because if Apple falls it'll just be some other new gizmo maker taking its place?

As I've stated in the past, radio's ability to survive will depend on emotional connection. Not just on the air, but also in sales building relationships with clients and agencies. The best way to ensure the medium's future is for the overall philosophy to change to "design driving profits". Something I really don't see happening for many operators, whether due to greed and arrogance or just being too far in debt to make the investment. But I think the opportunity is there, no matter what Apple does.

You make an excellent point about the value of ratings these days. Since I'm not "on the street" in sales I really don't know how much smoke-and-mirrors goes into getting each buy. I think we all understand the value of qualitative but if traditional electronic media usage is decreasing overall, doesn't the value of qualitative decrease as well? And are we reaching a point where even selling cost-per-point is an exercise in futility?

Jerry Del Colliano has warned about "something" coming from Apple that would blow both traditional radio sales models - and the record labels - both out of the water. (Since he became a paid service I only get the free teases now) Jerry admits to owning Apple stock so it may be all wishful thinking - or hyperbole - on his part.

Ultimately I see this discussion being about too many entertainment choices and not enough dollars to go around. But that said, it wasn't that long ago that Apple was being written off as just a company that made computers for media geeks to use for Pro Tools/Avid/Photoshop/Illustrator/etc. Now look at them.

Is there something here from which radio can learn?

 

[SRP]

Is there something here from which radio can learn?

There sure is.

Apple made its mark by inventing products people didn't know they needed. Once they got their hands on it they found they couldn't live without it.

Radio already has a product like that. It's called "live and local". Now the industry needs to revive that product then do what Apple does best - show people they can't live without it.

 

[SirRoxalot]

SRP, I absolutely agree with you. I'm not sure how we're going to be delivering that content, but immediacy and relevance are the keys to keeping local broadcasters viable.

As for Apple's profits, it's a pretty good illustration of just how overpriced most of their product is. The certainly aren't shy about restricting customers and developers, and charging top dollar for products. It looks like their lawyers will be racking up some serious billable hours both defending Apple from infringement lawsuits, and attacking other mobile device manufacturers over supposed infringement.

Apple's got some serious competition from some major players. Droid ain't going away, and tablet manufacturers are lining up to take on the iPad, with it's quirks, proprietary nature, and less-than-stellar display. For everybody enamored with the Apple name, there are several people who think of it as overpriced and overhyped.

 

[JustPastBuffalo]

As I've stated in the past, radio's ability to survive will depend on emotional connection. Not just on the air, but also in sales building relationships with clients and agencies. The best way to ensure the medium's future is for the overall philosophy to change to "design driving profits."

The comparison you make of radio/computers to the auto industry and your observations are quite eye-opening.

Apple's got some serious competition from some major players. Droid ain't going away, and tablet manufacturers are lining up to take on the iPad, with it's quirks, proprietary nature, and less-than-stellar display. For everybody enamored with the Apple name, there are several people who think of it as overpriced and overhyped.

Rox, I'm guessin' your mouse has left and right click. Still, it seems Apple, Jobs, Cook and Company have a left-brain-outside-the-box approach to creating products that consumers want and *think* they can't live without. And plenty o' cash to create the product. Many of us remember a time when radio had that attitude and product, especially in the days of the *format wars*. So what do we now have to offer our customers that has the potential to get them amped up? Not much cash on the table unless your company is privately held.

 

[SRP]

As for Apple's profits, it's a pretty good illustration of just how overpriced most of their product is. The certainly aren't shy about restricting customers and developers, and charging top dollar for products. It looks like their lawyers will be racking up some serious billable hours both defending Apple from infringement lawsuits, and attacking other mobile device manufacturers over supposed infringement.

Apple's got some serious competition from some major players. Droid ain't going away, and tablet manufacturers are lining up to take on the iPad, with it's quirks, proprietary nature, and less-than-stellar display. For everybody enamored with the Apple name, there are several people who think of it as overpriced and overhyped.

First, the disclaimer: I am NOT an Apple fanboy. I have a Mac and several PCs. I have an iPhone and a Droid tablet. So I think I have an impartial view here.

Apple stuff may be overpriced, but it works. No drivers to download, no "new hardware wizards", no drama. That applies to the Mac AND the iPhone.

I'm having a devil of a time finding decent apps for the Droid tablet (http://boards.radio-info.com/smf/index.php?topic=183337.0) but have had NO trouble getting stuff that works on the iDevices. The Android Market is light years from where the App Store is today.

For some people it's worth spending more to not have to futz with something. Apple knows that - and its profits reflect that knowledge.

 

[Lee Rust]

Integrated in hardware, software and content alike, Apple products are the finest current example of a well-executed 'new media' system. That's why people are willing to pay more.

Broadcasters and programmers need to make the same kind of intuitive leaps that Steve Jobs made about personal computers, music players and telephones. He didn't really invent any of them and has had his share of failures, but ultimately his particular genius has been to identify what 'personal' really means for information media and devices. He hired no consultants and conducted no auditorium tests or surveys, but he did hire the most inventive and creative people he could find in order to bring his ideas to life in increasingly attractive and seductive forms.

iBiquity's efforts notwithstanding, we are bound by our archaic but ubiquitous 'old media' broadcast system. It's not practical for us to re-invent our technology the way Jobs did, but can we change our mindset about the programming? Is 'live and local' really all there is to it?

 

[Mike Sheridan]

SRP, I absolutely agree with you. I'm not sure how we're going to be delivering that content, but immediacy and relevance are the keys to keeping local broadcasters viable.

As for Apple's profits, it's a pretty good illustration of just how overpriced most of their product is. The certainly aren't shy about restricting customers and developers, and charging top dollar for products. It looks like their lawyers will be racking up some serious billable hours both defending Apple from infringement lawsuits, and attacking other mobile device manufacturers over supposed infringement.

Apple's got some serious competition from some major players. Droid ain't going away, and tablet manufacturers are lining up to take on the iPad, with it's quirks, proprietary nature, and less-than-stellar display. For everybody enamored with the Apple name, there are several people who think of it as overpriced and overhyped.

First part: There are lots of people who will say that radio is doing fine, there is no problem. Those people are hesitant to try to improve the product with live and local.

As for Apple: They are a BMW in a parking lot full of Yugo's. Apple products are status, in, Hollywood style, and they work because Apple controls the hardware and the software. Jobs is picky, he has good judgment and vision when it comes to products. Apple products don't come out of focus groups. They get excited about what they are doing, then pass that excitement on to the rest of us. They live to surprise and amaze.

Try as I might to be objective, I had a much easier time selling a PC that I made with my own two hands than I did an Macintosh G4 computer. I got a lot more money for the G4 too. Still I hated to see it go.

 

[Paul_Warren]

In the Golden Age of Industry, what Jobs and Apple have accomplished would have been appreciated not just by industry insiders, but by the public at large. We used to look up to people like Henry Ford and George Westinghouse.

I've never owned an Apple product, but I sure appreciate seeing a value-add that takes the same set of blocks, stacks them in a new way, and makes them worth much more than the competition. What an amazing brand!

Apple reminds me of those wonderful radio underdog stories where the little kilowatt at 1400 gives the 50 kW blowtorch a run for its money.

 

[Bob1370]

"As for Apple: They are a BMW in a parking lot full of Yugo's."

Trouble is, just like a top end Beemer or Benz, they can be hard to keep in tune (remember all the problems with signal on the recent iPhones?) Sometimes technology can be like a car---a reliable, affordable Chevy might get you there best...

 

[SirRoxalot]

I've never owned an Apple product, but I sure appreciate seeing a value-add that takes the same set of blocks, stacks them in a new way, and makes them worth much more than the competition. What an amazing brand!

If that's what you want - a company that creates a product, improves it, and supports the previous product - then Apple AIN'T your friend. There are several reasons that Apple products "just work". Once they bring out a new technology, they simply abandon the old. Try to make a program for Mac OS 9.x work on OS 10.x. Ain't gonna happen. Microsoft has been the company that's generally made backward compatibility possible, which is a big reason why businesses gravitated toward Microsoft products.

Apple has also been very stingy when it comes to allowing non-apple devices to connect to their fully proprietary computers. Apple is the one that has to create drivers for those devices, and they charge a heft sum for them. They're very circumspect in giving developers access to their OS code, and Apple must approve your drivers before your Mac will see that device. That approval ain't cheap.

Apple has created some game-changing products, but they come at a premium price, and support services can be ornery. iTunes is a perfect example. I'll buy my music from just about ANYBODY else simply because I want to control my data, and use it how I see fit, not how Apple dictates.

There are plenty of other products that compete very successfully with Apple. In fact, Apple has often "borrowed" technology from others, then claimed it as their own. I admire some things about the company, but their addiction to hyperbole is sometimes tiresome.

 

[SRP]

Rox - I agree with what you say, but you could replace "Apple" with "Microsoft", "MacOS 9" with "Windows 9x" and "OS 10.x" with either "WinXP" or "Win7" and your comments would pretty much be right on the money.

Microsoft also charges vendors for certifying drivers, BTW - they have this thing called "digital signing". On a PC you can bypass that, however - Macs don't have that option.

And I also agree that there are other companies that do just fine against Apple. But for those who are willing to pay more and forgo backward compatibility to get something that "just works" - Apple is about the only game in town.

 

[Lee Rust]

Apple devices work as well as they do because their maker has always insisted on maintaining absolute control over applications and peripherals. Consequently, Apple is a very 'controlling' entity in the psychological sense and this can indeed be very annoying, especially with iTunes. Nevertheless, I run an all Macintosh shop, and that means I very rarely have to wear my IT management hat. The number of Mac-based broadcast software packages is very small, though. You can count them on less than three fingers.

 

[SirRoxalot]

Rox - I agree with what you say, but you could replace "Apple" with "Microsoft", "MacOS 9" with "Windows 9x" and "OS 10.x" with either "WinXP" or "Win7" and your comments would pretty much be right on the money.

SRP, I'm still running some very old DOS apps under Windows 7 32-bit. Yeah, it's tricky, but it's possible in many cases. Microsoft's backward compatibility is light years ahead of Apple. Add an emulator like DOSBox, and virtually everything from "back in the day" works.

Most of the incompatibility problems with Windows Vista/7 have to do with hardware. Some companies simply aren't around to create new drivers. Some aren't interested in creating new drivers because they're trying force you to move to newer hardware. Some issues have to do with the significant advances in technology since Windows XP came out in 2001 - back when most people had dial-up Internet access, 32-bit processors were the latest technology, and multi-media meant that you played CDs on your computer.

Microsoft ain't perfect, but they've certainly been the engine that's driven computer evolution over the last 30 years. And you can't dispute the depth and breadth of software available for their operating sysytems.