Tag Archives: Axios

No Longer A License To Print Money

Back in the 60s, it wasn’t unusual for a radio station to have an operating profit margin greater than 50%. (Operating profit margin can be defined as the percentage of revenue that a company retains as income after the deduction of expenses.)

When I took over a major radio property in Atlantic City, New Jersey in the 80s, our operating profit margin targets were greater than 30%.

Being in the radio business at that time was often called “having a license to print money.”

That was then, what’s it like now?

Radio Profit Margins 2022

As we ended last year, the trades were carrying reports of operating profit margins like 8.73% (Radio One), 0.8% (Beasley Broadcast Group) and it made me wonder about the future of the radio industry.

Townsquare

This week the CEO of Townsquare was saying that they were “no longer a broadcast radio company,” because Townsquare was now deriving more than 50% of its total revenue and profits from digital.

In fact, digital delivered a profit margin of 30%.

Borrell

In a February webinar with the Radio Advertising Bureau (RAB), Gordon Borrell told radio stations they should consider hiring digital-only sales representatives. Gordon presented research showing where advertisers were increasing their spending, and it was heavily in the digital realm.

Edison Research

This month, Larry Rosin of Edison Research, showed their research from “The Infinite Dial 2023” report showing that 75 million of America’s 214 million age 12+ population were now listening to their audio content online each month.  

The big winners in this digital online streaming music marketplace are Spotify, YouTube Music, Pandora, Apple Music, Amazon Music and iHeart Radio.

While AM/FM radio still wins in the car, its audience is shrinking due to people listening to their own digital music libraries, or listening to podcasts, or listening to digital online audio; much of it made possible by connecting their smartphone to their car’s dashboard entertainment center.

Comscore

In their annual “Year in Review” webinar, Comscore says that in America there are now 239 million digital users over the age of 18. That’s 91% of the total population, up from 88% three years ago.

While we’ve come to think of “digital” as the future for technology and innovation, the reality is it’s already matured, and as such, is now in a period of “consolidation, rent-seeking and regulatory capture,” says digital researcher Greg Satell.

The Monetization Challenge

Twenty-five years ago, Edison Research recognized how the AM/FM radio dial would be changed by internet streaming, when it began its research report called “The Infinite Dial.” But to think of the world only in terms of radio or audio misses the big picture; for while the future of media and entertainment is digital streaming, the challenge of making money in this infinite content media world has become increasingly difficult.

Ankler Media CEO Janice Min put it this way for Axios:

  • “Hollywood’s calling card has always been that it makes the highest quality content in the world … And when you start to populate a fire hose, you lose some of that.”
  • “Humans are not capable of putting in the same effort when you’re making 100 movies a year.”

Certainly, the quality of radio content has gone down with all the Reductions In Force (RIFs), as fewer people now have to produce more content for multiple radio stations; plus, podcasts, blogs and social media.

Bob Iger is back as Disney’s CEO and focused how to make the mouse’s streaming business profitable; he’s not alone, as every media company is in the same situation.

No one has a crystal ball, but one thing is clear,

the future will not look like the past.

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2021 the Beginning of a New Year and Decade

Last year at this time, we were debating whether 2020 was the end of the second decade of the 21st Century or the beginning of the third decade. (Spoiler Alert: it was the end. Decades start with 1 and end with 0.)

I remember being anxious for 2019 to end, but after the challenging year that 2020 became, I couldn’t for the life of me remember why 2019 was so bad. So, I decided to look back to find out what was happening. These are only some of the highlights that made 2019 an anxious year for me, and others.

United States Government Shutdown

On January 3, 2019 Democrats took control of the United States House of Representatives. Hopes were high that they would end the government shutdown. The shutdown had now been going on 22 days, leaving 800,000 employees unpaid, becoming the longest in U.S. history.

College Admissions Scandal

We learned of a college admissions scandal where around 50 people had been accused of bribery and fraud to secure admission to elite colleges for their children. The scandal featured two familiar faces, actresses Felicity Huffman and Lori Loughlin. (I’ll never think of “Aunt Becky” the same way again.)

Huffman would serve 14 days in prison, fined $30,000 and be required to perform 250 hours of community service for her involvement in the scandal. Loughlin and her husband would continue to fight into 2020 before settling with prosecutors, heading off to jail and paying fines.

The Mueller Report

What seemed like forever, 2019 was the year that Robert Mueller finally turned in his report on the 2016 Presidential election after a nearly two-year investigation on whether the Trump Campaign helped Russia interfere with our election. Attorney General William Barr would reduce the report’s findings to a four page letter to Congress that in essence said ‘there’s nothing to see here.’

Hats Get Thrown into Presidential Race for 2020

By the time Joe Biden threw his hat into the ring, announcing he was running for President in 2020, 20 candidates, the largest field of presidential candidates in U.S. history, were now all running against the incumbent, Donald Trump. It was in May of 2019, that Gallup’s tracking poll measured Trump’s approval rating at the highest of his presidency thus-far, 46%. (It never got any higher than 49%.)

That same month we also learned via the New York Times, that Donald Trump has lost $1.17 billion from his various businesses from 1985 to 1994, a far greater amount than previously known, and more than any tax payer in U.S. history.

Measles Outbreak

The Centers for Disease Control and Prevention in June reported that there were 971 cases of measles in the United States, the highest level in more than 25 years.

Jeffrey Epstein

Billionaire financier and registered sex offender, Jeffrey Epstein, is taken into federal custody in New York on charges of sex trafficking and conspiracy to traffic minors in Florida and New York. Labor Secretary Alexander Acosta would resign amid the controversy over his prosecution of Epstein in 2007, which raised lots of questions about how this case had been handled. Epstein, only months later, would be found dead in his jail cell.

NYC Blackout

Manhattan’s West Side was hit with a blackout, occurring exactly 42 years after the New York City blackout of 1977 that would also plunge much of New York City into blackness.

Election Security Blocked

Less than 24 hours after Special Counsel Robert Mueller warned of the continued threat of interference to America’s elections, Senate Majority Leader Mitch McConnell blocks legislation designed to improve election security in the United States.

The Phone Call

In September, the inspector general of Intelligence, Michael Atkinson, communicates to the House Intelligence Committee that a whistleblower had issued an “urgent” and “credible” complaint involving an apparent July 25 phone call between President Trump and Ukrainian president Zelensky. This phone call would lead to the Impeachment trial of Donald J. Trump in January of 2020.

Opioid Crisis

America’s opioid crisis would see Purdue Pharma file for bankruptcy in response to lawsuits related to its participation in the crisis.

Impeachment Proceedings Announced

The end of September would see the announcement by Speaker of the House, Nancy Pelosi, that the House would begin a formal impeachment inquiry against President Trump.

Meanwhile, the Washington Post reported that an IRS employee had filed a whistleblower complaint saying an unnamed political appointee at the United States Department of the Treasury tried to interfere with the tax audits for President Trump or Vice President Mike Pence.

On October 31, the U.S. House of Representatives votes 232 to 196 in favor of formally proceeding with an impeachment inquiry against President Trump. The first formal hearings to begin in November.

At those hearings, Gordon Sondland, the United States Ambassador to the European Union,  testified that there was a quid pro quo in the Ukraine scandal, pushed by Rudy Giuliani and ordered by Trump. The White House announces that President Trump will not participate in the House Judiciary Committee impeachment hearing on December 3.

On December 18, the House votes to forward two articles of impeachment against President Trump to the Senate, accusing him of abuse of power and obstructing Congress. Donald Trump became only the third U.S. president to be impeached by the House.

2019

Looking back, there was little wonder why we were all looking forward to the end of 2019 and the start of 2020. Little did we know what lay ahead or that we would long for the way many of the things had been in the year just past.

We knew there would be an Impeachment trial in the Senate, but we never imagined our world would be closed down by a global pandemic and that the most powerful nation in the world would be brought to its knees in the number of people testing positive for COVID-19 and dying of the novel coronavirus.

2021

Which brings us to not just the start of a new year, but the start of a new decade. We’re not out of the woods yet. Not by a long shot. Dr. Anthony Fauci believes the worst is yet to come. December became America’s deadliest month yet for COVID-19.

On top of that, our ‘make-believe economy,’ where there’s no such thing as risk, can’t go on forever, and according to Axios Markets editor Dion Rabouin, Wall Street knows it.

Creating New Habits

Experts in the study of human behavior tell us, that it can take anywhere from 18 to 254 days for a person to form a new habit. On average, it takes about 66 days for a new behavior to become automatic.

It was in March of this year that the World Health Organization declared COVID-19 a global pandemic, that was over 305 days ago.

If this lasts another six months, another 180 days, that would mean that we have been living with the new habits due to COVID-19 for 485 days. Does anyone seriously think that the new habits we’ve formed over that period of time will suddenly vanish?

Permanent Changes

This is not a blog about politics. It’s a media mentorship blog.

The big takeaway in today’s article is that the changes that have taken place during 2020 are becoming permanent. You can’t plan for the future by thinking life will return to the way it was in the first decades of the 21st Century. Hotels, for example, are now renting hotel rooms to people to use as an office, allowing them to get out of their house, but still remain COVID safe. Now that’s being creative! And if they can do it, what can your industry do?

We think too much and feel too little.

-Charlie Chaplin

So, take a moment to reflect on how the year just passed has changed you.

  • What did you love about the changes 2020 brought (no more commuting?).
  • What would you leave out or what would you do more of in 2021 to improve your career, and your life?
  • What did this year teach you, about yourself, your work, your life, your priorities?
  • What were you most grateful for?
  • Were you able to find happiness in things you previously overlooked or took for granted?
  • How will the things you learned in 2020, benefit you in 2021?

Think of 2021 as the year for letting go of the past.

Letting go of what was, is the way we create the space for building what can be.

Are you ready?

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The Great Ad Hack

great-hack-netflix-1564144457The other evening, I watched the Netflix documentary “The Great Hack.” It chronicles how big tech is taking our data, that we freely give away online, by both making money with our information and manipulating us.

The documentary makes one realize there’s a lot for us to be worried about.

 

Data Privacy

In an internet connected world, do we have any secrets? Everything about us is being stored, as we share our information via social networks, our credit card companies, our banks, our medical services – just about everyone we interact with online.

During the course of the documentary, professor David Carroll tries to see his data points as collected by Cambridge Analytica. Spoiler Alert: Professor Carroll wins a lengthy court case to obtain his data points. Cambridge Analytica never produces them but instead paid a fine and plead guilty for failing to do so. Not producing the data points was more important than revealing what they knew about Professor Carroll and giving the world an inside look at what they know about each of us.

Now Cambridge Analytica is liquidating to prevent anyone from ever seeing the data points they collected on anyone.

Our data privacy has always been important, but we’ve traded our privacy for speed and convenience in our internet connected world. The documentary points out that collecting and using our data points is a trillion dollar business that last year saw data surpass oil in value, making data the most valuable asset on earth.

The Persuadables

What Cambridge Analytica did was target people whose minds they felt they could change for the purposes of winning elections for their clients. In the military, such a tool is called Black Ops or False Flag tactics. Its psychological warfare used to induce confessions or reinforce attitudes and behaviors favorable to the user’s objectives.

Cambridge Analytica knew they didn’t need to change everyone’s mind, just a critical mass of people to achieve their client’s objectives.

Why did they do it? They wanted to make money, lots and lots and lots of money.

Advertising is Propaganda

The advertising “mad men” of Madison Avenue came from the propaganda operations of the United States military during World War Two. They took what they learned and applied it to selling cars, refrigerators, homes, soap etc. Great advertising seeks to persuade the reader, listener or viewer to buy a product or use a service.

Is it any surprise to anyone that as social media was born, these same methods would be applied to this platform, only on a level that was not possible through traditional media?

“These platforms that were created to connect us are now being weaponized,” says Carole Cadwalladr, investigative reporter for The Observer newspaper. “It’s impossible to know what is what, because nothing is as it seems,” she adds.

Tech Giants Crush Ad Market

Sara Fischer writes in Axios that the big tech companies like Facebook, Google and Amazon are consuming more advertising revenue than most other ad supported media combined. The reason? They have our data points and know how to effectively use them to get us to do what they want. You can read Sara’s full article HERE.

The eMarketer and Zenith Media data as graphed by Axios Visuals really shows where things are headed. (see below)

Screen Shot 2019-07-30 at 3.36.05 PM

Can Traditional Media Win?

The playing field today is so unlevel, it begs the question, if traditional media – newspapers, magazines, radio, television – can even have a fighting chance to win advertising dollars.

As a consumer, do you think you stand a chance to not be influenced by the tech giants when they are using your own information against you?

I encourage you to go deeper in this subject by both watching the Netflix documentary “The Great Hack” and reading Sara Fischer’s column “Tech Giants Still Crush the Ad Market Despite Looming Threats.”

Then I hope you will share your thoughts in the comments section of this blog article.

The future of our world is being shaped by the lack of data privacy.

I’d love to hear your thoughts.

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Beyond Broadcast

Our world has become over-saturated with technology.

screen shot 2018-12-15 at 3.50.20 pm

Steve LeVine writing in Axios says that from 1 AD to long after the invention of the printing press, media was a non-issue. Shortly after the beginning of the Industrial Revolution it wasn’t long before everyone had a smartphone, as the chart above demonstrates.

The speed of this new communications revolution is occurring at a pace that is virtually impossible for us to wrap our minds around. And it’s going to get even faster with artificial intelligence, 5G wireless, quantum computing, robotics, and more on the way.

Expect the future to rapidly change our lives in ways both good and bad.

Expect that as communications brings our world closer together, it will also create more distractions, divide us into silos, create chaos and change our societies in ways we haven’t thought about.

This is the world that traditional media will need to adapt to.

Attention Spans

Maryann Wolf, the director of the Center for Dyslexia, Diverse Leaners and Social Justice at UCLA recently found that “Many college students actively avoid the classic literature of the 19th and 20th centuries because they no longer have the patience to read longer, denser, more difficult texts.”

What this means to our society is that large numbers of students today have an inability to read with a level of critical analysis to sufficiently comprehend the complexity of thought and argument found in more demanding texts, contracts, or those deliberately written to be confusing in public referendum questions we all have encountered on voting day.

Social Media

Arguments engaged in on Facebook and other social media platforms are often based on emotional assumptions and biases, rather than any deep study of the issues being debated.

The issues most critical to society are often the ones needing the most critical analysis and complexity of thought to fully comprehend, unfortunately those types of issues can’t be chanted like “build the wall” or “lock her up.”

Yet, we live in an increasingly complex world where people are attracted to simple solutions. The reality is, there are no simple solutions to the problems that confront all of us, like climate change.

Amusing Ourselves to Death

Neil Postman published his seminal work “Amusing Ourselves to Death” in 1985. I continued to use it in my broadcast classes because, back in the day what he saw occurring with only television, has exploded in magnitude with the growth of the internet and social media.

We’ve never been more connected as a planet or more divided into our own little silos.

A New Direction for Broadcast

In next week’s blog, I will continue to consider a way for broadcast media to deal with this over-saturation of media. It’s radio’s super power whose time has come again.

 

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