John Cassaday retired. For a quarter of a century he had an up-close and personal view of the communications revolution. For sixteen years he was the CEO of Corus Entertainment, a leading Canadian media company. When he stepped down from that position in March of this year, he was asked to reflect on the broadcasting industry. I was most interested in his thoughts about the outlook for radio.
What’s the outlook for radio?
Cassaday was asked that question by The Globe and Mail. He responded:
“Radio is probably the most sustainable traditional medium. It’s becoming the only truly local advertising opportunity.”
The thing that separates chronically positive people from everyone else is that while they know everyone has their problems – it’s a part of life – it’s that they keep in perspective, that adversity brings growth. But what happens if your medium is headed for a cliff?
What’s the outlook for print?
Print aka newspaper revenue was over a $65-Billion (adjusted for inflation) behemoth as the world approached 2000. The current trend line has it eroding to less than it was in 1950; a little over $17-Billion. But it’s worse than that.
NYU professor Clay Shirky sees print revenue headed for a cliff. One of the tipping points will arrive when the cost of printing the paper is more than the advertising dollars/subscriptions that support its printing. But that’s still not the worst of it.
Shirky believes there’s another even more important tipping point that will occur before the one I just mentioned. That’s the one concerning the psychological threshold for the advertiser. The point where the amount of papers printed and distributed no longer justifies the investment in this form of advertising. How attractive will print advertising be when it no longer delivers the massive audience that an advertiser desires? That’s the point when revenues go from bleeding to hemorrhage.
One of the suggestions Shirky puts forward for newspaper owners is to get their best customers to think about getting the paper more as membership than a subscription.
The NPR Membership Concept
The concept of having people so loyal, so dedicated to the content you create that they want to be part of the family is the powerful concept that has been used by public radio stations to raise the necessary funds they need to operate. But let’s be clear, NPR has made a major investment in content creation and serving it up on any platform a member desires.
Much as HBO used to say “It’s not TV, its HBO,” NPR could just as easily proclaim “It’s not radio, its NPR.” And if you think that’s absurd, more than one focus group has shown that people, who say they don’t listen to radio any more, still listen to their local NPR radio station and support it through membership.
The iPad was never going to save newspapers
Shirky says you can add the iPad saving newspapers to the long list of cruel jokes Steve Jobs played on the media industry. Jobs was always about doing what was right for Apple. How do you think Apple became the most valuable company in the world?
Google+ is not Facebook
Even media companies that we think have all the answers, don’t. Google+ was a bad Facebook. Instead of trying to figure out a new niche that wasn’t being served and doing an incredible job, Google created Google+. The world wasn’t asking for another Facebook. This isn’t all that different than HD Radio. The world wasn’t asking for another type of FM radio either. The digital difference for the radio consumer has never been seen as a “must have.”
Shared interests is the new local
It’s clear that while geography used to be the only thing that defined what it meant to be “local,” going forward local is going to come to mean people who share similar interests. To a substantial portion of the population, where they live may indeed be the very interest they share. But radio operators will need to clearly identify and serve those interests if they are to survive and thrive. Leverage the opportunity to deliver desired content to your “members” or someone else will.
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