Tag Archives: Greg Satell

March 12, 2023 · 3:00 am

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.

9 Comments

Filed under Education, Mentor, Radio, Sales

Tagged as , , , , , , , , , , , , , , , , , , , , , , , , , , ,

December 11, 2022 · 3:00 am

Monkey First

There’s been many changes to the radio industry in the past fifty years, but one thing has not changed and that is the reason people listen.

People listen to radio that interests them.

This past week I sat in on a webinar that revealed groundbreaking data that is being produce by DTS AutoStage. Joe D’Angelo, Xperi’s Senior Vice President of Global Radio & Digital Audio, showed how granular, and in virtually “real time,” the data from vehicle listening produced by DTS AutoStage is. This research will give the radio industry unprecedented access to radio analytics and audience insights.

Train The Monkey First

The problem I see with all the technological advancements in the radio business these days is that it feels like we’re putting the cart before the horse.

Google’s division to foster innovation operates under the philosophy of “#MonkeyFirst.”

If you want to get a monkey to recite Shakespeare on a pedestal,

you start by training the monkey, not building the pedestal.

The hard part is training the monkey, as anyone can build a pedestal.

Applying this to radio broadcasting, the hard part is crafting the programming that goes out to a listener. The easy part is acquiring the technology to transmit a signal; whether over the internet or through the ether.

Headline News

CNN and Headline News (simply known as HLN) is under new ownership.

Back when Ted Turner conceived of the Headline News channel, it featured a full half-hour long newscast every thirty minutes, 24-hours a day.

With ownership change, came changes to Headline News, including the dropping of the name in favor of just calling the channel HLN. The channel also stopped doing thirty-minute newscasts round-the-clock and the only news program left was Robin Meade’s Morning Express.

That came to end after a 21-year run on Monday, December 5, 2022. Robin Meade explained that

“because of budget cuts and a changing industry HLN is no longer

producing its own live news. It means our news shows are ending.

In its place you will see a simulcast of CNN’s morning show.”

Once again, a broadcast company is expecting to do better by cutting costs and eliminating the very entity that drew people to the channel in the first place.

Too many broadcasters are hard at work building a better pedestal when where their attention should be focused on, is delivering the programming their audience wants.

The reason for this misplaced effort is because building technology is the easy part and management can show their investors early progress against a timeline.

The broadcasting industry is creating a world of outstanding pedestals, while the audience leaves.

Make sure you address the crux of the problem

and don’t waste time with the peripheral issues.

-Greg Satell

10 Comments

Filed under Education, Mentor, Radio, Sales

Tagged as , , , , , , , , ,

May 1, 2022 · 3:00 am

What Business is RADIO In?

This question was last asked at the NAB (National Association of Broadcasters) Show in 2019, before a two year shutdown of the world due to a global pandemic. I don’t remember what answer they came up with back then, but no one foresaw the changes that COVID-19 would bring into our lives.

The question was visited again in one of the opening sessions at this year’s NAB Show in Las Vegas and the answer can be boiled down to two words, “very different.”

New Media Behaviors

COVID changed the nature of how people do their jobs, and this got me thinking how my own life changed with my retirement.

From my high school days in the 60s until 2010, I worked six to seven days a week in the radio industry. If I wasn’t listening to my own radio stations, I was listening to the competition.

In 2010, I transitioned into my second career as a college broadcast professor, teaching the process and effects of mediated communications, the history of broadcasting, broadcast sales, on-air radio production and the program’s Capstone management course.

My radio listening was mainly in my car, as my college building wasn’t conducive to receiving over-the-air radio signals, so when I was working in my office I streamed smooth jazz from my iPad to the aux input on my radio.

When I retired from my second career, got married and moved to Virginia, my radio habits would change again, as well as my television habits. Now all of my media would be accessed via streaming on the internet.

The Future of Work Impacts the Future of Radio

Without evening thinking about it, as the nature of my work changed, my media habits were greatly impacted by those changes.

Looking at the future of radio, new studies done by CivicScience really opened my eyes. Their studies have found that 44% of people who listen to radio have changed their habits over the past 12 months.

People are now listening to more audio content via internet streaming, they’re listening at different times of the day, their consumption of podcasts have increased, and while 20% say they are listening more often, a whopping 34% say they are listening less often.

Listening More or Listening Less

When CivicScience looked deeper into the reason people are listening less to radio, they found that the location of where people worked played a big role. Of the 51% that said they listened to radio less, they also were part of the group that was working remotely (i.e. from home) or were unemployed.

Since so much of today’s radio consumption occurs in the vehicle, people who work from home are spending less time in their cars and therefore less time listening to radio.

Post-Pandemic Work Choices

When CivicScience asked people what their future work preferences were after COVID, only 24% said they wanted to return to their office full-time. 37% wanted to work from home full-time and 40% said a mix of in office and at home would be their preference going forward.

These findings present radio operators with a real dilemma. The radio industry depends on a working age population all moving to and from work at the same time, hence the reason that both morning and after drive radio time sales have always commanded more dollars than middays, nights, overnights and weekends.

Moreover, people who stream their audio content are the people who prefer to either work entirely from home or have some kind of hybrid office/work-from-home situation. They represent 75% of the workforce in this study.

Global Supply Chain Disruptions

The global pandemic and the war in Ukraine have caused major disruptions to the global supply chain. For example, GM announced they would be having a two week shutdown at its plant in Fort Wayne, Indiana (it produces the popular Chevrolet Silverado and GMC Sierra pickup trucks) due to a shortage of computer chips. While Russia and Ukraine don’t produce any of the computer chips that are in such short supply, Ukraine is the world’s leading supplier of neon, a gas used in the production of computer chips.

Company business models work on the premise that resources of materials and goods move freely across geography. Both COVID and a war have totally disrupted the way the world was operating. Long term, we will adapt, but the immediate future won’t be pretty.

Now, take this one example and apply it to virtually every area of our lives and you can see how complex things have become.

An Ecosystem-Driven World

Radio used to be such an easy business, just beat the other radio station in town and steal as many advertising dollars from the local newspaper as possible.

Every radio station was like its own little fiefdom, but now in 2022 every radio station is part of a very large media ecosystem and the competitive advantage is no longer how efficient you can run your operation but how connected you are to your listeners on all devices and via all platforms; connections that go far beyond your FCC license to operate an AM or FM radio service to your local community.

For me, Apple is not my iPhone, iPad, MacBook Air, Mac or Apple TV, it’s the ecosystem that all of my devices operate on. For me, that’s what is most important.

What makes our ecosystem-drive world so hard to navigate is that everything is in a continuous state of flux. This makes our deciding what we should pursue unclear, and whether other media properties are opponents or an ally.

“Competitive Advantage” is no longer the sum of all efficiencies, but the sum of all connections.

  Strategy, therefore, must be focused on deepening and widening

networks of information, talent, partners and consumers.

-Greg Satell

6 Comments

Filed under Education, Mentor, Radio, Sales

Tagged as , , , , , , , , , , , , , ,

January 9, 2022 · 3:00 am

Why I Stream ALL My Radio Listening

Twelve year ago, radio broadcast engineer Tom Ray, penned these words: “Unless we give Joe Consumer a reason to go out and purchase an HD Radio for his car – until he can obtain it easily and at a reasonable cost, and a device that works – I fear HD Radio is going to go the way of FM quad and AM stereo, relegated to the scrap pile of history.”

Tom Ray wrote his article for Radio World when he was the vice president/corporate director of engineering for Buckley Broadcasting/WOR Radio in New York City. He was a strong and vocal supporter of HD Radio and his WOR was one of the first AMs on the air with an HD Radio signal. So, any broadcaster that read Tom’s article, “HD Radio Shouldn’t Be This Hard,” should have taken it as a wake-up call about steps the radio industry needed to take to stay relevant in their listeners’ lives.

Buying a New Car in 2010

Tom is a loyal Ford customer, so when his Explorer went to the automobile graveyard with 230,000-miles on it, Tom wanted to get a new Ford Escape, equipped with HD Radio. The only problem was, Ford wasn’t putting HD Radios into their Escapes, instead, they were pushing Satellite Radio. (Tom noted that his wife listened only to Satellite Radio in her car, saying “in her opinion there is nothing worth listening to in New York’s Hudson Valley, 50 miles north of New York City.)

This should have been yet another radio industry wake-up call about its future.

I encourage you to click on the link and read what Tom Ray wrote a dozen years ago about how difficult it was to put an HD Radio into a new car which, at that time, didn’t offer OEM HD Radios and how he, as a broadcast engineer, was totally frustrated trying to install an aftermarket one.

Streaming Radio at Home

Since Christmas 2017, when my wife gave me my first Amazon Echo smart speaker, our Echo family has quickly grown to four of these devices. There is nowhere you can be in our home and not ask Alexa for something.

Since 2017, all of our in-home radio listening is via streaming.

While we also occasionally streamed radio in the car, on all of our road trips from 2018-2021, SiriusXM always seemed to be offering a 3-month free listening trial that I can honestly say we enjoyed the listening to. But, I’ve never been a subscriber, because other than road trips I spend very little time in the car.

Streaming Radio in the Car

In October, while enjoying my latest free 3-month trial for SiriusXM radio, I decided it was time to bring my in-house streaming radio habit into both of our cars. We own a 2006 Subaru Forester and a 2009 Honda Accord.

The Subaru doesn’t have an AUX input, the Honda does.

Streaming in the Subaru was accomplished with a Blue Tooth receiver that will broadcast on any FM frequency (88.1 works best). In the Honda, this same device’s output was plugged into an AUX receptacle.

The result is, as soon as either my wife or myself enters one of our cars, the Nulaxy KM18 immediately pairs with our iPhones. I installed the AINOPE Car Phone Holder Mount to hold our phones, and keep them easily assessible to control whatever we would like to listen to.

Total cost for each car: $33.43. Time to install, virtually nil. I just plugged the Nulaxy KM18 into a power port and it was operational. The AINIOPE holder easily clamps to an air vent on the dashboard and holds any smartphone.

Unlike the nightmare that Tom Ray experienced back in 2010 trying to put HD Radio into his car, this installation by me, a non-engineer, was a piece of cake.

A Call to Action

I recently sat in on a Radio World webinar called “A Call to Action, radio’s existential battle for the dash.” Paul McLane, Managing Director of Content/Editor in Chief of Radio World at Radio World/Future U.S., hosted the webinar and did an excellent job. However, one particular piece of information shared during the presentation that I thought was crucial was, how Mercedes Benz was equipping their vehicles’ radio screens with the following pre-sets: SiriusXM, FM, AM and TuneIn Radio.

TuneIn Radio is the App I use for most of my radio listening, but why was it chosen by Mercedes Benz? Turns out the answer is, “TuneIn’s radio stations can be accessed worldwide in 197 countries on more than 200 different platforms and devices.” TuneIn says it “provides the displaced radio listener a connection to home with local, national, and international stations anywhere they go and on any device.”

In other words, why would any audio consumer need DAB, DAB+, Digital Radio Mondiale, HD Radio, AM or FM when they can receive any radio station in crystal clear audio via streaming?

With the exception of the proprietary content offered by SiriusXM, everything else is available via streaming at no charge.

Cellular Plan

Now it goes without saying, that streaming consumes data. Each cellphone service provider offers different plans and different price rates. My wife and I are on Verizon’s unlimited phone/text/data plan. We have no landline phone in our home and our iPhones are our lifeline to being connected with each other, our family, our community and the world.

I’ve found streaming radio in our cars provides us with audio quality that is pristine. There’s no buffering or dropout, and it’s been a more reliable signal than AM, FM or SiriusXM radio, especially when traveling through tunnels.

Streaming Apps

I thought you might be interested in knowing what streaming Apps I have on my iPhone, here’s the current list:

  • TuneIn Pro
  • Audacy
  • Pandora
  • Spotify
  • Amazon Music
  • NPR ONE
  • YouTube
  • Simple Radio
  • StreamS
  • Apple Podcasts
  • AccuRadio
  • 650AM WSM
  • Stitcher

Why I Prefer Streaming My Radio

We live far enough away from Washington, D.C. that radio signals for WTOP or WETA experience lots of noise and dropout, depending atmospherics, sometimes making them totally unlistenable. However, their streams are always crystal clear.

This fall Sue and I escaped to Cape Cod for a week and when I get on the peninsula, I love turning on WFCC – Cape Cod’s Classical station – 107.5 FM. Now with streaming radio, I can dial up WFCC on my TuneIn radio App and listen when we’re back home in Virginia.

Full disclosure, I am the midday DJ on WMEX-FM in Rochester, NH. But even if I weren’t on the station, WMEX-FM would be my #1 pre-set for streaming. Gary James, the station’s morning man and program director, puts together a music mix that I find absolutely fabulous. It’s the music of my life.

Which brings me to another important point, radio today is global. No longer is your radio station competing just with other local stations, but radio that is streaming from anywhere on planet Earth.

Streaming also makes it possible for ON DEMAND spoken word radio, also known as Podcasts, to be easily available in the car.

Simington on Streaming

FCC commissioner Nathan Simington recently addressed Ohio broadcasters saying, “content delivery power had shifted away from broadcasters – stations and networks – and toward ‘online platforms,’ something he thinks the FCC needs to recognize in its quadrennial review of media ownership regs.”

He warned that:

  1. “Online media platforms are growing rapidly and threaten dominance over traditional media platforms; and
  2. Broadcast advertising revenue has flatlined, having been siphoned off from higher margin online platforms.”

The Future is Streaming

88% of the world’s population now uses mobile broadband as its main source of internet access, and nearly 90% of homes in the United States now have internet streaming. 2021 saw an estimated 22% ad industry growth rate, which Magna Global said was “the highest growth rate ever recorded” by this agency, beating a 12.5% growth rate recorded in the year 2000. The caveat however is, digital dominated traditional advertising raking in 64.4% of the growth in ad spending.

RAIN reports “The U.S. recorded music industry will exceed a 48-year revenue record set in 1999 (based on current estimates),” all coming from revenues paid by streaming music services.

The Harvard Business Review recently published “4 Principles to Guide Your Digital Transformation,” by Greg Satell, Andrea Kates and Todd McLees. In it, the authors wrote, “digital transformation is not just about technology. We’re desperately in need of a shift in focus. Leaders must inspire and empower their entire organization to boldly reimagine their work environment, customer needs, product offering, and even the purpose of the enterprise.”

Tom Ray was the proverbial “canary in the coal shaft” back in 2010, with few paying attention. Sadly, based on the early news coming out of the 2022 CES in Las Vegas, nothing has changed.

We’re living in a communications revolution,

bringing about changes that will be both

permanent and irreversible.

Revolutions never maintain or preserve the status quo.

42 Comments

Filed under Education, Mentor, Radio, Sales

Tagged as , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

September 13, 2020 · 3:00 am

What Will a Post-COVID-19 World Be Like?

While this global pandemic has caused everyone a lot of heartache, due to missed family events, vacations, employment and educational disruptions, it has also forced us to make some changes we might want to keep when COVID-19 is in the rearview mirror.

Work From Home (WFH)

Working from home, for those whose job permitted it, eliminated daily commutes. Just this one change has meant giving those families more time together, more money to save or spend on other things and more life satisfaction overall. For our environment, the reduction in fuel consumption has been a plus as well.

Home: The Place for Dinner & a Movie

Staying at home has meant that our giant screen TVs have become our movie screens. This hasn’t been lost on film makers, as they are now making movies more readily available to watch at home.

Additionally, retailers and food providers are now competing to deliver their goods to your home as fast as Amazon Prime does.

Road Trip America

Since COVID-19 has seen countries around the world take down their “Welcome Americans” signs, we’re discovering America’s great outdoors. RVs & camper sales are up, and the nation’s parks and campgrounds are full, as we take to the woods where social distancing has always been part of the experience.

Restaurants & Broadband

While dining al fresco is fun and provides social distancing for diners, many cities are closing down their main streets to vehicle traffic in order to make them both pedestrian and dining friendly.

Much like we are using our smartphones to order restaurant take-out, high speed internet service is now essential for work, education and entertainment in our homes.

Small Business Survival

Dion Rabouin, author of Markets, writes that “small businesses are losing confidence in their survival.” We’re six months into this global pandemic and American small business is nowhere near returning to “normal.”

The current unemployment situation reveals that in every state, more people are unemployed than jobs available. That means moving to another state won’t make a difference for an unemployed person because the same problem has hit every single community in the country.

K-Shaped Recovery

Maybe more worrisome is that we are seeing a K-Shaped Recovery, taking place due to COVID-19. Which means a recovery where the rich become richer, the big become bigger, the poor become poorer, and the small become extinct.

We’re seeing this now with Wall Street’s growth, versus Main Street’s demise.

Following the “Great Recession” of 2008, we saw something similar happen as America went through recovery. Though it happened gradually and occurring almost unnoticed by many,

This global pandemic is the equivalent of pouring gasoline on a fire, it acts like an accelerant. Things that were going to come to pass in time, are now happening at warp speed.

While big box retailers and Wall Street are dancing with delight, mom-and-pop shops and local service establishments are fighting for their very survival.

Local Radio & Newspapers

Having a K-Shaped Recovery means that local media enterprises, that depend on Main Street for their advertising revenue, will suffer the same consequences.

Big media companies having more access to the technology that’s playing a role during COVID-19 will shape the recovery. Big media companies are less dependent on Main Street, as the bulk of their revenues originate on a regional and national level.

The same inequality that has been bifurcating American society since the early 80s and has made achieving revenue goals for local media companies more difficult with each passing year, is reaching a tipping point with COVID-19. The very rapid evolution of society during this global pandemic is exacerbating inequality; of people, businesses, health, education, and opportunities.

Even after we have discovered therapeutics and/or a vaccine to deal with COVID-19, the way the world was pre-COVID won’t be returning.

The answers to the challenges of the future will not be found in the past.

The truth is that we need to continually innovate how we innovate if we expect to ever return to an era of renewed productivity growth.

-Gregg Satell

2 Comments

Filed under Uncategorized

Tagged as , , , , , , , , , , ,

March 10, 2019 · 3:00 am

Is Radio Prepared for The Future

Radio & CobwebsIn a lot of ways, the future is here, now.

All of the things we knew were coming back at the turn of the century have become reality.

But the radio industry continues to try to adapt.

Great Companies Don’t Adapt, They Prepare

When I saw that headline on a blog article by Greg Satell two years ago, it resonated with me because it made me realize that the radio industry wasn’t prepared for the 21st Century. It was trying to adapt the past to the present and hoping that it would sustain them going into the future.

Unfortunately, it’s impossible to create the future by focusing on the present.

“The truth is,” writes Satell, “that companies rarely succeed by adapting to market events.”

“Firms prevail by shaping the future…but it takes years of preparation to achieve.

Once you find yourself in a position where you need to adapt, it’s usually too late.”

-Greg Satell

Marconi & Sarnoff

Each generation has its great innovators, so It’s always a challenge to say who makes a greater contribution to changing the world.

Marconi gave us the wireless, a one-to-one form of communications that transformed the world.

Sarnoff innovated the radio as a form of mass communication, giving us a one-to-many instant communication service of news, entertainment and advertising supported radio.

What we can be certain of, each person who creates the future is one who overflows with boundless curiosity.

Investing in Research

All of the Big 5 Tech companies (Amazon, Facebook Microsoft, Google and Apple) invest heavily in research. Each of them, in their own way, has made themselves indispensable from our daily lives.

Recently, a daily newsletter I read called “While You Were Working,” asked its readers which of the Big 5 Tech Companies they could survive without. Here are the results of that survey:

Which Big 5 tech company do you think it would be easiest to live without?

Facebook  70.71%
Apple  14.14%
Amazon  7.35%
Microsoft  5.74%
Google  2.06%

Probably not surprising that Facebook was the choice folks said they could live without by a wide margin.

For five weeks, Kashmir Hill, a writer for Gizmodo, decided to see how she would deal with giving up today’s technology by blocking one of the Big 5 from her world. In her sixth and final week, she decided to go cold turkey and blocked them all. How did that go? Well I think the title of her article said it all, “I Cut the ‘Big Five’ Tech Giants From My Life. It Was Hell.”

Hill compared her experience to that of an alcoholic trying to give us booze. And that life without them makes life very difficult as we are so dependent on them.

I’m not sure any of us really understands how married we are to these Big 5 Tech Companies or how hard it would be for us to give up even one of them, let alone to give them all up.

Listening to Radio

One of the interesting side-bars of the article Hill wrote was that by not having Alexa, Spotify audio books, podcasts or other such services on her Nokia feature phone, what she could receive, unlike with her iPhone, were radio broadcasts and that allowed her to listen to NPR while doing her daily run.

But how sad that listening to radio only seems to be an option when all other options are eliminated.

Investing in the Core Product

Some of the differences between the Big 5 Tech companies are what non-core areas they invest their research money into, like self-driving cars. The one thing they all take very seriously, however, is plowing the lion’s share of their research budget into their core competencies.

In my sales class, I used to tell my students that people don’t buy half-inch drill bits because they want them, they buy them because what they want are half-inch holes. In other words, you will be successful when you invest your time solving your customers’ problems.

Radio Research

Most radio research dollars are spent on one thing, audience measurement. Unfortunately, that’s research that studies the past performance of a radio station, not the present moment. Virtually no radio research money is spent on preparing the ground for the future.

We all know that Artificial Intelligence (AI) is the next big thing. Alexa, in your Amazon Echo, is the perfect example.

How is the radio industry preparing its employees to acquire the skills they will need to excel in an AI world? Artificial Intelligence is a force that will impact the communications industry in the years to come.

Broadcasting has been living off of its seed corn for too many years, while the technology industries have been focused on solving our customer’s problems by investing in them for years, even decades.

Broadcasters can’t create the future by continuing to focus on the present.

Innovation, will require investment in research that, imagines new possibilities.

 

 

15 Comments

Filed under Education, Mentor, Radio, Sales

Tagged as , , , , , , , , , , , , , , , , , , , ,

October 21, 2018 · 3:00 am

The End of Retail Business

Going Out of BusinessIs the retail industry dying?

Stores that I grew up with, like Toys R Us, Sears, K-Mart, and Radio Shack are either in bankruptcy or out-of-business. Other retailers are reducing the number of locations to become more profitable to their investors.

The local retailer finds themselves even more challenged to deal with the likes of Walmart and Amazon.

Radio Lives on Local

The prescription for the radio business is to focus their programming on their local community of license. In other words, be VERY local in everything they do.

If the radio station you listen to could be transplanted into another city without changing a single thing about their programming, other than their weather forecasts and traffic reports, then that radio station isn’t really local.

If, on the other hand, you drive into a community and you have no idea what the people on the air are talking about or who the people they’re talking about are, then you have come upon a LOCAL radio station that is serving the people of their listening area.

Local Retailers

In the smaller markets I’ve managed radio stations in, we didn’t really do much business with those big box retailers. Sadly, in most cases, after the grand opening schedule and remote broadcast, they pretty much stayed away from local radio.

The local businesses that lined the main street, or were located in a strip mall or populated the surrounding small towns, were the life-blood of a local radio station.

As Walmart and Amazon strip away the ability for these small merchants to make a living, radio’s business base is likewise being decimated.

21st Century Retailing

Retailing is being disrupted. While some retailers are closing, we also see companies like Apple, Amazon and even Coca Cola investing in building new brick and mortar locations.

The change that’s occurring according to Greg Satell is that “the primary function of a physical store is not to drive transactions, but to service and support customers.”

In other words, retailing is being reimagined.

Radio Reimagined

Radio is giving up its major strength by not having live, local personalities on the air 24/7. Successful small retailers are winning because they engaged in their community and are part of the community’s fabric. They are owned and staffed by dedicated people who believe in super-serving their customer base.

We are living in a time of too much automation and algorithms.

The moves being made by the Apples, Amazons and Cokes to get closer to their customer base by having local people serve their local community is an indication that the pendulum is starting to swing in the opposite direction.

Radio cannot ignore this change in the wind.

Radio needs to unlock the enormous potential of people serving people.

Radio’s Why

A couple of weeks ago, I got a lot of people talking when I asked “What’s Radio’s Why?” What it can’t be any longer is, “we’re #1” or “we have the most listeners.” Nobody cares.

There are more radio stations on-the-air in America, than at any time in the history of radio. Ironically, there’s less choice of formats to listen to and there are less people working per station today as well.

It’s time for radio stations to define an audience for each station and then super-serve that audience. The radio stations who’s audiences are the most dedicated and passionate will be the winners, not the ones with possibly a larger, but passive audience.

Just as each station’s audience is clearly defined and targeted, businesses that are seeking those same people will become just as defined, and a win-win business relationship can be built and sustained.

As I lived through the consolidation of radio and the automation of tasks, I felt that the radio industry applied technology to many of the wrong areas of the business. The air staffs were the first folks to be eliminated in favor of voice-tracking and automation. The main radio station phone line, the listener’s first point of contact, was automated instead of having a live person to greet the caller.

The radio industry eliminated, through technology, the very points where the “rubber meets the road.” The people serving people point.

The Human Connection

I own a lot of Apple gear. I didn’t buy any of it at an Apple store. I bought it online. My iPhones from Verizon. My other gear online from Apple.

What the Apple stores mean to me is a chance to go in and play with the equipment, to ask questions and, like when my MacBook Air crashed, to have a place I can go and have it repaired, almost overnight.

The Apple stores are my human connection to Apple.

The radio industry was built on the human connection. Radio’s air personalities were constantly promoted, in print, on billboard, on television and they were always out and about in the community being highly visible. During consolidation, radio lost its way due to non-radio investors who only saw the money-making benefits of cutting costs to widen margins. Once this “Best Practice” type of thinking wormed its way through the whole broadcast industry, those benefits were quickly marginalized.

Values Shift, Not Disappear

“The businesses that thrive over the long-term,

not only see where value is shifting from

but where value is shifting to and race to get there.”

-Greg Satell

This is radio’s wake-up call.

Is anybody listening?

23 Comments

Filed under Education, Mentor, Radio, Sales

Tagged as , , , , , , , , , , , , , , , ,

January 21, 2018 · 3:00 am

Put Your Money Where Your Mouths Are

1021_boomboom 1

Boom Boom Brannigan, June 1, 2000. (Times Union Archive)

Last week, I wrote about the power of the human voice. Each of us who decided to make radio a career was influenced by the voices we heard coming through our radio speaker.

Zenith Radio

My first radio, a pocket Zenith Royal 50 transistor, was purchased at Sammy Vincent’s Music Store on North Street in Pittsfield, Massachusetts. My first SONY reel-to-reel tape recorder would also come from Sammy Vincent’s.

Both of these wonderful electronic devices would be the foundation of my lifelong radio career.

Sammy Vincent’s was also the place to get a free copy of the latest WPTR-AM1540 Top 31 songs of the week.

Boom Boom Brannigan

WPTR had many famous voices travel through its 50,000-watt AM broadcast signal. Its most famous voice was that of Boom Boom Brannigan. You can hear an air check of Boom Boom from January 1974 here. The Albany Times Union wrote upon Boom Boom’s death in 2010 at the age of 82, “Boom Boom Brannigan, a pioneer of rock ‘n’ roll radio in the Capital Region was known for his energetic personality, sideburns and bright fashions. For decades, Brannigan was the voice of the local airwaves, a high-profile DJ who delivered the hits that defined the music of the baby-boom generation.”

Every market had their own Boom Boom.

For example, Boston had Arnie Woo Woo Ginsburg, New York City had Cousin Brucie and Los Angeles had The Real Don Steele.

Each, larger than life personalities, that lived the part of being a radio star. Each more important to their listeners than the hits they exposed them to.

Radio Stars

Bob Lawson, who worked with Brannigan at WPTR in 1964 put it this way, “They were the real stars in those days, and Boomer was the epitome of radio stardom.”

These legendary radio personalities caused so many baby boomers to get into the radio industry.

I had the opportunity to meet Boom Boom one Saturday afternoon when he was broadcasting from a little phone booth like studio in the transmitter room, next to the huge 50,000-watt transmitter. He was the consummate gentleman and further inspired this young broadcaster as he let me sit in with him during his broadcast that day.

70-20-10 Rule

Fresh off CES2018 many radio executives are talking about the latest shiny new things that are on the horizon and how they will impact radio. Everyone’s talking about how radio needs to innovate. The big question is how does the radio business manage its innovation resources.

In his book, Mapping Innovation, author Greg Satell cites the 70-20-10 Rule that is used by companies like Google to allocate resources.

70% of a company’s resources should be invested in sustaining improvements to existing products. Eric Schmidt, Google’s Chairman, said the 70-20-10 Rule insured that Google’s core business would always get the bulk of the resources.

20% of available resources should get invested in exploring adjacent opportunities.

The remaining 10% are for creating something entirely new. Something that most likely will crash and burn, so you want to be able to sustain this effort without it damaging your core business. What Satell said he learned about businesses that invested in basic exploration was they all eventually hit on something big.

Radio’s 70-20-10

What would you say radio’s 70-20-10 rule is? 70% goes to pay down the debt? I’m sure many come away with that impression from what they read in the trades. But not every broadcast company is in that predicament.

How about your radio company?

Consider this operating strategy: 70% of your resources should be invested in your people who create the radio you broadcast every day. 20% should be invested in the adjacent delivery pipelines, like streaming, NextRadio and voice activated devices. And 10% should be invested in building a new paradigm.

What’s happening in the 21st Century is the acceleration of change for all industries. Innosight predicts that about half of the S&P 500 will be replaced by 2026. Back in 1965 33-years was the average tenure of a company on this stock exchange. By 1990, this narrowed to 20-years. By 2026, it’s forecast to drop to 14-years.

So, the gale force winds of change have never blown with more velocity.

Community & Companionship

What great local radio personalities each created in their markets was a sense of community and companionship for their listeners. That’s radio’s core business.

It’s where the bulk of your resources should be directed.

Put your money where your mouths are.

5 Comments

Filed under Education, Mentor, Radio

Tagged as , , , , , , , , , , , , , ,