Tag Archives: Henry Ford

What is Radio’s WHY Today?

One of my favorite authors is Simon Sinek. In his 2009 book “Start With Why” he wrote that “any organization can explain what it does; some can explain how they do it; but very few can clearly articulate why” they do what they do.

Sinek found that all inspiring leaders and companies “think, act and communicate exactly alike.”

“They can be found in both the public and private sectors. They all have a disproportionate amount if influence in their industries. They have the most loyal customers and the most loyal employees. They tend to be more profitable than others in their industry. They are more innovative, and most importantly, they are able to sustain all these things over the long term. Many of them change industries. Some of them even change the world.”

And they think, act and communicate completely opposite of everyone else.

Has Radio Lost Its Why?

When commercial radio was born in the 1920s, radio’s why was thought to be a technology that could provide nationwide communications that would be a unifier for cultural and social systems. Radio’s regulatory guiding principle was to “operate in the public interest, convenience and/or necessity.”

When people were still trying to wrap their minds around what exactly radio would be, there was one common reoccurring theme about what radio broadcasting could do, and that was to unify a nation and create an American identity.

It could accomplish this in several areas:

  • Physical Unity: the ability to unite America from coast-to-coast, border to border, with instantaneous wireless communication.
  • Cultural Unity: through entertainment, news and the spoken word (English); radio could create a kind of national homogeneity.
  • Institutional Unity: corporations and the federal government would come together on a mandate that this new powerful form of communications needed centralized control.
  • Economic Unity: through advertising, radio could now offer national, regional and local opportunities for businesses to expose their products and services and grow our nation’s economy.

Radio vs. The Internet

Just about every business has found its original business model challenged by a population connected to the internet. Think about the original radio why areas and you can easily see how each of them has been overtaken, embellished – and depending on your point of view – improved upon by the world wide web.

The internet, it turns out, is a better innovation for addressing those original foundational tenets of radio’s purpose than radio itself. So now what?

Radio first needs to know its “WHY.” Then it needs to communicate it, clearly and simply or suffer the consequences.  Bud Walters of The Cromwell Group loves to say, “If you don’t know where you’re going, any road will take you there.” Until the radio industry figures this out, getting new people to listen (or former listeners to return) will be a challenge.

People don’t buy what you do, they buy why you do it.

-Simon Sinek

Tommy Kramer’s Two Questions

To help you get started on defining radio’s WHY for the 21st Century, I’d like to share two questions that GOODRATINGS Strategic Services consultant Tommy Kramer recently asked his readers:

  1. What do you have that I can’t get everywhere else?
  2. What do you have that I can’t get ANYWHERE else?

Tommy says that coming up with the answers to these two questions will decide your future.

I would add that working through these two questions might just uncover your new WHY for the radio industry in the 21st Century.

Simon Sinek says “When you compete against everyone else, no one wants to help you, but when you compete against yourself, everyone wants to help you.” When you develop your WHY you do what you do, it will give you the strength to keep going and a desire to keep improving with each passing day.

My Question for YOU

What do you think radio’s WHY should be in today’s world?

Please post your thoughts in the comments section on today’s blog. If we can get enough people to think about our industry’s WHY, the what and how of doing it will naturally fall into place.

If you think you can or you think you can’t, you’re right.

-Henry Ford

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The Thrill is Gone

Like many readers of this blog, I grew up listening to AM radio. It created for me the passion and desire to pursue a radio career while I was still in grade school. As a young child, I remember my parents having a least one radio with the FM band, but scanning that band produced not a single radio station to be heard.

FCC Broadcast Station Totals

Looking through the FCC database, I found that the commission’s Broadcast Station Totals reports begin with December 1968, the same year that my professional radio career began. In America, that report listed 4,236 AM Commercial radio stations on the air with only 1,944 FM Commercial radio stations, and even adding the 362 Education FM radio stations only gets you to about half the number of AM stations.

On March 31, 1994, FM Commercial radio stations outnumbered AM Commercial radio stations 5,001 to 4,933; plus, there were now 1,674 FM Educational stations on the air.

To put things in perspective, when the number of America’s FM signals equaled the number of AM signals, 75% of all radio listening was estimated to be occurring on the FM band.

Today’s AM/FM Radio Landscape

The FCC just issued its March 31, 2021 Broadcast Station Totals report and it shows the number of AM Commercial radio stations is down from 27 years ago by 387 stations; now just 4,546 stations, and FM Commercial radio stations are up 1,681, for a total of 6,682 stations. In addition to the commercial stations, there are now another 4,213 FM Educational radio stations and 8,521 FM Translators & Boosters along with 2,114 Lower Power FM radio stations. That’s a grand total of 21,730 FM signals on the air in America compared to 4,546 AM signals.

What percentage of listening would you estimate is now taking place to AM versus FM in the 21st Century? I’m thinking it’s probably north of 99%.

All Digital AM Authorized

October 27, 2020, the Federal Communications Commission (FCC) authorized ALL-DIGITAL AM RADIO in America. The commission’s ruling says that all “AM broadcasters will be able to voluntarily choose whether and when to convert to all-digital operation from their current analog, or hybrid analog/digital signals.”

A quick check of the FCC database shows only 245 AM radio stations currently broadcasting in hybrid analog/digital; six of which either had their license cancelled or were silent.

The issue for the consumer will be having to buy new AM Digital radios, since all their existing AM radios will not be able to receive an all-digital AM signal.

No to Digital AM

Frank Karkota wrote a guest column for Radio World titled “No to Digital AM” in which he listed six reason why he was opposed to the digitization of the AM band. Let me summarize them for you:

  1. Building an AM Digital radio is too complicated
  2. The technology is becoming too complex
  3. Because of the remarkable advancements in analog AM receiver technology, there’s no need to digitize the AM band
  4. The poor recovered audio quality of digital radio
  5. The listening audience will lose some listening options
  6. Most car radios will need to be replaced to permit digital reception

I’m not an engineer, so I’ll leave it up to technical readers to weigh in here, but as a non-engineering radio guy, why would I go through all those hoops when I can simply click on an aggregator like TuneIn.com and stream any radio station I want to listen, to via my smartphone?

The biggest reason why this is a bad idea is that people are not going to spend money buying a single use device to listen to a radio station when there are so many ways to listen to virtually any radio station in the world today on so many other multi-use devices.

Radio’s Biggest Problem

Back in August 2017, I wrote an article titled “Coal Ain’t Coming Back & Neither is AM Radio” which had hundreds of people commenting.

This month Bloomberg reported “Coal Is Getting Even Closer to the End of Its Line” saying that the United States is on track to use less coal than at any point since the 19th century. This graph paints the picture:

Now look at the change in the number of AM radio stations in America over the past thirty years:

Whether we’re talking about coal or AM radio stations, the trendline is spiraling downward.

Radio’s biggest problem, AM and FM, is that it suffers from a deficit of imagining the lives of its listeners. Radio broadcasters are in the communications business, and yet, they are too focused on saving the past instead of focusing on the future of communications.

“If I had asked people what they wanted, they would have said faster horses.”

-Henry Ford

“You can’t just ask customers what they want and then try to give that to them.”

-Steve Jobs

Both Ford and Jobs understood that to win the heart of the customer, you needed to create a future they never even knew they wanted.

The future for radio is creating great audio programming that has people wanting to receive it no matter what platform it is delivered on.

Stop Your Air Talent from Multi-Tasking

It saddens me, that today the radio industry is asking their air talent to multi-task on multiple radio stations. Could you imagine the NFL deciding that their quarterback could also act as the team’s coach at the same time? Never!

The short answer to whether people can really multitask is no. … The human brain cannot perform two tasks that require high-level brain function at once. Low-level functions like breathing and pumping blood aren’t considered in multitasking.

-Chris Adams, ThoughtCo.com

Listen to what a difference it makes when an air personality can focus on one station, one market and communicate one-on-one with the listener, as KHJ Midday Personality Charlie Tuna does in this air check (Courtesy of the Charlie Ritenburg aircheck collection). Click HERE

This is not a morning show air check, but a midday one for Charlie Tuna. Notice how integral he is to the pace and flow of the radio station. He provides a link to the Los Angeles community and companionship to the listener. The on-air production is tight and smooth. It’s a style of radio so hard to hear anywhere today.

It’s the style of radio that launched my 50 year radio career.

Memo to the Radio Industry

 It’s time to bring back the thrill

of listening to Great Radio.

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Out, damn’d spot!

28Lady Macbeth says this line in Act 5, scene 1. The line has made for ironic jokes and marketing schemes. The Bard’s lady, where the blood spot becomes dyed into her conscience and where the king and queen persist in imagining that physical actions can root out psychological demons, Shakespeare’s Macbeth is an exposition of how wrong they are.

This all came back to me when I read about former CBS Radio President Dan Mason speaking at Radio Ink’s Hispanic Radio Conference in March about how many radio spots should run in a typical hour of radio programming; his answer was 8 to 10 units. Whereas the typical radio station these days is running 14, 16, 17 (or more) units every hour and Mason says that’s probably too much.

On Twitter Radio Ink tweeted “Is Dan Mason correct? You should be playing 8-10 units per hour.” I tweeted back “YES.” To which Dan Mason tweeted back “@DickTaylor @RadioInk not easy to execute in today’s environment but this is the goal we have to work toward!” And to which I then responded, “@radiodanmason @RadioInk Agreed. No one ever said it would be easy. But moving in this direction needs to be the industry goal.”

Then the next day Radio Ink printed this headline as their lead story “We Would Pay More For Shorter Stopsets,” from ad agency executives Blair Overesch and Jeff Chase of Walz Tetrick Advertising in Kansas City. Their clients include the World Champion Kansas City Royals and Dairy Queen. They bemoan how their clients become lost in long horrible-sounding commercial clusters.

The Birth of the Radio Ad

When the commercial radio was born in 1920 the only way operators of radio stations could figure out to support the expenses that came with running a radio station was by the sale of radio advertising. They copied the model of newspapers and magazines of that time. And here we are almost a hundred years later and nothing has really changed in this business model, except the birth of the Internet. The Internet of Things (IoT) has been the big disruptor of just about every business model.

Look Outside Your Industry for New Ideas

It’s said that Henry Ford came up with the idea of the automobile assembly line when he visited the meat packing plants of Chicago. There he witnessed how cows were disassembled. It was done on a disassembly line. And so the story goes that Ford had an “Ah hah moment.”

Radio needs an “Ah hah moment” when it comes to its business model. But what could it possibly be? Where would we go, as an industry, to find this new business model? Not in the world of ad supported media, that’s for certain.

Casino Gambling & Changing Business Models

Casinos in America started in Nevada in 1931. New Jersey would be the second state in America to legalize casino gambling in 1978. So for almost half a decade, Nevada – Reno & Las Vegas – had a monopoly on this type of gambling activity. New Jersey would also enjoy a boom from casino gambling during the 80s and early 90s as the seaside resort saw a new casino opening up every year. Casinos made money on gambling. Period.

What changed was the wave of states legalizing casino gaming all across America in their search for new revenue sources. Vegas and Atlantic City would find that trying to live off of just gambling handles was quickly eroding. Their business model was being disrupted.

The Most Profitable Resort in Las Vegas

Can you guess which Las Vegas casino makes the most money? It’s not located in the heart of the “The Strip” where thousands of visitors walk by every day. It’s actually Wynn Resorts.

Billions of dollars move through Las Vegas every year. Casino operators do everything they can think of to have visitors gamble away as much of their money as possible while they are in Vegas. But Wynn changed the casino business model for his properties. Steve Wynn decided that with the explosion of casinos across America, he needed to move in a new direction. He needed to become less dependent on high rollers sitting at gaming tables for the bulk of his revenue. Non-gaming activities at Wynn’s Wynn & Encore Casinos account for 67% of the company’s revenues.

Focused On the User Experience

Steve Wynn is totally focused on the visitor or user experience when he builds a casino. He gives his full attention to every detail. This type of focus can be seen in the Bellagio, a casino Steve Wynn built over 16 years ago and has since sold. It’s number two in revenues in Vegas.

Becoming Less Dependent on Advertising

The smart radio operator will take a chapter from Steve Wynn’s playbook and move their stations off of full dependency on the ad supported business model. Steve Price at Townsquare Media appears to be doing just that with ad supported radio at the hub of their strategy. Price said he wants Townsquare to be the largest local digital content business, the largest live event business, and the largest digital marketing services business in their radio markets. Chairman and CEO Steven Price says, “We believe our diversified strategy remains sound, demonstrated by the stability of our local advertising business and the outsized growth in our other businesses.  In addition, we further diversified our business, with approximately half of revenue now derived from sources other than the sale of terrestrial radio advertising.”

Monetizing a Media Company Beyond Advertising

It’s not about throwing the baby out with the bath water. Steve Wynn didn’t abandon gambling. In fact, Steve Wynn makes more money than every other casino operator in Vegas by doing everything just a little bit better than his competitors – both in Vegas as well as elsewhere. He just unhitched his properties from total dependence on gambling revenues. I believe Steve Price is pursuing a similar path as Wynn with his media company. I believe that Townsquare can run 8 to 10 radio ads in an hour and make money. Moreover, make money for his advertisers by putting them in a radio spotlight and increase TSL and audience ratings by making his listeners happy with the proper balance of advertising and entertainment. Done in this way it is a win-win-win.

What’s your plan?

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Radio’s NOT Like it Used to Be

Marconi Wireless(Spoiler Alert: It never was, starting with day 2) When I hang out on social media – or imagine this, have a real face-to-face conversation – with my radio contemporaries that grew up listening to radio in the 60s & 70s, the conversation invariably turns to “radio’s not like it used to be.”

From the moment of its birth, radio has been one long experiment.

It took hold when Marconi International Marine Communication Company, Limited began to make money with wireless over-the-air transmissions. Marconi was in it for the money. He really cared little how it all worked. He wanted to build more powerful transmitters and cover greater distances. He didn’t sell his technology but leased it. He also trained and employed the wireless operators who used his equipment.

So, imagine you’re a wireless operator on Christmas Eve 1906 and you’re at sea monitoring your dots & dashes – all that you’ve ever heard come through your headphones – when at 9 PM EST on Christmas Eve you suddenly hear a human voice coming through your headphones. Then singing. Then a violin playing. And finally a man speaks a Christmas greeting. What would you have thought to yourself?

The man who did this was Reginald Fessenden. In addition to being a brilliant scientist, he also sang and played the violin. From his transmitting station in Brant Rock, Massachusetts his first wireless transmissions of voice and music were heard up and down the Eastern seaboard. He would repeat this again on New Year’s Eve.

In the United States the final commercial Morse code transmission was sent on July 12, 1999. The last message sent was the very same as the first message sent by Samuel Morse in 1844, “What hath God wrought”, and the prosign “SK”.

What brought this all to mind was a news item that has been circulating recently about a survey by Morgan Stanley that was released by Quartz.

The survey is a positive for radio. In a survey of 2,016 American adults taken last November, AM/FM radio use was #1 with 86%. Number two was YouTube, number three was Pandora and number four were “TV music channels”.

The first four were all advertising supported and thus free to the user. The fifth on the list was also the first paid service; SiriusXM radio (tied with iHeartRadio).

So one thing that hasn’t changed is that most people would rather access free-with-ads entertainment versus paid-without-ads entertainment when given a choice.

However, this survey has spurred a lot of discussion in the radio world. Broadcasters are divided on what this survey is really telling us. Owners/operators are saying that it shows “radio ain’t dead.” Broadcasters that have been consolidated out of the industry are saying “not so fast.” And to some extent, they’re both right.

As Mark Ramsey pointed out on his blog, “86% of respondents saying its part of their usage routine” is what radio folks would call “reach” and does not really address frequency of usage or “time spent listening;” two key radio metrics.

Conspicuously missing from the Morgan Stanley list is a service I use and enjoy TuneIn radio. I wonder why?

So where does that leave us?

I think it’s a twist on one of Henry Ford’s most famous quotes:

Whether you think radio is or is not, you’re right.

Radio owners/operators have it within their power to create the future for the radio industry. So what’s it going to be?

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