Tag Archives: Mary Meeker

What is The Future of Radio?

Ten years ago, I was in Las Vegas presenting at the Broadcast Education Association’s annual international conference. My presentation was called “This Changes Everything.” It outlined things that would be changing in our world in the decade to come.

“Prediction is difficult…especially about the future.”

-Yogi Berra

Remembering 2011

2011 was the beginning of the second decade of the 21st century, and already we were witnessing a world where mediated communication was social, global, ubiquitous and cheap. It was the beginning of the social media revolution.

Groupon, which came into existence only a couple of years earlier, grew its revenue to over $1.6 billion in 2011. And yet, the doomsayers were already forecasting its demise. As this chart shows, revenues for Groupon did drop below 2011, but not until 2020.

A contributing factor to this downward revenue trend for Groupon might be that it’s estimated that only about 1% of Groupon users ever became regular customers of the businesses whose coupons they used.

TWITTER

A decade ago, Twitter was the most popular social media platform with more Fortune 100 companies using Twitter than any other social media platform.

As we begin the third decade of the 21st century, we know that the previous decade will now be known most for the impact of Facebook, not Twitter, when it comes to social media dominance.

Media Adoption Rates

In 1920, the adoption rate for commercial AM radio was incredibly fast, only to be eclipsed by the introduction of TV. However, both of these two forms of communication would be dwarfed by the adoption rates of the internet followed by the use of mobile internet made possible by the smartphone.

These last two brought about revolutionary changes in how we communicate.

In fact, the famous Maslow “Hierarchy of Needs” pyramid, might be updated to look like this:

How the World is Connected to the Internet

At the beginning of the second decade of the 21st century, 85% of the world’s population connected to the internet via wireless mobile devices.

To put that into perspective, only 80% of the world was connected to an electrical grid in 2011.

Today, 92.6% or 4.32 billion people connect to the internet wirelessly.

Top Three Gadgets of All Time

A decade ago, The History Channel came out with a list of the “Top Gadgets of All Time” and they were:

  1. Smartphone
  2. Radio
  3. Television

Hat Tip to Mary Meeker

None of these things were a secret, but it was Mary Meeker that tied all of these changes together in her presentation “Internet Trends 2011.” Her presentations are worth your time to view. The most recent one being 2019, before COVID19 disrupted everything. You can view that presentation HERE

What we do know is COVID19 took all of the changes that were slowly taking place and accelerated them dramatically. Think “warp speed.”

The big three takeaways from 2011 were:

  1. Every media consumer is now a media producer
  2. Smartphones are changing the world of mediated communications
  3. Media is now social, global, ubiquitous and cheap

“If you don’t like change, you’re going to like irrelevance even less.”

-General Eric Shinseki, retired Chief of Staff, U.S. Army

What Technology Might a Baby Born Today, Never Use?

Let me throw out some thought starters for you to consider. Please feel free to add to this list.

  • Wired home internet
  • Dedicated cameras
  • Landline telephones
  • Slow-booting computers
  • Dialup Internet
  • Hard Drives
  • Electric typewriters
  • Movie Theaters
  • Computer Mouse
  • Remote Controls
  • Desktop computers
  • Phone numbers
  • Prime Time TV
  • Fax machines
  • Optical disks
  • Record player
  • Cassette player
  • CD Player
  • VCR or DVR
  • Radio
  • ?????

“My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary. Sure, it was great to make a profit, because that – was what allowed you to make great products – but the products, NOT THE PROFITS, were the motivation.”

-Steve Jobs

So, What’s the Future of Radio?

In 2011, one hundred college students were surveyed about what they believed the future of radio was, here were their top three positive comments and their top three negative comments:

POSITIVE COMMENTS

  1. Radio will re-invent itself. It is always evolving.
  2. Radio has a bright future as long as there are cars. It’s the first choice for drivers.
  3. Satellite Radio will expand as subscriptions become cheaper.

NEGATIVE COMMENTS

  1. Devices are coming out that will allow iPods and MP3 players to be played in cars.
  2. Smartphones will gradually take over radio entertainment.
  3. The only time people listen to radio is in their cars. Even then, they have CDs & MP3s.

Radio’s Car Radio Paranoia

Then Fred Jacobs came out with a blog this week about the seemingly bleak future for AM/FM radio in cars. You can read that HERE

At the annual CES (Consumer Electronic Show) Fred’s been asking about the future of car radio every year, and noticed that more recently auto manufacturers are reluctant to give a direct answer if there might come a day when AM/FM car radios won’t be standard equipment.

For Elon Musk and Tesla, that day is already here.

How to Build Brands

Ernest Dichter is known as the father of motivational research. Over 50 years ago he did a large study on word-of-mouth persuasion that revealed the secrets of how to build brands. Dichter said there are four motivations for a person to communicate about a brand:

  1. Product-Involvement: the experience had to be so novel and pleasurable that it must be shared with others.
  2. Self-Involvement: people want to share the knowledge or opinions, as a way to gain attention, have inside information, or assert superiority.
  3. Other-Involvement: a person wants to reach out and help to express neighborliness, caring or friendship. They are often thought of a “brand evangelists.”
  4. Message-Involvement: the message is so humorous or informative that it deserves sharing.

“Win the hearts of the people, their minds will follow.”

-Roy H. Williams

So, if you are in the radio business, OR are a radio listener, the question you need to honestly ask yourself is:

How does your brand measure up?

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F’ing With the Magic

Those that know me, know I don’t use profanity. But former radio CEO Mel Karmazin, upon learning about Google’s automated advertising sales algorithm, verbalized what every nervous media and technology CEO was thinking when he said to Sergi Brin, Larry Page and Eric Schmidt “You’re fucking with the magic.” I read this in Ken Auletta’s 2009 book titled “Googled: The End of the World as We Know It.”

Media Advertising – The Last 10 Years

If we measure media advertising as a percentage of GDP (Gross Domestic Product), we see that in the last decade, media advertising in the United States was down 25% according to the Progressive Policy Institute. This think tank is reported to do some of the best research that uncouples advertising expenditures from the rest of the economy.

What caused this drop? Low cost digital ads, as compared to advertising rates in traditional media, what many of us used to call trading traditional media dollars for digital dimes.

Unfortunately, as traditional media, especially print, was seeing its advertiser base disappear, it compensated for fewer advertisers by raising its prices. Television did this too. They were assuming they held an impregnable position with advertisers. Unfortunately, they completely ignored the digital reality exploding all around them.

Radio’s Expansion

Similarly, the radio industry went about over-populating the AM and FM broadcast bands without acknowledging the growth of digital alternatives. The FCC’s “MM Docket 80-90” added over 700 new FM radio stations in the first three years after the law took effect in 1987. Then LPFM (Low Power FM radio signals) were added to help AM radio stations, as well as to provide local non-profit radio stations to communities that had no local radio service.

If that wasn’t enough, radio broadcasters began to embrace HD Radio (digital radio signals) when they learned that the same law that allowed for an AM radio station to rebroadcast its programming on an FM signal also allowed HD Radio broadcasts to be rebroadcast on an analog FM signal.

To be clear, in 1927 there were 705 commercial radio stations on-the-air (all on the AM band and most with transmitter power of under 1,000-watts). Today we have 25,819 radio stations (21,209 FM / 4,610 AM).

While all of this was going on at a frenetic pace, no one was paying attention to the 800-pound elephants in the room aka Facebook, Google, and Amazon.

Time Spent vs Ad Expenditures

It stands to reason, that the more time a person spends with a particular form of media, the more likely they are to be exposed to more of the advertising content it runs.

Ten years ago analyst Mary Meeker showed in her annual “State of the Internet” slide show, how things were trending negatively for traditional media.

For print, our media attention in 2010 was only 8%, but print commanded 27% of ad dollars. By 2018, our print attention had dropped to only 3%, and print’s ad dollars fell to 7%.

For TV, in 2010 it garnered 43% of our media attention, and commanded 43% of ad dollars. By 2018, both attention and ad dollars had fallen to 34%.

In 2010, for radio, we gave this medium 16% of our media attention and it collected 11% of the ad dollars. By 2018, our attention had fallen to 12% and radio’s ad dollars slipped to 8%.

Where did those ad dollars go? To digital media, as this Mary Meeker chart clearly shows.

More specifically, to mobile digital media.

In 2010, the smartphone in your pocket took up about 8% of our media attention and a paltry 0.5% of ad dollars spent. But by 2018, mobile digital media was commanding 33% of our attention and collecting an equal 33% of ad dollars, soon to be eclipsing TV in both metrics.

Too Little, Too Late

It’s easy to look back 20 years into the beginning of the 21st Century, and say what should have been done, but the fact of the matter remains that traditional media companies were in denial. The denial of the coming digital media world wasn’t just in the ad-supported mediums such as print, radio and TV, but also in companies like Kodak, which actually invented the digital camera in 1975, but whose leaders were in denial about it being the future of photography, and worried about cannibalizing its lucrative print film business.

Culture eats strategy for breakfast.

-Peter Drucker, legendary management consultant

Radio’s golden assets were its radio personalities and the relationships they built with the listeners. In the rush to expand, and appease shareholders who wanted accelerated growth, radio owners killed their “golden goose,” while enlarging its nest.

Radio continues to jettison the very people that connect its stations with their community of license.

Simon Sinek said, “People don’t buy what you do; they buy why you do it. And what you do, simply proves what you believe.”

For me, radio was a passion to make something great come out of a person’s radio speaker. It’s why I made radio broadcasting my career and why I went on to teach broadcasting at a university. It was my passion to create great radio!

What is radio’s WHY today?

I think that’s the question the industry needs to ask itself.

“If you keep your eye on the profit, you’re going to skimp on the product.

But if you focus on making really great products, then the profits will follow.”

-Steve Jobs

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Remember When Radio Was Agile?

Have you heard about the latest management movement?  It’s called “Agile” (but it can also be called “Scrum”).

Actually, to be more accurate, there’s “management” and then there’s “Agile.”  They are not one in the same.  Another way to picture them is one is a vertical style of management and the other is a horizontal style of operating.

The vertical style is familiar to anyone working in one of today’s highly consolidated public radio companies that own hundreds of stations.  The top of the management pyramid says “jump” and the troops respond with “how high?”  You may also find that the company circulates a “Best Practices” manual and wants every station to implement it even though a person on the front lines may wonder if these are “best practices” in their particular case.

The military model was the genesis of the vertical style of management.  New York City’s tall vertical skyscrapers are literal structures of top-down management.

Then I started reading about Agile.  Agile is a horizontal mindset.  Everyone in a company is working towards the same goals and on an equal plane.  The planning and execution is a shared endeavor all designed with one goal in mine and that is to delight a customer.

While both vertical and horizontal styles are business models and the purpose of a business is to create a customer (and ultimately a profit), the radical difference is vertical puts that profit goal front and center and has everyone focused on achieving that goal.  The horizontal style says if we delight our customers, then the profits will follow.  The customer is front and center and the focus of everyone who works at the company.

I’ve worked with couple of the big consolidators and I’ve heard the CEO’s message of how much the stakeholders had invested in the company and how we all needed to be focused on reaching or exceeding our goals.

But that’s not the style of radio I entered.  Back in my early days, the radio station; often owned by folks who lived and were active in the community, the focus was on our listeners and our advertisers.  Everyone in the radio station worked towards the same goals of delighting our two constituencies.

We didn’t call it “Agile” or “Scrum” but doing GREAT radio and operating in the public interest, convenience and/or necessity.  OK, not to get too Pollyanna, there was a vertical structure of sorts – a GM, PD, SM – but we all worked side-by-side in the same building and everyone did whatever was needed to be done to delight our customers.  It was a team effort.  It was a horizontal style of operating.

What changed was the Telcom Act of 1996.  That new law would change the face of radio through massive consolidation of radio stations.  All of these little horizontal operating enterprises would be stacked one on top of another until we had a vertical style of operating.  Now a group of folks would declare they were “the adults in the room” and start passing out thumb drives filled with spreadsheets full of revenue goals.

Nowhere were there discussions of delighting the customers.

Tim Cook, CEO of Apple, has made it abundantly clear that Apple is not always going to do things that simply fatten the bottom line and that if you are an investor in Apple that doesn’t like that way of operating, maybe you should invest your money someplace else.  Apple is going to delight the customer  – as Steve Jobs so simply stated – by making insanely great products.

How’s that focus on the customer working out for Apple?  Very well, thank you.  Apple has posted the largest net quarterly profit in history. Not in just Apple’s history but in the history of the world.

Radio is a fabulous business!  Radio entertains, informs and is there in times of emergencies to hold a community together.  But radio performs best when it is operated horizontally and not vertically.

Mary Meeker in her most recent “Internet Trends report at Re/Code” had a slide in her 180-slide deck that spoke most passionately I think to this concept of operating horizontally.  That slide was titled “Diversity Matters….It’s Just Good Business” and here is what the body copy of the slide said:

            “One of the things I have learned about effective decision making is that the best decisions are often made by diverse groups of people.

Saying or hearing these words is magic…..

‘That’s really interesting.  I had never thought of that way before.  Thank you.’”

That sure sounds to me like Mary was making a plea for companies to re-think how they operate and level the playing field by moving to a horizontal style of operating.

The reason the radio industry was so attractive to Wall Street investors was because it was a high cash flowing business that appeared easy to operate.

My roller skating coach used to tell me “Dick when you make it look easy, then you’re doing it right.”  Radio used to be doing it right.  It’s really a lot harder than it looks.  It’s time to go back to that way of operating.

OR – you can continue doing things the way you did last year and watch “flat revenue growth be the new up.”  Doesn’t sound like the radio industry has much to lose by changing their ways.

The good news is there are radio operators who are returning to the business that see the opportunities in the horizontal approach to radio station operations.  It’s a movement that will not only be good for the radio industry but the listeners and advertisers served by the industry.

It’s called Win-Win-Win.

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