Tag Archives: Paul Harvey

April 10, 2022 · 3:00 am

Less Is More

When I was a market manager for Clear Channel, the company president introduced a new concept for reducing our commercial load, he called it “Less Is More.” It sounded good on the surface, however instead of reducing on-air clutter it introduced shorter length commercials. Each of my radio stations now aired ads that were as short as 5-seconds down to 1-second in length. This meant more ads could be run in a spot break. For example, the time it would take to run four minute length commercials, with Less Is More stations could now run six half-minute commercials or twelve 15-second commercials etc. Listeners don’t consider the length of a commercial break, but the number of different elements that air in a break.

Radio Commercials

If there’s one thing radio listeners tend to always agree on, when it comes to improving the radio listening experience, it’s reducing the number of commercials. That means the number of ads that air in a single commercial break, as well as the total number ads broadcast each hour.

Clear Channel recognized this listener issue, but by introducing shorter length ads, the “Less Is More” initiative added more elements to each stop-set. To the radio listener, the amount of clutter increased and in essence, made their favorite radio stations less listenable.

Commercial Free Radio

It was in 2008, when New York’s CD 101.9 WQCD dropped its Smooth Jazz format to switch to playing rock music with the new call letters WRXP.  Not finding any radio station in the greater New York City area that programmed the Smooth Jazz format, I would search online and discover Sky.FM.

They offered more than one flavor of Smooth Jazz music programming and it quickly filled my appetite for this musical genre. They only stopped the music twice an hour, once to tell me that I could hear this music without interruption by becoming a premium subscriber and the other announcement was about how they were looking to hire more IT personnel.

Those were the only two announcements and they lasted about 30-seconds in length, but over time, it was like Chinese water torture; so, I went online to find out how much it would cost to become a premium subscriber, learning it would cost me only $49/year. But that wasn’t all, that fee also increased the audio quality of the stream .

I was hooked and remained a subscriber, only leaving the service when I got my first Amazon Echo and Radio Tunes (formerly known as Sky.FM) wasn’t available on the service.

Recently a reader of this blog, told me that he listened to commercial free Radio Tunes on his Amazon smart speakers and I’m a subscriber once again.

My wife Sue loves Pandora and for Valentine’s Day 2022, I bought her Pandora Premium. This is their top service, it’s commercial-free and offers listeners the ability to ask for any song and immediately hear it. Plus she still can listen to any of Pandora’s wonderfully curated channels and skip any songs she doesn’t like.

Repetition Breeds Acceptance

I often hear people say they get tired of hearing the same songs over and over. Yet, successful radio stations often employ strategies that can seem counter-intuitive. They achieve the more variety music position by playing fewer songs. They reach a larger audience by targeting and focusing on a more narrowly defined audience.

By subscribing to Pandora and Radio Tunes we didn’t eliminate music repetition, we eliminated the programming elements that interrupted the music. It’s the music repetition of our favorite songs that actually attracts us.

In fact, I remember when Sirius and XM were still two separate subscription satellite radio entities, the most listened to commercial free music channels on both of them were HITS 1 and Top 20 on 20; both of which had the highest music repetition.

Dave Van Dyke, the President & CEO at Bridge Ratings Media Research, said that globally there are 3.6 music streamers for every paid subscriber. So, don’t completely count commercially supported radio out yet.

Great Radio Ads

When I was managing radio stations in Iowa back in 1999, my two sons came to visit. Before they left, they made what you might think is an unusual request, they wanted to know if I could make copies of the radio commercials my stations aired and put them on a cassette to bring back with them to New Jersey.

I also remember being at a house party and the radio station providing the music entertainment was largely background, until they stopped the music to play some commercials, and everyone would hush the conversation so they could listen. Yes, the radio ads this station created were that good.

I’m a graduate of The Wizard of Ads Wizard Academy in Austin, Texas. Roy H. Williams has been teaching radio folks for years about what makes an effective radio ad. Following Roy’s lessons, my advertisers have been very successful.

Radio commercials aren’t bad.

Bad radio commercials are.

Radio’s secret ingredient is the radio personality. Great radio talent has been effectively telling their listeners about all types of businesses, products and services for decades.

I need go no further than radio’s greatest salesman, Paul Harvey.

I own two BOSE Wave Radios because of Paul Harvey. What makes this so amazing is that I listened to him broadcasting on an AM radio station, but Paul was selling me a radio that would play FM stereo and CDs with the highest fidelity.  

While Paul Harvey was a news commentator, he called himself a salesman. His audience knew that he used the products and services he advertised. Harvey personally wrote the radio commercials he would broadcast.

Among his many accolades, the one Paul Harvey was most proud to have received was being named “Salesman of the Year.”

Paul Harvey loved his advertisers, saying “I am fiercely loyal to those willing to put their money where my mouth is.”

Creating great radio, means leveraging the power of the medium to deliver an engaged audience for its advertisers. That means reducing the number of ads in a commercial cluster and reducing the number of ads per hour, making sure every ad is about the listener and their life.  

Tomorrow has always been better than today.

And it always will be.

-Paul Harvey

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December 15, 2019 · 3:00 am

Why?

Why why whyIt’s not unusual for little boys and girls to ask the question “Why?” They ask it a lot.

Why? Because they want to learn, to know why things have to be that way.

But what happens to the person who is asked the why question?

They are forced to think about it, sometimes even reassess the answer they knew and wonder if it was really the right answer or merely a convention. In other words, is the reason simply because, it’s the way something has always been done?

It causes one to consider that maybe things didn’t really need to be done that way, and could be done differently.

What If?

While why questions open our minds to new thoughts and opportunities, “what if” questions are like a fork in the road. They can take us in new directions.

For example, “What if radio stations only aired a single commercial in a break?” Or, “What if all radio commercials were delivered live by the radio personality?”

Edison Research revealed at this year’s Radio Show, that people would change radio stations or stop listening all together due to basically one of three reasons: 1) forced change, 2) engagement and 3) commercials.

Forced change was defined by a loss of signal or a bad signal. Engagement was described as boredom, didn’t like the song, the personality or subject matter. And I think everyone understands the tune-out factor of commercials to radio listeners.

Commercials

Why do commercials have to be a listener tune out? What if commercials caused radio listeners to lean into their speakers and pay close attention?

My first personal experience with doing just that was when I listened to Paul Harvey News & Comment and he said, “Page Two.”

Paul Harvey did his sponsor’s commercials live. He did them with passion and enthusiasm. The result was people listened, and even more importantly, they bought the products and services he told them about.

Podcasts

I’ve noticed that podcasters usually have a single commercial in their program and is usually delivered by the host of the podcast. What if that’s the reason podcast commercials deliver such powerful results and more advertisers are considering using podcasts as part of their advertising program.

Same, but Different

In my radio management career, I had the opportunity to live and work in different parts of the country with some fabulous radio professionals. The radio business is an identical business everywhere in America, but back in the days before consolidation and the concept of “Best Practices,” radio people tended to innovate the creative process in completely different ways. It’s one of the reasons many, my age, loved to DX AM radio signals after sunset.

The Innovators

I believe some of the best innovators for setting the course for radio in 2020 are working for you right at this very moment. They aren’t necessarily the “A players” or even the most focused ones, but they are the ones that are asking “Why & What If” and are continually looking for new problems to solve.

If you create a culture within your radio station that encourages that kind of inquiry, a culture that continually asks “why” do we always do things this way and “what if” we did things differently, radio for the 21st Century will begin to be born.

If you don’t, your business is ripe for disruption by another media innovator.

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December 8, 2019 · 3:00 am

Has Radio Become a Commodity?

commoditiesBy definition, a commodity product lacks a unique selling point. Two examples of what I mean are lettuce and pencils. No one has a brand favorite of either. To the consumer of both, they’re all the same. Commodities are interchangeable with other products or services, widely available, and therefore undifferentiated except maybe by price.

How about Radio?

Recently, an administrator of a radio group that I’m a member of on Facebook posed this question to the group “Rick Sklar once said jocks are like spark plugs and can be replaced with another one. What do you think?”

Now for those readers that may not be familiar with the name Rick Sklar, he became program director of WABC – 770AM in New York City in 1963. With WABC’s clear channel signal, a tight playlist that targeted teenagers and air talent which included Dan Ingram, Ron Lundy, Harry Harrison, Cousin Brucie, Chuck Leonard and Charlie Greer, Sklar made Music Radio 77 into the most listened to radio station in North America from the mid 60s to the late 70s.

Needless to say, the comments by former air personalities in the group took issue with this “spark plug” analogy, me included.

Unique Air Talents

One-of-a-kind radio personalities built radio into the listener favorite that it’s enjoyed for nearly a century. More recently, there’s Rush Limbaugh, Howard Stern (who said he was influenced by Arthur Godfrey), Paul Harvey, Super Jock Larry Lujack, Robert W. Morgan, The Real Don Steele, Dave Maynard, Joel Cash, Dale Dorman, Larry Justice, Jackson Armstrong, Salty Brine, Bob Steele, Dickie Robinson, Danny Neaverth, John Records Landecker, J.J. Jeffrey, Bill Bailey, Big Ron O’Brien, Don Imus, Bob Dearborn and so many more. Those are just some of the names that inspired me to pursue a 50-year radio career.

Each of these radio personalities is unique and the shows they presented attracted an audience that was loyal to their style of broadcasting. They were anything but, a commodity.

Computer Automation

With the advent of computer automation, the concept of voice-tracking was born. Now a few disc jockeys could be heard on-the-air over a multitude of radio stations across America. Unfortunately, this meant that customizing their radio shows to a particular radio market had to be eliminated and the DJ patter had to be appropriate for all markets the program was airing in. It became watered down and because all big box radio operators were employing the same “Best Practices,” the ownership of the station really didn’t matter as everything began to sound the same.

Contests became nationally oriented, jingles (if there were any) all sounded the same, and playlists, which once reflected regional differences and artists, were now homogenized.

On Air production, which was once an art form in and of itself, was now also computerized. The result being a disjointed, sloppy and anything but smooth radio experience.

The result of all of this was radio being turned into a commodity.

Culture Shock

“Technology is enabling great gains in convenience and diversity,” says Tyler Cowen, professor of economics at George Mason University. “What is being lost is a sense of magnificence.”

He goes on to say

“It is possible we will look back on the present day as a special time when both patterns of cultural consumption could be enjoyed in tandem and enriched (by) each other. But I suspect not. As today’s over-50 crowd slowly passes away, and our experiences fade from collective memory, I wonder if the world might be in for a bigger cultural shock than we currently realize.”

 

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October 7, 2018 · 3:00 am

It Was Always a “Good Day!”

harvey_ozy_1When I started in professional radio, 51 years ago this week, there was a gentleman broadcasting that captivated my attention, his name was Paul H. Aurandt. The radio audience knew him better by his middle name, Harvey; Paul Harvey.

He broadcast six days a week, just like all radio personalities did back in those days. It was a time when all radio was delivered LIVE. Paul Harvey was heard over the ABC Radio Networks with his News and Comment week day mornings and middays. His Saturday noon-time broadcasts were extra special broadcasts that were always sure to surprise and delight his audience of as many as 24-million people a week. Paul Harvey News was carried by 1,200 radio stations in America, plus 400 American Forces Network stations broadcasting all over the world.

Page 2

The first commercial break in each broadcast was clearly announced with the words, “now page 2.” And it caused me to turn up my radio and give Mr. Harvey my full attention as he told me about another great product that he personally used. The ad copy, just like the news and comments, were all crafted by the mind of Paul Harvey.

I bought my BOSE WAVE radio due to Mr. Harvey telling me how wonderful music sounded coming through its speakers and baffle system design. It started me on the path to owning several BOSE products as a result.

Paul Harvey News had a waiting list of sponsors to get on his program. In 1986 his News & Comment broadcasts were rated #1, #2, #3, #4 and #5 in network radio programs when he was the focus of a CBS 48-Hours broadcast commemorating Paul Harvey’s 70th birthday.

Bob Sirott did the profile piece and it showed Paul Harvey as few ever saw him. I encourage you to watch the segment on YouTube by clicking HERE 

Paul Harvey News

On April 1, 1951, ABC Radio Network premiered Paul Harvey News and Comment. His Chicago based broadcasts were often called “the voice of the silent majority” or “the voice of Middle America.”Paul Harvey (2)

Paul Harvey was making so much money for ABC, they added a third daily broadcast to the schedule on May 10, 1976 called, The Rest of the Story. These broadcasts were written and produced by Paul’s son, Paul Harvey, Jr. for its 33-year long run.

While Paul and his son maintained this entertaining feature which was based on true stories, not all critics agreed, including urban legend expert Jan Harold Bunvand.

I know from my own personal experience of the two times Paul Harvey included stories based on my hometown of Pittsfield, Massachusetts, that Mr. Harvey played fast and loose with the facts of the events to tell a good story. It made me wonder how all the other stories I heard might have been so “massaged.”

Iowa

In 2000, I was managing a cluster of radio stations for Connoisseur and Cumulus. We carried Paul Harvey on my 100,000-watt KOEL-FM. It was the only thing, other than local news in morning drive, that stopped the flow of the best in country music.

I remember being in my car at the time Mr. Harvey’s noon-time broadcast came on the air and hitting the scan button to hear Paul Harvey News and Comment on virtually every station my car radio stopped on. In media, that’s called a “road block,” the same program or advertisement, broadcast at the same time on multiple radio or television stations.

$100 Million Dollar Contract

In November of 2000, Paul Harvey had just inked a new 10-year contract with ABC Radio Networks when a few months later he damaged his vocal cords and had to leave the air. It wasn’t until August of 2001 that Paul returned to the air waves, but only with a reduced clarity and vocal presence in his voice.

I remember this very well as I was now back in Atlantic City running a cluster of radio stations, and my AM radio station WOND-AM1400, was the Paul Harvey radio station for South Jersey.

I had been cajoling Mr. Harvey’s secretary in Chicago for months before he lost his voice for customized promotional announcements to be voiced by Paul Harvey to promote his daily broadcasts over WOND radio.

One day in the fall of 2001, a reel-to-reel tape came in an envelope from Chicago addressed to me. It contained my customized, Paul Harvey voiced, WOND announcements. I was thrilled, but just a little disappointed when we played the tape due to the hoarse, raspy sound of Paul’s voice when he recorded them.

Before the end of 2001, Paul Harvey was back to full vocal dynamics.

Touched My Heart

It was after watching the Bob Sirott piece produced for 48 Hours a second time and then sharing my personal Paul Harvey memories with the love of my life, Sue, that I found myself choking up and tearing up about the heartfelt emotional impact that this gentleman from Tulsa, Oklahoma had made on me.

Using only wire copy and his manual typewriter, Paul Harvey crafted a broadcast of words that vividly created in the mind of the listener exactly what he intended. His full vocal range, the power of the dramatic pause and dynamic inflection completed his radio magic, what most like to call radio’s “Theater of the Mind.”

Could you imagine Paul Harvey doing podcasts?

I have no doubt that they would have been as popular as the original SERIAL podcast was from NPR.

Paul Harvey didn’t use any music or sound effects.

Paul Harvey created great radio, that was welcomed into homes all across the globe by his great writing ability and vocal acting talents.

Paul Harvey (3)

Harvey receiving the Presidential Medal of Freedom in 2005

Good Day

Paul Harvey died on February 28, 2009 at the age of 90.

Three weeks after his death, ABC Radio Networks cancelled the entire News and Comment franchise.

At the time of his death, he had less than two years left on his 10-year contract.

Paul Harvey called himself a salesman, not a journalist, newsman or anything else. He loved his sponsors saying “I am fiercely loyal to those willing to put their money where my mouth is.”

He never would have promoted his broadcast as “commercial free,” as he understood that this free, over-the-air medium called radio, was a powerful way to move product for his advertisers and that it was those very folks that paid all the bills for him and the ABC Radio Networks.

Imagine that, radio ads that were as cherished to hear as the rest of the broadcast itself.

That’s the definition of “GREAT RADIO.”

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August 5, 2018 · 3:00 am

Disruption is Everywhere

disruption aheadI’ve been reading the trades, trying to grasp what is happening, and it is all so very confusing. Have you felt that way too? That’s what a period of disruption looks like. Black is white. Up is down. It’s enough to give you an Excedrin headache.

SiriusXM

Jim Meyer, the CEO of America’s only satellite service reported strong growth in Q2. On his conference call he’s reported as saying that despite the surge in technology over the past ten years, AM/FM radio still attracts a big number of listeners. However, he also feels that the radio industry has a problem and it’s their product. He warns that if AM/FM radio doesn’t vastly improve their product, it will be to their own peril.

The feedback I received from my recent article “Radio & Traveling – Then & Now” that I wrote about in “From the DTB Mailbag…” seems to indicate that Mr. Meyer is not alone in that sentiment.

Streaming

Then I read how just halfway through 2018, streaming is growing at a rate that defies mathematical trends. By that, the writer meant when it comes to percentages, they are usually big when the numbers are small but become smaller as the numbers of people engaged increases.

With this area of streaming, we are seeing BOTH the numbers of people who stream growing with the percentage of people who are now streaming.

That’s a trend worthy of keeping you up at night.

Adoption Curve for Smart Speakers

In my university “Process & Effects of Media Classes” I introduced my students to the work of Everett Rogers and his Diffusion of Innovation Curve. Adoption Curve - Everett Rogers

Rogers studied how innovations with farmers in his native Iowa were adopted. He very soon realized that what he was witnessing occurred in all areas when a new innovation was introduced.

The latest research report from NPR/Edison, “The Smart Audio Report” showed we are into the Early Majority part of the curve with the smart speaker innovation.

Good News, Bad News

The smart speaker innovation has the ability to bring radio listening back into the homeEcho at a time when AM/FM radio is no longer the entertainment focus of the vehicle dashboard, replaced by the entertainment center that resembles the touch screen on your smartphone.

Unfortunately, the smart speaker also delivers an infinite world of audio choices and it is not a given that radio will be the benefactor.

Fred Jacobs basically lays out the fact that radio’s established brands such as a Z100 or a WTOP will find their engagement traversing from over-the-air to over-the-stream and onto smart speakers. I know that in my own case I can receive WTOP over-the-air, but atmospherics can play havoc with the signal at times. Not so with listening to WTOP via Alexa.

The best radio brands with strong listener engagement will grow.

Cord Cutting

The latest numbers indicate that cord cutting (eliminating the cable TV bundle) is growing faster than expected. The latest study from eMarketer  says that we can expect people cutting the cord to grow to 33 million Americans in 2018.

Netflix is now more popular than cable TV.

Jim GaffiganThe other night I watched Jim Gaffigan’s 5th Netflix special called “CINCO.” In his standup comedy routine, he hit the nail on the head about why Netflix is more popular than cable TV. Here’s what Jim said:

“Netflix has definitely made watching television with commercials kind of painful. Takes forever. You’re like, “What am I, growing my own food here? All right, Geico, we get it!” And it’s not just the length or the number of the commercials, it’s what the commercials say about the typical viewer of the show you’re watching. “Catheter? Why would–? Reverse mortgage? Back pain? I do have back pain. You know me so well, television show.”

Changing Habits

What we are witnessing in the current period of media disruption is the changing habits of the audience. They now have choices. Lots & lots & lots of choices.

Baseball, still radio’s #1 sport is seeing the decay of its audience to a myriad of choices to watch or listen to the same game. It’s no longer the monopoly it used to be.

But worse, once you’ve developed the Netflix or Alexa habit, going back to any delivery system that delivers lots of interruptions is, as Jim Gaffigan says, “painful.”

Ad Supported Media’s Future

I believe that there’s a future of ad supported media, but it can’t be done the way it’s currently being done. Podcasts understand this better than broadcast.

Amazon Prime is good at airing program promotions before the movie starts, in much the same way that my local movie theaters do.

And who didn’t enjoy hearing Paul Harvey say “page two?” It would be the first commercial break in his news and commentary but we listened. Because Paul was as engaging with his sponsor’s material as he was with the rest of his broadcast.

And thank you Mr. Harvey for making me want to own a BOSE Wave Radio. I now have two of them. However, I now play my Alexa Dots through them.

Life’s Only Constant

My old boss used to always say, nothing stays the same. You are either getting better or getting worse.

And he was right.

Life’s only constant is change.

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February 25, 2018 · 3:00 am

Radio Has an Addiction Problem

listening_to_radioHave you heard the latest? People are addicted to their smartphones. “We now see smartphones as dangerous for young minds,” writes Jean-Louis Gassée in a Monday Note.

More than 30 years ago MIT professor Sherry Turkle postulated that computers weren’t just a tool, but were sneaking into our minds. In doing so, they would change our relationship with the world around us.

Smartphones are Mobile Computers

Turkle would continue her thoughts on this subject in a 1995 book “Life on the Screen, Identity in the Age of the Internet” saying “computers don’t just do things for us, they do things to us, including our ways we think about ourselves and other people.”

Smartphones plus Social Media

When our mobile computers are married to a social media site like Facebook, things get really sticky. Sean Parker, a founding partner at Facebook, wrote about the problem after he left the company saying, “[Social Media] literally changes your relationship with society, with each other…It probably interferes with productivity in weird ways. God only knows what it is doing to our children’s brains.”

Time for Apple to Build A Less Addictive iPhone

The NY Times published an article by Farhad Manjoo that made the case for a less addictive iPhone. Can you imagine someone writing that broadcasters should be making TV or radio less addictive? That watching too much TV or listening to too much radio might be bad for our brains.

Broadcasters today find they have a different problem. They have lost the addictive luster of the past.

The Amazon Addiction

“For many businesses, Amazon is simultaneously a sales channel, a potential service provider and a competitive threat,” says Forrest Research. For broadcasters, Amazon is attacking our retail advertising revenue, by undermining the very businesses we sell to. Today Amazon is the go-to website for retail search, surpassing Google.

Trying to compete with Amazon is a retail challenge. The very retailers’ broadcasters depend on for their revenue.

Retailers measure how well they’re doing by their bottom line.

Amazon is all about increasing top line sales growth. (Wall Street hasn’t demanded Amazon to be profitable yet.)

See the problem?

Trying to beat the Amazon model is a race to the bottom with pricing for our advertising customers.

Free shipping, two-day shipping, lowest prices, biggest selection, customer ratings etc. are among the things making Amazon addictive.

People Made Radio Addictive

Over the years, radio has had personalities that made the medium addictive like Howard Stern, Rush Limbaugh, Dan Ingram, Larry Lujack, Robert W. Morgan, Jess Cain, Dale Dorman, Paul Harvey and many more.

Once upon a time, music formats could be addictive, but today’s access to streaming audio is challenging that beachfront.

Alexa Doesn’t Know My Local Radio Station

My local radio stations are called KISS (WKSI-FM) and WINK (WINC-FM). When I ask Alexa to play either KISS-FM or WINC-FM, I get the Los Angeles KIIS-FM or the WINK-FM licensed to Harrisburg, Pennsylvania.

When I asked Siri the same questions, she couldn’t help me play anything. Siri told me, “Sorry, Dick, I can’t help you with that on your iPhone.”

When your branding is not unique, these new consumer voice activated devices don’t have a clue what you’re trying to ask them. They either make their best algorithm guess or just throw in the towel.

Broadcast Station Call Letters

The FCC (Federal Communications Commission) solved this problem early in broadcasting by assigning each broadcast station its own unique call letters, but broadcasters abandoning those identifiers for branding like Kiss, Froggy, Hot, and others, that are duplicated all across the country, is now a problem in a voice activated world. But it’s not just the brand not being unique, the programming is likewise just as non-unique.

Don’t Be Generic

No one ever became addicted to a generic.

Addiction stimulates parts of the brain that trigger craving and longing, that release habit-forming, feel-good chemicals such as dopamine and endorphins.

Your iPhone does that for you.

You voice activated smart speaker does too.

Broadcasting is show business.

Which do you think stimulates the part of the brain that causes addiction? The show part or the business part?

Answer that question correctly and you’re on your way.

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April 24, 2016 · 4:00 am

History’s Technology Rhyme

Transistor Radio, Car Radio and Rock & Roll

Transistor Radio, Cars & Rock ‘n Roll

I’ve written before how history never repeats itself, but usually rhymes. So when I was reading an article in the NY Times about “Tech’s ‘Frightful 5’ Will Dominate Digital Life for Foreseeable Future” it hit me. Here was how history was rhyming when it came to communications. Fasten your seat-belt, this will get bumpy.

What this article’s author Farhad Manjoo wrote was how Amazon, Apple, Facebook, Google and Microsoft (others include Netflix in this mix) came along at a perfect time to roll up their user base. They were in the right place, at the right time in other words.

Geoffrey G. Parker, a business professor at Tulane University has co-authored a book called “Platform Revolution” where he explains how these tech companies were able to ride the perfect wave of technology change – that being a decrease in the cost of IT, an increase in connectivity and the introduction/fast adoption of mobile phones.

And when it comes to advertising, these companies are in the right place to leverage digital marketing and enjoy most of the benefits of this growth area as well. In fact, since there is a sense that these major digital companies will receive most of the online advertising monies, traditional media – like radio & TV – could see advertising monies return to them.  Let’s hope that happens.

So, where’s the rhyme in this story? Well consider this other time in communications history when television burst onto the scene after the end of World War Two in the 1950s. Radio, a lot of people thought, would cease to exist. Radio’s stars, programs and advertisers, to a large measure, jumped into television. Radio had to find a new act.

Radio was in the right place, at the right time for the birth of three things when TV came along; the transistor radio and the car radio. Both of these technology advancements would be the savior of radio along with one other important development; rock ‘n roll.

Radio was in the perfect place to ride the baby boomer youth wave of rock music, cars and transistor radios. Television grew in large measure by scarcity, only two or three television networks and few TV stations.

When broadband came along, that scarcity factor went poof. Radio now sees its dominance in the car being challenged by a digital dashboard.

The newest radio format to have come into existence – all sports/talk – is now 29 years old. Clearly, innovation in the radio world has stalled.

The good news is radio in America has more reach than any other form of mass media. The bad news is it sees annual erosion of its TSL (time spent listening). This can be fixed. To do this, radio needs to address the very factors that are causing its TSL to erode.

The thing most often heard from consumers about what they dislike about radio are its commercials. Yet, commercials don’t have to be a tune-out factor. No one tunes out the Super Bowl when it’s a blowout because they want to see what other clever commercials might still be coming on their television.

Most radio stations long ago did away with their copywriters. These masters of the spoken word who can craft a story about businesses need to be enticed back into the radio business at every radio station.

The number of commercials in a break needs to be reassessed by the radio industry as well. You can’t kill the goose that lays your gold revenue egg and expect it to continue to lay you golden eggs.

Bring back personalities. They not only sell the music (the record companies need you!); they sell your station and through live reads, your advertisers’ products and services.

Those who remember Paul Harvey News & Commentary will tell you that page two (his first live read commercial) was always something you turned up the radio for. I remember reading Paul Harvey brought in more money for the ABC Radio Network than everything else they did. And everyone loved Paul Harvey’s commercials and bought the products he talked about.

I think retired CBS Radio President Dan Mason said it best when he said this about radio:

“Without community and companionship, we have nothing.”

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February 28, 2016 · 5:00 am

The Day the “Dumbest Idea” Invaded the Radio Industry

shareholder valueLast week I wrote about killing the goose that lays the golden eggs. It was my way of comparing the Aesop fable to the world of American radio. It got a lot of discussion. But I felt that while I touched on how radio operators twenty years ago wanted to harvest all the golden eggs immediately versus waiting to get one each day, by virtue of a last minute insertion into the Telcom Act of 1996 that basically removed the ownership caps on radio, there was – as Paul Harvey used to intone – ‘the rest of the story’ to be told.

The rest of the story involves “the dumbest idea.” I grew up about a decade after World War Two ended. This was the period when America enjoyed an extended period of economic growth and a shared prosperity. By “shared prosperity” I mean it was a time when the workers who produced a product or service shared in the profits produced by the company. Managers and workers would see their income grow together. As everyone’s pay increased, there was more discretionary income to spend. This was the rise of the middle class in America. All boats were rising with the economic tide.

In 1968, I started on-the-air at one of my hometown radio stations while in the 10th grade in high school. I was paid the minimum wage; $1.60 per hour. Did you know that 1968 was the year when someone making the minimum wage had the most buying power for that rate of pay? The equivalent in 2012 dollars is $10.34 per hour. So what happened?

Somewhere in the 1970s things changed. Firms began to focus on themselves. The productivity gains produced by the workers were no longer shared with the workers. Since no one complained, this new way of doing business continued.

The 1980s really saw this new operational style take hold. And as it did, incomes for the middle class stagnated. When the middle class incomes stop growing, the ramifications on the rest of the economy are magnified. Workers no longer have discretionary income to spend. This was initially covered up by women entering the workforce producing two wage-earner incomes. Then when that ran its course, credit cards, second mortgages would keep the party going under false pretenses.

Today we are in a vicious cycle of decline.

What changed in the 1970s was a new idea about what metric should be used to measure the success of a business. Before this new idea was born, Peter Drucker’s measure was the rule. The purpose of a business, said Drucker, was to create a customer. But that went out with leisure suits, the new crop of business wizards would proclaim. What replaced it was something that even GE’s Jack Welch has called “the dumbest idea in the world.”

What was this dumb idea? Increasing shareholder value.

In an effort to offset declining profits and performance, a new operating modus operandi was conceived that the purpose of a corporation is to maximize shareholder value. To make sure the captains of industry got the message, boards of directors would change their compensation packages to cause these business leaders to focus on increasing the company’s stock price. What could possibly go wrong?

Everything!

The concept was embraced by both America’s business schools as well as industry. Unfortunately, the new policy not only didn’t solve the problem it was supposed to address but by unintended consequences created a myriad of new problems no one foresaw.

Tell me if any of these “unintended consequences” sound familiar to you: short-term decision making, relentless cost cutting, staff reductions (RIFs), less investment in the business, virtually no innovation, low workforce morale, no raises in pay, reduced benefits, non-stop mergers, increased debt, lost ability to compete, declining R.O.I., and economic stagnation. I’m sure you can add to this list based on your own experiences. For a more detailed look at this, you should read Steve Denning’s “Why ‘The System’ Is Rigged And The U.S. Electorate Is Angry,” the inspiration behind today’s blog post.

So twenty years ago, in 1996, President Bill Clinton signed into law the Telcom Act of 1996. This would bring “the dumbest idea in the world” to the radio industry. Wall Street jumped into the new shiny investment opportunity; radio. Everything that every other industry was experiencing from this new operational style was now rearing its ugly head in the broadcasting industry. All with the same negative impacts.

Not all organizations adopted this dumb idea of operating. They stuck with Drucker’s rule. And it’s the same with the radio industry. The smaller radio operations do operate differently. Their success has others sitting up and taking notice.

However, most organizations – and not just in broadcasting – are still in denial. The evaporating middle class is not good for an industry that lives off of advertising. Advertising is pitched to the masses who are the consumers that drive over seventy percent of the American economy. I wrote about the future of ad supported media last year after I read Thomas Piketty’s book “Capital in the 21st Century.” You can read that blog post here.

Based on the tumultuous presidential election season we’ve seen so far, it would appear that the American society has awakened and is now “as mad as hell and not going to take it anymore.” Cue Howard Beal here.

Steve Denning writes: “We are now at an ‘emperor has no clothes’ moment.” It’s now clear that this way is not working and is not only leading to systemic value destruction but an economy that no longer works for the middle class.

If we’ve ever needed real leadership in America, it’s now — and from all directions.

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