Tag Archives: Student Loan Debt

The Largest Financial Decision in Your Lifetime

122I was just reading an article about car buying and it said that buying a car is one of the largest financial decisions most consumers will make in their lifetime.  Really? I thought that was buying a house.

After being a university professor for seven years, I left with a feeling that getting a college education might be the largest financial decision. Today, student loan debt tops $1.3 trillion. The number of Americans with student loan debt is a record 44.2 million.

A record 107 million Americans now have auto loan debt. Worse, 6 million of them are behind on their auto loan payments.

Homeowners are doing little better with only one in four having more equity in their home than debt. Unfortunately, 5.4 million homeowners are seriously upside down – meaning they owe more on their mortgage than they can sell their home for. The rest of the homeowners are somewhere in the middle.

Then again, maybe it’s the cost of health insurance or putting away money for retirement.

Finding a Purpose in Life

Have you found yours yet?

I was lucky, I learned at a very young age what I wanted to do with my life.

It was to be a disc jockey on the radio.

Until one day, after being a DJ for ten years, I changed my mind. Now I wanted to be the radio station general manager.

That lasted over three decades until I changed my mind again. Now I wanted to be a university professor. I did that for seven years before deciding there was something more to life than just focusing on a career.

Business writer and editor Theodore Kinni says that “you can still build a rewarding career, even if you don’t heed the purpose ‘siren call.’ Start with what you’re good at and go from there – quit early and often until you’ve found work that works for you.”

 

“A sense of purpose is like an appendix. If you’ve got one, good for you.

 If you don’t, you’re not missing anything important.”

-Theodore Kinni

Luck & Success

I’m not discounting the need for hard work to be a success in life, but I know a lot of people who worked very hard and still had a hard time getting ahead while others seemed to have a much easier time.

Recently, a report in Inside Radio spoke to the fact that some radio markets were enjoying phenomenal growth while other markets were very challenged.

If you’ve ever worked in a large radio group, I’m sure your property was often compared to others who were making their numbers while yours struggled. No one seemed to care or found it important to understand the local market dynamics and how another’s “Best Practices” were not in your best interests to employ.

Radio Stations & Colleges

Turns out colleges have similar geographic problems as radio stations. Colleges are married to their location in much the same way that radio station licenses anchor broadcast properties.

Have you ever heard of the DCI?

DCI is the Distressed Communities Index and it shows that the U.S. economy is very diverse and fragmented when it comes to economic well-being. The 2017 DCI shows 52.3 million Americans today live in communities characterized as “economically distressed.”

For colleges that operate in these areas, their prospects for recruiting students to fill the seats is very challenging. Not all that different from radio stations trying to produce cash register rings.

Another area that both radio and colleges are being challenged, is the internet and the mobile economy. Whether it’s listening, shopping or getting an education, more and more people are doing it online.

When listening, shopping or education moves online, it no longer competes with the entities, but the best merchants, radio stations and the best colleges in the world.

Internet Dollars or Dimes

For too long, I heard traditional broadcast media complain that going online was trading OTA advertising dollars for internet dimes. And that was certainly true. It’s because we tried to apply the same business model to the internet that we applied to our broadcast business model. Colleges did it too. It was wrong. Internet economics is an entirely different business model.

Look at the top 50 internet websites and you will see they don’t make money the way that traditional media companies or colleges made money. The top 5 didn’t exist before there was an internet.

I’m sure if you dig deeper you will find that the digital dimes are being made by the traditional media companies and colleges, while the digital dollars are being made by those digital startups. In fact, INCOME did just that and compiled a list of the top 20 companies making the most money on the internet.

The real eye-opener is when you scan this list of companies and see how much money they vacuum in every second (Amazon $1084 per second is #1).

Very quickly you realize that internet commerce is made up of a few haves and a zillion have nots.

Once upon a time America had strong antitrust laws. Antitrust laws are really anti-competition laws that were put in place by the U.S. Government to protect you and me from predatory business practices by ensuring that fair competition existed and we live in an open-market economy.

Fast vs. Slow

The beauty of our government is that nothing happens fast. It takes time and a lot of political capital to bring about change.

Fortunately, that slow pace of government wasn’t that much slower than the rate of commerce over the last 225 years. It all worked. Until it didn’t.

Welcome to the 21st Century

Computers are fast. Computers connected to the internet are even faster. Collaboration adds even more to the speed of innovation.

Government hasn’t been able to adjust to this new high-speed world the internet created.

Colleges and radio stations are also trying to play catch-up.

Life is a balancing act.

Things are moving very fast.

No one can ever tell you what’s right for you. And no one knows where all this is going.

And so, I’ll leave you with some great career advice from Dr. Seuss:

“You have brains in your head. You have feet in your shoes.
You can steer yourself any direction you choose.
You’re on your own. And you know what you know.
And YOU are the guy who’ll decide where to go.”

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Radio & the Consumer Driven American Economy

99This week produced some conflicting economic data. The stock market was setting new records and the unemployment rate dropped to 4.3% but the number of people filing for unemployment benefits beat analysis estimates. WTF?

The Surprising Threat to Radio

It’s estimated that two thirds of the American economy is driven by consumer spending. Don’t get hung up on the percentage, but know that a lot of our economy is driven by the buying and selling of stuff that is consumed.

Some things, like a Whopper are consumed quickly and other things, like the car you drive, are consumed over a longer period of time. Much of our spending is discretionary.

Radio is a strong driver of putting thoughts into people’s heads about things they should be deciding to consume. Radio is the word of mouth medium with the big mouth.

So what threatens radio today? Consumers are not spending.

Radio’s Role in Consumerism

Broadcasters can’t change the attitude of an apathetic consumer for the most part. Other factors in the world create consumer attitudes, uncertainty being one of the biggest.

Uncertainty causes consumers to hunker down and make do with what they already have. And today’s world is filled with lots of uncertainty that is being stoked 24/7 by the cable news networks, talk radio and social media.

Radio is excellent at directing consumers to different businesses, products and services when they are feeling confident and want to part with some of that discretionary cash.

Barron’s reports that year-over-year growth in U.S. retails sales peaked in mid-2011 at 8.3% and has since rolled back to 4.5%. The four biggest performing stocks are Amazon, McDonalds, Comcast and Home Depot.

A World of Debt

Radio people are very aware of the huge debt problems impacting iHeartMedia and Cumulus. But they may not be aware that American household debt in the last quarter reached a record $12.73 trillion and Barron’s says that just surpassed the debt American’s owed at the height of the housing bubble.

Student loan debt is now over $1.4 trillion, which is about $620 million more than U.S. credit card debt. Student loan debt rose six percent in the past year.

American credit card debt rose by $3 billion in February 2017, its highest level since 2008 according to The Motley Fool.

Market Watch says that U.S. households now have surpassed the amount of debt they had in 2008. Plus Americans are struggling with their auto loan debt with these sub-prime loans hitting their highest delinquency levels in December 2016. A pattern that Market Watch says was seen prior to the 2007-2009 great recession.

An Inconvenient Truth

During the 1960s and 1970s, the American economy expanded over 11%. In the 90s it couldn’t get above 9% and in the most current expansion it hit 5.9% and recently was only 3.6% according to Barron’s.

Many Americans no longer see consumption as being the “American Dream” but now are saving as much as they possibly can despite interest rates on savings sitting at anemic levels.

Income inequality is also playing a huge role in the current state of American consumerism. 76% of the wealth in America is now held by the top 10%. Only 1% is in the hands of the bottom 50% of American families in today’s America. CNN Money reported in December 2016 the wealth inequality in America is getting worse. “The rich are money making machines,” said CNN.

A 2016 study by Gallop senior economist Jonathan Rothwell found that the bulk of our national spending is eaten up by just three items – healthcare, housing and education.

What’s the impact on ad supported media in a world of enormous debt and haves vs. have-nots? I wrote about this after reading Thomas Piketty’s book “Capital in the 21st Century.” That article was called “The Future of Ad Supported Media” and you can read it by clicking on the link here .

Survival of the Fittest

What all of this is telling us, Spending is OUT and Frugality is IN.

A broadcaster friend of mine was sharing that in his PPM market TV ad time is now selling at “radio rates.” When the pie isn’t growing, media companies are forced to begin taking more from someone else.

Radio is the best value for the money when the economy goes soft.

I started my radio sales career at the beginning of the early 80s recession. I was very successful and it saw me enjoying a four plus decade long radio career before becoming a broadcast professor to pay-it-forward to a new generation of broadcasters.

As Warren Buffett says, “It’s when the tide goes out, that you know who’s wearing a bathing suit.” In other words, when the business changes from taking orders to really selling, we will learn which companies have trained their sales people to not just survive but thrive.

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Where You Should Be Recruiting Radio Talent

63For the past half-dozen years, I’ve had the opportunity to work with college students looking for a career in radio. It’s made me think about my own radio career and college education. Let me share with you some observations.

Recruit in High School

Most of the people I know who got into radio did what I did, built a radio station in their parent’s home and began broadcasting to their neighborhood. I did that in the 7th grade; junior high school. By the time I was in the 10th grade in high school I had earned my 3rd Class Radiotelephone Operators License, Broadcast Endorsed from the Federal Communications Commission, got my work permit from my state government and was working weekends at one of my local commercial radio stations.

Students today are more advanced than I was when I was their age, yet the broadcasting industry doesn’t start recruiting these days until young people are getting ready to graduate college. Why?

Bachelor’s Degrees

So many radio jobs I post on my “Sales Jobs Board” require a bachelor’s degree. Why?

My entire radio career I had a bachelor’s and a master’s degree and not one broadcasting company I worked for ever asked me about them. It wasn’t until I pursued teaching at my current university that anyone ever asked about my degrees or to provide them with copies of my transcripts showing my GPA – I graduated Magna Cum Laude as an undergrad and was president of my college Honors Society and my GPA in grad school was a 4.0, a perfect score.

Close to 2 million students are today graduating with their bachelor’s degree and sadly are working at Starbucks just like they were before they earned their degree and amassed a ton of student loan debt.

And when I think about it, that’s what I did too. I went from working in radio part-time to pay for college and then upon graduation from graduate school went into radio full-time as a program director/operations manager/air talent.  The big exception being I did it with no student loan debt because college was more affordable then than it is today.

College Education

I’m not saying a college education isn’t important; it broadens you in ways that don’t pay an immediate return on your investment. In college I really came alive as a student and developed the love of life-long learning. However, nothing I learned in college meant a hill of beans to my career in radio.

I learned programming and operations through regional and national broadcast conferences and by doing the job.

I learned sales, sales management and general management by more regional and national sales conferences plus the radio company I went to work for in sales was a very immersive sales learning environment. We were members of the Radio Advertising Bureau and the International Broadcasters Idea Bank and my owner took his entire sales/management team to learn from every sales trainer that got with a hundred miles of our property.

Just In Time Learning

What I had was basically a form of “just in time learning.” Just as manufacturers learned not to stock parts but to have them arrive at just the moment they were needed in the manufacturing process, is exactly how I learned the radio business, one piece at a time from the ground up.

The way higher education is today is like stocking parts in the days of manufacturing yore. So much knowledge is acquired that may never be used or when it is needed may be sorely out-of-date.

Our 20th Century higher education system simply wasn’t designed to deliver what’s needed in a 21st Century world.

Where to Find Radio Talent

If you want to find radio talent you should be in the high schools, middle schools and elementary schools of your community. I really believe you can’t start too young in cultivating the radio talent you will need in the future. But waiting until our youth graduate college is simply too late.

Economically, this makes sense for both radio operators as well as students. A young person graduates high school with zero student loan debt; unlike a college student that accrues tens of thousands of debt in college.

As your young employee grows, your radio station could then support more formal education with your local community college, university or professional training through broadcasting’s professional organizations like the National Association of Broadcasters or the Radio Advertising Bureau. When the student is ready, the additional education is provided.

Wharton & Wizard Learning

I paid to attend the Wharton School in Philadelphia as part of the RAB’s Sales Management Training; training so good that I used it for the rest of my professional radio management career and at the university in my classrooms.

Roy H. Williams’ Wizard Academy was inspirational, motivational and exceptional in learning more about selling radio and writing persuasively (something not taught in colleges, except in my sales classes).

Degrees, Wisdom or Experience

Colleges and universities have no metric for wisdom or experience when it comes to hiring/retaining professors. They hire/retain based on degrees, not experience or wisdom or teaching ability.

Broadcasters could care less about degrees, what they care about is results. If you’re an air talent, can you get ratings? If you’re a sales person, can you make sales? Those are the things that are important to broadcasters.

Where once upon a time universities were measured by enrollment numbers, the metric is moving to one of graduating students and improving the graduation rates; which were anywhere from 27% to 60% for students graduating after six years at four year institutions.

Colleges need to change the way they hire/retain faculty in the 21st Century as the focus goes to getting results versus just filling seats in classrooms.

Unfortunately while what employers’ needed never perfectly aligned with what a college education prepared graduates’ skills for; the mismatch in 2016 has reached a tipping point. All the more reason that the broadcast industry needs to re-think how it recruits talent and when it begins the process.

Broadcasting is a great business, but it’s a people business that needs to attract talent to stay great.

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