Peter Smyth
Peter Smyth, President/CEO, Greater Media, Inc.
First, I look at the overall economy. Over the past several weeks, we have moved into much more treacherous waters with the housing and credit crunch, but I do believe the Fed will do all it can to keep us growing, even if it’s into the headwind. The specifics of the radio economy have the added challenge of stabilizing and trying to grow our advertiser list and our share of advertising dollars.
I know what WON’T work, and there are specific things on that list: (1) lowering rates; (2) increasing inventory; (3) beating up sales people for share at any price; (4) continuing to call on the usual suspects in the media department and whining about being zipped on the buy; (5) talking about new initiatives if we don’t have the courage of our convictions when it comes to budget time. These are all sure-fire ways to sell ourselves out of business.
What WILL work?
(1) Selling ideas and programs that will get the results advertisers want, not just what you have in a package. Stop selling spot schedules.
(2) Finding your way out of the media department. In most agencies, there are now people dedicated to online and interactive media. If you’re trying to sell these programs to a time buyer, odds are against you. They’ll just become value-added to the buy. You have to get to planners and account people in order to know what their client wants in the way of results.
(3) Learning the language of the online world and not being a “deer in the headlights” when someone asks how many page views your station website gets.
(4) Selling our medium, not just your station. We’ve got a great story and you should know it by heart. Do you?
(5) Staying focused and staying positive. Attitude matters in any game.
(6) Backing up your new media game plan with a dollar investment. Otherwise, it’s simply a hobby.
We need to redefine who our competition is and what our business is. We get sidetracked thinking the station down the dial is taking “our fair share” when it’s really the new media operators like Google, Facebook and YouTube who are siphoning millions of ad dollars into their new universes. In the big picture, radio is in the relationship and communication business. That means anyone who can create a compelling reason to listen, watch or click on their offering is competing with us for our listeners’ time and attention. Success in the future will not be defined by the share of the radio listening. In fact, that’s a small galaxy in a much larger universe of media usage.
Mike McVay
Mike McVay, President, McVay Media
We are heading “Everywhere!” There are always naysayers and doomsday predictors in every industry. Our business is no different. I’ve been reading of the demise of radio since I got into the business. AM was still king in 1971 when I took my first full-time radio job. FM was on the horizon and scared many in the business. Those among us who were smart understood that FM was going to not only grow radio listening levels, but that the stereo band would enable us to increase revenue.
I’ve seen and heard the threatening knock on our doors from the CB Radio, Eight-Track Players, Cassette Players, the Mini Disk, Audio Books, Movie Rentals, Cable TV, Direct TV, MTV, Video Games, CD’s, DVD’s, Satellite Radio, the Internet, Cellular Connectivity, HDTV, the MP3 Player, the iPod, the iPhone, Music Downloads, Podcasts, HD Radio and the latest which is Internet Telephone. These products, services and technologies are all competitors of ours.
All of these modern-day threats can help us grow our product lines. We must embrace these new technologies and make them a part of what we do. Stop looking at the increase of media as competition and instead view these various entities as portals for content.
We must start viewing radio as a delivery system. We’re not the “part-of-your-life” product we once were. Yes, there are stations that are still imbedded in the local community, and they should be. However, altering your view to that of “delivering programming”, will enable you to focus on the currency that is programming.
It is my prediction that network programming, syndication, voice tracking and the “virtual studio” will become more important over the next 3–5 years. Given the costs of radio, especially in smaller markets, owners and operators will begin to look to continue to trim expense from their local programming budget. They’ll have to further eliminate costs to make their budgets come in at an acceptable level.
Many small and medium market broadcasters will be operating radio stations akin to the local weekly newspaper. There’s nothing wrong with that, except using that model means you must trim content costs. It will mean your sales department will have to focus on selling results instead of ratings and we’ll all have to multi-task in order to help control costs. Side-note: the value of experience and knowledge is always at a premium. I’m not worried about broadcasters eliminating consultants. We’ll continue to have a role in the industry, although we may become even more vertically integrated. Consultants will be “Content Advisors” more so than “Radio Programmers.”
Guy Zapoleon, President, Zapoleon Media Strategies
It is hard to believe but we are close to the end of the first decade of the new Millennium. As we look at the business of both radio and records we see much of the old models of what made these businesses successful are breaking down as the way people are receiving the raw material (music), and the creations (radio formats etc) have changed forever driven by new technology like the I-pod and the ever changing medium of the Internet.
Over the past decade with consolidation and the devaluation of the dollar, radio companies haven’t been able to do what is needed for radio to remain a dominant force. This is a problem because as an industry we must be willing to reinvest back into the product with a plan to adapt and evolve our medium into a newer more relevant version.
Looking back it is easy to see why radio is hesitant about the Internet. Always on the cutting edge radio (and many other businesses) jumped into establishing a presence on the Internet during the Dot Com Boom of the late ’90s. While radio benefited from all these new companies advertising on radio, it soon became a Dot Com Bust as everyone realized that all these companies arrived on the Internet long before the masses did so the real ability to generate revenue didn’t materialize for several years. Radio’s Internet initiative was basically planting a flag on the moon with stations building Web sites but doing little with it. What remained were radio station Web site shells with very little content. What has followed was radio companies that created Internet divisions and for the most part have closed them down.
Over the past few years, it has become clearly evident we were all right a decade ago, and the Internet really is the “future” where every successful entertainment (and other) product will be viewed first and where the world would be spending most of their entertainment time.
It is critical now that we get a clear vision of radio’s future in order to lay out steps to secure our place in the future. Over a decade has gone by with our business not training the future broadcasters and talent that will keep radio a viable medium. Nearly a decade has gone by while we’ve allowed other mediums and competing technology to come along and push us to the brink of extinction or at least irrelevance. You can’t find more than a handful of teens today that spend a lot of time with radio let alone going to radio first to hear music.
John Parikhal
John Parikhal, CEO, Joint Communications Corporation
Google is not radio’s friend. Neither is MySpace. And, the internet isn’t radio’s savior, although it can be a big help as radio tries to surf the biggest technological change since television. In 2007, the internet wave crested over radio and television. It crested over all ‘broadcast’ media, the now ancient model where the consumer had very little interaction with their entertainment. Broadcast meant turn it on, off or change the channel. If someone tried to contact by phone or mail (what a quaint idea), they considered themselves lucky if anyone answered. And, ‘social networking’ was limited to talking about something after you heard or saw it.
But for 50 years, consumers wanted more. They wanted interaction. They wanted depth and more connection. They didn’t get it, because the technology was limited and ‘broadcasters’ didn’t want to spend a nickel on building a two way relationship with their customers.
Unfortunately, in some respects, radio is still behaving this way. 2008 will see less research which means they don’t know what customers want, and more cuts in staffing which means less time for programmers and managers to think about new ways to connect with listeners. And, of course, it’s all blamed on Wall Street. A stunning declaration of powerlessness by those charged with running and fixing radio’s problems. Wall Street is a pimp. It’s moved on to the fresh meat of new media – as Google stock moves towards $700 a share. And, advertisers are going with it.
Looking ahead to 2008, there is a lot radio can do to become more relevant and more profitable, and some of it is low hanging fruit. These include…
Aggressively push advertisers to adopt a 30-59 buy. This will capture a bigger piece of the huge Baby Boom audience and is more reflective of 21st Century realities than the 25-54 target invented at least forty years ago. There are 16 million Boomers aged 55-59, with more on the way.
Encode your stations to show song titles. Make sure every station is encoded so in-car listeners can see the name of the song playing. Listeners want to know what they are hearing. They already get this from satellite, online radio and even the iPod. Move into the 21st century.
Really care about your listeners. Learn more about them than their favorite songs. Give them a ‘bonus’ on your website – unique content, a real ‘connection’ with your staff and things they can’t get anywhere else. Think of them as 24-hour a day listeners. Don’t restrict all the fun and humor to morning drive.
Optimize Search. Make your website truly searchable so it’s easy for listeners to find what they want – fast.
Tap into your employees. Put a process of ‘formal’ innovation in place. Reward ideas. Stop with all the top-down initiatives, most of them haven’t worked. Give your employees time to think. Use formal brainstorming regularly.
Be visible. “Out of sight, out of mind.” Get seen on billboards, TV and especially non-traditional media. Be really creative and focus on your brand driver (make sure you know what it is).
Radio is still a good business and like all good businesses, requires innovation and reinvestment in an improved consumer experience. The consolidation model based on ‘saving’ your way to success is a failure. Yet, there are still millions of people who listen to the radio everyday. We have a chance to give them a better experience in 2008, and with it a renewed respect for and appreciation of radio.
Fred Jacobs
Fred Jacobs, President, Jacobs Media
Choices – After decades in radio where ”breaking news” consisted of the sale of a station or a big-name PD moving from one market to another, 2007 finds the industry awash in revolutionary change. These days, just about every time you pick up the trades, or more to the point, go online to read about tech developments and new gadgets, there are more challenges to the conventional wisdom that has fueled our business for decades.
This period of sweeping change impacts all facets of radio broadcasting. Whether it’s the challenge/opportunity of digital media and the Internet, or the shaky advertising model that threatens to usurp the time-honored relationship between great ratings and huge sales, there are now unknowns around every corner.
Group broadcasters have some difficult choices and decisions to make. Financial pressures have put serious limitations on how much they can really do, and as I hear from many of them, companies simply cannot undertake several bold initiatives at the same time. So, some big decisions are going to have to be made. Which would you fix first?
Digital content & marketing – The numbers don’t lie. Media dollars directed at traditional media are shrinking, while digital revenues are rapidly growing. Yet, many advertisers are still clinging to the security provided by “old media.” Radio has the potential to cover both needs – a traditional advertising vehicle that can integrate (potentially) strong web content, and the cume to drive listeners to websites. Of course, this multi-tiered platform requires investment in web personnel, programmers who can think creatively in both worlds, and dedicated sales reps who can effectively market this blended product.
HD Radio – It’s time to put up or shut up. The flawed philosophy that “We’ll start investing in HD2 content when there are more HD Radios out there” is beyond short-sighted. If indeed the captains of radio broadcasting truly believe that HD is the future, it’s time to start seriously investing in program content – the only thing that will drive awareness, word of mouth, and ultimately, the purchase of these radios. This is not about selling HD radios to consumers. It’s about creating HD2 content that is unique, compelling and buzz-worthy. That’s what will sell radios.
Talent development – Radio’s DJ infrastructure is in about the same shape as America’s bridges – shaky and struggling to keep up. Where are the big shows and personalities that will replace Imus, Bob & Tom and Rush Limbaugh? What is radio doing to attract young people, increasingly uninvolved in the medium in their formative years, to the business? You can throw out that old paradigm about how young people would kill to work in radio. Today, they want to work for Apple and Google. If we cannot attract young, energetic talent to broadcast radio, the future is a dark, self-fulfilling prophesy.
Joey Scoleri, VP Rock/Alternative, Hollywood Records
The record business has now morphed into the music business whether labels like it or not, we have to think as content providers and overall entertainment creators. Whether it’s the recorded music, the promotional opportunities for our various partners, licensing, merchandising, music placement and all other ancillary business have to obviously offset the loss of physical CD sales.
We also have to learn how to provide what the consumer wants, and have been obstinate and ignorant in doing so until now. You are seeing artists create their own models (pay what you want pricing), so called 360 deals (Live Nation/Madonna), and direct to consumer models where artists deal direct with fans. The one thing that won’t change is a hit and or a great album motivates the consumer. No one is going to buy a t-shirt, go to a concert or surf a website unless they are compelled to do so by a payoff. And that payoff is the greatness in the music or shared experience of community. We have to make it easier to share the experiences and cut through the over-communicated world we live in. It’s increasingly harder to touch people when they can touch themselves; vis a vis, why would you buy a CD when you can create a video and post it on Youtube? Or make your own music on garageband.com on your Mac.
Jon Zellner
Jon Zellner, Senior Vice President/Music Programming, XM Satellite Radio
It’s interesting when I talk to interns and young people about their memories of so-called great radio from the 1990s. Of course, I try to explain to them my passion for radio from the 70s and how it’s changed over the years. For me, radio was my window to the world. It was the place that captured the vibe of music, entertainment and current events. It was brands like 99X, WABC and WPLJ that caused fans to rally behind. It was the club where only cool people were invited to join and if you missed something, you really felt left out.
In 2007, the immediacy of entertainment at our fingertips due to the internet has changed the game completely. My kids hear about new music from a variety of websites and by the time radio (sometimes even XM) picks up on it, it’s yesterday’s news. Many companies have figured out that young people are the future of any business. Companies like Facebook become top of mind with kids because they’re run by the same people they target. How does all this affect the radio and record industry? It should be a wakeup call to start talking to high school and college students about where they get their music and what their expectations are. What do they think about radio? Are they not buying CDs because they cost too much or because they can’t find something they like? Will they buy it if they think it’s cool or are they still file sharing? I thought the Radiohead model was brilliant. It caught a huge buzz and the plan worked. I also think it’s encouraging to see artists like Colbie Caillat sell a million records. And, I think there is a new generation of fans who aren’t convinced that music is free. Look at the success Disney has created. They’re selling records and concert tickets to kids (and their parents) because parents approve and the kids aren’t jaded yet.
