The radio industry, a business of hard working people who love what they do but are held hostage to the bad decisions of their owner, has just shot itself in its collective foot one more time. Cox, Entercom, Cumulus, Radio One and, of course, their enabler, Clear Channel are at it again. They have offered what is said to be funding in the millions of dollars to help rival The Media Audit try again to derail Arbitron's Portable People Meter which is up and running "live" in Philadelphia now; will go live soon in Houston and has received accreditation in one market already. The price for this new service has been established by the major groups that have signed on and even Clear Channel can't change that now.
Look. There are companies that have major issues with the People Meter like Cox -- a good company with sincere concerns -- but to our eyes this latest gathering of the "anti" PPM believers is yet another example of why bad things happen to an industry full of good people. These new born rebels are posturing for price.
Arbitron's People Meter will cost significantly more. Why shouldn't it? It does significantly more than the paper dairy system that this cost conscious industry is hanging onto. The new People Meter will arguably give more realistic listening estimates and will no longer rely on the recall of diary keepers to determine their ratings. The new PPM will also factor in online listening some day when radio and the music rights holders eventually work out a deal on things like being paid for commercials meant for the terrestrial station but also aired over the net. But, we digress.
Look at what Jim Boyle, veteran industry analyst wrote from his perch at CL King Associates:
"Radio Holdouts Give Partial Funding to ARB’s Competitor, Presumed Dead – It’s Still About the Price: Five of the major radio groups are providing partial funding for ARB’s competitor to test their smart cell-phone much later this year. This is a negative surprise. Whether one feels it is a last-minute desperate action (akin to football’s “Hail Mary Pass”), or one feels it is a “horse race” again, it is a negative, either as a perception or reality. We believe it is a stalling tactic, or bluff, by the five PPM holdouts to influence price negotiations with ARB. However, uncertainty and delays could cause eventual PPM revenue to come slower."It's all about the money.
This from an industry that has been handed near monopolistic powers to merge and grow.
This from an industry that has courted Wall Street by repeating a mantra something like this
"it's all about shareholder value".
This from an industry that has not delivered shareholder value. Here are their most recent share prices: Clear Channel $37 (not the $90 something it was in the early days of consolidation). What happened? Entercom $30. What happened? Cox $16. Cumulus $10. Yes, $10 a share. Radio One $7. How could so many deciders run their share price into the ground so badly.
How about this. Poor decision making.
The radio industry has been getting it wrong consistently since the early 90's.
- Failed to gather around an HD technology and strategy before satellite radio. If HD was going to give the radio industry an edge, it was then, not now.
- Failed to develop new radio formats to keep the medium live and relevant. You can count on one hand the truly new radio formats since 1990.
- Failed to see that consolidation and the rush to public markets that followed was tantamount to "be careful what you wish for because you may get it". Others saw the pitfalls. Radio consolidators didn't want to.
- Failed to take the Internet seriously. When Clear Channel sent its controversial Radio CEO Randy Michaels out to pasture in 2002 they sent him to the Internet department. The Internet was radio's version of Siberia. No one ever heard from Clear Channel or Michaels while the hottest business in the past 20 years -- the Internet -- took off.
- Failed to keep the growth of listening to next generation listening going when their heads were turned by the Internet, iPods and peer to peer file sharing because radio's heads were turned toward Wall Street.
- Failed to see that satellite radio was not the competitor they feared. Satellite is in worse shape than radio. What was the radio industry thinking?
Arbitron will be the industry standard -- like it or not -- with the People Meter. If I'm wrong I'll eat my...my... Mac. This delaying tactic of funding the Arbitron alternative in the last seconds of the game is worse than a "Hail Mary".
The big difference is that in football the fabled "Hail Mary" pass -- the desperate, risk-all, long bomb last chance to win it all -- was only thrown after a team did their best during the rest of the game and kept it close.
Radio's "Hail Mary" comes after most radio companies have done their best to stand in the way of progress -- in this case the Portable People Meter -- and the players (in this case radio execs) never got off the bench. Even if rival The Media Audit catches their pass, the time has expired. Radio loses.
Delay is your enemy. Getting it wrong again is an disincentive to the many hard-working people who run your stations and compete with other media daily. When will this group do something inspirational?
As always, it's all about the money.
