In fact he reportedly memoed Tribune staffers recently "What has become clear as we have gotten intimately familiar with the business is that the model for newspapers no longer works".
So Zell’s COO, Randy Michaels, is looking to apply the now too familiar tactics that radio has used to shoot itself in the foot.
Cutbacks.
Fewer employees.
Fewer news pages.
That means instead of publishing more news pages than ad pages, this radio convert is looking for a 50-50 split in Tribune’s pages. At the LA Times, for example, that means eliminating 82 news pages a week at a substantial savings.
I’m not picking on my old friend Randy Michaels. He’s simply doing what radio people have done best for the past 12 years now – trying to grow companies by cutting them back. And, to be fair, it seems that just about all public companies operate out of the same playbook.
At least the ones in trouble.
On the other hand, real growth companies must have derived their name by actually growing their companies not cutting them back. Sounds simple, doesn’t it?
The radio mentality summed up by that hackneyed phrase “less is more” is a loser and now as radio people hired by Michaels for Tribune to reinvent newspapers get ready to do their thing – their thing is cutting back.
There is no reason for me to document all the radio companies that are laying off (a socially acceptable term for firing), consolidating staffs, physical plants and programming. In fact, the quickest way to say it is that virtually no radio groups are substantially hiring, expanding or experimenting.
It’s no accident that this strategy coincides with radio’s decline in advertising, audience and share price.
How can they expect growth to follow when they are committed to – no growth?
Clear Channel and others are continuing to debase the local radio concept by firing local personalities – especially on morning shows – and airing shows from other cities as a way of economizing. One show – many cities. But not local shows. And local is what makes radio work.
Citadel’s Farid Suleman is really into the one-show, many markets mode because his management has run Citadel stock into the worthless range and when that happens – radio CEOs do what they know best – fire someone else. But he’s not alone.
I don’t have any doubt that Randy & the Rainbows are going to save money at Zell’s newspaper company. The question is: can they also grow the segment and reinvent newspapers – a mighty large task – by spending less, doing less and thinking – less.
Here are today’s realities as they pertain to radio:
1. More is less - failure, that is. The first radio group to hire more PDs to program one station (instead of having fewer PDs run many stations) will get better local programming. More budget will lead to more resources that will produce better rated shows. This is a no-brainer. That’s how radio built itself into a fabulous cash flow business before the loonies in the accounting office ruined it all. It just happens to be polar opposite to what CEOs answering to Wall Street are able to do.
2. Less central control will get more ratings. Show me a radio group that gives its managers, talent, programmers and sales people relative autonomy, and I’ll show you a local radio station better able to compete for the available audience. I know I poke fun at radio’s CEO and COOs who are micro-managing but this is not funny. Radio has no future if it is not local.
3. More emphasis on the available audience will sustain more radio stations. The reality is: the next generation has moved on. One of my readers showed how deeply in denial he was in a comment recently when he basically said there are plenty of young people listening to radio and anyone who says otherwise is in essence nuts. Well, I may be nuts, but after a four year sabbatical teaching at the college level, there is no doubt in my mind that whether in college or among the non -college educated, radio is finished as we know it. Black and Hispanic youths are still strong radio users, but don’t get too complacent. That will change too.
4. Less complaining and more taking responsibility is the management formula that will work best in radio. Go ahead, name the radio CEO or COO who takes responsibility for anything that has gone wrong. First it was the inability to further relax ownership rules, then it was the Internet stealing ad dollars from radio, then the iPod was the culprit and the People Meter was going to be the ruination of radio. No, the ruination of radio is managing by dodging responsibility. Someone, please take some blame!
So, radio is dead among the next generation.
I got many emails the other day from readers, new friends and radio people who pointed to the recent Coleman study that documented for the first time the serious decline in teen radio listening. I have been screaming about the loss of youth listeners for years.
Sorry that teens have left radio, but they are not coming back. They don’t live by radios any more. The radio industry must go to them if they want to be content companies when baby boomers and Gen Xers go to that Hy Lit record hop in the sky someday.
But there is a new radio in their future – on-demand, mobile and different – that terrestrial operators could own if they could understand it.
Radio people are not dead in spite of the fact that radio companies are managing to kill their careers.
They are the ones who can deliver high production value content for all types of future applications.
To me that makes them a greater asset than a transmitter or a tower.
I will continue to talk about the new radio a lot in the months ahead, but I want to say over and over, if terrestrial radio (transmitters and towers) wants to remain a good cash flow business for the immediate future utilizing the available older audience it still attracts, there is one sure fire way to do it.
Fire the boss.
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