Radio’s Costly Game of Truth or Dare

I’ve figured out what the handful of radio CEOs that are holding their companies and industry back from the digital age have been doing for the past five to ten years.

They’ve been playing a costly game of Truth or Dare.

Here’s the wiki definition of Truth or Dare:

One player starts the game by asking another player, "Truth or dare?" If the queried player answers, "truth," then the questioning player asks a question, usually embarrassing, of the queried player; otherwise, if the queried player answers, "dare," then the questioning player asks the queried to do something, also usually embarrassing. After answering the question or doing the dare, the queried player asks "truth or dare?" of another player and the game proceeds as before.

Let me explain.

All along radio CEOs have been daring each other – and their investment banks have been daring them – to answer an embarrassing question.

There is little evidence that any of them have ever answered “truth” so that leaves them with “dare” and that explains why they have been asked to do something embarrassing.

It’s that simple.

Take Citadel CEO Farid Suleman:

Truth or Dare?

Truth? Come on! He’s taking “dare”.

Maybe the investment banks that hold the considerable paper on his company – especially for the ABC acquisition – may ask him to embarrass himself by trying to run the company as if he had any experience in radio (other than chief bean counter to Mel Karmazin).

Truth or Dare to Mark Mays at Clear Channel.

Think Mays is going to utter “truth” – no way, “dare” is so exciting. So, he is asked to try and run a formerly 1,100 station radio group by firing much of the talent he inherited when the stations were purchased.

Radio One?

Truth or Dare.

Can’t anyone own up to “truth”? Okay, Al Liggins says hit me with “dare”.

He is then forced to take his proud urban and ethnic stations and run them like they are collateral damage to the family investment portfolio.

You see, had he chosen “truth”, he might have been required to step up and answer why one share of Radio One stock is worth less than a bottle of Two Buck Chuck. And Two Buck Chuck has the potential of lowering cholesterol and improving blood pressure when $1.63 might be bad for your blood pressure – especially if you own lots of shares.

I could go on – but you can play, too.

I know I am poking fun but I guess this is my way of illustrating why an industry that could be perched on the doorstep of the digital age with every advantage in content and marketing skills is operating like they’d rather take their clothes off than answer a question honestly.

And that’s part of the problem – this group of desperate "trust" fund babies can’t be trusted to make the decisions that are necessary for their shareholders or their industry.

It is amazing that radio – with its talent pool on and off-the-air, in management, in sales – is playing out its present with no future in sight.

No Internet strategy

. After all, it’s been more than ten years since consolidation and the Internet has been around since Al Gore invented it. Has no one in radio figured out how to operate in that space?

That’s right. You can’t name a radio group that spends more than 5% of its budgeted operating expenses on the hottest thing since television came along. No wonder radio CEOs would rather punt than go for it.

The brain drain

I guess you could forgive an owner for a few nips and tucks in operating expenses – you’d probably allow them to find efficiencies. But, it’s been 12 years since a lot of these stations were acquired and the owners are still cutting loose talent – talent they could retrain and redeploy to give them the edge if they could find and pursue a role in the digital world.

The technology mistakes

Why shouldn’t radio have embraced the iPod from day one – iPods will need content beyond storing MP3 music. Who can produce production quality content better than radio people. And who could market it better.

Why are these radio CEOs still sitting on their hands when the radio of the future has been invented and they’re not going to be on it – I’m talking about the iPhone and smart mobile devices. Oh, some think they should fight to get the FM band on a cell phone. Lots of luck. Times have changed since the Walkman – that’s not how people use their phones. Today, it's short content controlled by the user not the broadcaster.

HD or No HD

Embracing HD says volumes for this group that can’t shoot straight. No wonder they’d rather kiss an investment banker on the lips than tell the truth. One of my readers emailed me recently that he made a trip to Radio Shack over the weekend – you know the home of HD radios – and saw two selling at clearance prices. Priced to move off the shelves – like in we’re going to sell something else. One HD radio was marked down from $249 to $82 and, you guessed it – it was going nowhere. Just like the radio executives who are the only people on the planet who cannot see HD for the boondoggle it really is.

Another reader reported that he saw a $1 FM radio in Wal-Mart. It wasn't selling.

Failure to see podcasting as the next radio

These guys and gals will be long gone by the time someone else is running a business that consists only of podcasts. Maybe someday the record labels will wise up and realize that they don’t need radio to push its music – kids don’t listen to radio anyway. The labels can deliver the freshest music overnight to everyone’s mobile device or computer and cut out the middleman. I could show you a couple ways they could make tons of money with that mailing list and merchandising.

Nah, stick with what you know – CDs.

There are some harsh realities that some may not be ready to accept.

Radio is only viable for the available audience and the available audience is older and does not include the massive generation Y – the next generation.

CBS Radio President Dan Mason is the only one who seems to get it. He’s retrofitting his stations to take advantage of the audience that will and can still listen to radio. He just reconfigured WYSP, Philadelphia recently to recognize that reality. And CBS has increasingly been using this strategy with all its terrestrial stations.

CBS also has an Internet strategy – and it could be dangerous if corporate budgeted more. By Internet I mean – not terrestrial radio. Not rebroadcasting your terrestrial shows and air talent. Not confining your content and marketing abilities to a technology that has clearly been rejected by the next generation.

This needless game of truth or dare is costing lots of talented people their futures but ironically not that of the CEOs who can’t or won’t take radio to the next level.

Can’t because they don’t have the skills.

Won’t because the system – investment driven capitalism – continues to reward them for not embracing the future. (Too close to see it clearly, think of the record industry and see what that sorry lot is doing to reinvent itself).

I’ve got this fantasy.

One day, these lemmings are asked by a shareholder (I know, I know – but I said it was a fantasy) to answer truth or dare.

Tell the truth about why they refuse to get their heads out of their ---

employment contracts ---

Or dare them to do something really embarrassing and humiliating –

Run one single radio station for one year – increase the audience, make a profit and make positive cash flow in the Internet.

Ok, it’s me, Jerry. I’ve been slapped in the face and I’m back to the reality of more cutbacks, more firings, no digital future and business as usual in an industry run by a handful of CEOs who could run one radio station today.

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