They're not.
Yet you wonder, how is it that almost everyone but these CEOs know that radio is headed in the wrong direction?
Take radio stocks.
The cream of the crop at closing yesterday was CBS at $7.66, Cox at $4.91 and Saga at $3.31 -- and that's not saying much. Then, it gets uglier.
Beasley at $1.30
Salem 88 cents
Entravision 87 cents
Cumulus 85 cents
Entercom 66 cents
Emmis at 39 cents
Citadel at 21 cents
Regent at 19 cents
Spanish 17 cents
Radio One just 13 cents
Westwood One is only 15 cents and Sirius XM a quarter. I still can't believe these prices! When Clear Channel sent me to academia for four years back in 2002, radio was a thriving business. But there were ominous signs on the horizon that the men at the top ignored.
Obviously, Houston, we have a problem -- now!
I'm sure most of us would agree on that, right?
So why do the boards of directors turn their heads the other way? Why are the same CEOs entrenched at their embattled companies? A lot has to do with the chummy way the companies were set up.
But there's something else.
Radio revenues have been declining every month for over a year and a half with the larger markets leading the downturn -- all this, by the way, before the economy tanked. Even the better performing smaller markets now feel the pinch. Of course, the recession has a lot to do with it, but radio started its recession well before everyone else.
And there's more.
When Clear Channel's Mark Mays says "Merry Christmas" with the promise of more stringent cost cutting measures ahead, we know that the ten years of clipping and nipping at radio's essentials didn't work then and won't work now.
Never mind that the product is watered down even for those older listeners who still want to listen to radio. Forget the next generation -- radio has.
Every group -- consolidator, independent operator -- even Rick Buckley -- has let people go to pair down expenses. I understand economics. You can't spend more than you take in (unless you are the Federal government). But these "economies of scale" are like putting an anorexic on a diet. Death is imminent.
Don't the big boys know this? Why don't they fix it?
When stations start doing what Beasley is doing and offering advertisers "one day" sales blitzes in exchange for cheap prices and multi-month commitments, can you say desperation?
And Beasley is not alone. Hell, back in 2002 when I was publishing Inside Radio, angry competitors of Clear Channel used to send me one-sheets that some Clear Channel stations used to fax to advertisers to sell them cheap -- really cheap radio spots. That was then, when radio was supposedly a booming business.
Doesn't anyone know that prostituting your prices because you can't sell ads -- let's just say it because that's what it is -- never works. I know a lot of smart sales people who could help radio stations right now. Jim Taszarek, my neighbor out here in the desert, is one of them. And we all know a lot of good former and current GMs who have their hands tied behind their backs.
Why are radio companies not getting help when they need it? Why are they dropping their drawers?
In fact, radio companies are cutting their sales forces back when they actually need more sales professionals.
Doesn't anyone know there is a problem here?
Major market radio stations have a program director opening but almost always the poor PD running one or more stations elsewhere in the cluster takes on yet a third station so the company can save money. We're not talking Ajax Communications here. It's CBS. Clear Channel. All of them.
This is occurring with startling frequency now -- one person for more than one job. I don't know if my friend Joe McCoy, the WCBS-FM programming legend, remembers a phone conversation I had with him many years ago when I asked, "weren't we considered a genius when we programmed one great station in our lives -- not three at the same time?"
We laughed.
Prematurely, it turns out.
It doesn't take a lot of great programmers to know that one station is tough enough to program let alone whatever the company heaps upon you to save money.
Don't they know this?
Everybody and their uncle is on the Internet.
There's Facebook, MySpace, Pandora and on and on. Listeners who previously walked around with portable radios are never without their cell phones now (hint/hint). A new generation has arrived and radio ignored them. Now it's payback time. That Millennial generation was not raised on radio. They want the Internet. Their cell phones. Free music downloads. They look to each other not to djs as their music authorities.
Of course, the folks at Sleepy Hollow (Radio CEOs) must know that the Internet has arrived. But no -- they obsess about satellite radio -- satellite frickin' radio! Their professional association aka The NAB spent millions last year fighting -- you guessed it -- satellite radio. Maybe the Sirius stock price of 25 cents a share scares them.
Radio's idea of the Internet used to be putting up web pages with their jock's pictures. Of course that won't work today.
No jocks.
Just link directly to Ryan Seacrest's home page. The more "hip" (if I may use an unhip term) radio companies think the Internet is simply another channel for airing their terrestrial format. Great for at-work listening. Boy, did they miss the point.
When will they ever learn?
One more thing.
Once upon a time everyone knew that radio was local. Even in the days of network radio, the national programming appeared on stations that were very local to their communities.
You know -- and I know -- and hell, the listeners know -- that radio works best when it is local. Yet money losing CEOs have themselves convinced that they have no other option but to find ways to take one program and amortize it over many stations.
Starbucks announced a few days ago a 97% decrease in profits. That was due to the costs of closing stores. Yet if you listen to what their CEO said, the plan was to take the hit and implement a strategy for the long-term.
Long-term -- when have you heard that phrase in radio lately except maybe to describe the kind of unemployment insurance some of their ex-employees are on?
Why do we know -- why do the listeners know -- and even some advertisers -- that radio is not dealing with its many, real problems?
Listen, you don't have to look any further than Main Street to see the same behavior. Stores that are closing because they couldn't get up the courage or resources to respond to their competition.
I have seen it in academia as well where major communications schools are still -- I repeat still -- teaching radio, television news (a dying art to say the least if you follow all the local news programs that have been cut over the years) and journalism (presumably newspaper with a wink and a nod toward online -- whatever that means).
It is my belief that the human condition is that we want things to remain the same or revert to the past -- better days.
But the lesson -- why good, smart media executives keep making God awful decisions -- is this...
We don't do what we need to do until we hit rock bottom.
The sports team that just misses the playoffs thinks it's only one or two players away from competing again. Often, they are wrong. One season later when the bottom falls out, the franchise bites the bullet.
We don't answer the bell until we hit rock bottom.
And that's a scary thought when the rest of us -- those without $11 million annual salaries and private planes -- already know we're there.
Which is why you can expect more of the same in 2009 -- until the pain is felt by those who are inflicting the hurt to this industry and its people.
It's not like you can turn it around at some point once the Great Enlightenment arrives.
The next generation is still lost.
Radio listeners are still aging.
The Internet is still not going away.
And the replacement for radio's mobility became the cell phone while radio CEOs played Gordon Gekko.
The decline of radio will never become a Harvard case study.
It's a Shakespearean tragedy.
All 's Well that Ends Well, Act III, Sc. V
"No legacy is so rich as honesty".
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