It's Not Nice To Screw the Audience

I have been reading The New York Times since I was 12 years old (15 years ago).

Seriously, I don't think I have ever not had a subscription to the paper and I don't consider it Sunday without pasta and Sunday "gravy" on the stove and The New York Times in the house.

So you can imagine how upset I was -- a loyal, longtime reader -- to see The New York Times pull a Clear Channel on me.

You know the concept -- national radio instead of local.

The Times stuffed a white sheet of paper in the newspaper last week to tell me they were raising my subscription price again.

I'm sorry that The Times is having financial problems. Sorry about buying The Boston Globe and taking on all that debt but don't screw with your loyal subscribers.

In Phoenix and LA, the Sunday paper isn't even the real deal -- only the metro area Sunday Times is the whole package and even metro subscribers are paying an increase.

So, sit down and see how dumb I have been and how dumber The New York Times is being.

How's $796 a year for seven-day service without the real estate section!

That's their new rate.

How about free on the Internet -- that's my new rate.

I'm not too smart because until now I never checked to see what I was paying -- I just automatically renewed. What's worse is I read the entire paper online before I go to bed (thanks to the east-west time difference). What am I doing with a printed newspaper I don't read (except Sundays) without owning a dog?

And The Times is not so smart because they made me think too hard about what I have routinely been paying them. They are making it impossible for their audience to subscribe. Sticking it to loyal subscribers will fail and The New York Times -- hit by new media competition and sinking ad revenues -- will likely fail with it.

This is not an isolated example of how the media business has so desperately lost touch with its market. May I take it closer to home?

Satellite radio -- the one and only Sirius XM -- apparently believes it has a business model at $12.95 a month when its biggest claim to fame is that some channels -- some -- have no commercials. Certainly satellite radio never reinvented terrestrial radio for even one day. There's not a lot special on satellite radio these days.

But they still don't get it.

That's why you will soon be able to buy an Apple app to allow you to pay an additional $12.95 a month to listen to Sirius XM on your iPhone. Forget that they are not adding the app -- or charging a onetime $9.99 app charge -- they are screwing you twice if you are already a subscriber.

That is, unless you are waiting for universal WiFi and mobile access to Internet streams. Then, you'll keep your financial powder dry.

I've said this many times but it is worth repeating here -- you can't have a growth industry in the media business without the next generation. And, if satellite radio execs were ever looking and learning about their audiences, they would know that the next generation would never pay for music -- they don't like radio -- and that deal is dead.

Even closer to home...

The music industry is playing mind games with radio stations over repealing the performance tax exemption without regard whatsoever for the audiences that radio stations still have. If they had any guts at all, the stations would start adding unlicensed music to their playlists and actually do what they used to do -- make the hits. The labels would come begging for airplay.

Not once -- never -- have I seen a story about the performance tax exemption that mentions the impact on the audience.

Radio stations are serial offenders of the don't screw the audience rule.

Next to radio employees who have been fired faster than the stooges on Donald Trump's TV series, radio listeners have been taking it on the chin at the hands of Fagreed, Tricky Dickey, John Slogan Hogan and all their wannabes.

When a smooth jazz format is taken away from an audience as we have seen recently (with the exception of Chicago), the disenfranchised listeners are sent to a cheap Internet stream or worse an HD subchannel that is sitting around empty.

Most don't have an HD radio anyway (and don't want one) and they can't hear that gratuitous Internet stream on their car radio.

When radio listeners are robbed of their favorite local morning show personalities because the consolidator decides to cut costs to pay down debt, no one in our business spends much time thinking about the audience.

Hell, when consolidation occurred, radio totally took for granted that teens would always be the next radio listeners.

Look what happened.

Teens grew up without radio. They had other options (Internet, messaging, email, texting, mobile devices, iPods, social networks, etc) and paid radio back for not considering them.

Yesterday, Clear Channel's Chief Execution Officer, President John Slogan Hogan, went out and spent some money creating two new useless executive positions.

Darren Davis as Senior VP for Premium Choice which as I have said before is really Premium Chuck. I guess his job will be to beat managers into submission to get them to carry the repeater radio content they are in business to develop so local stations can fire talent.

Then there's Clay Hunnicutt who was named -- are you sitting? -- Community Engagement Director.

No, I wish it meant he'd be helping people plan their weddings. That would at least be responsive to an audience need.

Slogan Hogan who must have sat around for a long time coming up with the title "Community Engagement Director" has earned the "slogan" nickname. According to Hogan, Hunnicutt will "oversee “stations’ community engagement efforts and ensure our commitments come to life in a robust, consistent and sustainable way.”

That's a lot of horse shit in one sentence.

See, the audience doesn't need a Community Engagement Director. Radio did just fine on engaging its audience before consolidators butted in.

The best liaison with the community always was and still is the air talent - duh!

Of course when you take the air talent away and force Premium Ground Round down their throats and begin to worry that the FCC and Congress may one day figure out that national is not local, you come up with this sham.

Clear Channel is not alone.

The major consolidators are tap dancing faster than Ginger Rogers and Fred Astaire these days.

It amazes me that companies will make major decisions affecting its future and future revenue streams without taking into account -- their audience.

Apple does.

They built that company by giving its young changemakers core products and concepts they want and think are cool. Usually, Apple does not disappoint.

Does Steve Jobs have a Community Engagement Director?

I'm waiting!

Would Steve Jobs raise a price to cover his debt (which is nil, by the way)? Of course not, when Jobs mispriced the initial iPhone he turned it into a PR victory by promptly lowering the price and rebating $100 to those who paid the original higher price? Take note New York Times.

The music industry died in 2000.

Napster wasn't the issue (although it was to a bunch of arrogant label executives who were having their faces rubbed in it by a bunch of kids).

Filesharing was something the labels could have owned.

Consumers don't want CDs -- they want digital music -- but the labels continue to hawk what the marketplace clearly doesn't want.

As long as Evian can get people to buy water they could otherwise filter out of their own taps -- at a premium price -- then you know consumers will be the ones to decide what they want in their lives and what they will pay for.

No young person I have ever met that has a cell phone skips the expense of the additional text messaging package. That's what they want. That's what phone companies can sell.

Record labels have killed themselves to push their favorite $19.95 monthly all you can eat package of everything that was ever recorded, but consumers clearly have rejected it.

There are big lessons here for all of us.

1. Ask and you shall receive a ton of input about what your audience wants, needs and values.

2. Decide without consulting them and you're going to pay the price in the end.

3. Take your audience for granted (raise subscription prices too high, substitute national radio for local, offer little in content for the next generation) and you eventually lose the market.

4. Innovate or die. All of us want the next great thing and that applies to the media business. One reason I can guarantee you radio is over is because there hasn't been a lick of innovation during the past 13 years of consolidation. Forget debt the consolidators can't pay. Forget the incompetent CEOs running most groups. Radio hasn't innovated anything significant since the late 1980s. That's a death wish.

5. Companies that employ happy people innovate (ever hear of an uprising of unhappy people at Apple?)

6. Companies that don't have more debt than they can pay have money to invest in people, projects and connecting with the needs and passions of their marketplaces. Again, Apple is full of cash.

7. The best way to get the pulse of your audience is to take it to the street. When radio pulls out of local radio leaving just a few employees standing in each market, how in touch do you think they will be with their audience even with a so-called Community Engagement Director?

Those of us in the radio, record, TV and newspaper business suffer from consoladitis -- that infectious disease that kills off human contact with its audience.

And those of us embracing new media must be sensitive to the fact that the Internet and mobile phone are simply the delivery systems -- not the content.

It's not hard to predict the future based on this standard of staying in touch with the audience:

Apple -- continued success and financial gain.

The New York Times -- disaster that may end or neuter a great paper.

Radio -- way out of touch with Main Street and way out of luck with Wall Street.

Satellite radio -- not a necessity outside a Lexus.

TV -- lost in the thought that the computer is the message. It's content, baby -- and where it is played presents new opportunities not just challenges.

Record labels -- as outdated as the CD because what its audience is all about is music discovery not lawsuits, monthly downloading plans or variable pricing on music that is stolen anyway. The labels would know -- if they asked -- that music is worth five to ten cents a song today. If that's not a business for them, then it's time to get into another.

Mobile phones -- carriers not content providers. As long as you need a mobile carrier to text, talk or surf, it is a business. There is very little innovative about phone companies when it comes content.

Internet streaming -- something the Internet does along with reading, seeing and connecting. It is the enabler not the innovator.

Social networks -- if Facebook doesn't morph into thousands of niche groups of like-minded people, it will have been a colossal failure when all is said and done. If it does, social networking is the story of the century (at least so far).

One more thing.

We in radio and records tend to look at the world as a different place separate and apart from our world. Talk to any radio person and see what their concept of radio is compared to what the audience's concept is.

It is becoming more important to look at the macro view.

Our recession is worse than a depression even though it is not a depression.

Prices will be revalued.

Products will be reconsidered by the public.

New models are on the horizon that several years in the future -- in my opinion -- will use the Internet as a driver of revenue by offering paid content that the audience values and desires.

Some of you may have attended a management conference I put on a number of years ago at the Phoenician in Phoenix where the brilliant management seer and soothsayer, Peter Drucker, addressed media issues.

Foolishly, some -- but not all -- attendees scoffed when Drucker told interviewer John Parikhal that the Internet will be a major force.

In 30 years!

He's a fool. He's got to be wrong, right?

As it turns out it looks like the late Drucker hit the nail on the head once again.

Drucker said if the Internet had a Dewey Decimal System instead of what amounts to primative search engines it would be a more potent force.

It's helpful to understand and elevate our thinking to have more of a customer focus -- the only true important blueprint for a successful company and industry.

And as of today, with all due respect Hogan is not Drucker. Suleman is not Jobs. And Dickey is not Tim Westergren (Pandora's guiding light).

Bottom line.

It's not nice to screw the audience because the audience always wins in the end.

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