Voice tracking, of course, is the process of using one voice to record many pieces of content to make radio sound live.
Once the weather forecast says “sunny – get out and enjoy the day” during a tornado (as reported to you a few weeks back), the cat is out of the bag.
And when the content is so vapid that only a misguided radio CEO can like it, listeners usually figure it out.
If audiences were starting to cool to radio five years ago, they’ll like it less today as the industry converts to all voice tracking all the time. Lest we forget, Randy Michaels brought voice tracking to public prominence approximately ten years ago as he married new technology with working for greedy owners.
This losing formula works just fine for consolidators who have no other expenses left to cut back. They are being chased by lenders increasingly angry that their investments are headed south.
Clear Channel, Cumulus and Citadel – some pretty big radio consolidators, wouldn’t you agree – are on the brink of bankruptcy possibly as soon as the end of this year or the first quarter of 2010.
Radio One and Done isn’t exactly rolling in dough.
Regent has its problems.
Little guys like Wilks is now forcing its staff to take a 5% cut in salary or commission and bonuses and are closing their offices at 12:30 on Friday to save money. That's pretty pathetic.
What is this, Good Friday every week?
Most of these consolidators have never sold an ad, done an airshift, programmed a station or managed anything.
Can you imagine Jeff Immelt, the CEO of GE, hiring such inexperienced people to run anything at General Electric?
Now, there’s more disturbing news.
A very large radio consolidator is getting ready to set up ten test stations to convert to voice tracking.
They have been in talks with AFTRA as recently as May 26 and 27th in New York City.
(I’m not identifying the consolidator to protect my source so you’ll have to use your imagination for now – you won’t need much of it to deduce the latest convert to voice tracking).
We’re talking major markets here.
This group is big enough to pull the trigger on more massive voice tracking in their non-union markets so even if an agreement is not worked out, the non-union cities are set for massive cost cutting.
It’s not just about the stations that are losing money. Many being targeted by this group are still in the black and cranking out plenty of cash to pay their parent company’s debt service.
It’s that bad.
As attractive as voice tracking is to consolidators desperate to cut expenses, it is that odious to the audience. They may not know what voice tracking is -- and the People Meter might actually pick up "listening" to voice tracked stations, but don't confuse that with liking it.
The fact that radio advertisers do not complain is interesting, but then again how stupid are they to be spending billions of dollars on radio stations that don’t know what they do, what their needs and goals are or how they can be of help?
And, and on top of that – bury their commercials in six minutes of nonstop spots.
Radio is broadcasting the wrong message.
Terrestrial radio is a poor imitation of an iPod, with fake personalities and irritants such as commercials.
This dumbing down of content is more than a financial issue. It may be a short-term cure for bad financial management but it is also a long-term investment in killing the franchise.
Let’s be candid here.
Radio consolidators are out of time. (I know I am preaching to the converted). Even Lew Dickey knows it. He’s not dumb. But consolidators have gotten themselves into a real pickle.
Last week I read that industry experts say although radio revenue is down again, it has bottomed out.
Want to make a bet?
There are financial analysts who say that radio may never be a growth industry again and certainly not before 2011 before they see the light of day once more.
Well, Cumulus, Citadel, Clear Channel, Radio One and Done and a host of smaller operators such as Regent may not be around for that day.
They can’t sell their stations to raise money.
Debt holders are getting restless and may just push one or more of these groups into bankruptcy.
Once in bankruptcy, forget Fagreed, Hogan and Tricky Dickey, it will be up to Judge Shorty Long in bankruptcy court. Their companies will spin out of their control into the uncertainty of bankruptcy court.
So I realize and I want you to realize that I don’t think all of the consolidators want to fire people or put wimpy voice tracked programming on their stations.
But it is either that or their necks -- and you know which one they are picking.
The real fascinating story is how it got to this in the first place.
1. No plan B. Plan A was grow the group, win more deregulation, feed the stations like pigs on antibiotics and sell for a huge profit.
2. No recession – at least not this one. They had to know that paying huge debt to borrow money – first to acquire and then to operate and finally to refinance couldn’t be sustained if the economy didn’t hold up.
3. No expansion of sales efforts. Instead, these failed groups did the opposite by first combining and then cutting sales forces, training and support. Then, eliminating traffic directors by giving the work to sellers instead. Making them report to headquarters before they made local calls. Eliminating competent sales management and running everything from spy-in-the-sky headquarters.
4. No plan for the digital future. They assumed radio would always be popular with every generation and that assumption robbed radio of its future. Gen Y was raised without it and has gone on to embrace new technology (smart phones) and changing sociology (social networks). Radio is left out in the cold failing to follow its audience to their devices.
5. No competent management. Mel Karmazin was probably the best of the original radio CEOs. Always a salesman, loved by Wall Street, shrewd. The rest you wouldn’t pick out of a lineup. If I told you ten years ago that John Hogan of Atlanta would be the Chief butt kisser for Lee & Bain, you would have cancelled your Inside Radio subscription. Who is Fagreed Suleman, anyway? Wasn’t he Mel’s bean counter? Lew Dickey was just a nice guy – Harvard educated, and put into place by his powerful father, Lew, Sr. He was benign until he ran out of money and ideas.
No wonder it has come to this.
Everyone knows voice tracking makes lousy radio.
But when lenders stand ready to repossess your radio group, I guess desperate times call for drastic measures.
And, all together now, when monkey see monkeys "do" even more voice tracking.
Bet on it – within 60 days -- a big radio group will ape Clear Channel because monkeys may eat bananas but radio consolidators run their companies on peanuts.
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