The Media Crisis of 2009

Terry Teachout wrote an excellent article recently in The Wall Street Journal about lessons the media industry can learn from the last big technological and sociological revolution when television replaced radio.

In The New-Media Crisis of 1949 the author accurately framed the debate over what to do with the Internet, mobile space and social networking. Just as important, by inference he was giving us a view of what not to do.

My purpose in bringing this up is to add some additional content to the issue specifically targeting radio, music and new media.

Ironically, networks played a role in the previous technological revolution.

The early, popular radio shows were networked across the country and by 1949 -- at the advent of commercial television -- there were 85 million radios tuned in to hear these national programs.

By contrast, today, Repeater Radio and voice tracking exist not to offer one-of-a-kind talent to a nation but to offer one-of-a-kind cost savings to consolidators.

There were only 1.3 million TV sets in use -- mostly on the East Coast -- by 1949.

Unlike today -- when the Internet, cell phone, social networking and file sharing became available for exactly the opposite reason -- it was free and more readily available.

Some of my USC students felt that even though the Internet is everywhere, the devices upon which to access it were not available to all socioeconomic groups. So there was a parallel -- televisions cost about half of what a new car would run you 60 years ago -- and a laptop isn't cheap today.

It was, as Teachout points out, that the rise of network TV due to the laying of coaxial cable between a number of major cities made the new medium available if not affordable.

Radio stars were big back in the day -- so big that many didn't want to cross over to television. Some did -- successfully. Some did not. Careers, thus, were prolonged or eliminated by a radio star's ability to make the transition to radio's new competitor.

Today, we see radio groups embracing the Internet only in a cursory way -- repurposing radio shows, streaming terrestrial formats online and inserting different and less expensive commercials.

That's not much of a business plan for the future when there is no future in it.

Talent is mired in terrestrial radio unable or unwilling to see podcasting as the new radio, the Internet as simply a delivery system and not a format category and social networking the "coaxial cable" of the future -- is not the product, not the content -- only a component.

Fred Allen, one of the biggest radio stars that never made it in TV insisted that radio was still better because the listener "had to use his imagination" (quoting WSJ).


Doesn't this kind of remind you of what is happening in the radio business right now in 2009?

The "for us or against us" attitude that permeates radio (i.e., you're either a radio person or not). By radio person that would be someone who works in a terrestrial station and takes a lot of crap from management that doesn't see the future. Dare to say that radio is over -- and you'll be lynched (figuratively speaking).

In the Journal article, three "lessons" were offered that I would like to comment on:

Lesson #1

"Network TV lost vast amounts of money in its early years. It was only because the existing radio networks were willing to subsidize TV that it survived—leaving CBS and NBC at the top of the heap in the '50s and '60s, just as they had been in the '30s and '40s. The old media of today have a similar chance to prosper tomorrow if they can survive the heavy financial losses that they're incurring while they develop workable new-media business models".


Can you see the difference already?

Radio groups today are not willing to subsidize their future competitor that is the Internet/mobile space. In fact, radio groups stubbornly refuse to invest anything in the burgeoning new technology.

Most large and small radio groups have no Internet strategy, limited understanding, no funds budgeted to the media that will likely surpass radio for good this time.

Unlike the early days of television where radio interests were developing radio with pictures, radio now is a minor player at best in the future of webcasting, mobile content and social networking.

Lesson # 2

"Established radio performers such as Benny and Hope, who embraced TV on its own visually oriented terms, flourished well into the '60s. Everyone else—including Fred Allen—vanished into the dumpster of entertainment history. The same fate awaits contemporary old-media figures unwilling to grapple with the challenge of the new media, no matter how popular they may be today".

That's right -- radio's biggest names today will vanish like the dinosaurs into ancient history.

As I like to point out, the ones who will invest and innovate in new media -- particularly podcasting -- may go on and count themselves as the few and the fortunate to transcend a dying medium into a growing industry.

History repeats itself.

There is a reason why the old saw still rings true.

And why does history repeat itself?

Because we never seem to be willing to learn our lessons from it -- so, any radio talent looking to end his or her career need simply to stay where they are in a medium that is about to be replaced by a new one in which radio has little interest.

Lesson #3

"Americans of all ages embraced TV unhesitatingly. They felt no loyalty to network radio, the medium that had entertained and informed them for a quarter-century. When something came along that they deemed superior, they switched off their radios without a second thought. That's the biggest lesson taught by the new-media crisis of 1949. Nostalgia, like guilt, is a rope that wears thin".

Radio people need to read and reread that last paragraph.

An entire new generation of 80 million are in the process of departing for new media leaving terrestrial radio with no growth potential and no real way to survive ten years from today. That is a fact.

Even older available listeners have taken to Facebook, downloading songs to iPods, embracing Twitter, watching YouTube -- to mention a few -- all at the expense of their radio listening time.

The monopoly radio had in cars for years has come to an end -- the car radio is now called the entertainment center.

Satellite radio was to become the next radio and all it managed to do was be a costly part of this entertainment center not a stark contrast to its competitor -- terrestrial radio.

Radio listeners have embraced new media and continue to gobble it up at a record pace. Still, radio groups exist as though they have no competition and everything is still beautiful.

The lessons are many but they are happening in real time and cannot be ignored.

There is a reason why radio operators in the 1940's supported and subsidized its eventual replacement -- television.

It's because these leaders then saw a vision of the future and wanted to be part of it.

By contrast, today's radio consolidators refuse to acknowledge let alone subsidize what may very well be their technological and sociological replacement -- the Internet and mobile space for exactly the opposite reason.

They can't see the vision and don't want to be part of what it considers the enemy -- not the future.

This Wall Street Journal piece is excellent if you have the time to read it -- click here.

I hope this discussion has resonated with you as it has with me and I encourage you to share it with your media friends.

The richness of radio is its talented managers, salespeople and on-air performers. They are being forced to take their futures to new media without any industry leadership.

That did not happen in 1949.

But it must happen in 2009 if they are to find a place in the digital future.

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