Radio's Untold Bankruptcy

Did you see over the weekend that Jay Leno is losing his audience not to other television networks but to – DVR machines?

TiVos are eating television alive.

Leno is down 1.8 rating points in his 10 pm (eastern) daily show. You may remember CBS CEO Les Moonves said at the time Leno’s strip was announced that there will be more viewers available for people who put on great dramas -- I assumed he was talking about CBS.

That’s great one-upsmanship but not very accurate.

What is really happening should serve as a lesson to beleaguered radio stations, failing record labels and other traditional media companies who seem clueless about why their world is changing.

The TiVo is winning.

Yet you may remember that the broadcast television industry decided to fight time-delayed rebroadcasting (DVRs) or stymie it as much as possible when consumers began to embrace it.

Too bad.

One-third of America’s TV households are equipped with DVRs and 10 pm is turning out to be a great time for watching some of the shows they’ve been recording. It’s that way in my house – maybe yours, too?

NBC and ABC are also down when Leno is on (with the exception of when “The Mentalist” that was moved into that slot is aired).

The audience will not be denied – any good programmer knows that. I always say cooperate with the inevitable – after all, the inevitable is, well – inevitable. Why buck it?

TV networks are as clueless as radio execs. They would rather have a live viewer than a TiVo watcher, but would rather have a TiVo viewer than nothing at all.

Kind of silly but perfectly understandable when you arrive at the conclusion that traditional media wants time to stand still.

Broadcasting is so – well, 1920’s.

If aliens arrived on this planet (no, not Wall Street bankers), they wouldn't turn around and say, "let's cut down trees and print news on paper". They'd look around and say, "I like that Droid over there, let's use it". I can't imagine someone from outer space saying, "we need more towers and transmitters". But I can hear them saying, "more iPhones would be out of this world".

Before the technology and sociology "big bang", airing a radio signal and decades later the TV transmission was the only way to get the product to the marketplace.

Today, broadcasting is increasingly becoming the least efficient manner of delivering content and the very one broadcasters are stubbornly holding onto. It would be like saying newspaper publishers insisted that their news be printed on paper … oops, sorry about that.

And, by the way, it doesn’t matter if NBC cancels Leno as rumored. The networks hastened the move to indirect broadcasting by pushing the 10 pm Leno experiment in the first place. (Isn’t it interesting that satellite operator DirecTV is really IndirecTV because so many people record content and then replay it at their convenience?)

As a professor I always warned that today's audience wants what they want when they want it. Media companies should know this because they have been pandering to this desire in promos, copy, shows, scheduling and yet somehow they don’t really believe in it.

Look to the record industry.

The labels are going down with the CD and the CD’s successor – streaming audio for a monthly fee. They can see it no other way because at the labels, they want what they want when they want it, too.

In radio, it is even worse.

Radio hasn’t had time to worry about listeners. Too busy cutting costs and avoiding bankruptcy.

Look at the mess they’ve made of local radio. The smaller companies and few medium-sized operators who defy the death of local radio are still outperforming their smartypants consolidated competitors.

Let’s see now … I wonder why?

Radio listeners are having their way and Lew Tricky Dickey, Fagreed Suleman and John Slogan Hogan don’t care. No one at Cumulus, Citadel or Clear Channel is really paying attention to changing audience habits.

Research budgets are slim or none. No major group budgets for Internet -- doesn't that amaze you? The biggest thing since the industrial revolution and consolidators won't even put in a 3% line item for webcasting. No mobile strategy in sight at any major radio group. Personalities are fired. Program directors spread so thin that they are becoming "program facilitators" of outsourced national content.

Talk about bankruptcy.

I don’t know about you, but if you took away my radio I’d live, but take away my cellphone and you die – you get what I’m saying.

We can’t live without a cellphone and increasingly a smart phone like a Blackberry or iPhone. Thus, we deduce that the audience wants their phone to be the center of their communications universe.

I want to listen to my favorite non-terrestrial radio morning show, Dave & Geri, on my phone in the form of a podcast and I want to make morning drive when I want it to be.

Hey, I’m sounding like the college students I taught.

I want what I want when I want it!

Oh, and I’m tried of commercials period and specifically bad ones that are bunched together for five or eight minutes. Tired of hype, bland playlists, talk stations that are only about politics.

Leno is a great teaching lesson because it shows what happens when you put even a well-liked performer on at a time when the audience doesn’t want him.



And pathology.

My readers recognize the first two words because I believe that to succeed in content delivery in the years ahead we will have to, as Steve Jobs does, master where technology and sociology come together.

I also added pathology defined as any deviation from a healthy, normal or efficient condition.

And failing to understand and heed the needs and desire of the audience – not investors – is a deadly deviation.

Invest in the consumer’s interests and you get Apple – a hugely popular company and business that has in essence skipped a deep American recession.

Ignore what the audience is telling you and you get NBC, CBS, ABC, Clear Channel, Cumulus, Citadel, most radio groups and the four major record labels.

Bankruptcy -- the kind facing Citadel January 15th and Clear Channel as well as Cumulus later in the year -- comes from bankrupt programming decisions such as not going where the audience is available and not giving them what they want.

Radio people know this.

Bankers don't care because Saks Fifth Avenue, Chrysler and radio groups are all the same to them -- just commodities upon which they make endless fees and profit even when they fail.

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