Reinventing Radio

One of the reasons my January Media Solutions Lab seminar is going to delve into reinventing radio is because simply turning back the hands of time (as Tyrone Davis would have us do) will no longer work.

That’s right.

Even reinstalling the morning show, cutting commercial loads, eliminating voice tracking, rehiring everybody and raising ad rates can only have a limited effect on any turnaround of radio going forward.

Would these things help?

Yes, of course.

Are they "The Answer"?

No, Allen Iverson is the “The Answer”. In radio we no longer have answers -- just clues.

One place to look for clues is not how radio has changed, but rather, how our listeners' lives have changed and in fact how listeners are very different compared to just a few years ago.

Radio remains the same – a strategic disadvantage as you're coming to see.

Audiences have grown by embracing new devices, more accessibility to content, new ways to get what they want and to go where they want to go.

I was talking with Dave Jagger and Geri Jarvis (of Dave & Geri podcast fame) yesterday about how far the terrestrial radio industry has drifted even in the few years that they have been off the air in Grand Rapids.

Dave & Geri are icons in local radio and had been delivering top ratings for the best part of 18 years until the consolidator they worked for decided to save their salaries.

Thought you’d like the essence of what we discussed as it impacts on whether the radio industry can be resuscitated from incompetent owners, Wall Street lenders, an audience that has been frittered away and advertisers who have now become accustomed to really cheap ad rates.

Since Dave & Geri were laid off – there, I’ve used those dastardly words – the following things have changed:

1. The rise of the iPhone. Previously Blackberry devices were in use mostly as a business accessory but the proliferation of iPhones made it possible for more morning commuters to get the weather in the palm of their hand.

2. Text messaging took off – even in cars – invading the sacred listening space of morning show audiences. Like it or not, text messaging and, in fact, cell phone use has skyrocketed while driving.

3. Music streaming sites and music discovery itself have expanded to off-the-dial places such as smart phones and laptops as well as desktops. The desire to hear new music has been satisfied by media not exclusively a traditional radio station.

4. Listener attention spans have become shorter – and not just for Gen Y that seems to get all the blame of not being able to concentrate – but for older audiences as well. That’s why one third of the nation’s TV households have DVRs such as TiVo and use them to watch TV on demand.

5. News now travels a different circuit to consumers. It used to be not long ago that the radio newscast aired the serious stuff on the way to work and the morning show covered Tiger Woods’ affair. But now TMZ is the official Tiger Woods “station” and believe it or not The National Enquirer has become a reliable source of gossip news (John Edwards affair, Tiger Woods, et al). Former morning show content is no longer exclusive to radio – and that’s assuming some asinine decision hasn’t turned the local morning show into syndication. I got 12 emails yesterday with the Tiger Woods Christmas card send up complete with a golf ball stuffed in his ear and stitches on his face. Viral broadcasting has arrived on our computers and mobile devices.

Let’s start with this.

You know right now there is only one Larry Wilson willing to buy radio stations for very low multiples. But if equity owners of the major radio groups have their way, there will be an entire sea of Larry Wilson's ready to put their life’s savings at risk to fulfill their dream of owning radio stations.

Yesterday I mentioned how Clear Channel and other major consolidators are dropping their rates to a handful of dollars in some markets. It is fair to say – and advertisers will concur on this – that they expect radio to keep dropping its prices.

Even as I type this Clear Channel is getting ready to succumb to so called yield managers with strategically placed dollar holler type sales blitzes that advertisers are now able to wait out.

That is, the stations are driving down whatever they could have gotten for ad rates through misguided sales strategies such as this.

Meanwhile, the happy talk press played up a recent Nielsen study – another shameless pep talk for “everything is great as is in radio”.

Nielsen is bragging that half of adult audio is listening to AM/FM.

The questionable study that is portrayed as “good news” for radio is really deceiving. The average 18+ year old listens to 2 hours and 45 minutes of audio each day with terrestrial radio making up half of that listening.

What’s in “second place”: CD/Tape Players (16%), satellite radio (8%), iPod/MP3 Players (5%), streaming audio on the computer (4%) and MP3s on the computer (4%). “Other” is 13%.

Five cities, no reference to actual sample size, only the number of minutes observed and some strange study limitations (see the full study here)

If things are so good, so wonderful then radio doesn’t have the problems it has. Owners won’t be cutting the rates, firing staff or trading syndication for local programming.

Hey, they can't have it both ways.

One media buyer begs to differ with Nielsen’s conclusions:

“I'm 47. My iPhone is my primary delivery system for audio - podcasts, mostly, and WunderRadio app to listen to Imus and occasionally CBS-FM. I'm in Chicago - WGN gets me if I'm in the car at all 9 a.m - 4 p.m. My wife is 37, commutes on the train. NPR gets her for about 20 minutes a day (over the air). Our daughter is 16 - mostly iPod, occasionally CC's CHR here - KISS, when her alarm clock goes off. Even if the numbers are close, it begs a bigger issue: I won't recommend to anyone that they waste a penny on a spot buried in a 6 minute stopset.

A few years back, a research group questioned Gallup's numbers on how many people attend church on Sundays. Gallup was reporting big numbers. The researchers believed that people who are polled on that topic lie and report what they think they should be doing vs. what they really do.

So the researchers (from Notre Dame and the Hartford Institute for Religion) designed a study in which they identified representative counties across regions of the U.S. They put teams in each of those counties for just over a month each, stationed outside of churches on Sunday mornings, and counted.

Results? About a third of what people were self-reporting. I want to see numbers like that for radio. Maybe deploy teams of midgets into peoples' glove compartments?”

So when we convene in January, we’ll work together as a group on what can be done to have an immediate impact on radio listening and advertising. Then, look to how to grow new streams of revenue through new media. What to do with social networking and put it all together.

It’s like a hybrid – 85% radio, 15% new media as sources of revenue.

But by January 2011, it will have to ramp up to 20% new media and 80% radio.

Then as a slow economic recovery digs in, new media will take off as advertisers were posting plus numbers in new media buying even during this recession. If they are into it now, they are not likely to retreat during prosperity.

It hurts to see radio’s leading companies do destructive things to their people, their audiences and their advertisers, but ignoring it won’t make it stop.

But there is a way to come out ahead – for those who dare to think differently

As far as the Nielsen PR eye candy research goes, I’d like to bend a Harry Nilsson album title to put it like this …

Nielsen Schmielsen.

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