The Mad Media Meltdown

The trades are all abuzz with news that radio may, in fact, be headed for another challenging year financially. And when the trades admit it, it must be bad because they like to keep their constituents’ spirits up.

Take NBC late night.

Conan and Jay are not just a TMZ gossip story. They are a sad commentary on the meltdown that is taking place across traditional media these days. How could NBC be so stupid?

And how could radio consolidators be so shortsighted to be firing their personalities and injecting voice tracked programming and network shows when the best defense against new media is doing local radio with favorites on-the-air.

Consolidators are in financial trouble not because of the recession (remember radio has survived many recessions in its history) but because stations have stopped innovating.

As one of my readers pointed out:

“I’m so tired of hearing radio CEOs describe a better 2010 using ‘it’s going to be easy to beat last year comps’. I’ll bet the guys at Kodak said the same thing after 9|11 … the economy would get better and people would take vacation pics. The guys at Kodak could never understand the magic in pictures was sharing the experience not the chemical processed film imagery. Cell phone cams didn’t have the picture quality but they sure where (sic) convenient. Sharing become easy and quick as pushing a button. Poof … no more Kodachrome. You know the story for radio”.

In spite of what equity lenders think, it is innovation that sells not bean counters that cut expenses.

After all, NBC Universal parent General Electric mandated deep cost cuts not a bounty of innovation and we see where that has led NBC.

As former NBC President Bob Wright said the other day the only cure for the problems at NBC is a sale to Comcast.

That’s what radio consolidators routinely do now – cut expenses at the risk of diluting their local radio product.

So what do Conan and Jay, advertisers cutting back and the demise of local radio have in common?

The companies that are perpetrating these crimes are guilty of murdering innovation.

Enter Steve Jobs, as he will on January 27th, and innovate once more to the delight of consumers and shareholders as well (I am both).

Apple will likely announce its new tablet device. I am hearing there will be a seven inch and ten inch model – the top of the line unit could cost $1,000. They may be available as early as March.

Of course, only Steve Jobs knows for sure but he certainly has our attention without spending a dime because he has a proven record for innovating.

Look, Harvard has earned its business school reputation by concentrating on case studies. The theory being if you see what has worked and has not worked for other companies, that makes you an outstanding executive.

Cumulus CEO Lew Dickey is a Harvard grad.

Harvard’s got its own problems as many institutions of higher learning do these days. They take their own advice which is why with record endowments, the school has lost its financial shirt in the stock market.

Back to Jobs.

Jobs is a dropout from Reed College in Portland, OR.

As frequently is the case, dropouts learn more than graduates and make their educational time count. According to Jobs' Wiki bio, "Although he dropped out after only one semester, he continued auditing classes at Reed, such as one in calligraphy. Jobs later stated, 'If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts', he said".

Jobs could play top executive in the model of GE's Jim Immelt if he wanted to. Could have a corps of bean counters invade Cupertino, but no – that’s not an innovator's M.O.

Apple has hired its way through the recession not firing people.

It has grown shareholder value for its investors even during the worst economy of our lives (assuming you were not around for 1929).

Mel Karmazin was the media darling of Wall Street for years and all he talked about was building shareholder value.

Sirius XM stock closed at 67 cents yesterday.

Other radio CEOs did the same song and dance and some of them are now in bankruptcy, some are headed for bankruptcy and the rest are clueless as to where the future lies.

Fortunately for me, I have invested my USC pension in Apple – all of it! It has doubled in the past year. Doubled! In a recession. Now that's shareholder value!

So why can Apple do it with a one-semester Reed College dropout and Cumulus can’t do it with a Harvard alum?

I'm wrong.

Lew Dickey has a Bachelors and Masters Degree in English Literature from Stanford University and an MBA from Harvard. Stanford is not chopped liver either.

Smarts only work when you know how to use them.

Back to NBC's mess.

How can NBC fail strategic planning by putting Jay Leno on in prime time while saving money on dramas, screw up their affiliates' late local news lead ins as a result and water down the one part of its schedule that prints money – late night? (And did I mention that they are going to lose Conan, the younger target demo talent to a competitor and pay him to leave?)

Can you say no inno? No innovation.

So it’s going to be a grim year – in fact, a depressing future for anyone who cannot learn to innovate. And that requires raising your consciousness as well as bringing out the talent of others.

That requires new skill sets.

Most folks in the media business have plenty of the old and cannot even identify the tools they need to access the future.

Yet Pixar produces hits.

Apple invents new businesses not just electronics.

Zappos sells shoes online by mastering the art of innovating great service.

Radio does what these days?

Oh, cut costs and dilute local programming.

Record labels do what?

Cut expenses instead of doing a full court press to find new music and learn from young people who actually know more than they do about the music industry’s future.

Newspapers do what?

Shrink the size of the paper. Try to force readers to buy it while giving away the content online for free (in return for running ads that don’t equal the expenses it took to gather the news).

No inno.

My readers tend to understand that the demise of traditional media was not necessary. It could have been saved.

Yes, radio could have evolved as it always has and found a place in the new world order of mobile devices -- perhaps not as a 24/7 broadcaster as much as a major content provider and marketer.

The music industry could have morphed into the digital world and pioneered the one thing people cannot live without – music. Ok, food and water, but you get the point.

Don’t let what killed them, kill it for you.

For those of you who would prefer to get Jerry's daily posts by email for FREE, please click here. Then look for a verifying email from FeedBurner to start service.
Thanks for forwarding my pieces to your friends and linking to your websites and boards.

The people who are attending my Media Solutions Lab next week here in Scottsdale are going to get a full dose of innovation – who does it best, how it can change the future and how they can acquire the skills to be more like Apple than NBC.

Want to attend?

Register for my Media Solutions Lab here.