All together now – the only way failing radio operators can cut costs is to fire more local talent.
Clear Channel has been methodically going from market to market to either renegotiate deals with low ball offers as in San Diego or slicing talent from money producing successful programs like the Gerry House franchise.
Or ... firing the morning team and picking up Kibbles and Bits or whatever they call Prime Choice these days.
I call it cheap local filler.
Clear Channel is sneaky. But you know that already.
Ever since they got burned by making a spectacle out of firing almost 2,000 people a year ago on presidential Inauguration Day, The Evil Empire moves purposefully and continuously to slice payroll while babbling out of the other side of their mouth about how great it is for radio.
Recently, Clear Channel pulled the plug on Lex and Terry’s fine local show in Houston to save money, but interestingly enough continued to use Lex and Terry as hamburger helper for other Clear Channel markets – perhaps as many as 30, I’m told – where Clear Channel will then not have to pay local talent.
Citadel, the other serial offender, is also working hard to be a network not a local radio operator. It has hired consultant Mike McVay to put more local radio talent out of work by creating Citadel's own brand of cheap local filler -- Donny Osmond comes to mind.
But the point is that this is counter intuitive if these troubled radio groups want to build local audiences and increase revenues.
One of my readers, a former radio exec who has gone to the great beyond (or as I like to call it, digital media) puts it in perspective:
“Radio can grow but it’s not 40-minutes of music already on an iPod, two 8-minute commercial pods, and 4-minutes from the on-air talent from wherever they are. Content needs to draw in and engage the audience. Content that appeals, rewards, and keeps the audience listening. Then add the appropriate sponsor messages for that audience and listening happens. Sponsors get results. Radio gets rewarded. NPR has figured this out.
AM/FM needs to get real, personal, and local. Or, just continue to broadcast … no one is listening.”
The remarkable thing is I know hundreds of radio people who can revive this industry and then take it to the digital world. But the handful of decision makers who run it don’t want to go there.
And the way you explain broadcast companies firing successful franchises and replacing them with cheap filler is that radio in the future will not be about winning listeners or even getting the higher ad rate. In fact, we can now see how advertisers and agencies are already driving down the cost of radio advertising (with the permission of radio groups) until radio will be just another cheap commodity.
And here is a wake up call for radio from the mobile business:
“Dec’09 19% smartphone penetration (Source: Nielsen) and more than 50% by Dec’12. Three years that change the media world.
It’s doesn’t take a local merchant long to notice customers shopping, lounging, hanging out with their lit-up iPhones, Droids, Blackberry’s . Programs like CityGrid offer 500,000 local merchants “pay per action” model. Spend only what you want, by day, week, month. No fixed commitments. No un-measureable results. No long sales negotiation.
…new Mobile Smartphone programs like UrbanSpoon, OpenTable, Yelp!, Google Local, and CityGrid will take away the local merchant from radio the same way eBay & Craig’s List took away classified advertising from newspapers. You know what happened to newspapers when they lost the lucrative classified ad revenues. Radio without local merchant support leaves an empty building. The radio reps will move over and become affiliate reps for the new mobile program companies.
No amount of radio price discounting will overcome the appeal of a “pay per action” program."
Maybe the three “C”s see this now.
Go national with repeater radio, voice tracking and syndication.
Then sell cheap reach points to GEICO, McDonalds and Home Depot as the bargain basement medium of choice for national media. Under that scenario, Clear Channel builds its stable of national talent the way it used to build local personalities.
Then they get profitable.
And go public again.
Our problem (yours and mine) is that we love this business.
Their problem is they love business and will turn local franchises that work into a shell game for as long as they can.
Ironically, Clear Channel, before it became known as the Evil Empire, was described by the name Cheap Channel.
Now, the description will be true to advertisers buying radio with them.
So when others scratch their heads and wonder why presumably intelligent radio CEOs are dismantling local radio, you now know that they think they have a future in commodities of which radio will be sold just like pork bellies.
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