I can't tell you how long the alarm has been sounding for terrestrial radio to get its act together to save its future by developing new programming and content that will be compelling enough for today's under-25 year olds, but I do know that Bridge Ratings has been publishing studies about this for at least four years. And I know several other highly-respected researchers who have been doing it longer.
Yet have we seen any creativity on this front? I can't say I have. There are some youth-oriented attempts on HD radio, but these kids don't care about HD. Even satellite radio hasn't developed any programming that will attract this hard-to-reach generation. Is everyone just giving up? Knowing how important it is to develop future audiences, one would think both traditional broadcasters and the satellite radio companies would dig in their heels and get with it.
I was invited to present some findings at three corporate retreats last year. Bridge Ratings was commissioned to find out what terrestrial radio could do to make its business relateable to Generation-Y. Everyone nodded their heads, slapped me on the back to thank me for opening their eyes, yet nothing's been done!
Frankly, perhaps the reason nothing has surfaced that is compelling is because technology and Gen-Y tastes are a moving target and they are moving too fast for radio to keep up. First there was P2P music file sharing; MP3 players, iPods, iTunes, then Myspace, Facebook, YouTube - it can be exhausting for some. This I get. Now comes something new that will blow your mind: Mobile Social Networking Software or MoSoSo which is essentially the sophisticated reach of cyber-social networks like MySpace combined with the military precision of GPS.
New cell phones equipped with this software were marketed to the college-aged life-group by Rave Wireless last year. It's mobile GPS technology that enables students to find like-minded buddies (Bored? Love Indian food? Meet me under the clock!), it also offers a cyberescort service linked to campus police. If the student doesn't turn off a timer in the phone, indicating safe arrival at a destination, police are dispatched to a GPS location. Your friends can find where you are at any given moment and can keep tabs on your whereabouts all day long if they want. Fortunately, the locator function is strictly "opt-in", meaning users can turn it on and off at will.
The point here is that the more time that goes by, the more convinced I am that terrestrial radio - even satellite radio - are being left in the dust as today's youth clamor for more customized, on-demand, "what I want - when I want it" media which includes the high-speed train known as mobile phones. Cell phones are becoming, if they haven't already become, the new 'radio'. Cell phones serve the same function today as portable radios did two generations ago; they are just more sophisticated social technologies that are empowering groups of our youngest consumers.
Technology will not slow down. Shelf-life for any of these things grows shorter and shorter. The first wave of MySpace users long ago abandoned it and have moved on. Fodder for technology companies to stay ahead of the game. In fact, most highly-focused consumer-oriented tech companies have divisions of brainiacs whose only job is to work on what's next.
Has radio invested in anything similar for its future? Or has it given up on keep up with Gen-Y only to be satisfied with an aging listener base? This is what keeps me up at night.
Monday, January 29, 2007
Friday, January 26, 2007
The "End" of Innocence
The time has unfortunately come in our industry where one event defines a tipping point that has been coming for some time. I speak, of course, of the radio contest incident at KDND-FM, Sacramento in which a listener lost her life after consuming nearly two gallons of water competing to win a computer game.
Enough has been written about what happened and debate has been swirling as to what the lawsuit and any potential FCC action may bring. With this unfortunate situation comes clarification of what's wrong with the radio industry.
Fingers have pointed at consolidation as one of the principal reasons the radio industry is in its current state. Much has been said about how combining radio assets in a given market in order to save money has eliminated many hard-working, creative and effective people from management to on-air personalities, traffic directors and support staff. From my perspective having spoken with managers on a daily basis since consolidation (1996), there has been this undercurrent of concern expressed to me about deteriorating effective performance by station managers.
Where once one manager oversaw one station's operations (General Manager), one Program Director creatively built one station's programming, one Sales Manager oversaw one sales department, the late 90's saw a proliferation of multiple stations or staffs falling under one manager. It has been expressed to me on numerous occasions as far back as 1999 that this type of structure was a defensive approach to management, i.e. too much was going on within the radio stations for management to effectively keep their finger on the pulse, to effectively plan ahead and lay the groundwork for smooth operations and excellent communication.
In order to accommodate this demand for one's time, managers delegated responsibilities. After all, there were only 18 hours in a workday and not enough time to pay attention to the minutiae that often makes these businesses work.
This is at the heart of what happened in Sacramento. General Managers used to participate in weekly promotion meetings, if only to be aware of what the station was up to and to provide guidance in the event there were any questions about legal or ethical issues related to promotions or contests. With consolidation these promotion meeting appearances by GM's began to disappear. If the GM was interested enough, he/she would have notes about the meeting submitted to him afterwards and if the station was fortunate, he would actually read them.
I know programmers, sales managers and general managers today who submit weekly or monthly reports to their bosses and believe their reports are never read. There just isn't time.
And in Sacramento, the lack of General Management involvement with the promotion department has exposed how one person can only do so much. Entercom owns six Sacramento stations. Entercom Sacramento GM David Lichtman likely was not involved enough to be aware of KDND's "Wee for a Wii" promotion. In all likelihood his non-involvement was rooted in his time management. From what I know, Mr. Lichtman is a good man and has been a good executive for Entercom. He just couldn't be everywhere he needed to be.
And while they may not be as significant on the surface as his missed opportunity to stop this promotion before it started, it is quite possible that Lichtman's involvement with 6 stations caused other important decisions, strategies or personnel issues to fall through the cracks.
This single event has brought to the forefront a significant symptom of what's wrong with the radio business whose managers used to be proactive, where general managers would see the future and plan for it - not only react to the here and now. Where sales managers would spend time with their staff and train to excel. Where program directors would have time to consider ways to improve programming and stay ahead of their listeners.
The implications of consolidation become more clear each day, but nothing crystallizes how consolidation has contributed to distraction of management more than what happened at KDND-FM, "The End", in Sacramento.
The industry can learn from this event. But will it?
Enough has been written about what happened and debate has been swirling as to what the lawsuit and any potential FCC action may bring. With this unfortunate situation comes clarification of what's wrong with the radio industry.
Fingers have pointed at consolidation as one of the principal reasons the radio industry is in its current state. Much has been said about how combining radio assets in a given market in order to save money has eliminated many hard-working, creative and effective people from management to on-air personalities, traffic directors and support staff. From my perspective having spoken with managers on a daily basis since consolidation (1996), there has been this undercurrent of concern expressed to me about deteriorating effective performance by station managers.
Where once one manager oversaw one station's operations (General Manager), one Program Director creatively built one station's programming, one Sales Manager oversaw one sales department, the late 90's saw a proliferation of multiple stations or staffs falling under one manager. It has been expressed to me on numerous occasions as far back as 1999 that this type of structure was a defensive approach to management, i.e. too much was going on within the radio stations for management to effectively keep their finger on the pulse, to effectively plan ahead and lay the groundwork for smooth operations and excellent communication.
In order to accommodate this demand for one's time, managers delegated responsibilities. After all, there were only 18 hours in a workday and not enough time to pay attention to the minutiae that often makes these businesses work.
This is at the heart of what happened in Sacramento. General Managers used to participate in weekly promotion meetings, if only to be aware of what the station was up to and to provide guidance in the event there were any questions about legal or ethical issues related to promotions or contests. With consolidation these promotion meeting appearances by GM's began to disappear. If the GM was interested enough, he/she would have notes about the meeting submitted to him afterwards and if the station was fortunate, he would actually read them.
I know programmers, sales managers and general managers today who submit weekly or monthly reports to their bosses and believe their reports are never read. There just isn't time.
And in Sacramento, the lack of General Management involvement with the promotion department has exposed how one person can only do so much. Entercom owns six Sacramento stations. Entercom Sacramento GM David Lichtman likely was not involved enough to be aware of KDND's "Wee for a Wii" promotion. In all likelihood his non-involvement was rooted in his time management. From what I know, Mr. Lichtman is a good man and has been a good executive for Entercom. He just couldn't be everywhere he needed to be.
And while they may not be as significant on the surface as his missed opportunity to stop this promotion before it started, it is quite possible that Lichtman's involvement with 6 stations caused other important decisions, strategies or personnel issues to fall through the cracks.
This single event has brought to the forefront a significant symptom of what's wrong with the radio business whose managers used to be proactive, where general managers would see the future and plan for it - not only react to the here and now. Where sales managers would spend time with their staff and train to excel. Where program directors would have time to consider ways to improve programming and stay ahead of their listeners.
The implications of consolidation become more clear each day, but nothing crystallizes how consolidation has contributed to distraction of management more than what happened at KDND-FM, "The End", in Sacramento.
The industry can learn from this event. But will it?
Monday, January 22, 2007
HD Radio: The Battle for Your Mind
Bridge Ratings' just-released consumer study on HD radio isn't cause for too much excitement for the radio industry. iBiquity Digital Corporation, which created HD radio to bring AM and FM radio into the digital 21st century, recently confirmed that the number of HD radios sold through 2006 numbered in the 'several hundred thousands'. Our study confirms that the radio industry's massive ($400 million) HD radio marketing campaign of 2006 has helped raise awareness of the term "HD radio" but has done little to motivate consumers to want or purchase the technology.
Why is there such little consumer interest in the technology that terrestrial radio seems to be depending on to move it into the digital era?
Need.
Our study of 3000 consumers of terrestrial radio reveals one thing right off the top: they don't understand what the benefits of this new technology are and why they should make an investment into a new radio. The marketing pros who have done the creative for the $400 million campaign have not been able to communicate this simply and effectively to the masses.
Thus far it is still the audiophiles and early adopters who show interest and that is where the 'several hundred thousand' units sold comes in to play. Even more discouraging is that consumers understand the benefits of and need for satellite radio. With less than a million HD radios in use, satellite radio's 13.5 million subscription numbers appear overwhelming. And while 4 in 100 persons in the U.S. subscribes to satellite radio, less than 2 in 100 are considering it. With interest in HD radio substantially less than satellite radio, perhaps HD's challenges are becoming more clear.
It is only speculation, but part of HD radio's growth problem is hinged on the fact that satellite radio beat it to the punch - was first to the market, and with such a sliver of a market available, there is little room for second players or sub-niches such as HD radio.
HD radio's problems are complex but the root lies in simple marketing. Marketing gurus Ries & Trout have clarified product 'positioning' in many of their books. In their classic "Positioning: the Battle for Your Mind", Al and Jack point out that there is just so much information 'noise' that is trying to get into your head that our minds try to simplify the onslaught by creating ladders where we just naturally rank all sorts of information. For some of us, Hertz is at the top of the rental car ladder and Avis is second, Coke is at the top of the soft drink ladder - Pepsi is second.
However, for minor niches there are fewer 'rungs' on these mental product ladders; some may have only two products or brands - others, such as beer, could have as many as 7 if you're a beer drinker. In the last few years, the radio product ladder has added rungs for Internet radio and satellite radio along with AM/FM radio. HD radio's tiny niche doesn't have a rung on most consumers' product ladders. For most it doesn't exist yet! That is the marketing dilemma facing this new technology.
If HD radio is going become the solution to terrestrial radio's battle with digital technology options, a significantly greater sum will have to be spent on educating the public. It'll take time. Positioning HD radio in the minds of consumers is at the heart of our conservative growth estimates for HD radio. (see www.bridgeratings.com).
The radio industry needs a realistic, tempered expectation for what HD radio can do for its expansion into the digital 21st century.
Why is there such little consumer interest in the technology that terrestrial radio seems to be depending on to move it into the digital era?
Need.
Our study of 3000 consumers of terrestrial radio reveals one thing right off the top: they don't understand what the benefits of this new technology are and why they should make an investment into a new radio. The marketing pros who have done the creative for the $400 million campaign have not been able to communicate this simply and effectively to the masses.
Thus far it is still the audiophiles and early adopters who show interest and that is where the 'several hundred thousand' units sold comes in to play. Even more discouraging is that consumers understand the benefits of and need for satellite radio. With less than a million HD radios in use, satellite radio's 13.5 million subscription numbers appear overwhelming. And while 4 in 100 persons in the U.S. subscribes to satellite radio, less than 2 in 100 are considering it. With interest in HD radio substantially less than satellite radio, perhaps HD's challenges are becoming more clear.
It is only speculation, but part of HD radio's growth problem is hinged on the fact that satellite radio beat it to the punch - was first to the market, and with such a sliver of a market available, there is little room for second players or sub-niches such as HD radio.
HD radio's problems are complex but the root lies in simple marketing. Marketing gurus Ries & Trout have clarified product 'positioning' in many of their books. In their classic "Positioning: the Battle for Your Mind", Al and Jack point out that there is just so much information 'noise' that is trying to get into your head that our minds try to simplify the onslaught by creating ladders where we just naturally rank all sorts of information. For some of us, Hertz is at the top of the rental car ladder and Avis is second, Coke is at the top of the soft drink ladder - Pepsi is second.
However, for minor niches there are fewer 'rungs' on these mental product ladders; some may have only two products or brands - others, such as beer, could have as many as 7 if you're a beer drinker. In the last few years, the radio product ladder has added rungs for Internet radio and satellite radio along with AM/FM radio. HD radio's tiny niche doesn't have a rung on most consumers' product ladders. For most it doesn't exist yet! That is the marketing dilemma facing this new technology.
If HD radio is going become the solution to terrestrial radio's battle with digital technology options, a significantly greater sum will have to be spent on educating the public. It'll take time. Positioning HD radio in the minds of consumers is at the heart of our conservative growth estimates for HD radio. (see www.bridgeratings.com).
The radio industry needs a realistic, tempered expectation for what HD radio can do for its expansion into the digital 21st century.
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