The Business of Radio
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Like in any business, radio's product has to be better than its competitors'. What makes the radio business more difficult is that its two types of customers are at odds with each other - audience and advertiser.
Every business also has its "business" side, i.e., the administrative back-end items that customers never see which add (or detract) from efficiency and profit.
Coming off The NAB Radio Show, it's a good time to question whether radio is paying attention to either its product or business end with the same degree of awareness that its new competitors exhibit.
You're going to find opinions on both sides of these issues. Those with an interest in radio staying healthy, like NAB President David Rehr, argue many points that praise what radio is and how it grew. Others, many others who don't have a stake in the radio industry (or who keep their words anonymous because they are still working in radio), constantly hammer the industry for failing to meet customer (advertiser and listener) expectations.
There are two items in each customer group that radio needs to address.
1) Consumers (listeners) want a fresh approach to stale radio concepts.
2) Consumers want an attachment to their newfound interest, the internet,
where everyone feels like they've accomplished something by clicking a mouse.
3) Advertisers want a fresh approach on attracting attention to their message.
4) Advertisers want changes that "show me response."
By now I'm sure you've heard of the latest radio promotion fiasco. A Detroit station has offered $1000 to whoever can come closest to guessing "When will Britney end it?" What's that? You only read the major radio industry trades? Oh, then maybe you didn't hear about this stunt because it isn't posted at any of their web sites as these words are written. I picked it up from the Detroit Free Press which is reporting the public outrage over another radio station using a terrible situation to spike its numbers. (Can you say Tsunami Song?) Keep your eyes on Google News. It's sure to be reporting more media picking up this stupid stunt now that Fox News has sunk its teeth into the story.
I point to this because it reflects exactly what radio has been delivering over the past 11 years - gimmickry, stunting with heretofore untouchable topics, and disc jockeys who are either a) too lazy to produce a real "show," or b) too dumb to discuss anything outside of sexual or outlandish topics.
On radio, the audience has been promoted to death. It's been shocked to a point of numbness and disbelief. There are only so many radio stations in your town and the masses are tired of what's being broadcast on them, which is why we see the flood of interest in iPods and internet radio. Today's audience is seeking new forms of audio entertainment - and they're not particular on where it comes from.
Regarding the internet, what is it in a radio programmer's psyche that he won't allow the jocks to talk about the internet - except with the words "go to our station web site and see pictures of (fill in whatever)." You want to capture young males' attention and build that Alternative Rock station's audience, discuss online games and car web sites. The other morning on CBS's "Rover," his group was talking about how wives like their men to be rough and raunchy! Now, there's a topic that hasn't been talked about before. Good use of the public airwaves, isn't it?)
The world is changing and radio stations are ignoring the change by not providing listeners with internet destinations other than their web sites. Radio could suggest to listeners how they can get a better user experience from their computers. We're talking about little tips, short sentences, like "hit your keyboard's 'Windows' key and the letter 'D' together to collapse all open browser windows."
(Go on, try it.) There are thousands of computer/internet related tips that the public would love to know. Remember, most of radio's audience is fairly new to using computers. Most of the audience is older than 24.
The local advertisers who make up 70%-80% of radio's revenue are also looking for something new, yet radio commercials haven't changed their style despite a cyclical nature in how the masses respond. Theater of the mind? What's that? Maybe this is a better question relative to advertising: Where is theater of the mind found on the radio dial today?
Advertising has changed advertisers. When I can walk in with a proof-positive method and show a client how each response on a radio campaign cost them over $100 while each response from a digital campaign cost them $8, which do you think the advertiser will go for on their next campaign?
Accountability is a buzzword in the radio business; it signifies a call to deliver results. In a radio person's mind that means PPM. In an advertiser's mind it means how many orders at the cash register. Accountability has been growing as a topic for over five years, yet radio is still counting on PPM. It should have started experimenting in 2002 with using the internet to prove results.
You want this summed up?
Radio is a business that, since consolidation, has resorted to cutting expenses so investors see a return on their dollars. In today's business world advertisers are asking for that same privilege of spending less to get more, and the internet is showing it to them.
Radio is a medium that fights for an audience's time among many more media today than it did in the past. Anyone who's produced programs will say you can't keep a person's interest if you don't give them something new. What's coming out of the speakers is not new, unless it's something akin to a Britney Spears' suicide contest.
Radio executives are doing a lot of talking, yet radio is standing still when comparing the speed of change within the radio industry with that taking place outside of it. New media is constantly changing - improving its methods for advertisers and its variety of programs for the audience.
Yesterday isn't good enough for tomorrow. Radio needs to change its business model, and there is no more time for talk.
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