Someone recently asked, “Eric, if you could gather all the big publicly owned broadcasters in one room, what are the biggest concerns you would share with them?” Here are my concerns:
Cost-Cutting: In our efforts to cut expenses, we have cut into the bone. We cannot grow the business by more cost-cutting, because there is little left to cut without seriously hampering operations. All efforts should be focused on growing top-line revenues and overall radio spending.
Top-Line Growth: The misconception is that the RAB’s efforts to promote radio to national advertisers will solve this problem, yet national advertising is only a small percentage of radio billing. Though this effort can help, top-line growth will come from investing in our front-line troops locally — the 65,000 people selling radio. Most are ill equipped and poorly trained. Without excellent training, relevant messaging, and an understanding of how radio really works in today’s environment, they will be unable to create growth.
Quality Content: Radio is not investing enough in quality talent and programming. If Hollywood had overly automated, no one would go to the movies anymore. Hollywood may be containing costs elsewhere, but they invest in their product: quality writers, directors and actors. We do not.
Loss of Experienced People: We’re burning out our people with unrealistic expectations, enormous pressures and little job satisfaction. We’ve lost many of our best people to other industries. Others plan to jump ship the second they can sell their stock.
Ability to Attract and Retain Salespeople: Other industries offer six months of in-depth training before the reps’ first sales calls. They also receive perks, company cars, and ample time to learn and perform. We still throw new salespeople the Yellow Pages, giving them 45 days to sink or swim as we churn and burn bodies. Young people are unwilling to work in a negative pressure cooker with limited rewards and an irrelevant 20-year-old audiocassette as training.
Ability to Attract New Listeners (Thinking 10 Years Out): As teenagers, my generation embraced radio as the soundtrack of our life. Today’s teens and young adults do not have the same relationship with radio. Listening is declining as we compete for their time with iPods, cell phones, video games, Internet and more. Radio is not developing talent and programming targeted to teens, because we cannot make money on it today. If we don’t get teens addicted to radio now, they won’t suddenly become addicted when they become a “money” demographic five or 10 years from now.
Spot Loads: Our inability to price our product fairly and command our price (a training and a quarterly earnings issue) has led us to whoring our rates to get business at any cost and has led to increased inventory. Spot sets are unreasonably long, and unfair to paying advertisers whose ad falls in the middle of a long cluster. This produces unhappy advertisers as well as listeners, and we play into the hands of the satellite radio “commercial free” environment.
Quarterly Earnings: By setting aggressive expectations on Wall Street, our performance must continue to improve each quarter. Growth can no longer come from acquisitions and expense cuts; it can come only from investing in new long-term strategies and investment in our product. Wall Street does not give us the time to innovate and reinvent.
New-Generation Thinking: Every 40 years, the baton passes to a new generation and brings changes in thinking, culture, music and media. The last major shift was in 1964. It’s happening today. This shift impacts what we say, how we say it, what we advertise, and how we sell and communicate. What worked a year ago does not work today. The baby-boomer motto was non-conformity. The echo-boomer motto is authenticity. Radio is ignoring the shift and sticking to what we know — which won’t continue to work.
I’m not being negative. These are realities we cannot deny. Pretending that everything is OK is for fools. Cementing a solid future for radio is possible, but the solutions are painfully slow and require investment. Radio can build a solid future as a predominant medium if we are proactive and stop drifting down Denial River.
7/05/04 Radio Ink Magazine. By B. Eric Rhoads