Fred Jacobs is President of Jacobs Media, a media research and consulting firm. Jacobs Media clients have included CBS Radio, Premiere Radio Networks, Citadel, Greater Media, MTV Networks, Playboy, Amazon, Electronic Arts, NPR, Sylvan Learning Centers, and Taubman Malls. Learn more about the company here.
"Ladies and gentleman, as you've no doubt heard, the FAA's system has run into some sort of system failure. Maybe they installed Windows 7. But we now have received manual routing, and we'll be taking off in eight minutes."
It’s noteworthy that in Great Britain, they are actually considering a “three strikes and you’re out” rule. If you get caught stealing music three times, they take away your Internet.
Now they’re rethinking this concept because this survey of 1,000 16-50 year-olds who are online shows that what’s ailing the music industry has less to do with illegal downloads and more to do with music passion.
(Not dissimilar to the folks who scream on the request lines or send programmers nasty memos. They are the most emotional listeners because they care the most. It’s usually not too difficult to turn them around if you take the time to listen.)
According to Peter Bradwell from the think tank Demos (the company that commissioned the study from Ipsos Mori), “Politicians and music companies need to recognise that the nature of music consumption has changed, and consumers are demanding lower prices and easier access.”
But perhaps that’s where there are greater similarites between the U.S. and the U.K. because the labels still don’t understand this notion of control, variety, choice, and access. If they rethought their premises, it’s the pirates who could actually save the music industry.
Where is it going? That's always a big topic, and the blogosphere has no shortage of experts and geniuses who will tell you they have the answer to what's ailing radio, and what we'll all be doing in five years.
It's a lot like the stock market. There is the ongoing avalanche of analysts, many of whom have great credentials. But then there's Warren Buffett. Yes, he's had a tough year, but over the long haul, investing in his Berkshire Hathaway has been a pretty good bet.
That's why their recent purchase of AdMob caught my attention. For a mere $750 million in stock, Google now owns another piece of the mobile ad machine.
This is especially noteworthy because it signals another investment in the mobile space for Google. As we have learned at jacAPPS - our mobile application division - there is an abundance of optimism, and it's backed up by industry metrics.
Paul Palmieri, CEO of Millennial Media chimes in with his view: "Today Google validated what many companies including Millennial have thought for years - that mobile is a different market with a huge potential for advertising; possibly a bigger opportunity than online media."
It's interesting that we first started our mobile division, and then actually went to school on this space. My best teacher has been a Finnish consultant, Tomi Ahonen. He now lives in South Korea, and is the author of Mobile as 7th of the Mass Media.
This is where the action is. In a recent article, "What Hath Apple Wrought," Inside Digital Media president, Philip Leigh, notes that "outside America, most people connect to the Internet over a mobile device. At 1.2 billion units, worldwide mobile phone sales are about four times those of personal computers."
Mel Karmazin thinks this Christmas will signal a significant rise in the sales of satellite radio. My money is on mobile gadgets - iPhones, Droids, and the like. With WalMart, (Radio) Shack, BestBuy, and Costco all selling more affordable iPhones and iPod Touch devices, the forecast calls for an even more ubiquitous mobile environment.
Here’s a guest post from Jacobs Media’s talent guru, Keith Cunningham, with some observations about a new celebrity phenomenon.
Cincinnati Bengals’ wide receiver, Chad Ochocinco is at it again. But this time he’s not changing his name, hilariously trash-talking with opponents, catching touchdowns, or racing thoroughbred horses – he’s on the way to becoming a media monster.
After all, who has the best access to what really happens in the locker room? As Ochocinco promises, “"If I break it, you might as well believe it."
While it’s early in the game for the OCNN, this is another sign that traditional media is being challenged on every level. When you think that it was TMZ that broke Michael Jackson’s death – not CNN or NBC – Ochocinco’s concept doesn’t sound so crazy. It’s also proof that anyone with motivation, creativity, access, and resources has the ability to participate in, or even change, the entertainment and news landscape.
It’s hard to stand out in today’s crowded field, but radio personalities should take notice of Chad Ochocinco’s efforts and begin thinking of ways to grow their own personas outside of the traditional airwaves.
Has creative ideas and has the cojones to put them in motion
Could a radio personality pull this off on a local level, or in the case of syndicated shows on a national scale? Keep in mind their advantage in being able to promote initiatives to large audiences each day. In the digital world, a big-thinking personality can do big things.
Ryan explains that he once saw a documentary where Neil Young said he would never sell out, and so he vowed to follow suit. That is, until he thought it through: "I realized two things. First is, Neil Young’s a millionaire. And second, nobody’s ever asked me. So as soon as they asked me, I said, ‘Well, why not?’”
What about your station? What is sponsorable, and how can business help defray your costs in exchange for some smart product integration. Which tools, methods of exposure, and programming that connect with listeners can also help your advertisers expose their products? It's a discussion that should be happening inside sales departments at every station in the U.S.
Ruby Tuesday has sunk millions into getting answers and working on its core problems - from improvements to the menu to better understanding and meeting customer needs. One line in this story jumped off the page to me, because it was a consistent theme that ran through their customer complaints:
"In this economy, you can't afford to treat me this way."
Think about that. First, they actually have the guy who runs their Wow-U training school reading the roughly 400 complaints they receive nationally every week. And second, they take these complaints seriously, because they realize that one bad experience at a Ruby Tuesday can repel a customer forever. There are other casual dining restaurants. They have options.
In radio, there is no shortage of complaints, ideas, and audience feedback. But most of the time, we either ignore listeners, or don't provide a bona fide system for initiating and receiving customer concerns. If you have a complaint about radio, where do you go? Where is it clear on the website where listeners can go if there's a problem or they have an idea? In the old days when radio thought it could afford the "Where else are they going to go?" philosophy, perhaps that monopoly on audio entertainment was good enough.
But in today's environment, options abound. As we saw last week in that much-quoted Council for Research Excellence study, radio still leads all other audio sources in cars, at home, and at work. But in these last two locations, roughly half of the time spent listening is now going to CDs, tapes, satellite radio, mp3s, streaming radio and other sources that are growing in popularity.
Consumers are still dependent on radio in many of these locations, but much of this usage is being driven by habit, rather than passion. If broadcasters don't focus on how to make listeners once again love the experience, the erosion will continue. The same consumers who gladly put a station bumpersticker on their cars to display their loyalty are the same ones being courted by everyone from Sirius XM to Pandora.
How do you stay on top of the hill? Not by doing the same thing you've always done, and ignoring the consumer experience. Sandy Beall is well aware of that in the casual dining space where his sales are off 8% from last year. Reaching his goals requires researching customer satisfaction, improving the cuisine, training his staff, and creating passion and loyalty for his restaurants.
Where are radio's priorities as they pertain to improving the listener experience and the advertising experience? Consumers and clients are the two main constituents for broadcasters, but how much time is spent on determining and meeting their respective needs, and providing solutions? Today in all the radio trades, the quotes you read from broadcast CEOs revolve around reducing debt, working on efficiency, margins, and improving EBITDA.
When you read these same trades, you rarely hear anything about amping up passion, improving customer satisfaction, and creating better radio. Cutting does not improve content.
The other piece of the Ruby Tuesday story that stands out is how important it is to work on the experience, and not just ask about basic image dimensions at the margins. A case in point is a quote in the story from Ron Paul, president of Technomic:
"You ask people in surveys why they chose one casual dining chain over the other and they’ll say, ‘because the line was shorter.’ Ruby’s is trying to break out of that."
In radio, we're famous for research questions like "Which restaurant has the shortest lines?" rather than "How can we make you happy?" In our perceptuals, we include 17 image statements that ask things like "Who's the Oldies station?", "Which station is the concert authority?", and "Who plays too many bad songs along with the good ones?"
These are OUR questions. They don't address audience or advertiser needs. While we still have reasonably healthy cumes, radio needs to seriously start asking better questions. Research companies have to start shredding the same questionnaires they've been using since 1983. Broadcasters need to focus on improving the experience for listeners and advertisers.
One of the lessons of the new media world is how category leaders don't own the franchise, and dominance is far from guaranteed. In radio, we have become accustomed to seeing the same radio stations on top of the heap for years - or even decades - KGO in San Francisco, KMOX in St. Louis, and in medium markets, stations like WIVK in Knoxville - all examples of call letters that you always see in that #1 position. (Of course, PPM has had a lot to say about the "new order" in many markets.)
But in the Internet world, the pace is considerably quicker. Today's leaders are tomorrow's losers or also-rans. And reversals of fortune can happen fast.
Even President Obama has felt this pain. He took office with an incredible 78 approval rating, but has watched his poll numbers drop precipitously each quarter. He was walking on water in January, but even strong leaders can never take their constituencies for granted in this fast-paced environment.
Then there's Yahoo. Remember that before Google, that's the service that most of used for various portals and search (along with Lycos and others). Now that Google owns the world, Yahoo is left to try to market its way out of this mess. And they're not doing a great job of it because all the TV advertising in the world isn't going to change the minds of consumers. They know what they know, and all the glitz and glamour of Yahoo's newest effort is just a bunch of marketing noise.
So, what does this mean for your station, your morning show, and your brand? Consumers are all driving much faster than 55 these days, making their way through products, gadgets, restaurants, and brands. To help the filtering process, they have more and better evaluative tools, from online reviews to social networks to good old word of mouth. If a new product or service does not make a good impression, consumers move on. If they've been an existing customer of a brand, but recent experiences have been underwhelming, they don't hang around for long.
If your station has been mailing it in, not researching the target, and just hoping that your audience base will simply stay tuned because they always have, think again. Even in a tough economy where resources are tight, service, quality, and innovation have to do more than hit the minimum standards.
An old Ziebart campaign reminded us that "Rust never sleeps." And it is true that when erosion sets in, it's tough to stop the bleeding. "Trust never sleeps" either, and stations cannot take their relationships with listeners for granted.
Old friend and veteran rock programmer, Ron Nenni, sent me an eye-opening chart, courtesy of the Silicon Alley Insider. As you can see below, a new Nielsen analysis of a media use study conducted by the Council for Research Excellence shows that radio out-reaches the Internet on a daily basis.
The methodology of this study is observing consumers, rather than allowing them to report their media. It sounds like another form of ethnography, the methodology we used in the Arbitron "Bedroom Project" a few years ago. This study covered five markets and the research was conducted in '08.
It is impossible to know what this data might have looked like a decade ago. Clearly, broadcast radio would have been in the 90% range in all three locations. But even this recent data shows that while different gadgets and media outlets are eroding radio's dominance, the numbers are impressive.
Now nay-sayers will have no problem shooting these charts down. Perhaps lots of this radio listening is indeed background. And of course, reach does not equate to engagement.
Those who write off radio should perhaps rethink their logic. But those who own broadcast radio companies should consider the half-empty implications of these charts. Radio is a leaky bucket, and the options are growing and are plentiful. But with the right investment in research, content creation, personality development, and the strategic applications of digital tools, the medium still has a great deal of life and vitality.
It's the beauty of research because it's very much dependent on who's looking at the data.
There is sure to be a lot of controversy about ABC-TV's new V, which debuted earlier this week. If you haven't tuned in, it's the saga of a charismatic new leader offering the promise of hope and peace. Of course, it's all cleverly disguised and is, in reality, an alien invasion.
Politically, the show raises the idea about questioning what is right in front of everyone's eye, while the media jumps on the excitement bandwagon. Clearly, Obama followers, fans, and pols will not be happy with the tone and messaging on V.
So, when we see radio companies continuing to battle only with one another, while totally missing what's happening outside of our shrinking empire, it is difficult not to wonder why the industry isn't taking a larger strategic inventory of the real competition for radio.
"When we can make money from it, we'll start doing it."
"We'll do it when we can find a way to pay for it."
"When there are more mobile phones out there, we'll look into branded applications."
Westergren must laugh at this because he has all that broadcast radio revenue in his crosshairs. As he explains it to AOL's Daily Finance: "In the last year there has been a big sea change in the infrastructure surrounding radio. That's driven by the ability of cell networks to carry a streaming audio signal. That a phone can now stream Pandora has broken open what until now was a domain occupied only by commercial radio (satellite or broadcast) either in cars or homes. I think this new ubiquitous streaming capability is a hugely disruptive change that will put Internet radio right up alongside broadcast radio."
And in fact, Westergren's goal is to displace broadcast radio, and he's tipping his pitches, telegraphing his passes, and allowing radio into his huddle. And broadcasters still don't realize what's going on.
More than 200 enthusiastic ADULTS gathered on a cool Monday night at the Palladium theater complex to hear Westergren speak, and to get a T-shirt. How many local stations could have pulled this type of crowd - without cheap drinks or a football game on a big screen TV?
And he did not disappoint. Westergren is a charismatic, folksy, unassuming presenter who comes off as a music fan who just wanted to create a radio station that would play more and better music than what he grew up listening to on the FM band.
So while radio programmers are wrestling with each other in the mud, or rushing to beat each other out for the honor of who will be the first to play "White Christmas," Westergren has a higher mission.
And while our sales departments are running around, giving away inventory and bonus spots, Westergen is creating value for his growing bevy of Pandora sponsors.
Yes, it is easier to charge up the hill on an exciting mission like Pandora than it is to play defense and protect the throne. But if broadcast radio is to succeed in this awful test of finances, innovation, and strategy, it must get serious about the real enemy.
Or maybe it's just that famous quote from Pogo. You have to believe that's what Westergren is banking on.
