Eric F. Richards wrote:
D Peter Maus wrote:

And, again, in the US Radio is ALWAYS about the money.

[...]
This is the crux of the matter: Advertisers call the shots. They always
have. Everywhere.

Sure. But both the stations and the advertisers are working from a
flawed model. It's like two blind guys trying to take care of an
elephant, based solely on how the tail feels to them.

The advertiser is told that if he does such-and-such, the tail will
feel better according to some arbitrary attribute of how the tail
feels. So he does such and such, and the tail feels better according
to his measure.

But his measure has no effect on the real picture. Everyone sees
through the same distorted lens, so they get the right results based
on that view.

But the view has nothing to do with the real elephant, or listening
audience.


Yes. Actually, there's more truth to that analogy than most are
willing to recognize. But the real matter is that it doesn't matter
whether the model is flawed, or not. It's what works for the people who
make the decisions and call the shots. It produces revenue and profits
and business embraces it. Radio is in the business of selling the tails.
Advertisers buy the tails by their feel, and turn that feel into
experiences then sold to listeners. It doesn't even matter if it's a
real tail....it only matters that it works. Advertisers buy, Radio
stations sell. Neither is sees no benefit in changing what works.

And for the comparatively few, like you and me, it's distasteful that
things work this way. It's a waste of resource. So be it. It is the way
it is. If you can convince Radio there's money in changing
it...well...then make your pitch. But if there's no money in it...more
importantly, if there's no profit in it (that means the same revenue at
no extra cost to most bean counters these days) then have at it.


Now, if Wendy's wants to advertise on a handful of high-powered
stations blanketing the midwest about a product they are offering
throughout the midwest, they aren't paying extra for the signal to
cross arbitrary lines on a map -- the radio waves don't care.



No they don't. And advertisers don't pay for the extra reach, it's
true. But if, say Wendy's want's to boost sales in Decatur, buying WLS,
WGN and WBBM aren't the cost effective way to do it. Yes, they're still
making impressions in Decatur, but a week's run on three Chicago
stations at $900 a throw will not equal the reach of one single day's
schedule on WSOY, at $75 a throw. So the advertisers don't boost their
WLS, WBBM and WGN buys to get the extra noise into Decatur...they buy a
few spots on WSOY and WDZQ. Why? Because the combined reach of WLS, WGN
and WBBM in Decatur is a statistical no-show compared to any local in
the top 5. For a fraction of the cost.

It's bad business to spend money that produces so little return, so
advertising buys are targeted to local audiences only, where there is
significant listenting done. Since a station out of market has so
little local reach in Decatur, getting back to the original point of
this thread, WGN, WBBM and soon WLS can turn on the IBOC hash blowing
away all the out of market listening, and do so without a care.

It's not something that I personally like. It's just what is. And
it's primarily because advertisers, not radio stations, make the
decisions about what reach is and is not important. Based on actual
listening behaviours measured.

It's a numbers game. Averaged behaviours in desireable demographics.
Stations are programmed to produce the desireable numbers. Or at least
saleable numbers.

Actually listeners...not really the focus here.



I've said this nine ways from Sunday, and I don't know how to say it
better, so let's try some fundamental questions -- I respect your
viewpoint, Peter:

Do you think that terrestrial radio will have more listeners hearing
those ads, or fewer, in 10 years? Do you think the so-called HD/IBOC
(which is neither HD, nor in-band) will improve the situation or not?


Me personally? Fractionalization of the audience will bleed off
listening, yes. I think so. Radio will adapt. As David likes to point
out, listening levels per capita are only marginally less than they were
in the 70's. Although, during some pretty detailed staff meetings at In
finity, Mel Karmazin painted an entirely different picture. HD/IBOC FM
has some advantages, without the liabilities of AM HD/IBOC. Multiple
revenue streams and, ultimately, subscription radio among them. AM
HD/IBOC is not so compelling to listen to as good AM Stereo. And it
comes with some technical liabilities which we've all discussed. But
then, listeners respond to content. If the content is what a listener
finds appealing, quality is relative. Noise, on the other hand, is a
different matter. If HD does away with the crackle of electrical and
atmospheric noise on AM then it will attract a listener base regardless
of the audio quality, which to my ears blows chunks.

So, for AM listening, I think the jury is out as to whether HD/IBOC
will actually make a difference. Ultimately, given that Powell's FCC
mandated that all future modulation schemes be digital, it's here
whether the public is ready for it nor not. Unless the Federal
authorities decide to take the MW Band dark, as they did in Canada,
HD/IBOC AM is here. And it's staying. Given no choices, the public will
adapt and adopt. Whether listener levels will vary remains to be seen.

I don't care for it. But then, I don't do much listening, anymore,
either.




If the cost for a more sophisticated methodology is so bad, what about
the cost of adding all the extra, licensed crap to the transmitters?


Hardware to do the job is a single cost per installation item. It's a
cap item, not a recurring cost.

Ratings methodology gets paid for with each survey period. Recurring
costs multiple times a year. Cap costs can be swallowed. Recurring costs
are the ones to be avoided.

You can get a cap cost past the bean counters. Recurring costs
they'll move heaven and earth to cut.

But the real costs of more sophisticated methodologies would be borne
by the ratings companies. They have no motivation because there is no
demand for them. If advertisers were screaming for more sophisticated
methodologies, the ratings companies could justify the cost, and the
advertisers would be willing to share the increased cost through higher
station rates. But there is no such clamor. So there is no motivation,
when what they're doing right now produces huge revenues and profits.

You don't raise costs unless there is a profit motive. And right now,
there isn't. So cost per point, cost per thousand figures remain the same.






Do you think people are willing to pay extra for all this? They will,
one way or the other.

Yes they will. And eventually, they'll embrace it. Because there will
be little option.

Will they grumble. They already are. Feder has been bitching in his
column about the cost of HD radios and he can't tell the difference
between HD and analog.

Eventually, that noise will die down. Look at cable. Bitching there,
too. And lots of it. Paying for TV? Are you nuts?

Have you seen cable bills lately? Dish? Satellite Radio?

Will the public pay for HD Radio. Sure they will. By the time you
fully dress an iPod system, you can drop half a kilobuck. Doesn't seem
to be slowing things down. HD Radio, especially, when there is no
option, will sell. At least on FM.


Content is what keeps the listeners, not
advertisers. If the content suffers, the listeners go away, and the
advertisers will only be talking to themselves. Eventually even their
myopic model will collapse around them.

With ongoing perceptuals and nearly daily market research
specifically addressing content, if the content suffers, Radio can know
about it and make corrections pretty quickly. Those that don't, fail,
are sold, and picked up by people who will. Remember that the
programming model is NOT the sales model. They interact, but they are
NOT the same. Programming content is crafted to attract a demo. Actual
listenership is what is evaluated for Sales. Programming can be tuned,
trimmed, altered, even changed wholesale, without altering the
Sales/Advertising model in anyway, as long as the demo remains the same.
And the Sales/Advertising model doesn't change even if there is a
significant change in the numbers. Conversion rates are held to the same
figures, only the percentage of national sales changes. The pitch only
goes after different local businesses, with an adjusted rate.

We're simply witnessing the death of radio.


Obituaries may be premature.