IBOC at Night and the Local/Regional AMs
"D Peter Maus" wrote in message
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David Eduardo wrote:
"D Peter Maus" wrote in message
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A few years later Karmazin was 'out-Karmazin'd' By Sumner Redstone,
and he found that the best way to improve his station was to gt out.
Interesting that, now, he's at subscription radio and the discussion is
about increasing the subscription base, and debate about advertising.
iBiquity may not have mentioned subscription implementation, but its
licensees certainly have.
Nice post, with an interesting insigt from one company's point of view.
Mel is definitely one of the most interesting people we have seen in
radio, and his statements are well worth considering.
Mel, despite his rather edgy manner, did think out of the box as he
looked at future revenue opportunities. I was once offered a job with him
for the NY Spanish station, but was so putt off by either him or the
native New Yorker he represented that I did not take the opportunity. It
would have been an interesting ride, though, until one of us screamed at
the other.
LOL! I've heard tell that this happened from time to time at the corner
office at BlackRock. But nothing definitive.
I do know of at least one GM who voluntarily fell on his sword rather
than deal with Mel after a series of bad quarters. And here, in Chicago,
Mel refused to speak with my GM, after a revenue tumble. This went on for
a couple of years.
He's an interesting bird. And I'm not at all sure he's been good for
radio, except in that he put radio revenue on the map, and proved
conclusively that many of the myths by which radio lived were, in fact,
mythical.
I found him real easy to work for, though. He's very clear about his
expectations. You meet them. He doesn't care how, as long as it's ethical.
His expectations are VERY high. But, then, so are his rewards.
That's a dream job, compared to some I've had.
I have never had any discussion either in-house or with members of the
industry committee, about pay channels. I think nearly all of us see that
associating "pay" with terrestrial radio is a mistake. While the
discussion may have come up, I never saw it progress. Most of us believe
that splitting the HD digital FM in two offers great quality (absolutely
marvelous, in fact, compared to iPod and satellite channels) and the
ability to market new free channels.
I actually disagree with you about the mistake of pay terrestrial radio.
And so do others in the biz. Truth is, that subscription radio, whether
it be the baseband channel, or one of the alternates, may be the only way
to create viability for some formats that are not supportable through
traditional advertising.
My GM, for instance, desperately wanted to create a viable blues format.
(Imagine, the Blues not viable in Chicago...but there it is). He could
never get the perceptual data to support it. But subscription radio would
have made that possible. Just as a number of the niche formats on XM and
Sirius, now.
Now, on the other side of that, Karmazin believed the ratings/revenue
relationship to be more myth than reality in the presence of REAL sales
people. He preached it regularly. That the only thing needed to overcome
weak ratings is more sales people, who could then create demand within an
single station. Even driving rates up the card. And the 30+ sales ducks we
had on staff were a testament to that. And he believed that any station
that couldn't convert at a minimum of 200% needed an new Sales Mangler.
We routinely converted at 200% and above.
So, though, it's a good bet that subscription terrestrial radio is bad
idea, questionable at best, it's not entirely a settled issue. Out of the
box thinking can make pay radio happen, and clever execution can make it
work. Especially, where there is little advertiser support.
(One of Karmazin's other bone deep beliefs is that every service pay for
itself. No one gets subsidized. And if it can pay for itself, it can
profit. In that aura, pay radio is an eventual certainty.)
As far as quality goes...that's a better marketing point than it is a
broadcast reality. Everyone talks about quality, and everyone has a
standard, but where quality is defined as absolute faithfulness to the
original material, it's failed everytime. If you use the tone control, on
your car radio, you're not that interested in high quality. If you have an
equalizer on your audio system....you get the picture.
HD Quality is, and will be, perceptual and personal. Right now, it's
being presented at its optimum. That will change. Stealing bandwidth will
begin. And look straight into your monitor and tell me you can name 5
engineers who can resist the temptation to 'tweak' their audio. Name me 5
more who don't believe they can 'improve' it.
The Quality pitch is temporary. Once HD is established, and there is a
significant user base, the whole 'quality' issue will no longer be
mentioned, except to say 'digital quality.' Which is what they say about
Sirius and XM...and some of that is pretty ratty.
Since there are only 100 shares in any market, there will be no expansion
of radio listening, but there may be a slowing of any erosion. At the
same time, selling today is about clusters and combos, not single
stations for the most part... so having more specifically targeted
stations will definitely help. Low spillage and finely honed targets get
better rates than broad, vague targets, as sports AMs demonstrate.
No question. And HD formats will be, as cluster formats are now,
selected strategically, to protect the cash cow, and mop up any periphery.
Likely to be sold in unwired combo packages. With lip service paid to
innovative and alternative programming. At least in the short term.
And at least for the time being, you may indeed see a slowing of
erosion. New, exciting toys, with fresh options for things not commonly
heard. But as XM did recently, gutting a number of the channels I enjoyed,
and replacing the music I preferred to hear with things that are more
'salable' and adding commercials to some music channels, eventually
terrestrial and HD will fall into the same patterns as terrestrial radio
exhibits, today.
The pith, here, is this statement:
"Since there are only 100 shares in any market,
there will be no expansion of radio listening,
but there may be a slowing of any erosion."
With evermore options for listening, and fractionalization of the
listenership into potentially thousands of niches, eventually, programming
offerings are going to have to be sold in combinations. Actually quite
large clusters of programming issues. That means that programming
offernings, whether on the baseband or the HD's, will have to fit into
certain packageable categories. Since the target demos essentially do not
change, and the maximum share is 100%, The total numbers are fixed.
Competition will have to be within the existing numbers. Robbing Peter to
pay Paul, as it were. Combo programming packages will have to be
selected, or created, with some target demo participation. To remain
salable in that context, some alternatives will be too far off the target
to be salable, in favor or more mainstream, salable content. Not exactly
like anything else, in the package, but not that different, either. No
matter how you slice it, if advertising support is going to be part of the
business framework, nothing's really going to change, except how the
programming offerings slice up the existing demos.
In the end, the same research that gives you what you have now, will
give you a different slicing of the same listeners for thousands of new
channels.
More channels, less revenue per channel. More channels, less expense
per channel.
Profits fall.
Consolidation of expenses rears its ugly head, once again.
In the end, not much really changes, except how the pie is sliced.
Because there are only 100 shares in any market. And radio has saturated
the market with a mature product.
Now, in reality, Radio can't acknowledge this. Especially, not today,
in a stock price driven radio economy. So HD will forge ahead, with
promises of newer, better, cleaner, stronger.
Most only realized for a short time before economic realities crash the
party. The rest, unrealized at all.
All on technology that admittedly is a best guess at preventing
erosion. Sounds a lot like "do something, even if it's wrong."
But then, a lot of business is like that.
In the process. We, as listeners, get our dial trashed, but spend more
money. And in the end, the overall economy booms.
Which is the point. Because after all, in the US, Radio is ALWAYS about
the money.
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