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Radio's Perfect Storm - Part I
Radio's Perfect Storm - Part I
4. Radio's new competitors jockey for position Let's pretend the industry gets its wish and HD radio takes off. So now every station becomes three stations. And all three of those stations are rated. So now we have 100 stations "above the line" competing for the same audience that 30 stations used to compete for. Now we're not worrying about 4.0 shares, we're too busy hoping for a 1.0. And what is the value of being top 5 ranked when there are a hundred stations in the ranker? Answer: None. What are the odds that the top-ranked station in an HD world will have a half dozen HD-2 stations thrown its way by competitors desperate to steal some of that thunder? I would estimate those odds at 100% - at least. Let's now pretend HD doesn't take off. How much time and effort and expense is being invested in chasing HD as the primary driver of radio's future? What is the opportunity cost of this obsession? That is, what else could we have done with that money, that time, that hard- headed focus on our future? How diversified is your group's portfolio of futuristic ideas, hmm? Finally, consider this: The ratings deck is stacked to favor the original players. The 100-share Arbitron world is a world which generally excludes non-commercial stations (unless you look hard) and Internet stations and Satellite Radio (don't let Arbitron's poor attempt at satellite radio ratings fool you), not to mention video games and Internet video and all the other fabulous distractions for our eyes and ears which are carving out their own slice of the advertiser's pie today. Your station isn't competing just against all other stations. It's competing against all other entertainment distractions, some of which are likewise ad-supported. That makes them substitutes for you - your direct competitors. Radio's 100-share pie is getting smaller, relatively speaking. http://www.hear2.com/2007/11/radios-perfect-.html HD Radio is screwed! |
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