Thursday, June 18, 2009
I don’t know how radio CEOs can be so wrong so often.
It is about to happen again as Sirius XM is set to launch an Apple app that they hope will revolutionize satellite radio.
Here’s the latest misread of the media consumer.
You’ll be able to get Sirius XM on your iPhone for free.
That is, of course, if you subscribed to the webcast feature.
It’s $3 a month for everyone else.
Look, did anyone tell Mel that he’s not the only one having a recession? Can’t he see that people are not lined up to pay for satellite radio that is arguably not much better than what they can hear for free on terrestrial radio?
In fact, as consumers feel the pinch, what would make these SiriusXM execs think that charging more monthly fees for the same old “not exactly free radio” is a good business strategy.
You can expect this new SiriusXM app to be a flop just like the free version of Clear Channel’s iheart Radio which received a few million downloads and a great number fewer fans once they listened.
Nothing personal, but consumers don’t think like media executives and you can be damn sure media CEOs don’t think like consumers.
A few years ago, one of my USC Solutions Labs did a project for XM Satellite before it merged with Sirius. These young folks came up with lots of ideas for satellite radio — none of which they were doing and few of which they adopted. The ability to listen to streaming satellite radio on a cell phone was not one of their recommendations.
I understand SiriusXM’s enthusiasm to get into new media because in today’s media world satellite radio technology is as ancient as a wagon train.
But they are getting it wrong — so wrong.
Satellite isn’t the only radio organization to do their version of iScrewedUp.
Terrestrial radio wasted broadcasters money and got a false sense of security in pushing HD which in effect was an excuse to create more channels on a radio. This would be great if the radio were a hot consumer device.
Even in a car, radio is a mere part of the automobile’s entertainment system with growing competition from new media. No young person these days (or many older for that matter) buys a car without an iPhone jack.
The HD concept of adding more channels than the federal government would let consolidators have was fatally flawed when it turned out radio groups couldn’t operate all the stations they bought. And now we’ve seen that they can’t pay the debt on these acquisitions, either.
It would have been so much better to check with the consumer first — not iBiquity, the NAB, auto manufacturers (oops) or radio makers.
Lesson: Consumers want variety where they live — on mobile devices not radios.
Radio screwed up when it tried to bilk the record industry into paying legal payola to get airplay. They deny it but before then New York Attorney General Eliot Spitzer started his holy war, big radio groups and record labels were settling for seven figure penalties.
This was a screw up because radio is nothing without the music industry and the record business is proving that it is nothing without a vibrant radio industry. Maybe the heyday of consolidation factored into it but it is no accident that radio has declined in direct proportion to the music industry.
You know things are bad when the labels still — in 2009 — sue their customers and then turn on their radio partners in trying to win repeal of the performance tax exemption.
Lesson: Radio and records should have joined forces to create new delivery systems and content and launched the iTunes store before a computer company kicked their butts.
Radio is screwing up in the sacred area of news, information, talk and localism.
Repeater Radio to save money on personnel lives up to the term I use to describe it — a no-brainer.
But before radio groups decided to sell out programming to save money, they misread the marketplace again.
Have you witnessed how news from the disputed Iranian elections and the riots that followed is driven by Twitter, Facebook and the Internet?
In fact CNN here in the U.S. has been busy defending its initial non-coverage of this world news event while their worldwide audience was taking matters into their own hands — literally.The many pictures are shot from eyewitnesses via their cellphone cameras and uploaded to YouTube.
When Westinghouse/CBS used to say “you give us 22 minutes and we’ll give you the world”, the consumer now says, “give us 20 seconds and we’ll give you thousands of photos, reports and commentaries”.
Events like 9/11 and Katrina may be the last traditional media coverage we’ll see.
Certainly, you can’t rely on a radio to cover a tornado down south or a crisis in markets where Repeater Radio is babbling on.
The marketplace is telling media execs that they are no longer the gatekeepers of news and entertainment.
They think finding the next Rush or Hannity is going to save talk radio — especially when you can mindlessly syndicate it across the nation. But today’s audience doesn’t need a lecture, they already have a town meeting with unbridled access to people and places that radio cannot duplicate.
To survive, it would take a sharp radio executive (an oxymoron) to start delivering content with new means and in new ways.
Lesson: Your new boss is the listener. They have taken control of your radio station and redefined how news is distributed. And before you start with, “but they are not trained journalists”, I ask “how many radio stations employ trained journalists”?
One more example of iScrewedUp.
Terrestrial radio streaming.
Media execs love duplicating the same content that they air for free on the Internet. Why? Because they think they can make a fortune selling different cheap commercials on the stream.
But there has been precious little evidence that streaming is even wanted by their audiences.
Yes, if you’re in a building and want to listen to a terrestrial format, of course, it comes in clearer online. But even with all that factored in, terrestrial radio listening delivers not quite 3% more listeners to the station’s format. By any standards that is a screw up.
Because a smart radio exec would listen to their audience and find 1,000 ways to program niche content that listeners absolutely could not easily get anywhere else and find a new model for Internet radio. They could also build Internet radio stations for local businesses and rent the stations to their sponsors. No biggy. No great expense. The music rights issues will eventually be resolved and they’ll be sitting there owning many franchises.
Radio execs missed the point.
Lesson: You can’t cram analog mentality into the digital space. If you do, you’ll get just 3% of the available audience.
Okay, I lied — one final point.
The People Meter.
You know, the one Cox CEO Bob Neil railed against publicly for years and spineless consolidators put down while they were secretly signing PPM contracts.
Turns out iScrewedUp applies to this as well.
I can’t tell you the number of apologists who gleefully remind me that radio’s total listening is up one million people.
Wow. Imagine that.
And how do you think tired old radio, with thousands of talented programmers and air personalities fired, is accomplishing this feat?
Can you say People Meter?
Finally, the diary system that broadcasters love because they can easily manipulate it is now reporting the real audience.
But radio CEOs and association execs drunk with spin are using this as proof that radio is alive and well.
What they don’t get is that the People Meter means a major redesign of radio programming.
I don’t know about you but even after all their meetings, conferences, research and consultants — radio still sounds to me like it’s built for the diary.
Lesson: The People Meter allows radio stations to know what listeners want every moment of the day and enables them to deliver it. But they are listening to each other again and not the audience.
So, there appears to be an endless stream of major screw ups that radio and record industry CEOs have made — enough to inspire a developer to design their own Apple iPhone app.
Unfortunately, just like other radio apps, it would be downloaded by millions but I am afraid few people would listen.