A Change Will Do You Good
July 18, 2014
It's axiomatic that the only constant in life is that everything changes -- Heraclitus, I believe, sort of (depends on the translation), or maybe Kathy Troccoli. (Obscure early '90s Top 40 references FTW.) Either way, we know this, or think we do. Yet the radio industry seems not to want to believe it. I was reminded of this...
...Okay, let's back up a bit. No, back up some more. Okay, right there, sometime in the '80s, when I was trying to figure out for sure what I wanted to do with the rest of my life. Back then, I was fairly certain that I wanted to own radio stations and that radio would be growing and remain a strong business for the rest of my life. Fate, of course, laughed at me and ran my dream over with a tractor-trailer and backed up over it a few times to make sure, but by that time, I'd changed my goal. I realized, after going through the numbers at the time, that a) I wasn't going to get the financing, and b) it was soon to be too late -- station prices shot through the roof at about that time and didn't come down for a long time. And as time went on and I discovered that I really was more of the creative type than the suit-and-tie type, I saw the business morph into what it is now, concerned little about the creative product and little about the consumer and even little about the advertiser and inordinately concerned with the investor. By the time the radio industry became beholden to Wall Street analysts and institutional investors, I'd moved on. My goals were different, so I adapted. Things changed.
And I was reminded of that by another round of articles in the local L.A. papers this week that took note of the lack of a deal to put telecasts of Dodgers games on DirecTV and Dish and most of the cable providers in the region. I'll summarize in case you don't know: The local baseball team here signed a massive new TV contract to create their own channel via Time Warner Cable, and the idea was that Time Warner would then do what they did with the Lakers and cut deals with all the other carriers and make back their money with those fees and advertising. Except for this: To make the dollars work, Time Warner needs a sliding scale of fees starting at over four bucks per subscriber, EVERY subscriber, whether those people want the games or not, whether they watch or not. That's how most cable sports channels, and indeed most major basic cable networks, have always operated, and Time Warner and the Dodgers assumed that this is how it would play out again, passing the charges along to consumers, who would shut up and pay, because they wouldn't have a choice in the matter.
Except that, now, they do have a choice. They can cut the cord and get their video entertainment online with Netflix and Hulu and a friend's HBO Go password. They can point an antenna at Mt. Wilson and get local channels in HD plus countless digital channels they'll never watch but for which they won't have to pay. So when Time Warner, in a panic, began to pepper L.A. area residents with TV spots on local channels imploring us to call our satellite or cable operators and demand the Dodger games... nothing happened. People really aren't panicking that they can't get the games. It would be NICE to have the games, but it's also nice to save $50 a year by NOT getting the games, because life is going on without Clayton Kershaw and Yasiel Puig on my TV screen (Vin Scully, on the other hand, might be worth the $50, but I'd prefer it to be optional, just as I opt to pay more than double that for the MLB.tv online package, sans blacked-out Dodgers). And if my carrier insists on increasing rates for more channels I don't watch, I COULD cut the cord at some point. The upshot is this: After a couple of decades of gouging the public for programming fees, the public has other options. Cable and the networks failed to adapt for this, but they're starting to get the message now: Things change. Your business plan is not exempt from that. Failure to adapt is fatal.
And... radio. Okay, here's a thought: Throwing your streams into an app isn't really adapting. Neither is trying to strong-arm cell phone carriers into activating FM chips in cell phones. That's because you're not seeing what the changes really are, or you're praying that you can convince investors that your streaming app is "just like Pandora" ("If you squint really hard and you're color-blind, our logo almost looks like it could be Pandora's") and they'll bail you out of your crippling debt load. All of this is targeting investors who have been fooled once, twice, three times, maybe a lot more times, but how long can you string them along with the choice of "help us refinance or you'll lose everything," especially since all that's happening is that they have even more on the line by giving you more time? And how does that address the real, fundamental changes that, if not rendering radio's business plan obsolete quite yet, means that the future is at best unsettled and at worst a spot on the shelf next to Betamax and 8-tracks?
The changes are, of course, not just the general "people moved to digital" thing. It's that people are increasingly wanting their entertainment -- all of it, not just audio -- on demand, at their fingertips, not served up in a traditional manner on a linear program. They increasingly don't want the old stuff, not the old guys-in-suits talkers or Dingo and The Baby morning shows. There's still a market for that, but not long-term or even mid-range. There IS growth in other areas, like customized streams or ad-free options or on demand talk. There's demand for radio, but BETTER radio. THAT'S the change. And if it invalidates the traditional radio business plan at an inconvenient time when growth has stalled and investors are restless and debt is beginning to slop over the retaining wall and making a mess of everything, well, nobody guaranteed you that radio, the way it was in 1986 or even 2000, would be forever. So you now have to -- gasp! -- look to create a better product people will want in 2014 and beyond, and better ways to deliver it. That might not make investors happy in the short run, but they can't be looking at the future as presently projected and think things are just swell as they stand today.
So, Heraclitus. Everything changes and nothing stands still. Or H.G. Wells, if you prefer: Adapt or perish. Nature's inexorable imperative. The audience changes, their ability to circumvent your best-laid plans changes, and you have to change with them. 'Twas ever thus.
Something that changes all week long -- with new items -- yet never changes -- always a great source for material -- is All Access News-Talk-Sports' Talk Topics, which offers hundreds of items and ideas for segments on your shows, plus kicker stories you won't see anywhere else. Find it by clicking here. And the Talk Topics Twitter feed at @talktopics has every story individually linked to the appropriate item. This week, you'll also find "10 Questions With..." Tim Lewis, who's PD and morning host at KBLI-A-KBLY-A-K249EE (NewsTalk 97.7)/Idaho Falls-Pocatello-Blackfoot, and who talks about how, after a major market sports radio career, he decided to head to Idaho for a very different position. Embracing change... yeah, fits this week's theme.
Full Disclosure: I also serve as Director of Programming for Nerdist Industries (a division of Legendary Pictures), which includes the Nerdist Podcast Network, one of your major podcast entities.
Okay, gotta run again. Big change happening here: I finally got around to getting my car air conditioning fixed, and I have to go pick it up now. Okay, maybe that's less "change" than "personal responsibility." Or less "personal responsibility" than "my wife was refusing to ride in my car anymore until I got the A/C fixed." But that wouldn't have fit the theme this week.