October Have You Scared Yet?

A few days ago Jeanie and I had the pleasure of visiting Oklahoma City for a sporting event, and were invited to accompany a friend and his wife to dinner at Mickey Mantle’s.  Our friends are about to open a brand new restaurant in Dallas with two well known professional athletes, and I couldn’t help but wonder why on earth anyone would do that at this point in time!  I suppose with the partners on this project one wouldn’t have to worry about getting your hands on the necessary working capital to get the job done, but with the general economic landscape appearing so bleak for many months to come, why on Earth would you jump into that equation?
In our friend’s case, it’s because that is who he is.  Because loans are hard to come by doesn’t make a true entrepreneur slow down, but rather forces them to move in other less traditional paths to attain working capital.  In fact, it may be the perfect time to get spectacular lease terms on property which might not otherwise even be available!  People wired this way don’t see issues but solutions.  I must confess that my spirit was somewhat renewed by that perspective and the dinner was worth exponentially more to us long term than the monetary investment (and it was an investment).  Oh, and the other friend who joined us that evening is also starting a new business in the energy arena, and he shared much the same  attitude toward our present economic mess… that of rare opportunity.
I bring up this story to remind us that the reason we got into entertainment in the first place was not only an artistic spirit, but an inability to follow traditional paths and abide by the rules which invariably accompany those on the customary routes.  We are idea people with an entrepreneurial sprit which really can’t be contained by prevailing conditions but only by our own decision to stop looking for ways to reach our goals.
Don’t let these tough times slow you down.  Use our current economic  downturn as an opportunity to reconsider each element in your business plan to assure yourself and your employees that your vision is clear and the time is still now.  We’ve got magic to create and our audience needs to experience it now more than ever.  Someone at that table may well be looking to your vigor to keep their business spirit sustained.  Oh, and I highly suggest the striped bass on lobster risotto as a great way to get the creative juices flowing at Mickey’s!  We’ll let you know how the place in Dallas turns out when it opens in December.  I’m confident it will be fabulous!
Garry Leigh

Snafu Consulting

AdAge Article Says Radio Listening Is UP!

Radio Gaining Audience — but Not Ad Revenue

Medium Holding Its Own Against the IPod, Trying to Embrace New Media

By Andrew Hampp 

Published: October 20, 2008

NEW YORK (AdAge.com) — Radio has been right behind newspapers as the old-school medium most adversely affected by digital developments. New research, however, shows that radio is actually gaining audience, even in spite of its closest competitor, the iPod.

Zune: Songs on radio are for sale.

A recent online study from Paragon Research polling more than 400 14- to 24-year-olds about their music-consumption habits found that the youth demo has increased its time spent listening to radio 11% this year, while its time spent listening to iPods has actually decreased 13%. The study coincides with the Radio Advertising Bureau’s annual RADAR report, which shows that AM/FM radio listeners increased by 3 million in 2008, bringing the number of weekly radio listeners to 235 million. 

Jeff Haley, president-CEO of the RAB, said the Paragon study confirms what the radio industry has heard anecdotally by reflecting the “lack of inertia in the MP3 experience. You don’t have the ability to refresh or any kind of automated way to come across great new music. As a result, that isolated programming effect does not allow you the serendipitous experience the way radio does.”

But more listeners are not doing much to boost radio’s fortunes. Industry revenue has been largely flat to down in the past five years due to the gradual migration of listeners to MP3 players and online radio — not to mention advertisers’ simultaneous migration to other niche media such as cable TV, web portals and, to a smaller extent, satellite radio. Its two core advertisers — the automotive and retail industries — are being slammed the hardest by the financial crisis, particularly at the local level, which is where radio makes more than 65% of its total ad revenue. Radio ad revenue was down 6.5% during the first two quarters of 2008, making it the second-most-declined medium next to newspapers, which suffered a 7.4% decrease in ad spending during the same period, according to TNS Media Intelligence’s spending report on the first half of 2008. Internet spending was up 8%, a margin notably smaller than the increases it posted in recent years due to the stabilized growth of display advertising. 

And it’s not as if radio can blame the iPod for the ad declines. Jim Boyle, senior radio analyst for C.L. King & Associates, said although the iPod has had some affect on radio listening, its impact on radio ad revenue has been minimal at best. “It’s not as though you have to compete with the iPod to go to the local auto dealer in Ohio for an ad,” he said. “Even if they chew into your listenership, the pie is still a much bigger pie. You may only lose a very small percentage of your cost-per-thousand point.” 

Self-inflicted wounds
And as the industry’s highest-ranked executives have readily admitted in recent years, radio hasn’t done a good job of embracing new media. As Frank Flores, chairman of the New York Market Radio Association and VP-general manager of the Spanish Broadcasting System, put it, “We’ve let everybody brand us and put us in different places. The internet branded us as slow and a dinosaur, iPods and streaming just made us seem like your father’s brand of communicating, and we’ve done nothing to dispel that.” 

That’s why its biggest industry initiative to date, dubbed “Buy from FM,” is aimed at making FM radio tuners available on every MP3 player and cellphone in the next five years so consumers can identify and buy the songs they hear on the radio directly from their devices. Its first partner in FM song tagging, Microsoft’s Zune, just rolled out in 450 stations nationwide, with the RAB and National Association of Broadcasters in “aggressive talks with many carriers to extend the platform,” Mr. Haley said. 

The RAB has also embarked on a similar partnership with the American Association of Advertising Agencies called the “universal ad ID program,” designed to make radio commercials as interactive as the purchase-enabled songs to which they’re attached. Mr. Haley said 56 of the top 100 advertisers have adopted the technology thus far, with initial tests expected to roll out in the second half of 2009. 

Of course, it’s going to take a lot more than Zune’s 4% to 5% share of the MP3 market if radio wants to make major inroads in monetizing the music-discovery market, particularly among young influentials. And convincing Washington and the major wireless companies to get onboard “Buy from FM” without Apple’s initial support will be tricky at best. “If you don’t have the top market-share leader who is dominant in the field, you have your foot in the door, but the door is harder to open,” Mr. Boyle said. 

Lisa Delio, exec VP-managing director, local broadcast at MPG, said the ad market for reaching young listeners is very finite, so even if overall listening is up, there are only so many ad dollars that can be dedicated to reaching them. 

 

*So….. programming and sales need to do a better job of working together on generating enthusiasm from both consumer groups!  What a concept!   Garry Leigh

Why Are We Here?

No, I mean here, not Here.
When we all started out in Radio or Records, I don’t believe any of us saw ourselves in the positions we currently hold or certainly not doing the things we do every day.  How did we get here?  Did we aspire to do nine jobs simultaneously, often with diametrically opposed philosophies that tap into our areas of weakness as well as our strengths?  Did we see the need to spend a great deal of time trying to work on weaknesses which are there precisely because they are areas in which we have absolutely no interest or passion?  I don’t want to be an accountant and worry about all those little categories you people create for the money that we are spending.  I want to be an artist and create a real communication of passion in areas of man’s greatness, not crunch numbers for some Vice President of Numbers Games dealing with Wharton people all day.  We were born to break rules, or at least stretch them as far as they would stretch, and now we are required to not only write the rules but then enforce them upon the people we used to be.  What the hell?

“The purpose of life is to fight maturity.” –  Dick Werthimer

Hmmmm.  Do you think Dick went to Wharton? No, my bet is he played guitar way too loud and way too late with way too many friends around.
In small business I totally understand the need to accomplish tasks not of our liking because that’s the nature of small business.  We hire contractors to do the things we can’t or don’t want to do and focus on the things that put us in the position to open a business in the first place.  Right?  So what’s the deal with BIG business and the BIG picture people making us all move to the left brain when we are demonstrably good working from the right side?  STOP IT!
Today, let’s try harder to draw on people’s strengths and support them in every way we can to further develop those strengths.  Go with people who are passionate in their area of expertise and make it safe for them to go there while respecting the same of those around them.
I have always loved management retreats precisely because each of us on the team had very different strengths and we could get away and learn about each other’s passions and then try to do a better job of drawing on them in the future.  That’s part of what makes a good team better and in simplest terms why some companies have great leaders and why some never rise above good.
Take the team out and encourage them to express why they are passionate about their department and where they would take it if they could.  My bet is you’ll see the rest of the team pitch in and cover their weaknesses so they can each better utilize those individual strengths and focus more on Why We Are Here!
Garry Leigh