Tuesday, August 4, 2009
Radio: Shack attack
I’m telling you. I couldn’t make this stuff up if I tried.
Did you hear the latest one about Radio Shack?
No, not the one about HD Radio. They pulled those stiffs off of their shelves a year ago, maybe more.
From this day forward, Radio Shack will be known as The Shack. Just The Shack. No Radio.
That means their 4,400 company-operated stores, their 1,400 dealer outlets, and 700-plus wireless phone kiosks will no longer display that word.
Why? A spokesperson for The Shack says, “Fewer of the company’s customers going forward will ever own a radio.”
Lee Applbaum, the Chief Marketing Director of The Shack told the Clear Channel-owned Pravda….er…Inside Radio, “This creative is not about changing our name. Rather, we’re just contemporizing the way we want people to think about our brand.”
And have you seen that new Bank of America TV spot that opens with a shot of an alarm clock MP3 docking station?
Look closely the next time it runs. That’s not an alarm clock radio.
Last week Ad Age carried a story on what marketers want from radio. You missed it? Read it here.
You’d think that when Diane Whitehead, the director of national retail advertising for Verizon Wireless, speaks – the radio industry would listen and take heed? After all, Verizon is only national radio’s number one client and local radio’s number two advertiser. She asked, “Radio promises us effectiveness, but can you prove it?" She added, "Yeah, radio gets X million people to listen, but what are they doing with it? How are they engaging with it?"
Ms. Whitehead also made note of a five-minute, seven spot break she heard on a Jersey station, which featured two spots for Home Depot and one for rival Lowe’s.
It’s sad. The radio industry continues to sputter and fail under most of its present leaders and advisors. They’re legends in their own minds and too engaged in getting their egos massaged to take notice that its very name - radio - is considered passé.
Radio has less of a clue as to what it should do on line. Remember when the words creativity and innovation were used to define profitable radio groups? Today, those words are used to define new media.
Radio still labors to typify new media as a collective industry that intentionally tries to cripple it – when nearly all of radio’s ills are self inflicted by apathy, greed, short sightedness, lack of planning, and no specific goals other than trying to figuring what its supposed to be while time ticks away.
iPods and satellite radio aren’t direct competitors to terrestrial radio. Neither were CD players, turntables, cassettes, and eight-tracks, and rival terrestrial stations in the past. You listen to whatever is providing you with the best entertainment at that moment.
The acquiring radio chains failed or refused to recognize the cultures of the stations that were being purchased. That was the industry’s greatest vulnerability. The seizure and occupation of anything, whether earned in war or through acquisition, is almost always a seizure of hostile territory.
The occupation of territory is labor-intensive. It’s police work, not soldiering. Soldiers kill enemies. Police identify and remove only lawbreakers and social misfits. Most acquiring radio chains failed to understand the culture of their just-purchased companies and in most cases, the best and brightest were replaced by – well, to paraphrase the late Paul Harvey - you already know the rest of the story.
One story I’m familiar with found a highly successful, independent-thinking program director answering to a new boss who was a stringent paint-by-numbers guy. Arguments over musical direction ensued. Both had valid points – but the incumbent programmer knew the market best and his numbers proved it.
So a market study – when radio could still afford to 'em – was commissioned. The end result proved the incumbent programmer was right – and the new boss was wrong.
Or you could say the incumbent programmer was dead right.
A month later the new boss replaced the incumbent with a clone of himself. Today, that station has seventy-five percent fewer listeners and is an also-ran in its target demo.
Consolidation was the alternative to competition. Theoretically, it would be less costly and risky than having multiple groups compete in one market. But it didn’t work that way. Clear Channel and others attempted to redefine a balance of power – but minus any long-term goals. In fact, most chains, Clear Channel included, didn’t even know what they were trying to achieve beyond the next quarter’s earnings.
Successful merger math is defined as one and one equaling three.
In today's post-post-deregulation go-go, buy now-pray later radio acquisition world, the inability to service debt has become the radio industry's greatest accomplishment. That, and losing audience at a rapid clip.
The major radio chains that persist on keeping their gargantuan, sluggish properties alive with their own brand of voodoo economics will continue to create only long term inefficiencies, which will keep its cash flow lethargic. At best, it’s a stay of execution. In the long run, they will not survive.
Some things were never meant to be that big: banks, insurance companies, and radio groups.
I have to laugh at all the complaining and lack of focus on Arbitron’s PPM. Sure, it’s not a perfect science – and any discrepancies should be addressed immediately.
But what ever happened to pride in product? What ever happened to building a rock-solid radio station?
Instead of focusing in on how to best manipulate a PPM – why not concentrate on building a solid product that will provide a loyal audience that already know and listen to you? The only stations that survived in the sixties through the early nineties were those that put little on manipulating the actual diary holder other than the usual tricks of the trade. The most successful and dominant stations earned mass appeal trust and TSL.
We’ve been watching the forgotten but not gone children of privilege play with their radio toys for a little over a decade. It’s been fun. Art Linkletter was right. Kids say - and do - the darndest things. But, if you don’t mind I believe it’s time for the adults to take control of the business again.