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.

Ouch!

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.
---

117 comments:

Anonymous said...

Due to the loose lips of some in the local advertising community, this is not breaking news to some, but if you didn't already know:
After nearly four years - first as the Local Sales Manager of WNCX, then as the General Sales Manager of 92.3 K-Rock and most recently as the Local Sales Manager of WNCX and Radio 92.3 - I have resigned my position with CBS Radio. Today (August 4, 2009) was my last day.
I have decided to look for a new challenge and may be reaching out to you for suggestions, contacts or references.
For those of you who have been customers or business associates, thank you for your business and for your partnership throughout the years. I hope to work with you again on behalf of your businesses and/or your clients. In the meantime, you should hear from your new Account Executive from WNCX and Radio 92.3 soon or you can call Linda Rodriguez at 216.861.0100.
And to friends and family, thank you for all of your support.
I will be working full-time to find my next gig, but if you know of any job opportunities in sales, advertising, marketing, promotions, event planning, sports marketing or other fields where someone who is a problem solver with marketing expertise, understanding of media, outstanding presentation skills, a creative mind and 15+ years of experience can contribute significantly, please let me know.
Effective immediately, I can be reached via cell or this email address.
Please delete all other email addresses you have for me.
And, please do NOT reply to all



Thank you
Todd

T. Berk
Restricted Free Agent
216.965.4448 (CELL)
teeberk@hotmail.com

Anonymous said...

It seems as if their view of the word "radio" is that it's a relic from the past. "Radio heard then".
Sad, but they may have a point.

Anonymous said...

John, Your best yet and required reading for everyone in both the radio and ad communities. Radio is in dire need of fresh leadership - now. Tomorrow will be too late.

Anonymous said...

John, You summed up the radio industry better than anyone else has. You speak the truth. Now, how do we turn it around? How soon before the fire sales occur?

Anonymous said...

It is nice to read something from someone who truly cares about the radio industry.

Anonymous said...

John:

Your comments ring so true, especially the one comment made by Ms. Whitehead concerning the long commercial breaks.

Several years ago, while working at a CBS station, we ran 8 minute 10 unit sets, twice an hour....I'm not lying to you! As an advertiser, how would you like to be the 8th or 9th unit in that stop set?

Several years before that, in Richmond, we were running 6 stopsets an hour...each one was at least 5 minutes and up to 8 units! That's over a half an hour or commercials!!!! Who can listen to that?

I suggest some of today's Radio Gurus listen to some of the old air checks on the web. Jocks had personality and they played 1 or maybe 2 songs and then hit a stop set. The difference is that the break was only a minute or so and maybe 2 units, then right back into entertainment. The advertiser got to be featured and some listeners actually heard the product being advertised!!!

Next staff meeting, get the jocks and sales folk together and play your station. Let a typical stop set play and then ask the brethern to write down as many spots as they can remember. I'll bet your prod director can't get all of them and he probably dubbed or cut those spots....

No wonder we have to bonus spots on the overnite, give a free web banner and remote to get the buy. That's added value?

Anonymous said...

They never got the memo that greed wasn't good after all. Eventually, you get caught, you go to jail, or your disgraced - or you are Mel Karmazin and get away with it. Whatever the case may be it is time for a change. Thank you, John. It was a well written, well thought out piece. We need you back in radio.

Anonymous said...

Had these mergers gone smoother (though they rarely do) and the best of both worlds could have continued to lead the stations maybe we would not have the mess we are faced with today. My observations was that the most talented and most creative were immediately fired and replaced by loyal obedient servants. I am of the mind that it is too late to save radio and it should be allowed to die the horrible death it deserves and that creative people should migrate to the internet and start new stations there. Even internet radio could use some real talent.

Anonymous said...

These radio sales people wonder why I no longer advertise? No results that is why. It is not their fault. I hate to tell my saleswoman who is a 100% professional that it is not her personally. It is her radio station. I no longer get any response to my advertising which I had been doing for twenty years. I am doing more TV and internet and getting the response I used to get from radio. To you radio heads. Don t take it out on your salespeople. It is your product and your 10 unit spot clusters that make our message unheard.

Anonymous said...

Boy, did you ever wrap this whole story up in a nice tidy package. You explained radio's last decade perfectly. You are absolutely right about those running and advising radio. They are kids playing with toys. They do not know how to run anything right from programming to sales to promotion to how to generate revenue to service their debt. You have mentioned fire sales often. When will they begin? If they don't occur soon it may be too late for radio to save itself from itself. Time for the trust fund kiddies to go back to wherever they came from.

Anonymous said...

I don't know if you read Jerry Del Colliano. He did a similar story on Radio Shack but took a different tact and slammed them for dropping radio. I think Jerry is wrong about this one. Applebaum is a young agency guy who landed a sweet gig at Tandy. I think he is on to something. His generation which is the same as mine did not grow up on radio like my older siblings did. Radio was never a part of my life and maybe it was the same way for Applebaum. Radio, the word means nothing to me. It is like cassette deck or even an old Diamond REO. If Applebaum can hip up the Shack and make it a place where I can find what I am looking for @ a reasonable price I would gladly go there instead of Best Buy to pick up electronic items.

Anonymous said...

What must the elder Dickeys and Mays think about the way their children destroyed their once great empires? More proof that monarchies in public companies and nations do not work. Even Viacom is in trouble with the family feuds there. Too bad the parents cannot take the toys (radio stations) away from these reckless children.

Anonymous said...

If they start stocking sex toys they could call themselves the Love Shack and have a built-in theme song.

Truthfully, I like "The Shack" better than "Radio Shack". "Radio" sounds so dated.

Sorry, radio guys. Not your fault. it was your owners that destroyed your business.

Anonymous said...

John,

Loved the item about a local programmer outwitting his corporate boss, then getting canned for having common sense.

Clear Channel is the Green Acres of radio, Mr. Mays is Mr. Haney, and Their world headquarters is Hooterville -- What's right in the real world is always wrong, or completely the opposite in Hooterville.

Anonymous said...

Good point, John. Why didnt radio complain about turntables and cassette decks when they had every opportunity to seize listening away from radio. The answer is that radio was confident in what it was and knew that it provided the service to sell product & people would be back for more. Today radio cannot sell music and the artists are probably right that they should get a royalty from radio play. How about that. Payola in reverse.

Anonymous said...

Honestly, I do not know anyone under the age of 40 that listens to radio for music. A few people I know under 40 listen to sports talk and a couple listen to Rush but that is it. Radio is already dead to most people. It is strictly an over fifty phenomenon and judging from some of the comments here even the oldsters are not listening that much. I never listen to local radio. It sucks. Sirius used to be good until they tightened up their playlists.

Anonymous said...

What happens when Radiohead becomes just Head?

Anonymous said...

A direct analogy can be made between modern radio and the US auto industry. The US auto industry collapsed because it failed to recognize the market was changing, failed to change itself hoping for a return to "the good old days", didn't listen to the consumer and provide what they wanted and didn't plan past the next fiscal quarter. Now, they border on extinction. Radio. It's all about listening. Why don't they?

Anonymous said...

Hard to believe but true. I am in the business and I hate to say it. The word RADIO sounds dated to me too.

Try spending a day getting beaten up by clients telling you they no longer get the same response they once did from their schedule or that they will not buy time at all unless they are the first or second spot in a set.

Don't even ask me about value added.

Most of my time is spent defending radio. That is the roughest part of the gig because that is when I really have to lie.

I think radio is over and I am looking elsewhere. Ten years. Each year I have watched radio's image decline. Now radio is becoming a joke.

Radio Shack did the right thing. Bank of America did the right thing.

Anonymous said...

Is it possible that HD Radio is to blame for the name change? Struble, any comment?

Steve Matela, Eurocinema said...

Just look around you, it goes beyond The ** Shack and the Bank of America commercial, all those folks you see with ear buds, hate to break it to you they ain't listening to the radio. The smart guys in radio over the past 10 years who thought it was a good idea to make all the stations they owned sound alike, programmed from a central location, taking all of the local appeal out of them. I understand the economies of scale, one programmer, syndicated or voice tracked jocks, why pay 10 when you can pay just one. I always had a feeling that some radio genius walked into a shopping mall in San Diego and then one in Charlotte and saw all the same stores, I mean if you fell asleep in one and woke up in another you would not be able to tell the difference. And thought to himself wow what a great idea make all our stations sound the same. Well that is what radio has become, whether you are listening in one city or the next it is all the same...what happened to the local flavor of radio. Remember when John Driscoll came up the EOR format and the joke around the industry was End of the Road, well maybe he predicted something.

Anonymous said...

If radio has to start paying to play music, then they should treat all music like ads. However many times a song is played, the artist gets billed XX amount of dollars, they refuse to pay for the "ad", then their music doesn't get played anymore.

Anonymous said...

This is in response to the last post. The problem with the system you proposed is that it was already used by Randy Michaels @ Clear Channel & copied by every other major chain. Legal payola took hold & stations wouldn't play a song unless the labels paid for play. At some CBS radio & Cumulus stations the General Manager was choosing the music not the PD or MD. Contemporary radio stopped playing the hits the listeners wanted. A lot of songs played earlier in this decade that you will never want to hear again were the result of legal payola. At one point the US charts were radically different than the rest of the worlds. Almost no foreign songs were being played in the U.S. because their managers would not allow the labels to deduct the payola payments from their artist's royalties. The legal payola became a necessity because the radio stations had a big nut to crack because of debt service. Every penny stations made in legal payola went to corporate to pay down debt. The deal fell apart when the feds realized it was out of control & the labels backed down.

Anonymous said...

This should be distributed to every radio station in America. You are telling it like it is. The wrong chains won. The wrong CEOs are in power. The consultants are nothing more than facilitators for the wants and needs of the radio groups. It is all wrong and not the way to do business. Radio has so many opportunities with social networking and providing localism and instead avoids spending the time, effort and investment into saving its sorry butt.

Anonymous said...

This should be distributed to every radio station in America. You are telling it like it is. The wrong chains won. The wrong CEOs are in power. The consultants are nothing more than facilitators for the wants and needs of the radio groups. It is all wrong and not the way to do business. Radio has so many opportunities with social networking and providing localism and instead avoids spending the time, effort and investment into saving its sorry butt.

Anonymous said...

Radiohead becoming just Head is the best line yet! You'd be "Morning Material" if there were any damned jobs left!

Anonymous said...

There ought to be a law against broadcast monarchies. Can you name one that ever worked? Even the Terrible Terrell (you oldsters remember him?). His son is Kevin (W-NNNN-B-CCCC) Metheney who ruined WNBC, Clear Channel Cleveland and everything else he ever went near. Could we have a rule that sons and daughters don't follow their parents into broadcasting and can we have a rule that forbids anyone named Mason, Dickey or Mays from ever being allowed even near a radio station. Enough of this.

Anonymous said...

the estate of queen just ruled that radio ga ga will now be known as just ga ga. elvis costello changed the name of 'radio radio' to '(nothing)'. the alternative act from the 70s radio birdman will just be known as birdman (sorry tim byrd) and autographs' 'turn on the radio' will now be known as 'turn on the streaming audio.' its all over folks. if you are in radio. turn the board off, turn the transmitter off, turn the lights off, it (the medium formerly known as radio) is officially dead and the mays family, dickey family, mason family, farid family have been arrested for murder.

Anonymous said...

Look...I work in the industry and even *I* haven't bought a stand-alone radio in 25 years. The last radio I bought came with a car as standard equipment. Nice bonus. But most of my radio listening is done through my computer. That's also where I watch most of my TV. And listen to most of my music.

I don't see this as a slam against radios. The fact is that Radio Shack as a store has always been low class. Lafeyette Electronics, an early competitor, was even lower, in my opinion. Radio Shack hasn't specialized in radios for years. I bought my first computer there. I bought my first cell phone there. It's become a Spencer's Gifts for electronics.

But this has nothing to do with radio programming. It has to do with radio devices. Radio Shack doesn't sell a lot of them. The novelty of the device is long gone, and there's not much the content people can do about that. Even the absolute best content can't help an antiquated device. That applies to any electronic device. Not just the radio

Anonymous said...

"I don't see this as a slam against radios. The fact is that Radio Shack as a store has always been low class."

It sure is a slam against radio - you must work in the industry and you are just making excuses.

Anonymous said...

OK, how about this line here. Instead of "turn your radio on", how about "turn your streaming audio on". Nice ring to it. Any questions? Comments?

Anonymous said...

Applebaum is a young agency guy who landed a sweet gig at Tandy. I think he is on to something. His generation which is the same as mine did not grow up on radio like my older siblings did. Radio was never a part of my life and maybe it was the same way for Applebaum. Radio, the word means nothing to me. It is like cassette deck or even an old Diamond REO.

As much as Mr. Gorman hates the likes of Rush and Glenn Beck, at least they show personality and are entertaining. Rush is said in some quarters to have saved AM radio. How? Personality. And why don't kids listen to radio anymore? Study history for an answer.

I also liked the earlier post suggesting radio big wigs listen to some old airchecks. I've mentioned before that the old WIXY and WKLO tribute sites are chock full of material that illustrates why radio was so compelling back in those days ..... PERSONALITY!

Anonymous said...

Mr. Berk,

Anonymous.....hmmmm I don't think that word means what you think it means.....

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