October 6, 2009

Are you happy if your business is "getting by" and not losing too much money? Have you cut jobs and other expenses to be able to make the profit expected of you by ownership? Are you ownership and cutting expenses is the only way you know to survive in these tough times? Have the cuts worked and you are keeping the bankers away from closing the doors? Is morning or afternoon drive the only really "live" show you have on the air?

You have made some short-term decisions over the last few tough years that have kept you afloat. You cut marketing first, then research, then personnel. First it was just a little; back in the '90s when you took out one advertising campaign, maybe a research project, but you thought you'd put it back in when things got better. But things didn't get better so you had to continue with those cuts and a few more to keep profits up and keep bankers and/or Wall Street happy.

I know you see where I am going. Over the last 15 years, escalating in the bad economy, we have saved ourselves down to nothing.

There is something interesting going on in network TV and it's something we should look at because it shows what happens when expenses overrule good business decisions.

John Spiropoulos is the SVP/Dir. of Marketplace Analytics and Publicis Group's Media Vest. Recently he was looking at NBC'S 10-11p time slot. That's right, the Leno hour. After a big shot of adrenalin when it debuted, the numbers have trailed off. Spiropoulos says the expectation is that the show will get a 1.5 to 2.0 share of the 18-49 demo. At that level the show's ratings are like the best shows on CW Network.

NBC is apparently happy with that because the low overhead means they don't have to sell it at a premium and can still pull a little profit. While the network is happy, it is another example for buyers that regular TV audiences are dwindling.

Hasn't radio done the same thing? We have taken out our personalities, marketing, research, etc. and replaced the compelling content with voic tracking and liner card readers. Over 90% of America still listens to radio from our transmitters. Are we going to let the audience continue to scatter because there's nothing compelling on the air? By the way, if it's not compelling on the air, it's also not compelling on the Internet, cell phones, HD Radio, or whatever.

How many times have you heard the line, "We're in the content business." The line should be, "We're in the quality content business." It's important to deliver our content in every way possible, but if it doesn't stimulate the audience they won't be back. Here's an analogy: You want pizza delivered quickly. If the pizza isn't very good from the fast delivery joint you'll gladly accept a few more minutes from the not-so-fast joint to get great pizza. Let's deliver great content first.

In an Advertising Age story about TV, Spiropoulos said, "A lot of short-term smart decisions go into a long-term collapse, and that is what I think we are watching in pieces."

That word "collapse" is scary. It doesn't have to happen to radio if you don't let it happen.