Wednesday, October 29, 2008

BROADcasting--now a dead concept?

In a day and age when we can have web sites personally designed to give us the information we want immediately upon log-in, when we can subscribe to RSS feeds on any subject imaginable (and some unimaginable!), when we have a choice of 200 channels on our TV, streaming audio/video on our cell phones, and hundreds of radio stations cascading down from space and into our radios...then I have to take a breath after that long opening sentence before asking the question: Is there any longer such a thing as "broadcasting?" Emphasis, by the way, on the word "broad."

Many media have had as their primary reason for existence the goal of delivering the largest possible audience or readership. LIFE, LOOK, THE SATURDAY EVENING POST, READERS DIGEST...all were successful because they gave advertisers access to millions of readers each week. Network TV--ABC, NBC, CBS and Fox--presented a "mass" audience...millions of TV households tuned to their prime-time offerings. Radio stations all tried to be "number one!"

That is all fading away, replaced by one of my favorite made-up words: demassification. Most advertisers no longer want to reach (or pay for) a mass audience. They want to target, to efficiently reach targeted potential customers. What better target for a carpet cleaning service than a search engine where people are searching for carpet cleaning services? Why spend what it costs to reach thousands of people on TV, radio or in the newspaper when practically none of them are in the market to have their carpets cleaned? Those guys are on the Internet anyway, looking for a carpet cleaner!

Advertisers can target with cable/satellite TV, based on programming. The audiences are much smaller per channel, but ad guys know where to go to reach potential customers...not paying for vast masses of people who have no interest in what they are peddling, simply to hit those who are.

That is why those big national magazines no longer exist. And that is why I can boldly predict the following:

-- Network nightly newscasts will be gone in fewer than ten years. I can't wait to see which network blinks first and gives up on the entire concept. Fox now looks especially brilliant for never starting it, happy instead to go the 24-hour-a-day cable channel route in the first place.

-- Networks will move more and more toward narrowly-targeted programming...maybe a night aimed at non-ethnic teens, a night geared to high-income 35+ viewers, or the like, and will be happy to settle for third or fourth place because they charge higher rates and make more money than the number one network...because they efficiently deliver the right sets of eyeballs.

-- By 2013, many mid-size cities will no longer have a newsprint-on-paper daily newspaper. When car dealers and grocery chains finally give up the fight and stop using newspapers, their doom is sealed.

-- Many radio stations--especially AM stations--will go away, returning their licenses to the FCC, and no one will file for them. Still, someone will figure a new way to price radio audiences to advertisers and will invest in the programming that it takes to attract a marketable block of listeners. And how to incorporate other means of distributing their compelling content, too, and make money on each of those means.

--Narrowly-focused cable/satellite TV channels that use Internet content to enhance the viewers' experience will thrive. Examples: Golf Channel, Big 10 Network, HGTV.

Doubt it? A recent Friday night, the number one prime time TV show reached fewer than 10 million households. That was the first time that happened since the 1960s...when there were far, far fewer TV households. The number one radio station in my home market used to have a 12 rating...12% of the entire population of the city listened to that station for at least fifteen minutes in a week. Now the top station has a 5 rating.

I've been saying this for the last dozen years or so and it is rapidly coming true: any medium has an audience/readership that has some value to some advertiser at some price. The goal is to have enough of an audience for which you can charge enough of a price that you can make a profit.

Nowadays, that means you better attract an audience that advertisers want and are willing to pay for. Size does not necessarily matter that much. Quality does. Targeting does.

Are the people with the keys to radio and TV stations and print media ready to invest in the research and creativity it will take to remain in business in this new climate?

Stay tuned.

Don Keith N4KC

Friday, October 17, 2008

Gored oxen

I am likely stating the obvious here. Those who resist change most vehemently are those who feel most threatened by it. Native Americans were perfectly happy with the status quo. The influx of pale people--modern conveniences, railroads, and evangelical religion notwithstanding--was not viewed with particular enthusiasm. They resisted violently. Ask General Custer.

I see a perfect example of such resistance to change by those most threatened by it when I look in my former field of broadcasting and the current controversy over how viewership and listenership are measured. It had to change. Previously used methodology is archaic and not very accurate at all. Billions of ad dollars are spent based on those estimates, and those decisions have been made primarily on the memories and honesty of diarykeepers. Busy, distracted people, facing a glut of media swirling all about them, are asked to write down what shows they watched or stations they listened to over a one-week period. I won't even try to tell you all the horror stories I have personally witnessed or all the things that can and do go wrong with this methodology.

Then, Nielsen (a company that used meter technology over 50 years ago but still measured the bulk of TV viewing by hastily scribbled diary entries and pencil) started extending the use of its set-top boxes in the homes of so-called "Nielsen families." There was great anguish and gnashing of teeth from some groups because the results from this much more accurate measuring stick came in better for some stations and shows and worse for others than they had with those diaries. Arbitron (who built a multi-million-dollar business on diaries and pencils) heard the clamor from advertisers and developed the Portable People Meter, which has been previously discussed on this blog, including my own limited personal involvement when I worked with Arbitron.

Wow! A device that impartially measured whatever its bearer was listening to. No recall. No guessing about call letters or dial position. No writing down the call letters of the station with the most billboards and bus panels, just because that was the only one the diarykeeper could remember. No having one teenager in a household fill out eight diaries for other family members who did not want to fool with such silliness.

But, just as with Nielsen's far more accurate methodology, those who felt the new, more reliable way of measuring actual media usage was hurting their particular segment of the business began yelling loud and long. Loud and long enough that the attorney general of the state of New York was asked to intervene and take legal action against Artibron's "illegal and misleading business practices." And the Federal Communications Commission was asked to intervene (I'm no lawyer, but I see now way there is any jurisdiction here!).

Yes, many stations that are programmed for African-Americans and Hispanics lost ratings with the PPM, just as happened when Nielsen meters became more widespread, replacing diaries. And lost ratings mean lost dollars from advertisers. Sometimes millions of lost dollars. I undersatnd the plight perfectly. I, too, owned a radio station that suffered from Arbitron's diary methodology.

(Could it have been that the diaries allowed some people to "vote" for "their" stations to whom they felt called to show loyalty by indicating more listening than was actually taking place? I'll save that argument for some other blog post.)

Well, NY AG Cuomo has filed suit, claiming Arbitron's methodology is biased and that the company has deliberately misled customers and advertisers. The FCC is deciding if they have authority to look into the syndicated audience estimates of a company that does not have to have FCC approval or license to do so. (That would be like the FCC investigating a television critic who pans certain shows.) Sure, Arbitron, whose whole business is based on publishing accurate, unbiased, third-party audience estimates, is going to put into the marketplace ratings information they know to be wrong! That is too ridiculous for words!

Look, no research that relies on statistically valid sampling or some type of system for collecting that data is going to be 100% accurate. But the PPM is by far the best way of measuring radio (and TV, too, if the nuts at Nielsen would realize it and re-enter the partnership with Arbitron...especially for measuring out-of-home viewing [never saw a Nielsen meter on my hotel TV sets] and video streaming).

Although it almost sounds like the argument that religion, railroads and "civilization" were much better for Native Americans than the lifestyle they had happily lived for centuries, I believe the changes in the industry are good for stations. Accuracy is a good thing for everybody, including those whose audiences may actually decline in the beginning. Accuracy means advertisers can trust the numbers they are seeing and will, in the long run, mean more ad dollars for radio, including those who feel like they are being slimed by Arbitron's new device. And with all the other challenges facing traditional terrestrial commercial radio these days, the industry needs all the credibility it can get, credibility that can only be enhanced by more accurate ways of estimating usage.

But then, I am an advertiser. My ox is not getting gored.

Don Keith

Tuesday, October 14, 2008

"Dashing through the snow..."

Prediction from one of the pundits I read:

This year, Christmas music on the radio will be at an all-time-high popularity level.

Reason: people are so depressed about the economy and the presidential race that they will seek solace in Johnny Mathis and the Harry Simeone Chorale like never before.

What do you think?

Truth is, I got so burned out on seasonal songs when I had to play them on the radio that I turn pale when I hear the first notes of "White Christmas." Still, I understand the logic here, and I think it is probably correct. Of course, I always felt that going "all-Xmas music all the time" was a lazy way to program a radio station. And when stations started switching before the last trick-or-treater had pummeled my doorbell, I gagged.

Or maybe it was all those little Snicker bars.

Don N4KC

Friday, October 3, 2008


I know this blog that is supposed to be dedicated to technological change often tends to swerve toward media, but darn it! That's where I've lived most of my life. And there is so much technological innovation (and disgusting pig-headedness) there that it begs discussion.

Here's a short blurb from a media trade email that got my blood pressure up already this morning:

"When PPM rolls out in eight additional markets next week, dozens of new stations will get a shot at appearing in the monthly ratings book. But not all operators are encoding their multicasts, and so far no HD2 or HD3 station has showed up in the ratings. One GM says 'Nothing can kill a new idea faster than metrics.'"

Quick background: PPM is the "portable people meter," a device that has the capability of measuring exactly what a person is hearing. Though it is only being used for radio now, it has the capability of measuring TV, Internet streams, and more. We were in the development stages of this device when I was with Arbitron, and it is by far the most accurate media measurement system ever passive as possible (not dependent on people remembering or writing down what stations they listen to) and single-source/multimedia (can measure more than just radio and give a picture of people's media usage HABITS, not just radio listening).

"HD2" and "HD3" refers to the ability of digital over-the-air radio stations to broadcast additional programming on separate channels from their usual main one, all on the same signal.

With digital radio happening all over, station owners and operators are facing several hurdles:

  • Despite millions of dollars of marketing, the general radio-listening public remains mostly unaware of digital over-the-air radio

  • Those who are aware are almost completely put it mildly

  • No one knows how to monetize those additional channels...advertising? Donations?

  • And if the idea of having an extra channel or two attached to every AM and FM broadcast station in America should catch on, won't stations actually be competing with their main channel with all those additional sources of programming?

And all this is happening at a time when traditional terrestrial commercial radio broadcasters face competition from streaming Internet stations, XM and Sirius via satellite, iPods, people talking on and getting programming from their cell phones. And at a time when broadcasters refuse to develop talent, spend money on programming, or take any chances whatsoever. Yikes!

I know owners and investors are scared. But that one quote in the story above is about the silliest I have ever seen.

"Nothing can kill a new idea faster than metrics."

Instead of saying, "We are going to put content so compelling on our sub-channels that the public will flock to us...please, please measure it so everyone will see what we have," they are afraid someone will see that, once a yardstick is applied, there is nothing there to measure. This is the very "head in the sand" attitude by the people who hold the keys to America's radio stations that will eventually kill the medium graveyard dead!

Don Keith