Archive for the ‘2020 Vision’ Category

January 10, 2014 @ 9:46 am
posted by admin

Here’s an interesting perspective on the future of radio originally posted on JacoBLOG last year…

Best of JacoBLOG – Why I Won’t Go To Radio Reunions

I know this post will come off as callous or even blasphemous to many hard core radio people, but I’ve been thinking a lot about point of view over the holidays.

In fact, I’ve changed my Facebook Timeline picture to show a view (in Michigan) out the windshield – rather than looking back through the rear-view mirror.

At so many formal and informal radio gatherings over the past few years, the conversation has devolved to a discussion, debate, or lamentation about how the radio business isn’t what it used to be.

Nothing is what it used to be.  That’s why the phrase, “the new normal,” came into being.  It’s a statement that life as we knew it has changed.  It is incumbent upon all of us to adjust – or simply move on.  Either decision is valid, but to stay in place and complain about how the business has gone to hell is simply counterproductive, especially for those of us who are making our way through it, trying to innovate, make adjustments, and keep it vital and healthy.

While there are so many aspects of radio that I also miss, getting caught up in conversations about the good old days erodes our ability to implement change, improvements, and to keep it moving forward.

So that’s why I’m looking ahead.

We can debate or lament the industry’s changes, and point the finger at consolidation, radio companies going public, or all the painful staff cuts that have taken place.

Or we can play the cards we’re dealt the best way possible to make it better.

So I’m done with radio reunions.

And it’s not because I don’t want to see old friends and colleagues because the past four decades have been cherished times professionally and personally for me.

But I’m hoping that the next decade is just as memorable, amazing, and exciting – even though I know all too well that it will be very different than the way things have been in the past.

No rear view here.

Eyes out the windshield.

Who’s taking the ride with me?

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June 20, 2012 @ 10:04 am
posted by jhooker

For all those trying to figure out the future of radio and all those getting mired down in how to fix this digital challenge, Mark Ramsey has the best advice I’ve heard:

Don’t look to others to find your answers or inspiration, look inside yourself and those around you and ask, “How can I serve my users better? My listeners, my advertisers, my employees and even myself?”

You know your own capabilities and your market better than anyone. Start thinking “user experience” as much as how to make money doing it. The answers will come and users will pay for it. That’s what Steve Jobs did in the late 90′s when he came back from the dark years to resurrect Apple making it one of the most highly valued companies on the planet. Here is Mark’s blog:

Chasing the Unicorn

Last week Seth Godin penned another pearl:

The easiest way to sell yourself short is to compare your work to the competition. To say that you are 5% cheaper or have one or two features that stand out – this is a formula for slightly better mediocrity. The goal ought to be to compare yourself not to the best your peers or the competition has managed to get through a committee or down on paper, but to an unattainable, magical unicorn. Compared to that, how are you doing?

The problem with many radio broadcasters is that we tend to innovate – if we do so at all – by looking over our shoulder at the other guy (usually the other broadcaster, and usually a guy).

That’s too bad, because looking over your shoulder at people who are looking back at you over their shoulder leads to lots of sideways glances and a tendency to settle for what’s already being done rather than aspire to create new value for your consumers and advertisers.

I know when I do a research project for a broadcaster my interest is always creating something new – some new advantage, some new feature, some new way to say “we’re better today than we were yesterday,” new creations in tune with the wishes and dreams of the audience.

But research is an investment, so many stations do without.  Looking over our shoulders is easier, and always less surprising and inspiring – to us and our audiences alike.

Too many broadcasters can’t even imagine the Unicorn, let alone see fit to chase it.

Here’s to those who can and do.

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March 28, 2012 @ 5:54 pm
posted by jhooker

This latest data from Edison Research will have a significant impact on the Scenario Model we’ve been tracking driving future predictions toward what our participants have describe as “doomsday” or “wheel spinning” if Broadcasters don’t heed the warning signs and move to a multiplatform digital strategy. This is radio’s opportunity to win or lose depending on how they react to these changes in the listening behaviors of radio’s customers.


As we discussed in last week’s conference on the Future of Radio Conference in Hilton Head, SC, radio operators still own a significant music brand with their listeners but it is time to act by providing those customers with a 2-way music experience branded with the station’s name.
http://www.edisonresearch.com/home/archives/2012/03/a-dramatic-rise-in-internet-radio-usage.php


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November 5, 2011 @ 12:55 pm
posted by jhooker

Yesterday I post an excerpt from a Digital Ad Age article by Al Reis about branding. Mark Ramsey also posted this slide show that further defines and helps in developing a branding strategy. It’s written by Kirk Phillips of Conrad/Phillips/Vutech an agency specializing in Branding. Here’s the link slide deck entitled the “9 Criteria for Brand Essence.”

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November 4, 2011 @ 11:47 am
posted by jhooker

Al Reis wrote an article that appeared in Ad Age Digital about the difference between marketing and branding. The important part of the article points out that you build a brand first and make money as a result. That’s contrary to the saying, “If I can’t monetize it, I’m not doing it.” I have contended for a long time that radio has two well established brands in many markets:

  1. a brand that means something to listeners
  2. a brand that means something to advertisers

All of that is changing in the digital realm. Can you morph your brand to represent your authority in digital advertising? Can you preserve your cache with listeners who are streaming? Reis makes some interesting points.

Here’s an excerpt from the article and a link to the entire article:

Over the past few decades, it’s become apparent that there’s a better word to describe what today is called the “marketing” function — “branding.” I expect that in the future a CMO will become a CBO, chief branding officer.

Why not? Branding has become his or her most important role. In addition, there’s a new approach many companies are using that dramatizes the importance of the brand. I call it: Branding first, sales and profits second. If you can build a brand, then you should be able to figure out a way to turn that brand into a profitable enterprise.

That ties in with one of the biggest problems in business today: Distribution. A lot of products could be successful if they could get on the shelves of supermarkets, drugstores, convenience stores and other outlets. But how do you get on the shelf?

“Put my wonderful new product on your shelves,” says the entrepreneur, “and it will become famous.”

“Make your product famous,” says the distribution, “and we’ll put it on our shelves.” Distribution has a valid point.

Amazon.com is a good example.

Today on the stock market, Amazon.com, Inc. is worth $103.6 billion. Sales last year were $34.2 billion and net profits were $1.2 billion.

But that’s not the way the company started. Founded in 1994, Amazon lost money for nine years in a row. On an overall basis, Amazon didn’t break even until the company was in its 15th year.

Compare Barnes & Noble with Amazon. In the late 1990s, Barnes & Noble introduced an e-reader and in 2001, followed with an e-bookstore. But early sales were discouraging and the company discontinued its e-reader in 2003. Big mistake. Branding first, sales and profits second. It wasn’t until November 2007 that Amazon launched the Kindle, which rapidly became the leading e-reader brand. Barnes & Noble was forced to play catch up with the Nook, launched two years later in November 2009.

That’s not the way you build a brand. If there’s an iron-clad rule in marketing, it is this: Brands are built by being first in a new category. Not just first in the marketplace, but first in the mind. That’s why a new brand pioneering a new category has to stick around long enough to penetrate the minds of potential customers.

 

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October 31, 2011 @ 11:14 am
posted by jhooker

Mary Meeker of Kleiner, Perkins, Caufield and Byers, an investor in Groupon, Spotify and Zynga, presented a digital trend update at the Web 2.0 Conference in San Francisco recently. She reported that the four leading tech companies will be competing for the consumer’s dollars and attention. This month the cover story in Fast Company is about the “Fab Four” as they refer to it. Read that article here.

Mary also reports there are more users of social media today than total Internet users in 2006, and 7 out of 10 are using Facebook. She says mobile growth is 35% and that the iPad consumption has grown faster than the iPod and iPhone. More consequential for radio is that she claims audio is the next big boom in digital. Here’s another stunning fact: digital ad revenue in 1995 was $55 million and in 2011 it will be $73 billion…that’s with a “B”. Radio can’t ignore the facts in this presentation.

Here’s a link to her complete presentation.

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The Europeans have been very pro active exploring all the dimensions of the future of radio delivery and the role radio plays in their political and social milieu. Here’s a link to an article that details another effort on their part to involve the European Union in defining the future of radio. A month ago I was in the UK and met with Nick Piggot, Chair of Radio DNS and James Cridland of Radio DNS. They explained the way the UK radio has fully embraced DAB as well as how the radio manufacturers have cooperated in providing digital devices. Granted our infrastructure is much different than the European model, but I think there is something to be gleaned from observing their efforts and success in redefining the future of radio. I’ve invited James Cridlund to come to our conference and tell us what they are doing in the UK.

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September 24, 2011 @ 10:51 am
posted by jhooker

For the last three years I have been facilitating a discussion among a number of brokers, researchers and independent station owners from medium size markets who have been gathering near Hilton Head Island, SC to exchange their ideas about the future of radio. On www.futureofradioonline.com, you can read a series of Whitepapers that summarize the deliberations from all three annual meetings, as well as examine a collection of articles and papers following the trends that are driving the future of this business. I started writing a series of articles, for which this will be a part, thinking about where radio will be in the year 2020. I’ve titled this series 2020 Vision. Jay Mitchell recently asked me to write this article describing where I think radio will be in five years…2016. It’s clear to me that like many other businesses going forward, radio will have to be a multiplatform business to relate to both consumers and advertisers. What’s also clear is that it won’t be like your father’s radio business from the past.

Historically, radio has kept transforming itself every time it has been challenged like it is now. Many are thinking a similar transformation will emerge and radio will once again find its soul only better than before. That has been the case with each evolution that occurred moving radio from the block programming of the 40’s to format radio in the 50’s to FM music stations in the 70’s and AM talk in the 80’s. The common denominator to each of those iterations was that radio remained in each case Broad Casting…a one-way medium where radio delivered content from the producer to the consumer.

This time, change in the evolutionary process is much different. With the advent of the Internet, all media have become 2-way interactive processes. The definition of who is the producer and who is the consumer has changed. Anyone can produce content, and the consumer who wants something to say about that content is in effect blurring the lines between who is who. The media business, including what we have come to call radio, has become all about engaging content with the user, often in very discreet ways or small group exchanges now described as “social media.” Because of this, marketing has changed dramatically as the trend is away from interruption advertising. The spot advertising business will continue for a while but not in the same way we have it now. The consumer in the future doesn’t have to and won’t put up with 10-16 commercial minutes per hour.

Another major shift is away from the inefficiencies of the past where we delivered 80,000 impressions to get 50 customers. With interactive media the advertiser can identify exactly who they want to talk to and deliver customized information specific to the consumer’s wants and needs. Using these interactive methods, advertising can become totally accountable and far more efficient. Accepting the old Wanamaker story that “only half of the advertising works but I don’t know which half” just won’t cut it with the advertiser in 2016.  When I bought stations through the 90’s I was able to get financing based on the fact that I was in a business with very significant barriers to entry with licenses issued by the FCC. Today, however, anyone with a high-speed connection can get in the radio business. These trends will completely and totally change the business by 2016 for the radio operator.  I’m sure newspapers thought they were in great shape because no one wanted to buy huge presses to go into the newspaper business against established competitors… and I’m sure the Yellow Pages felt good that since they controlled the phone number information they had a monopoly… and I’m sure tv/cable networks felt good that few wanted to lay out the capital necessary to start a network.  How’d that work out?  And why would Radio be in any way exempt from this scenario?  What’s so special about us that we’d be immune from the same effect?

With all of this said, there is hope for many well established operators today. Most radio stations have a brand that means something to a group of listeners in their market. Consumers trust the station to deliver a certain type of content whenever they tune to the frequency. When the station’s brand is mentioned to people in the community it represents an image with strategic attributes that have been developing over past years. The station also has a brand with specific attributes with a group of retail advertisers in the market. They have come to trust the station to deliver ad services that communicate a message to prospective customers. Because of the changes mentioned previously, these brands may not last into 2016 unless operators move to preserve them. It’s hard to comprehend that the brands – not the licenses – have the real value in this discussion; yet most radio broadcasters have treated brands as secondary.  How many 50-year-old radio brands that meant something to many consumers have disappeared in the last five years for various reasons?!

Using the Scenario Option development model, the people who have attended our Future of Radio Conferences have identified three major drivers to the future of the radio business expressed as continuums:

  1. Technology: Radio moving from being an RF delivered medium toward a multiplatform, digital medium
  2. Advertisers: attention/spending on radio increasing or decreasing
  3. Listeners: time spent listening to radio increasing or decreasing

I don’t see the RF driven model existing in 2016 as it does today. I think some people will be accessing radio via an analog, AM or FM tuner, but the numbers will be much smaller. The growth of Wi-Fi and mobile platforms is moving so fast in most markets that people will access “radio” in many different ways that involve an IP address. The direction of the other two major drivers, Listeners and Advertisers is more in question.

Where listeners go in 2016 is still in the hands of the radio operator but not for long.

Recent listener data released by Edison Research, based on internet listening data being converted to Arbitron-like numbers, reported that Pandora was the number one listened to radio station in the top five markets. In Pandora’s recent quarterly report, they said they had a .3 share of listening nationwide. That’s an incredible beachhead to grow from. But Nick Piggott, director of RadioDNS in London recently wrote a hopeful piece on his blog:

The good radio stations have always acted as curators. What musos and pluggers deride as being heavy-handed playlist controls is curation that our listeners value. Some stations are more curated than others, but the principle is that rather than throwing people into a sea of music and seeing the majority drown, we create signposted swimming (and sometimes paddling) pools of music.

He says that unedited Internet media whether music or written word, devolves to an unacceptable point for the consumer. But curating content is expensive. Consolidation, economics and new technology changed many radio stations into voice-tracked jukeboxes with content that tends to be very bland. That trend carried forward another five years will be the end of radio, as we have known it. Interactive media is all about engaging people and facilitating their acquisition of content and friends that satisfy their unique interests. Radio stations have the opportunity today to start providing them with the content and friends they want, but a day will come when it will be too late to make the investment to sustain your brand. This is the crunch point where crisis creates opportunity… and it may be the lever we can monitor where the pain of the current circumstance becomes greater than the pain of pursuing an alternative strategy.

Advertisers also present a great opportunity for broadcasters. Local, retail advertisers are generally very confused about the digital/social medium. Agencies are springing up every day to help them answer their questions, but there is still plenty of opportunity for radio companies. Unlike a new agency, radio stations have credibility with the advertising community. They have been delivering results for years and those same advertisers are hungry for digital solutions. There is a problem here. There are a plethora of vendors selling solutions to radio companies that can be quickly packaged as digital media to be peddled to the local retailer. The problem with many of these solutions is that they come to radio to solve the operator’s problem, not the retailer’s challenges. Advertisers smell package selling that solves the station’s problem of selling spots from a mile away. Sure some of it works to meet this month’s billing goals, but it doesn’t work to sustain your brand in the long haul as a provider of marketing solutions to your customer.

Having now had the experience of turning around a group of suburban stations in Chicago to 35% plus margins, I have proven, as have many other successful operators that advertiser-oriented marketing solutions has worked at many other stations over the years. It might take the next five years to re-train your people to be knowledgeable digital media experts but just look at the numbers. According to BIA, local ad spending in 2008 was $156.3 billion, and their forecast for 2015 is less…$151.4 billion. However as a component of that number digital ad spend in 2008 was $15.5 billion and will grow to $35.3 billion. In 2007 radio revenue was $17.9 billion, and by 2015 it is still not projected to get to that level. The experts are reporting that today radio is failing at getting a proportionate share of digital revenue compared to other media. If that trend continues to 2016, the future for radio will be bleak. At last week’s NAB Radio Show, leaders of the industry from the NAB, RAB, and major groups all stood up to sing praises of radio’s future. Today radio still is a powerful medium reaching most Americans every week.  Many owners want to think “it’s going to be just fine.” Yet there is evidence to the contrary including the outside-looking-in analysts who told the industry (in the very same NAB Radio Show) that “radio needs a new message.”  Anyone who left Chicago thinking everything will be just fine without making changes is guilty of selective hearing.

Ultimately the future will be determined by how well broadcasters can manage change in their organizations. I’m talking about leadership. If you subscribe to the old, “if ain’t broke, why fix it?” you will loose. By the time the traditional radio is broken, it will be too late to fix it. There’s a great story about leadership in a recent post I wrote entitled Lessons from the Steve Jobs School of Leadership. Leaders are great stewards of their brand. They see the long-term future and make calculated risks to change their organization’s direction because they believe the short-term loss or investment will pay off. They are fanatics about protecting and enhancing their user’s experience with their brand. Nothing else sustains a business brand better than courageous leadership. So here’s the change formula:

Change occurs when the perceived risk of continuing to do the same things is greater than the pain of making changes in the way things are done in your organization, and the first steps are clear.

If you think that sacrificing margin in the short term is more painful and riskier than engaging new platforms of media delivery, you’ll stay the course. On the other hand, if you think that training your people and hiring a different kind of people who know digital is less risky than running your station as you have in the past, you’ll chart a new course. How much change can you stomach? Will you focus your leadership on your user’s priorities (listeners & advertisers) or will you focus on the bottom line. I’ve heard broadcasters say, “if I can’t monetize digital, I won’t do it.” Great leaders make calculated risks based on knowing their customer’s wants and needs.  Long term profitability and growth are determined by how well you fulfill your organization’s mission of serving its users. Not the other way around.

I think the future of radio in five years will be exciting and rewarding for those that focus on how the listeners, advertisers and your employees define radio. In 2016, your definition may not be relevant because your end users will define what they perceive as radio. Perception is reality!

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August 25, 2011 @ 3:19 pm
posted by jhooker

Here’s some painful news from Ad Age Blogs’s Matt Carmichael regarding the latest census reports about the characteristics of households in America. This isn’t fun reading but it is a reality check of sorts that everyone should be factoring into their plans for the future. It points to slower growth and recovery. Not a news flash but important data as you are thinking about your strategies for the future. Click here to get the article.

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August 22, 2011 @ 12:44 pm
posted by jhooker

Jim Meltzer emailed me a link to an article written in Media Post about the incredible growth/domination of Steve Jobs and Apple since his return to same in the late 90’s. During all the recent economic upheaval one of the bright stars was Apple whose market cap exceeded the largest company on the NY Stock Exchange, Exxon. So Apple for a few hours or days was the biggest company in the world. I’m not smart enough to dissect all the reasons they have succeeded, but one thing I hear Steve Jobs rail about is how anything they do will enhance the “user experience.”  Unfortunately the thing I hear most from many broadcasters (not the ones who come to our conference) is

“how can I monetize all this digital stuff?”

How often do we in radio hear people talking about the “user experience”? So which is more important in the long haul, monetizing digital or enhancing the user experience using multiple digital platforms? Of course it is both, but can you take the leap of faith that if you enhance the user’s experience with your brand that it can be monetized down the road. Tough choices I realize when debt covenants are hanging over everyone’s heads. On the other hand if all you use to measure success is monetizing digital you might never get to it before the train leaves the station.

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