Cross Ownership – just a little late!

 

Ajit Pai

This week the FCC indicated it would relax the cross ownership rules between radio/TV/Newspapers in a single market.

Futile.  Absolutely futile.  Like sending Harvey Weinstein to a sexual manners class.  Too little too late..

It could be argued that there are some synergies between news departments of the media.  Some stations around the country already do something like that – either formally or because they had grandfathered ownership under the same roof.  But how does a cluster of CHR, Country, AC radio stations synergize with a newspaper or TV station?

It was a stupid rule when it was imposed. And became an even more stupid rule with the rapid spread of internet dissemination.

Most bureaucracies operate one-generation behind the technology – the FCC is no different.   Broadcasters are just going to have to build new business models to survive.

 

Facebook will Fry You…

Oh…I’m sure you didn’t miss it.  Facebook last week disclosed they are working on publishing two feeds.  One called loosely Friends & Family.  The other Business/Publishing.

Freak out.

Businesses have been built around the implicit understanding that Facebook will distribute their content free of charge.  In one of our markets, Thurston Talk (www.thrustontalk.com) has developed a nice business creating content and adding circulation through Facebook.  Now it’s clear.  Facebook will be happy to post your content – for a price.  It’s putting millions of businesses in a vice.

Vice_title_screen

 

It’s unclear how the two feeds will co-mingle and whether a business can purchase distribution through the Friends & Family channel.  But you can be certain it will be for a price.

 

Frankly – good for Facebook.  We’ve all got clients who count of Facebook and think it’s just great because it’s FREE.  Well it was never really free and now it’s about to get more expensive.  And the truth is it’s been less and less effective every day.

Facebook says there are no plans to roll this out beyond the test markets.  Right.  Same thing they said about the auto-play videos earlier this year.

Lesson?  Don’t count on someone’s free platform to build your business.  It will bite you as soon as you start making money on their backs.  Not a pleasant vice to be in!

New Media is Already Old Media

New-media-jpgOur freinds at the investor site Seeking Alpha this morning referred to Yahoo as “dying old media”.

Really.

Old media.

So why is a digital content company…now deemed ‘old’?  Only Google and Facebook exceed Yahoo in traffic but Yahoo has been kicked to the curb and about to be sold at Eddy’s Used Car and Website Lot.

Poor Marissa Mayer, the former CEO.  She signed up to run a company with a model around creating and developing content.  Yahoo has lots of content…it’s what we used to call a ‘portal’, now as dated a phrase as ‘groovy daddy-oh’.

The teeter-tooter balance between content and distribution  has lost it’s legs.  There is no there, there.  Content is everywhere and in great abundance…and so is distribution.  So where is the power if neither of these control the media space?

I’d argue that programatic buying is the new king of the hill.  And wit

Sunrive Golf Edit

h some 60% of digital budgets now placed programatically, it’s hard to argue.  We no longer need specific content to reach specific clients.  It’s no longer necessary to buy ads around golf sites to reach golfers.  Programmatic can find you duffers wherever you may be on the web.

But the issue now is that by it’s nature, programmatic buying pushes down the price of inventory, particularly  when the amount of inventory of all kinds continues to expand rapidly.  And let’s not even get into the fraud/bot issue here.

So sorry that Yahoo (now part of AOL/Verizon/etc) is now old media.  What does that make newspapers, TV and radio?  Ancient?

 

 

 

 

Best Radio Ad in Years…

Terraplane LogoAs a business we’re a bit weak on great creative.  But then so is everyone else.  With the exception of the creative free for all during the Super Bowl, most TV, radio, print and digital ads are lacking is STORY and impact.

This one is an exception…give it a listen.

You can NEVER check out..

2013-03-09 10.25.33You’ve heard it.  That old phrase, “repeating the same behavior and expecting a different result is the definition of crazy”.  Or insane.  You get the idea.

My buddy Bill in a market further west than one that I run was complaining how tough it is to recruit sales people these days.  A complaint I’ve had for years.

So I started looking at the basics.  In 2007 radio billed $21B – slid off the cliff in 2009 to  $16B  – a 31% drop in revenue.  Since then with events, NTR, digital and dog-n-pony accounting radio still bills about $17B annually.

So essentially, flat revenue for a decade.  But rent, power, salaries, music rights, etc. all continue to be more expensive.  And when it come to paying our sales team, assuming we want sales costs to be in the 20-30% range we do offer a draw against a commission rate.

But we’re offering commissions against flat revenue.  So a 15% commission today is about 19% LOWER than it was in 2007.  A commission of $5,000 in 2007 is worth about $3,200 today.

The work is the same or harder…calling on clients, developing plans, closing, etc.  All of that is the same but we make 19% less than we did before.  The same in absolute dollars…but still a lot less take home.

That doesn’t count the added competition.  Google AdWords had 200 customers in 2002 and no one had yet heard of Pandora, Spotify, or any social media.  Adding digital to the inventory is wonderful but profitless for everyone and takes focus off our core product.

No wonder we struggle to recruit.

The net result…?  We end with a group of radio passionate sales people (rare breed) and the bottom of the media sales barrel from which to recruit.

Sadly – no real solution here.  Just venting…