Redemption or good deal…?

So our business has a curmodgeon commentator Jerry Del Colliano …

Jerry feels that he has it on good – even very good authority – that Lew Dickey is about to take his baby back – that he’s set to make a bid on Cumulus out of their inevitable bankruptcy.  Jerry is right more often than not…so let’s see what that might look like.

Frankly, this is a move that may be more about redemption than a realistic financial path.  Assuming this actually happens…let’s see what could come with this scenario.

1)  Dickey coming back is every employee’s worst nightmare.  Lew is a very SMART guy but his people skills border on sociopathic.  He  doesn’t get people very well…
2)  The ensuing chaos of a bankruptcy is bad enough…knowing the guy that drove you into that financial state is returning leaves NO room for light at the end of the tunnel…
3)  Are the banks really that dumb?  Yeh…probably…
4)  The debt knows that a workout is less disruptive than a straight chapter 11….it’s a known haircut.  Dickey’s plan is unknown with a lot of potential potholes.  The current CEO Mary Brenner has been to this rodeo before with Readers Digest.  Good chance she knows how to navigate the shoals….
5)  The people he’s said he’d fire make it look like a Venezuelan coup.  You get the feeling he’d put people like Mike McVay in jail if he could…:).
6)  He truly might get a great price for Cumulus, but it would be a company in complete chaos and collapse as everyone of any caliber scrambles to gets out…
7)  And as far as who was to blame for the bad morale…he WAS CEO.!  Does the guy take no responsibility?  In another interview he threw people under the bus saying “…he’d trusted the wrong folks…”.  He apparently was blameless for all that happened.
8)  On the other hand he’s a very smart guy – I have always been impressed with his strategies.  But his ability to build trust, confidence and inspire people is at the bottom of his strength’s chart.  Few people would follow him to the bar, much less the depths of radio hell…
OK…sorry. Sounds like I just vented…! And I guess I did.   Jerry brought it up…sure is interesting.

We Used to Own this Town…

Comedians…in Cars Getting Coffee…is a hit internet-only show on Crackle (it has since moved to Netflix).   Hosted by Jerry Seinfeld it’s a remarkable reminder of the power of stories.  And when Jerry picks up his favorite comedians (Jay Leno, Barack Obama among them) he takes them for a ride in a memorable classic car.  As they drive to the coffee shop they are sharing stories the entire time.  Very entertaining.

ShandlingIn one episode, Jerry picks up Gary Shandling, just before he unexpectedly  dies.  It’s maybe the most funny and poignant of the series.  They decide to visit the old Seinfeld set at the backlot at Universal Studios.  Walking through the lot they are passed by young producers, set people and script assistants who do not recognize either one of them.  I can understand missing Gary…he was sick and looked it by this time.  But to miss Jerry Seinfeld?

As they walk out of the lot into the LA sunshine, Jerry puts his arm around Gary and ruefully says, “We used to own this town…” And indeed they did…

It dawned on me in that moment that that was the magic of radio and TV that drew me to it…  and for a while, we did own ‘this town’. We were big shots.  Top 40 jocks and TV personalities were a big deal in every town.  The stream of cars that drove by our Salt Lake City studios at KCPX (KAY-PIX) on Social Hall Avenue in the 70s required the cops to control traffic.

The impact of stories on the late TV newscasts was remarkable.  Many newscasts had a 12-20 rating.  That’s a rating, not a share!   20% of the market watching one newscast EVERY night! Late news is lucky to get a 2 rating these day.

Being recognized everywhere you went.

And the power of local editorials on TV was a social power unto itself .  We – the local radio jocks, TV personalities and anchors “...owned this town“…all over the country.

It’s clear Jerry misses that time…and so do I.

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…