Thursday, September 14, 2006

Metamorphosis of The Media

I am a student of The Media…I am a product of The Media of the late 20th Century, as are most Americans. Garbage-in, garbage out; media-in, media-out; We are what we read, watch, and listen to, and for the past 30-years it has been my desire to make the quality of a portion of that media content a little more worthwhile.

It is interesting to watch traditional media sources metamorphose in an ever-changing social, technology, and demographic environment. Media consumers are different because their needs have changed, and alternative sources of information have sprung up to meet those needs. The result has been a vastly-altered “mediascape” in which companies like Disney, CBS, ClearChannel and The Tribune Company operate.

The old-line media companies—Radio, TV, and Newspaper—have been struggling to rise above the clutter of their old ways, while grasping the concepts of the new ways of doing things. In addition to AM, FM, newsprint, and video sources, there are now satellite radios, cable and satellite tv, web streaming, podcasting, blogging, and even audio streamed to your cellphone—all providing alternatives for media consumers, and further fragmenting the audience pie.

Media companies have not been able to maintain the same level of earnings performance in this environment, and their reactions have been intriguing. ClearChannel embarked upon a campaign to reduce the commercial time it airs. Their smoke-and-mirror tactic was not to reduce the number of commercial units, but to shorten their lengths to :30-, :15-, and :10-second units.

The result: If you were running a failing ad campaign of 60-second radio spots, you now have less time in which to pitch your message on a ClearChannel station. And since the number of units was no less, just shorter, ClearChannel really only shrunk the clutter. Like the difference between plain and peanut M&M’s, there’s still a whole bag full. Some are just smaller than others.

The other result of this is that stations buying-in to this dubious strategy have seen their effectiveness diminish. The proof is in the declining ad sales revenues, and the corresponding declining value in media company stocks. Why else would Disney, ClearChannel and CBS all be trying to unload their Radio stations now?

To paraphrase Jessica Rabbit’s famous line, “I’m not really bad, I’m just drawn that way,” Radio stations aren’t evil wasters of ad dollars, they're just run that way.

CBS Radio executive management, under the leadership of Mel Karmizan, for years eschewed streaming audio of its Radio properties. Couldn’t figure out how to make any money at it. Meanwhile, the rest of the world took the plunge, and it’s taken CBS a few years to catch up. Mel was wrong about that one. Karmizan is now running Sirius satellite; hide and watch as he figures out how to alter commercial free subscription radio to include advertising. Will subscriptions fall off as a result? Would YOU pay to hear your favorite programming interrupted?

The media companies that are getting it are those who have figured out that it’s not just Radio, it’s not just TV, its not just the daily paper that is going to drive revenues solely on their own merits. No one is giving out merit badges any more. Investors as well as media consumers demand better, and the survivors are going to be those who grasp the concept that content is king, and are able to commoditize their content over a vast array of media modes, analog and digital.

It is interesting to observe The Tribune Company’s edict to cut staff at the Los Angeles Times, which is being defied by that paper’s editor, Dean Baquet. The Tribune wants to show a prettier bottom line to investors. Baquet wants to produce a better product, and knows that cutting editorial and newsroom reporting staff is not the way to achieve that.

Look at your own daily paper in your town. Count the number of stories that are written locally vs the ones that are provided by a news syndicator. I read my local daily to find out what’s going on in my town. A writer in New York hardly gets what people are thinking and saying Texas; they’re not here.

I applaud Baquet’s stance for preserving the editorial integrity of his publication. I hope he can hang on to his job. Media operating companies must recognize that there is a fair amount of art that is required to operate their business. Content providers and producers are no less craftsmen than financial technicians who create deals that make money. Both skills are vital for business success, and the content creators—writers, editors, performers, hosts—are the core of their business, and should be the last resort for layoffs and cutbacks.

The reality is that the free sources of information we’ve always taken for granted—Radio and TV—are really not free. Their services and content come with a price, paid for by the advertisers who believe in their content enough to invest in ad campaigns in their medium. You enjoy the content? Support the businesses who advertise on the airwaves and between the pages.

My forecast: as the Big Boys (CBS, Disney, ClearChannel) begin to divest themselves of properties they’ve mismanaged into poor performance, you’re going to see smaller operators acquire them and begin to provide a different level of content quality. Some changes will be improvements (how many C&W Music stations does one market really need, much less can sustain?) and some will be dismal failures (Gospel Punk does not appeal to me.)

You will decide whether they succeed or fail, because the consumer is the final judge and jury of what works and what flops.

1 comment:

Ray said...

Brent Clanton for President!
Myself for FCC Chairman