One of the joys of writing a blog (www.jacobsmedia.com/blog) is that there is no shortage of opportunity to weigh in on the burning issues of the day. Or to occasionally be a little frivolous and light-hearted, particularly in contrast to some of the difficulties and challenges the many media professionals are facing.
But today, it's a more serious matter that is becoming a bona fide topic in industry blogs and lunchroom conversations. I have been reading with interest various blogs and articles that seem to suggest that there is diminishing value in "local" - that consumers don't really care a whole lot about locally originated information when they can go to global websites - like Weather.com or Craigslist or Facebook - and quickly tap into information that reflects their towns and neighborhoods. As Mark Ramsey asked in a recent blog, "If the Internet makes the world 'local,' then what is your advantage?" Many years ago, I heard Lee Abrams give a speech, back when he was hawking Z-Rock. In defending the validity of network radio, he asked the audience just how "local" local stations actually are? In his monitoring, the only area information he heard was the occasional weather forecast or concert announcement. And he wasn't wrong. In fact, back when Lee uttered those words, radio was doing a pretty lousy job of truly serving local markets and audiences. Today, it's much worse. A couple of decades later, thanks to the savings that broadcasters have achieved through "economy of scale," you're hard-pressed to find many radio outlets fulfilling their missions as licensees to metro communities. And as stations streamline, eliminate talk to sound more PPM-friendly, voicetrack to save money, and focus more on their global assets, that singular experience you get when you listen to a great local station truly serving a community has become rarer still. "Premium choice" does not refer to the feeling that consumers get when they hear a satellite-delivered show from a DJ who strategically drops in an occasional "Shreveport" to relate to area residents. For listeners, there's nothing "premium" about the experience nor do they have any choice. It may make CEOs happy to axe more local announcer jobs, but it sure isn't making the audience happy. And it begs the question about who will be on the radio a decade from now if we're not investing in building a radio farm team. The audience sees through this, and it weakens the connection they have with area stations who they once proudly displayed on bumper stickers, T-shirts, and hats, but now would rather wear "Tommy Hilfiger" or a swoosh on their chests. So is there really any value to investing in local assets, DJs, community relations, and truly providing a service to both area listeners and area advertisers? Has it all been reduced to merely being about creating entertainment commodities? Because if that's the case, radio is going to have problems competing globally. We've seen the impact that Sirius XM can have with gazillion dollar talent budgets and millions more to spend in television and magazine marketing. Yet, even with that monster spending, they are becoming less and less a part of the larger entertainment experience. At the recent Canadian Music Week conference, researcher Jeff Vidler unveiled some preliminary research from a 3,000 person web study his company recently wrapped up. It shows satellite radio running out of steam, particularly when compared to Internet based music offerings. Our new Tech Poll - with more than 26,000 in-tab respondents from around the U.S. - will show the same thing. Satellite radio - despite the noise, the relentless spending, and Howard Stern's recent antics - is stalling out at the same mediocre percentage it has owned for a few years now. And customer satisfaction and intent to continue to subscribe continue to dip. A comeback for the auto industry may provide a momentary band aid, but stopping the cancellations of subscribers who refuse to put up with one more monthly entertainment payment is a daunting challenge - especially given the rapidly expanding Internet choices, many of which provide control, variety, and no fees. So how does the lowly local station compete in this rapidly competitive space if not to refocus on what put them on the map in the first place? Because if they don't turn their attention to their own turf, there are big entities that are gunning for their valuable local real estate. And they want it badly. The local question is mitigated by the reality that so many local market radio stations are shadows of their former selves, ravaged by the impact of cluster consolidation, the recession, and moving away from what's happening in the cities and towns they are licensed to serve. Even as national advertising dollars have dried up, most stations have not truly refocused their efforts on tapping into the resources of their communities. Oh sure, they have lots of sellers trying to garner every last dollar from the local retailers that haven't been squeezed out by the Wal-Marts and other big box stores. But how many stations are truly focusing on presenting that special blend of music, personality, and content that only a truly plugged-in local station can provide and program? If you grew up with radio back in the '60s, '70s, or even '80s, you always knew where you were. Cities like Chicago were loaded with area personalities, crazies, wise guys, and stars. Whether it was Steve Dahl, Larry Lujack, Kevin Matthews, or Wally Phillips, you couldn't get out of the way of great radio that set the tone for life in the Windy City. But the same was true in many smaller cities and towns that grew their own style of radio. KDF didn't sound like CMF. And WNEW-FM had very little in common with KLOS despite the fact they were both technically large market AOR stations. Ratings are ratings, and the elements of success have become more and more standardized over time. Researchers and consultants (yes, fire away) have had a hand in the erosion of unique, local radio, too. At the Canadian Music Week conference a couple weeks ago, a consultant told me that "Canadian stations are following Clear Channel's lead" when it comes to voicetracking, slashing, and revenue generation. And while local radio stations are chasing ratings and revenues with just a glance at audience and advertisers, the big boys - and girls - are moving in for the kill. Consider this: Huffington Post has now created what they call "local verticals." Starting with Chicago (hmmm... maybe Arianna hears the same thing happening on local radio and the metro's weakening newspapers) and now in L.A., New York, and Denver, they are rolling out local sites based on the popular Huffington Post global entity. Here's a look at the Chicago version:
ESPN is using a similar strategy, setting up their own locally targeted web
efforts in big sports towns. Here's a look at ESPN Boston:
This puts just a little pressure on WEEI, The Hub, and of course, Boston's local
newspapers to step it up and better serve their local sports communities. ESPN
has great assets, but a well-oiled, deeply rooted local media outlet knows the
backstreets, has the inside track, and ought to be poised to provide a better
Boston sports experience. Or at least they should.
OK, one more example. Last June, AOL bought Patch Media, and now this idea of
hyper-local news is taking shape. Last week, the announced relaunch of their
City's Best service, set to roll out local content for 25 markets this year,
sets the tone for AOL's strategy. Patch already provides this coverage in 40
markets. In addition, AOL is going to ramp up local stories on its home page.
But it's their CEO, Tim Armstrong, who tells you all you need to know about
their plans and the opportunity:
"Local is the one area of the Internet that has not been built out in an
extensive way. While there are companies in the local space, AOL has the
technology to digitize the local space at scale ... We believe it's an untapped
market for the most part and one of the largest commercial opportunities online
that has yet to be won."
Untapped because newspapers are going out of business and scaling back, while
local TV and radio operations prune their staffs and their coverage. It's never
been about a lack of interest in local among consumers. So when these huge
entertainment and information brands invade your hometown, you better believe
they've researched this opportunity extensively, and they smell blood.
For information providers, think of it as Wal-Mart and Best Buy systematically
putting the local hardware and stereo stores out of business. It will happen to
local media, if they let it happen.
If you think it's been difficult to compete against global brands on their
digital turf, imagine how much more challenging it's going to be to go up
against ESPN, the Hufflington Post, AOL, and other mega media companies on your
home field.
So, the conversation turns to how radio stations should be focusing their
efforts and resources in a changing media environment.
If you're buying what I'm selling, you have hopefully reached the conclusion
that local market radio stations need to be victorious in the battle they can
win - on their home court. While streamlined music and less talk may be a
formula of success in PPM this month, it is unlikely to be the winning strategy
that will serve you over the long haul.
Pandora, Accuradio, Slacker, Rhapsody, and the many commercial-free music
services that exist now and will be created in the years ahead have the
capability to create a better, more listenable music product than what most
local stations can deliver. And whether the listener selects the music or it's
done by recommendation or algorithm, the fact is that global streaming radio
provides great choice and variety for a growing number of consumers.
And as the hardware for accessing the Internet becomes even more readily
available at home, at work, and in the car, a bland, music-intensive local
market radio station is going to be hard-pressed to compete with global
streaming brands.
So, how do you compete with big Internet brands for listeners, for revenue, and
for survival?
The answer is to do local better. Pandora Chicago may one day exist, but the
folks at The Drive, B96, and XRT know the geography and the people much better.
Or at least they should.
As stations like WMMR, WDVE, KQRS, 97Rock, KISW and many others have proved over
the last few decades, there is value in having local roots, strong personality,
street presence, and a sense of what people care about in their markets.
But as the recession has deepened and broadcast companies have become more
desperate, some strategic decision-making has moved from questionable to just
plain dumb. Cutting loose some of the best local personalities only genericizes
radio, diminishes presence with advertisers, and erodes the sources of loyalty
between the stations and its listeners. It may be "cost effective" to throw some
dollars to the bottom line by throwing heritage personalities out the door, but
it's a short term strategy that will only hurt radio's ability to fend off big
brands that decide to pitch their digital tents in your hometowns.
Local matters. While consumers may enjoy renting movies from Netflix, buying
toaster ovens from Amazon, bidding for cars at eBay, or creating custom music
channels on Pandora, that doesn't mean they've lost interest in what's happening
next door, down the street, and in the heart of where they live.- When your morning show talks about local politics, it matters.
- When you set up online voting for March Bandness, it matters.
- When your afternoon guy champions a local band, it matters.
- When you support a local charity or cause, it matters.
- When you throw a concert or event, it matters.
- When you put together a great promotion with a couple of local advertisers, it matters.
- When your night jock speaks at the local high school, it matters.
- When you get a group of listeners backstage for a meet-and-great with a major act, it matters.
- When you organize a rally for a winning sports team, it matters.