Voodoo Economics in Radio

Jerry Del Colliano had some interesting thoughts about the iPad in a recent Inside Music Media, relating it to radio and Pandora and how the bean counters in radio are just throwing good money after bad:

Have you ever purchased an HD radio anywhere — not as part of an auto entertainment center that came with your car? Ever buy an iPod Nano for the FM Tuner? Own a Kindle and an iPad? I just bought a Kindle because it causes less eye strain when reading at day’s end. That’s two new readers. No new radios.

The other day, one of my readers wrote that his 60-plus year old father has become an avid fan of Pandora. When Pandora founder Tim Westergren talked to one of my USC classes a few short years ago, he surprised a lot of students with the number of older people who loved Pandora.

Things are changing rapidly while the radio and music business remain the same.

Radio fights for more FM chips in mobile devices. Yet few people of any age buy an iPod Nano or other available mobile device to listen to FM radio. And do you know anyone under 35 who listens to AM radio anywhere at anytime? I’m sure you’ve noticed the rush by some radio operators to get their excellent AM programming on the FM band, which means they are now only 15 years behind the consumer.

Maybe you saw the figure recently that indicated Apple will sell an additional 21 million iPads in 2011 — that’s in addition to the many million they have sold since the early part of this year.

(And we’re to believe that HD radio is nearing “critical mass” after selling a couple million after eight years?)

What it all means is that radio runs the risk of being excellent on devices that consumers do not buy. And that the radio executive assumption that simply making a new age device a radio is dead wrong.

What does that mean for the suits running radio stations and their numbers gleaned from studying the monkey bones of Arbitron?

Station owners can play the People Meter game and shut their remaining jocks up. They can put a watered down morning show on-the-air and try to believe that their listening went up because the format was better. In fact, the listening went up because of the drive-by nature the PPM carriers picking up encoded signals.

My radio buddies who have settled in the Phoenix area dined at the beautiful and sumptuous hamburger joint Zinburger at the Biltmore Fashion Square last week. Lunch started at 12 noon and the last of us left around 4 pm — our usual short radio lunch.

Believe me, we observed that the strange music that was playing over the restaurant’s speakers would have been credited to us for four and a half straight hours had we been wearing a People Meter and had it been a radio station playing encoded music.

We weren’t and it wasn’t. . . .

So the bad juju tells the bean counters to run up a bunch of HD channels and play canned shows, or buy out other stations to reach out farther to entice more people to listen. Budgets stretch to breaking, held off temporarily by a volley of pink slips, as “public” stations scramble frantically to try to figure out what it is the “public” wants — giving them ultimately what their numbers tell them is mass appeal, what “everyone” is listening to. Could the end be near for the counters of magic beans?

Don’t shut down your radio stations especially if they have a brand, some personalities, local involvement and/or a significant following.

In fact, radio is doing the absolute worst thing it could do to listeners who still listen to a radio for radio — they are putting out a pretty bland product. . . .

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