Jeff Smulyan Got it Right

New media pundits have been telling us that radio is dead for nearly a decade now. The fact that radio is alive and well hasn’t seemed to deter them. They find no irony in the fact that radio survived NetRadio and Live365, MTV and Napstar, Satellite radio, and the ultimate insult, that iPods don’t have radios built in.

Radio is dead is new media’s Big Lie. Joseph Goebbels, Hitler’s propaganda expert described the Big Lie as the principle that when one lies, one should lie big, and stick to it. George Orwell added that one should, " forget any fact that has become inconvenient."

We have used this space many times to point out new media’s Big Lie and the inconvenient facts that the Big Lie ignore. In May we pointed out that no other audio medium comes close to terrestrial radio’s reach and impact. In July we reported the results of a JupiterResearch study that showed that radio was the top media source for new music, out-performing new media and even word of mouth.

A Rasmussen poll in September showed that more people prefer to listen to music on the radio than other sources such as MP3 players. 42% of participants preferred radio compared to only 5% who preferred streaming.

Arbitron’s first (and perhaps their last) satellite ratings study showed that most of satellite’s offerings wouldn’t even show up in a small market Arbitron because listening levels were too small to qualify. Howard who?

But facts don’t seem to slow down the pundits who are determined to dismiss radio and declare it near death. It’s understandable why we would hear the Big Lie from people outside of radio. New media types have a vested interest in trashing radio. The new media types of the 1950s were saying the same thing when television appeared. What is particularly galling is that too many people who work for radio stations believe the same thing. These people ostensibly depend on radio for their livelihood, and yet seem to delight in taking shots at radio.

Here's the shot Tom Asacker, a marketing guru, took at radio recently:

The following landed in my inbox last week in an email titled "NAB SmartBrief:" "Radio’s ‘challenge’ isn’t to retain its audience or remake its programming, but to convince marketers that the medium is still viable, according to Jeff Smulyan, Emmis chairman-CEO. ‘The challenge is the perception,’ Smulyan said during a conference call with analysts.

Really? I heard something similar from the CEO of General Motors a few months back. In essence he blamed his company’s fall on the uninformed, and misinformed, marketplace: "It’s the consumers, stupid!" Or maybe, it’s the stupid consumers. In any event, and with all due respect, if you believe that you need to "convince" your ignorant audience of the value of your offering, you simply don’t offer anything uniquely valuable. In this day and age, if you did, and people were interested, they’d figure it out.

As we said, this dismissive attitude towards radio isn’t new. It is just another cheap shot by someone who is deeply ignorant about the facts. The bigger problem is that Mark Ramsey, presumably a person who should know better, supports this viewpoint and reprinted the remarks in a blog that is directed at radio broadcasters.

Jeff Smulyan got it right. Tom Asacker and Mark Ramsey got it wrong. According to Arbitron, over 93% of New Yorkers consume radio on a weekly basis, with 67% of them consuming radio on a daily basis. They spend nearly twelve hours a week listening to radio. Can any other audio medium match that reach? Can any other audio medium match the amount of time people spend with radio? Study after study says no.

Mr. Asacker’s attempt to draw a parallel between Jeff Smulyan’s defense of radio and Rick Wagoner’s defense of General Motors just illustrates desperate punditry and confidence in the Big Lie. Ignore the facts, link radio to an industry that everyone knows is in deep trouble, and presto, you’re an expert on how to fix radio.

GM is in trouble because people stopped buying their cars. People don’t want Hummers anymore, but people continue to listen to radio despite iPods, streaming, satellite, and all the other distractions.

Asacker and the other self-appointed saviors of radio feel comfortable spouting off about radio’s decline because of what’s happening with other traditional media. Newspaper circulation is in the tank. It has been eroding at a 2% rate for years and is now falling at about 4% a year. Magazines are disappearing at an accelerating rate. Prime time viewership of the top five English language television networks is down nearly 7% this year alone.

With other traditional media in free-fall, and with so many new competitors, the average uninformed person would assume that radio is performing as badly. The facts suggest otherwise. According to Arbitron, radio cume is down about 4% over the past decade and there are methodological reasons to believe the real number is smaller.

A great deal has been made about the decline in TSL. Even the critics who concede that radio’s cume is holding will point to time spent with radio and say that the recent declines prove that listeners are abandoning radio. We have to keep in mind that the steepest declines in TSL happened before iPods and satellite radio. They coincided with Arbitron’s cost cutting efforts. Incomplete diaries that were once rejected began showing up in the sample, so some of the decline in TSL may be directly attributed to methodological issues.

No studies have shown a direct link between new media adoption and a decline in radio listening. None. In contrast, studies have shown that computer use negatively impacts television usage, not radio usage. And consider this. From 1977 to 2007, the final year New York was measured with diaries, TSL declined five quarter-hours, just a little over an hour. Think about all that has happened in 30 years and yet listeners continue to consume radio at roughly the same rate as when Jimmy Carter was President.

With newspapers and television in steep declines, it might seem reasonable to assume that radio is in a similar situation. With satellite, iPods, streaming, and the like it might seem reasonable to assume that radio usage is dropping. But the facts say otherwise. Listeners still believe in radio.

Jeff Smulyan got it right–or maybe half right. We have a perception problem. Not with listeners, but with the buying community. Unfortunately, radio itself has created the perception problem. We have conveyed a lack of confidence in the product through our lack of pricing integrity. We’ve acted like radio is in trouble and debased the product in the eyes of buyers. Now we are paying the price.

Comments

[Tom Asacker]

Interesting angle on reality, Glenda. If you believe in the free market economy - the recent meltdown notwithstanding - then you know that pricing reflects the value that the markeplace places on a product or service given the alternatives available in that marketplace.

This has nothing to do with any kind of LIE (and I never appointed myself as radio's savior. Puh-lease). It has to do with the BIG TRUTH. And that truth is that we have come to the end of marketing and sales spin driving perception of value; yes . . . even in media. It's over. Ask the folks at Merrill Lynch.

If you think 2008 was tough, you ain't seen nothing yet. It's up to every product and service provider in our new "value economy" to demonstrate the "value" of its offering. In radio's case, its the medium's ability to create desire, and thus drive sales and profitability for advertisers' brands.

If you can't demonstrate that outcome - not reach, not frequency, not listeners . . . consumer action - then you should expect more of the same in 2009.

By the way, I happen to love radio. So please, don't shoot the messenger.

[Kent Sterling]

I work with and for Jeff, and the one thing he is above all else is a realist. So, of course he's right. With all other media fighting for their lives, is it productive for them to laud radio as the one medium that continues to build audience?

It's prudent, although a lie, for print and TV to position radio as dying. That's just life when newspapers and local TV station are scraping to keep every nickle.

What radio does is continue to generate results for clients who invest in this unique medium's ability to communicate one-on-one with consumers. People who buy radio correctly make more money. That is how we'll not only survive, but thrive. We deliver for clients.