Suck it Up...and Pay!

Good Morning!

Lot's of odds & ends this week so let's get right to them.

I was talking to a friend this week who knew someone who just spent time with the auto manufactures, in Detroit. They are now telling radio, TV, newspapers, and anyone else that does business with them,

"Do NOT suggest any marketing plan unless it includes our web site"

Their research shows that 80% of potential car buyers go to the web site BEFORE they hit the showroom. They "build" their car before they see the dealer. Get them to their web site (perhaps through yours!) and you may have a chance to improve an otherwise lackluster (formerly robust) advertising category.

Check out the new FM1 web site! Dave did a great job! www.figmedia1.com. Shameless plug embedded in the content below. (hint for audio in the future)

- An I-Pod with an FM radio? What a great idea! Is this something we can make money with? You bet! What does this mean for radio? *

1. In 2005 there were 32 million I-Pods sold. (up from 10 million in 2004) That's 100 every minute in the entire 4th quarter. Podcasting anyone? (if you program or run a radio station and don't know how to download a podcast I suggest you ask any 14 year old and learn fast!)

2. Over the holiday, 14 million were sold. (up from 4 million in 2004) It's not slowing down at all! If you can't beat em' join em.' (see 3)

3. The FM tuner is an attachment for the latest I-Pods retailing at $49.00. (watch the video below) Can we give away a few? (million?)

4. 40% of the cars produced in 2006 will offer I-Pod integration. The battle for ears behind the wheel is getting bigger. Podcast your content or you miss the boat. Get something up there. Your competition will. (all of them!)

5. By the way, remember the I-Pod Video players? They sold 8 million downloads in the last few weeks. 8 MILLION! (at $1.99). And it's just getting started. Cameras in the studio?, a station TV spot before any local content? (think the local evening news.) It's the new way to collect content.

Prediction - There will be a lot of information stations (news/talk/sports) coming to an FM band near you very soon.

I always get people who question how big this "non-am/fm" stuff is? Really, are people going to give up their AM & FM radios for all this new "stuff?"

No, they are not! But if I had to guess, I would think we would look at this new technology as a branding opportunity. It's another way to get your name out there. AM/FM/I-POD/STREAM and yes, even HD. (see FigFamily Newsletter on HD here. http://www.figmedia1.com/figfamilynewsletter_081405.html ) If you have a strong radio brand, it should be available everywhere.

These content distributors are NOT going away. People are NOT going back to AM if they can get what they want on FM, Streaming, or I-Pods. Get there now.

How many calls (e-mails) a week do you get asking about streaming? Every manager I talk to say it's the NUMBER 1 request from listeners. And it has been for years now. Stop ignoring this obvious trend.

But who is going to pay for this?

Answer?

Radio Broadcasters Must Suck It Up!....And Pay!

We are NOT used to paying for distribution. It's an expense we didn't have five years ago. We have it now! And our competition is paying for it. We must too!

Radio stations can no longer run the same operating budget they did five years ago!

It's a new world out there. What will change in 2006?

Radio stations will start getting serious about internet revenue. Podcasting, streaming, and even HD will require a new revenue model. (hint- it's not the usual 14 minute spot load we are running on AM/FM stations.)

It will be much more subtle. It's time for a new spot load clock. The current AM/FM clock won't be accepted by anyone using this new technology. (sorry!) But, if your web site is in good shape, get them there first, then to your advertisers.

(shameless plug for my client. Dave Michaels has re-branded his company as "Station'ality" and he's got great quality image building ideas at http://www.stationality.com/)

Radio stations are going to have to suck it up and pay for PPM. Any programmer that has seen the information available from this device loves it! Unless we rid the industry of the archaic diary, advertisers, and the people who buy advertising time will perceive us as "old school." A big step was taken this past week. Another major agency agreed to buy it. http://www.onlinepressroom.net/arbitron/

Hmmm, they will have info about our stations that we won't have. Not good.

PPM is expensive. But I think it's just a matter of time before we resign ourselves to take on this expense. Business in 2006 is NOT going to be great. Broadcasters (TV too!) are starting to realize that the world is changing. The revenue years of 1999/2000 are NOT coming back!

We Can't keep cutting in the face of new competition.

If we are going to re-build high-single digit growth and more, it may take a few "investment" years.

And a new way to think about "audio". We produce "branded audio" that is distributed over AM & FM. Now we must add other channels of distribution.

Audio "BRANDS" will need "Bucks, Brains, and BALLS!" (two out of three won't work....any...more!)

Have a great week everyone!

Fig

*Watch the entire presentation with Steve Jobs here. http://macworld.apple.com.edgesuite.net/mw/index.html
(I love the understated yet effective graphics in this presentation. Can we do this for radio? Can advertisers see us this way? I'll help for free!)

You can add revenue to your radio station THIS MORNING from your home computer. www.softwaveradio.com (yep, another client.)