Radio & TV execs throw alot of money, manpower & worthless research at digital. Radio still only gets a 2% share of local web revenue and TV claws for about 10%. Compare these anemic numbers to the hefty 50% local share that goes to pure-plays like Groupon, Google and Reach Local.
Will any of this be honestly discussed at the NAB Radio Show 2011 in Chicago? Probably not. Will the NAB or RAB step up and sound the alarm? Hmmmm. I wouldn’t hold my breath. By the looks of the 2011 Radio Show agenda and list of same speakers we hear, year after year, the Internet is still being downplayed and discussed as a “nuisance”. No wonder Radio get less than 2% local web revenue share.
Broadcasters still haven’t gotten their digital-revenue act together. They still haven’t understood the very real threat of these new, hyper-local competitors who are out to eat their lunch.
The reason why Radio and TV struggles with online revenue generation is simple:
The wrong people are probably in charge of the digital assets. Their compensation package doesn’t light a digital fire under their ass, so why should they worry about profit?
Still letting a program director or webmaster call the digital shots? Your newsroom manager controlling everything that goes online? Well, good luck with that. There’s no motivation and penalty from those executives to get them serious about making you a big, fat, digital profit. So why did you put them in charge?
What to do: The one person who is ultimately responsible for the financial success of your web initiative must have their compensation directly tied to digital profit.
Newspaper recently came to grips with this sticky issue and is steadily replacing old school, newsroom managers with digital-first executives with biz-dev skills. They had to, as they saw Patch poaching their staff. They saw Facebook, DataSphere, and cable operators ramping up their local, online sales efforts.
At the recent NAB Las Vegas show, CBS Radio’s Dan Mason admitted to getting his staffers digitally motivated was still a big problem. “Our biggest frustration is educating and bringing along our own people” said the CBS Radio chief.
Dan also compared the threat of Pandora, to 8-tracks and satellite radio. Funny, the Newspaper industry made the same kind of dismissive mistake by blowing off Craigslist a few years back, and lost most of their classified advertising.
Have ya noticed? Local media CEO’s always boast about their Internet efforts at conferences. They claim growth in streaming hours, page views and Facebook fans as if any of that really matters. It doesn’t. What really matters is cash flow and digital profit margin.
In TV & Radio you have one person who calls the final shot. That’s the GM. If you have a “team” that’s in charge of the website, you’re screwed. You don’t have an Internet business model…..you have hobby.
Putting a finer point on it: you have a non-profit hobby that’s a time and money suck.
Watch this video clip that describes the growing digital threats that Radio and TV face in their local markets.