Radio Must be an “Entertainment Experience”
MarketWatch and also the first president of CBS Digital. We talked at length about the challenges media in general – and radio in particular – face amidst a torrent of change.
Watch this video and see Larry’s answers for Radio.
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What follows is an edited transcript of our conversation.
The title of the book is C-Scape: Conquer the Forces Changing Business Today. What is the C-Scape and what are the forces that are changing business?
The “C-Scape” is named after the four themes of change that have ripped through media and all start with the letter C:
The first one is consumer. The consumer is in much more control than he used to be and has taken a much more aggressive role in the relationship now.
You may want show people a TV show at 10 o’clock Tuesday night, but they’re going to watch whenever they want to because they can, so now there are so many different choices that the consumer has at his fingertips that he really has a much more dominant part in the relationship now with the programmers.
The second C is content is king. Content has always been important obviously. I’ve staked my life on it when I started MarketWatch – that content wasn’t a commodity, that you could create some content better.
Now you don’t depend on one distribution system or not. Now the power has shifted more to the content creators. If the New York Cable System was in a fight with ESPN and decided it was going to drop ESPN rather than pay the money ESPN wanted, people in New York could go somewhere else for ESPN and they would drop that cable system. They didn’t have that choice in the past. The Internet digital platforms do that; they match buyers and sellers and they squeeze middlemen. There are more and more ways for me to get what I want.
Well they’re huge. The fact is if you were a radio broadcaster in Kansas City, you had X number of radio stations and that’s all I can listen to if I was driving my car down the block. Well, guess what? Suddenly there’s Sirius and Internet radio. The choices for me aren’t limited to what that broadcast license bought you before.
Okay, but there are still a ton of people listening to radio. The time they spend with radio may be declining, but there’s still plenty of usage, right?
Well, that’s true. I’m not saying that the medium dies. I’m just saying it becomes more difficult to be dominant.
More people are watching television than ever before, but they’re just watching it in different places in and in different ways and the network portion of television has dropped dramatically.
Today, if you have a bad year at NBC, there are probably 10 or 15 cable networks that could outdraw you and you’re in trouble. Ironically, when Comcast – a distributor – bought content [NBC/Universal] because they knew they needed to own some content, what they really cared about were those NBC-owned cable networks much more than they cared about NBC. The cable networks made much more money than the actual network. The actual network is bloated, expensive and carries with it a lot of broadcast baggage, licenses and things like that. The cable networks are more focused, there are better brands. What do the NBC, CBS, ABC brands mean? Almost nothing. They mean sort of quality generally, but that’s about it. What do all the cable networks? They all have brands that mean something. ESPN means sports, CNBC means business. They all have niches and the main networks didn’t because they never needed to.
So given this scenario, what action must the broadcaster take to respond?
Great content. You have to put on great content. There’s no way around it. You’re not going to be a success because you’re the only guy in town anymore.
The difficulty you have, far more difficult than anything in the past, is being heard in the first place. Getting out in front of people, getting people to know you have great content. It’s why brands matter and in this world, brands are still better built on media because old media is more passive, less interactive.
In interactive media, you generally go after what you want. In a passive media, things are put in front of you. You promote the new shows and the old shows. You turn a page of a newspaper and you see an ad for something you didn’t ask for. But in the new media, the interactive media, you’re getting very targeted products. You’re not going past things. You are going after something. For the serendipity, for the idea of learning about new content, new brands, new everything, it’s much harder to do. So you got to resort to things like social networks where word of mouth matters. Like it or not, that’s the way it is.
When you say “great content,” if I’m a radio station playing country music, I’m thinking you know I’m playing the best country music there is, is that what you mean by “great content?”
Sure, for the people who want country music.
But if I’m playing the best country music, then what makes me different from the thousand other country music stations I can tap into that you indicated as well as Pandora or whatever?
Well, if all you’re doing is playing commodity music, nothing makes you different except you have to surround it with criticism, with observation, with interviews with country music artists. You have to do something better.
For me I started MarketWatch. If all I ran were stock quotes, I would not have won that war because everybody has the same stock quote by definition, right?
So what you’re saying is that the music becomes the base of what you do but not the end of what you do. It’s the beginning.
It’s not just the music, it’s the whole experience. People want an experience. For bookstores, it’s meeting authors. Whatever the experience is. You need to understand and know your audience. That’s the bottom line here. You have to listen. You’ve got to really talk to your consumers, listen to them, and don’t think that the way that they’re going to want it is the way they’ve gotten it in the past.
If you ask people three years ago, “Would you watch video on your phone?” 95% would have said, “Are you out of your mind.” Three months later, the iPhone debuted and if you asked those same people six months after that, 40% would say “yes.”
You have to make it more interesting for consuers. You give them serendipity. “Hey, you like this guy? Let me play somebody for you that’s out of Memphis who you’ve never heard of, but this guy really has something. Listen to this…”
You spend a lot of time in the book talking about the mistakes companies make in framing what business they’re in and getting it wrong. If I’m a broadcaster in radio today, what business do you think I’m in?
I think you’re in the entertainment business or you’re in the news business. You’re one or the other.
The newspaper, they thought they were in the newspaper business and that’s what killed them. If they thought they were in the news business, they’d be doing something completely different. It’s the railroad example all over again, right? They thought they were in railroad business. If they thought they were in the transporting people and freight business, they would have been into cars and airplanes a lot sooner than they were which was never.
So if my consumer’s problem is that he wants to listen to Country music, I’ve got to give it to him and I’ve got to entertain him and I’ve got to delight him. That’s not necessarily easy.
What are the last two “C’s”?
Curation is the third one, and it’s really new art form built around the fact that there is so much information available now. What people desperately need is someone to help them sift through it.
It is part of what we should be doing as media for our customers. They need it, we need to help them do it.
The final one is convergence, which is what’s happening to the media that’s really at the heart of all this. We’re converging all platforms into one for the first time.
So you can tell a story now using words, video, audio, text, interactive graphics, anything in one place. That means that the storytelling process is going to change. It’s going to be better. There is no reason to just write a book or just give you a video story or just write a newspaper story. We need to focus on the best way of telling that story and bring all the elements together.
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