(By Eric Rhoads) “This is going to make me a ton of money,” said a radio station owner in the Northwest after about 40 minutes on the phone as I explained my system for helping stations make 10 times their current revenue.
This man had phoned me after reading a recent editorial about how I managed to hit my annual company budgets this year by March, how I managed to grow the company 300 percent in the last five years, and how it appears I’ll soon have 10-times growth.
He’s not the only one who called, but honestly, out of the thousands of people who read the magazine, less than 1 percent inquired about how I did it.
In that editorial I stated that this solution was so unique and powerful, it could be employed by radio with a small investment of people, and would pay for itself after the first year. And it has a strong chance of growing the business of any station by 10 times within three to five years. I’m not talking 1-2 percent growth, I’m talking about massive change and growth.
And best of all, it required no salespeople and no inventory. I wasn’t even selling anything, just offering the idea. I did, however, explain that the solution is digital.
One manager sent me a note that said, “Eric, you’ve been promoting digital for years, and it’s proven that digital does not work. There is no money to be made in digital for radio.”
I hung my head in shame. I hadn’t even made this manager curious. He assumed it was some lame digital solution, probably banner ads or something else he assumes doesn’t work.
I had presented something that is not theory, and something that took my little business into rapid growth mode — so much so that we just got named to the Inc. 5000 Fastest Growing Company list for the third consecutive year.
What I find intriguing is that only a small number of radio managers, owners, or leaders have shown any interest, in spite of revenue decreases.
The ones who did speak with me got very excited, and some even offered to partner with me, since I’ve already got the team in place.
Others still resisted. “But Eric, we’re in the radio business,” said one critic once I laid out the plan, which brings revenue to the station and benefit to the audience. “This won’t work for us because we’re in the business of selling ads.” But what if all of a sudden no ads were selling? What would you do with your biggest asset — the relationship with your audience? Twice this month I’ve heard from managers who have told me their once-fruitful ad sales business has dried up. There was no change in ratings, no change in the format, no change in the sales department, but billing was off about 60 percent, suddenly and unexpectedly.
Each told me that the lost advertisers had switched to Facebook and Google and were getting good results, good tracking data, great ability to follow up and track visitors, and good sales, for a fraction of the investment.
It all reminded me that Dave Penski from Publicis said at last November’s Forecast conference that almost all of his clients had shifted 60 percent of their media budgets to those same two companies.
I’d never be one to predict the death of radio, or any medium, but if this trend were to occur everywhere, the current revenue model would need to be replaced with a new one.
What’s my point?
Change in the media world is happening at the fastest pace in history, and fighting change is a fool’s game. Embracing change is the game of winners. I don’t claim to have all the answers, but I know I have one that creates a new income stream for radio. Sadly, only a handful of people were curious enough to even ask about it.
Curiosity doesn’t kill the cat. It’s the lack of curiosity and openness to new ideas that kills the cat.
Eric Rhoads is Chairman of Radio Ink magazine and can be reached at [email protected]