(By Buzz Knight) A couple of headlines this week caught my attention about the media landscape. These are not-so-gentle reminders to the leaders of media companies that if you think you can control what consumers want you better think again.
As radio faces headwind challenges, it would be wise to pay attention to the lessons of the media landscape to support clear and decisive thinking.
The article, the front page story of the Wall Street Journal on Wednesday, August 16, refers to what they call “streamflation” which is the fact that the average cost of watching a major ad-free streaming service is going up by about nearly 25% in about a year.
The bet that companies like Disney/Hulu, Netflix, Paramount+, and whoever else has entered the game since I started writing this piece are making is that customers will pay up or switch to their cheaper and more lucrative ad-supported plans.
Is arrogance taking over for reasoning? Has each company researched what the pain/price point is? I’m assuming yes to both.
Either way, when these companies invest in content, from a business model POV, someone has to pay for this stuff, so this is clearly an economic quagmire.
The second headline was even more disturbing: “TV Makes Up Less Than 50% of U.S. Viewing For First Time”
As platforms like Netflix are powered by shows like “Suits” and their streaming share grows to new heights, the impact is profound as far as the erosion of the cable-TV bundle.
When you lose a quarter of subscribers over the past decade, one has to wonder whether the leaders of the TV companies were leading by their own arrogance, unaware and misguided about the impact of cord-cutting.
So, what does this mean to other media sectors or specifically to radio?
We are living in a world of many choices for consumers. That, in its purest sense, means radio should not take its audiences for granted. It used to be realistic to think if you lost audience, you would get it back later that day – or certainly the next day. Those in charge of radio brands need to guard and cherish listeners, particularly the loyal heavy users with kid gloves.
The other reminder is about the critical creation of content. Audiences will gravitate toward content as long as there is a watchful eye on high standards.
When that is abandoned, the radio headline will be similarly dark.