SPRING 2002
What do I mean by "bean counters"? I mean managers who focus on costs at the expense of product. But you can't save your way to success...just look around!
The big news in Detroit is Robert Lutz -- the new product czar of General Motors. A tough ex-fighter pilot with "gasoline in his veins," Lutz was the force behind such hits as the Dodge Viper, Ram pickup and PT Cruiser while at Chrysler.
GM needs Lutz badly. It hasn't had a product-oriented honcho since the '50s. Instead, its leaders have been bean counters like Roger Smith, who started as an accounting clerk and climbed GM's financial ladder to become CEO in 1980.
Smith focused on acquisitions and manufacturing efficiencies rather than product. (Sound familiar?) The Smith years yielded a series of mundane, lookalike cars -- can you say Chevy Lumina? -- that didn't get anyone's blood pumping. The result? In the words of NPR's Car Talk guys, Smith "successfully reduced GM's market share from an unwieldy 50 percent down to a manageable 29 percent. Good work, Rog!" In a business where a single share is worth billions in sales, GM's decline represented a meltdown.
In the '90s, GM brought in a cadre of marketing gurus to reverse its sagging fortunes. But its share only dipped further. If the cars are undesirable -- can you say Pontiac Aztek? -- even the best advertising won't sell them. Finally, after its share hit rock bottom, GM realized that Product Matters! What it needs is better cars...cars that consumers really want. What a concept!
That's why GM hired Lutz. And why Ford is now out looking for its own "car czar."
What does this have do do with radio? Well, we've got our own version of General Motors...
By now, Clear Channel's cost-cutting has become legend. Who else could slash budgets, slash jobs, then slash some more?
Others may fret about the loss of jobs, homogenization of prog ramming and lack of community service that result from Clear Channel's operating style. But I want to focus on how Clear Channel's approach has hurt...Clear Channel! (What? No tears?)
Let's use Detroit as an example. The scenario has been played out elsewhere, but Detroit is the market I live near and listen to most....
Clear Channel owns WNIC -- for years, the market's sole A/C. WNIC also had a "market icon" morning man named Jim Harper, who'd been at the station since '77. Altogether, that made WNIC #1...not just #1 25-54 as you might expect, but (in recent years) #1 12+ and huge 25-54. All this was good for a reported $30 million plus in revenue two years ago.
WNIC's problems began when consultant Gary Berkowitz's contract was up. Of course, Clear Channel didn't renew...we all know CCU isn't big on outside consultants. Berkowitz got hired by Greater Media for its flagging Jammin' Oldies WGRV.
The next thing you know, Greater Media was talking to Jim Harper, whose contract was due to expire in mid-2001. They offered him a seven-figure salary. Reportedly, Clear Channel's bean counters prevented local management from matching it.
So WGRV had Berkowitz, Harper and (soon after) Harper's female sidekicks...also an integral part of WNIC's "Breakfast Club." In July of 2001, WGRV became WMGC -- "Magic 105.1." To my ear, it's a lot like WNIC. But it has Harper, WNIC doesn't.
In the Fall 2001 ARB, WMGC became #1 25-54. WNIC dropped from first (in Spring) to fifth 12+, losing more than half of its morning audience.
The story here is not just about how one station lost a franchise personality! It's bigger than that. I suspect that WGRV doesn't even become Magic 105.1 without luring Harper! By failing to re-sign Jim Harper, WNIC didn't merely lose a strong personality...it gained a whole new competitor! And its market leadership is now history.
Given the millions each rating point in Detroit represents, what do you give Jim Harper to keep him in the fold if you're WNIC? Whatever it takes...after all, Product Matters! But that's not how bean counters think.
CCU proved it again when it lost WJLB's morning star John Mason to Radio One. Since then, WJLB has declined and is in a "dead heat" for Urban leadership.
Clear Channel never was a product-oriented company when it owned a handful of stations. 1200 stations later, it's still not. To quote the Detroit Free Press: "The loss of Harper and Mason sends a message that Clear Channel will not pay large sums to its local radio talent."
In 1988, we were commissioned by a medium-market Michigan station -- let's call it W*** -- for a strategic research project. W*** was a sleepy A/C hovering around a two share, far behind the market's A/C leader.
The very fact that we ever did a project for W*** was amazing, since W*** was definitely run on the cheap. But the station's local manager -- let's call him "Joe Smart" -- was persistent and insistent that something be done to awaken the sleeping giant.
When I analyzed the results of the research, I got excited. W*** had a great Classic Hits opportunity...the best Classic Hits opportunity I had ever seen. W*** switched format during the Spring '88 rating period. When the book came out, it had moved from #11 to #2 12+! In the Fall ARB, it grew even more.
You'd think that the owner and group manager would have been ecstatic about W***'s instant success. So did I and Joe Smart . Wrong. If anything, top management seemed suspicious of W***'s success. "We've had false starts before," they said.
False starts???
Joe Smart and I begged them to promote W***. They refused. We proposed a music test...essential for any library-based station. Uh-uh, they said. They didn't want to invest in the success of W***. They were more comfortable saving their way to a marginal profit than building a dominant station!
Joe Smart got frustrated and left. His replacement brought in a P.D. who didn't "get it." W*** declined. While it remained ahead of where it was as an A/C, it was a shadow of what it could have been. The bean counters had claimed another victim.
Business, like life, is a "balancing act." Spend too much and you'll go out of business. Fail to invest in your product, and your business will decline as well. Financial managers have an essential role to play in radio, as in any business. But when they affect programming in a negative way, the industry is in trouble, because Product Matters!!!