Radio’s Bean Counters May Choke on Their Own Beans
You know the old saying, “Be careful what you wish for”? That saying is coming down hard on broadcast radio stations and the companies that own them in the form of Arbitron’s “portable people meter” (PPM). And I say, GOOD! This is what the money-grubbing robber-barons of the radio industry deserve! At this time I should point out after seven hard years of work at the Tampa Bay cluster of Clear Channel Radio, I was fired last September due to “budget cuts” so this post may be ripe with sarcasm. Less than two months after I was released because my paltry salary was dragging down the company’s line, Clear Channel agreed to go private with a $26.7 billion sale to Bain Capital Partners and Thomas H. Lee Partners.
In the never-ending search for more money, the radio industry (not just Clear Channel) demanded a new way of accounting for its listeners. For decades the industry had been using paper diaries from Arbitron to create ratings reports four times a year (two times a year in smaller markets). Several years ago I felt the diary method was extremely outdated, and that belief continues to this day simply because people are too busy with their lives to write down every station they listen to at all hours of the day. So several years ago Arbitron came up with the PPM, a beeper-like device that detects hidden tones in a station’s signal. The PPM basically is a live, as-is ratings report. Whether a person listens to one station for eight hours, or eight stations in one hour, the ratings can be accurately reported instead of hoping the diary holder can accurately recall which stations he/she listened to at the end of the day.
There’s no doubt about the real, underlying reason why stations wanted the PPM– MONEY! With accurate, real-time ratings stations would not only know the age and gender of the listener but the listener’s habits too. How many hours does a person listen to the radio? Exactly where are they listening at? Why does a person change the station or turn off the radio? By digging deeper in to ratings, stations could adjust their rate cards and charge more to advertisers because they would know precisely how long a listener is listening. But then an interesting thing happened… radio found out how long people were listening to the radio. And the news wasn’t all good.
In the first PPM report from Houston, Texas, the most shocking revelation was that fewer people listening to radio during the morning drive (6 a.m. to 10 a.m.) as opposed to ratings derived from diaries. The data also showed just as many people listened to nights (7 p.m. to midnight) as they did morning drive. Afternoon drive (3 p.m. to 7 p.m.) was the highest-rated drive time, while weekends were listened to more than indicated in paper diaries. If this data remains accurate, it will turn the radio world upside down in that it was commonly thought that the order of most listeners (from highest to lowest) was mornings, afternoons, evenings (weekends were typically “thrown out”, never really considered as viable data in determining rates).
In New York City, stations that ranked in the top 10 during diary days have slipped 10 to 15 spots in the rankings with the PPM. Some stations say a lack of representation in minority listeners is to blame for this. But as evidenced in an article from the New York Times, Arbitron senior vice president Tom Mocarsky cites radio listening among minorities has actually gone up 67% with use of the PPM over the diary. So what does this mean?
Well first of all, Arbitron needs to make sure they properly fill the quota for minority listeners. This is something I’m sure they will do since the future of the PPM requires extremely accurate data from all demographics. Second, it means the radio industry HAS to wake up sooner or later and realize people don’t listen to one station for a long time like they used to. With competition from the Internet, mp3 players, and CDs, radio has to give the average person a compelling reason to listen in the first place and to listen longer. Radio could also help itself out by not having so many similar formats. With so many crossover artists and tight playlists it’s hard to tell one station from another. Finally, you have to have live, local, and entertaining talent to get people to listen and to listen longer.
But these are bean counters we’re talking about, and they’ll ignore good programming while counting their beans and blaming the PPM results on some outside force. But by keeping their blinders on the bean counters are merely getting their just desserts.
* A follow-up to a previous entry of mine regarding casual dining outlets. Following Applebee’s new logo it appears other chains are also trying to pump up business in the sagging industry… with coupons! One analyst calls the move one of the worst things she’s seen in 14 years in the business. Check out the story from USA Today.
