Newspapers are folding at the rate of two per month. The New York Times Co. supposedly only has $25 million in the bank, is closing other papers in major cities, and barely saved the Boston Globe this week. Congress is paying attention, and John Kerry and John Conyers have been holding newspaper hearings this week, talking about how to save the newspapers. Will a bailout for the dying newspaper industry be next?
Newspapers are dying because they have become irrelevant to a generation that no longer wants to wait for the news when they can get it by Twitter within seconds. Warren Buffett said recently that if someone were to suggest the invention of newspapers today, people would laugh at the business model. Write the news, cut down millions or trees for paper, build massive printing plants to print it overnight, have a distribution model that pays people to fold and bag hundreds of papers and burn thousands of gallons of gas to go house-to-house throwing papers out of their car windows so people can walk out into the cold or rain in order to read news that is 12-24 hours old. Or those could just turn on their full-page Kindle DX reader, due this summer, or look on their iPhone or laptop and use Google Reader to get news customized to their liking about any subject in the world.
Why would Congress want to save an industry that is based on Gutenberg technology? Is it possible that no amount of money invested in that business can turn it around? Do they really believe the Internet generation can be convinced to sign up for home delivery? Yes, probably. Because most people in Congress don't understand the world today, and they don't want many of these supportive voices to disappear.
If and when we hear of newspaper bailouts, those of us in radio shouldn't be tempted to shout, "HEY, WHAT ABOUT US?" Has it crossed your mind that when newspapers become nationalized like the car companies and banks, their businesses will be beholden to the direction of the government? Somehow the ideas of freedom of speech and government news-media ownership don't make good bedfellows. We don't want someone at the government pulling strings and saying, "Let's pull that story or we pull our money." Can you say "BBC"?
Could a newspaper bailout happen? Count on it. And when other troubled media see it, they'll be waving their arms to get their piece. And if by chance those in control of radio happened to be more concerned about their balance sheets than worrying about a little issue like freedom of speech, well, a bailout for radio could happen.
Newspapers are sunk because they were clinging to their comfort zone (sound familiar?). They were way ahead of radio by embracing the Internet early, but they still missed the boat on what is happening with interactive advertising. Radio needs to understand the plight newspapers are facing could happen to us too if we don't adapt rapidly, become willing to shed our tired old business models and comfort zones, and invest in seducing the next generation with vigor.
No, it won't pay for itself out of the box (which is why its being ignored) but it might just keep us from going to that great transmitter farm in the sky.
A radio bailout would be a fate worse than radio's death.
Eric Rhoads
Radio Ink
For free radio industry headlines via e-mail go to http://www.radioink.com
I opine that to get the loan from creditors you should have a great motivation. Nevertheless, once I have got a commercial loan, because I was willing to buy a house.
Posted by: Travis30Paulette | April 15, 2011 at 04:48 PM
A few comments back, the same guy who says satellite radio is "the future" opines that "local doesn't matter anymore."
Chuckle.
Posted by: Roger Coryell | May 11, 2009 at 10:11 PM
Newspapers are over...gone. Radio is dying a slow death, because most of it is the same homogenized content over and over. The only hope is some truly original programing...not follow the leader (sic)over and over. Todays generation will not be tuning in, unless there is something unique to listen to...otherwise it's to the ipod,computer...or even yes ...the TV, all 175 stations.
Posted by: G.Meade | May 09, 2009 at 11:54 AM
Here Here.
Posted by: Adam-12 Boardman | May 09, 2009 at 09:29 AM
These kinds of rants aren't going to help anyone. You know better than anyone, Eric, that satellite radio and internet radio are the future -- not "terrestrial radio," especially low-quality stations.
Yet you pretend that somehow your clients will survive because . . . well, because they just have to!
You never seem to point to stations that are ACTUALLY transforming themselves. You only point to the idea that stations SHOULD change somehow -- and NOW.
Give me a break, Eric (and followers): SHOW me, don't tell me, how you're going to make local radio relevant in an age where LOCAL just doesn't matter much any more.
We're Netizens, for heaven's sake! We live in virtual communities that our parents and grandparents can't even imagine. Radio is so yesterday.
Posted by: Jeremy Mott | May 08, 2009 at 11:02 PM
Great article Eric ... thank you!
Radio needs - right now - to be left alone by the government. No "performance tax", no state sales tax on advertising, no other taxes or new license fees. Savvy radio operators will come up with ways to keep the bottom line positive. We don't need the "we're from the government and we're here to help" routine.
The nice thing about radio is that you can do a lot more - with fewer resources - than any other media.
I'm a firm believer that localism is the key to radio's survival. The remotes from the non-profit events, the high school sports, radio's ability to turn a ho-hum grand opening into a must see event ... these are the things we must concentrate on to be successful in this economy. The emotional connections to the listeners AND the sponsors can't be beat!
Radio can , does and will succeed without government intervention.
On September 11, 2001, over 10000 broadcasters did what they do best ... without intervention from the government ... and without the activation of the EAS system - the very system designed to allow the government to keep the public updated in the event of a national emergency.
This is the mindset we must maintain to succeed.
Posted by: Bill Lakatas | May 08, 2009 at 10:31 PM
I don't care what business it is...if it can't make it on its own it shouldn't exist. I'm in the smallest of small markets and we are still making money! We've been on the air for 26 years with no government help. If it gets to the point where I need a bailout...I'll quit!
Posted by: Maynard Meyer | May 08, 2009 at 04:41 PM
Whoa Eric...you've come a long way from selling those Giant Boom Boxes at NAB Conventions years ago. You have seen the light. You speak the truth and we all applaud you loudly! As one who did a radio column in the Ann Arbor News and for nearly seven years did the same for the Oakland Press in the Detroit area, I see where it's all going. The Ann Arbor News (after some 200 years) will stop printing in July and the Journal Register that owns the Oakland Press is already in bankrupcy. Keep on carrying the torch Eric, and turn up those giant boom boxes even louder so everyone can hear your words of wisdom.
Posted by: ART VUOLO, JR. "Radio's Best Friend" | May 08, 2009 at 04:22 PM
To expect the government to bail out radio would be a complete about face. If you're in the radio, tv, or any other wireless business, have you not been getting a bill from the FCC every year since the "deficit reduction act of 1992" with increases each and every year that far exceeded the governments own rate of inflation figures? Even with the economic mess we're in now, don't expect congress to give you a discount this year, because just like most other people, if you're in this business, you are filthy rich in their opinion. I only wish they had to live on the salary I live on for one year. They would see it a little differently. I would probably close the doors and go home before I would ask for help, but all I ask is for them to not try to come up with all kinds of rules that requires so much time and resources that we do not have time to do the job they expect us to do. I understand that the airwaves are considered public airwaves, and we do the best we can to serve the public because, it's not only the thing to do, but it also makes great business sense. With that said, airwaves do not exist until someone invests a lot of time and money in equipment and turns on a transmitter. Until that happens, there is only SPECTRUM which is all air, not "airwaves". The users of airwaves are the listeners, not the people who send out the information on the airwaves.
Posted by: Ralph Clenney | May 08, 2009 at 03:27 PM
As a voice for change... and a solution provider for a healthy, industry-safe, transformative approach into a new media era, I hate to say that although radio has a lot of inherent advantages to lead, it has a dreadful culture for it.
My optimism is indeed fading at this point, yet I certainly hope to encounter some real change agents to partner with soon so we can help turn around an industry that has proven to me to be terminally addicted to a wait-and-see mindset.
Posted by: Andrew Deal of CelleCast | May 08, 2009 at 02:58 PM
Well put Eric. The Buffett comments should be shared nation-wide by all of us. I've already forwarded them to a certain hockey-playing Senator from Massachusetts - and I'm a flag-waving Canuck.
Posted by: Andy McNabb | May 08, 2009 at 02:51 PM
A member of the corporate radio media wants newspapers to go out of business...I'm shocked, just shocked.
Posted by: Brian King | May 08, 2009 at 02:14 PM
Loved your comment about the danger inherent in 'clinging to the comfort zone'. The industry we grew up with (or 'in') is gone; if we broadcasters don't change with the times and technology, we won't deserve (or get) a bailout. We'd better find our way among the HD, IP and .com channels that will soon be available on our clock radios, car receivers and cell phones.
Posted by: Jaime Arbona | May 08, 2009 at 01:57 PM
Amen. The only thing I would add is that in addition to seducing the 'next generation', my station is focused on wooing the 'current' generation of listeners we have. KKHI is a smooth jazz station. This is a great format because the demos we are targeting still love and use radio. We are building an efficient model of the modern, 21st century radio station. Internet, interactive advertising, return on investment and proof of results, (without using ratings) is our push. I agree completely that radio needs to get on the Internet Train, and now. We're not finished yet, by a longshot!
Posted by: Steve Hamilton | May 08, 2009 at 01:28 PM
Good stuff Eric...completely agree with you/your thoughts. Radio is a great media-maybe the best to be able to embrace new technology. We can promote our websites 24/7 creating an entirely new revenue stream. We can incorporate text/mobile campaigns for clients. Our information is delivered NOW (not tomorrow)...all stations should be fully utilizing web/i-pods/text/mobile to build and super-serve users/listeners and increase revenue.
James Derby
Director of Programming
Newsradio 750 KXL & Sportsradio 95.5 The Game
Posted by: James Derby | May 08, 2009 at 01:21 PM
Why not? Those of us in the smaller markets are still fighting to stay alive, provide real public service, pay our obligations to our vendors and creditors, and provide local jobs. If we go away, who's left? And, while I'm loath to ask for a handout, what's the worst that can happen? The Feds will say, "thanks but no thanks".
Posted by: Fred Morton | May 08, 2009 at 01:19 PM