Media Curmudgeon

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November 22, 2003

Saturday, November 22, 2003.

Saturday, November 22, 2003. Profit Pressure and Greed
The pressure for profits at publicly traded media companies is intense, as I have written in several recent blogs. Another manifestation of this pressure is that some local TV stations that are owned by publicly traded companies will look for other revenue streams, like WFLA-TV in Tampa did. WFLA-TV is owned by the public media conglomerate, Media General. What WFLA-TV did to boost flagging revenue was to charge businesses for interviews in its morning show. WFLA-TV isn't the first station to do so, a TV station in Syracuse did it last year, but eventually saw a 20 percent drop in the ratings for the show.

But what's interesting about the Tampa story is that the Tampa Tribune is also owned by Media General, and the Tribune was slow to report on the story of WFLA-TV's chicanery and deception, and when it did, it included a statement by Media General's CEO who tried to dodge the issue by saying that WFLA-TV's morning show was not "news." What else can you expect from a company that would prostitute their TV product?

I am against the FCC's proposed rules that would allow companies (including those that own networks--Disney, Fox, GE/NBC, and Viacom) to buy more television stations by raising the limits from owning stations that reach 35 percent of the population to 45 percent and allowing companies to own a newspaper and a television station in the same market. Of course, CBS and Fox have a waiver and are over 40 percent, and there are several markets, like Tampa/St. Petersburg and New York where the FCC has grandfathered cross ownership. I strongly believe that relaxing the rules would limit the diversity of voices, and I'm against it. We need more voices, not less. And, especially, America needs more independent, as opposed to more corporate, conglomerate, voices.

On the other hand, I don't think the WFLA paid access situation is the right argument to make against cross-ownership. Just because WFLA is a whore and that its co-owned Tampa Tribune defends WFLA-TV is not an indictment against all cross-ownership situations; it doesn't mean the A.H. Belo Company, that owns the Dallas paper and WFAA-TV, is a whore.

It's a simplistic approach by those who are against the new FCC rule relaxation to use the WFLA-TV case as an example of why the rules are bad. Such an argument was made by Elizabeth Rose, an ex-public affairs director of the FCC, in a column in Broadcasting and Cable magazine, in the November 10 issue. Rose, who obviously has an agenda, was using the WFLA-TV incident as a launching pad for her anti-cross ownership position.

The WFLA/Tampa Tribune story is an indictment more of Media General than it is of cross-ownership. In some markets in which a newspaper owns a TV station, the TV station's profits allow the paper to stay in business. That's OK if the company is responsible, has integrity, and keeps the two independent. But it's not OK in Tampa with a public company that has no integrity, no sense of serving the community, just serving the interests of stockholders and greedy managers.

But let's not throw out the Belo babies with the dirty Media General bathwater. On the other hand let's not allow any more combinations because not every company that would buy a newspaper and a TV station in the same market are Belos or the New York Times Company--good citizens. I'm afraid too many would be greedy whores like Media General.

Media General is a publicly traded company, A.H. Belo is private and the New York Times Company is controlled by the Sulzberger family, making it act like a private company. There is lots of evidence that privately owned media companies are much better at serving their communities than public companies. In other words, the owners of private media companies hold their media outlets to a higher standard than owners (stockholders) of pubic companies do, and certainly to a higher standard than Wall Street does. And we know about the ethical and public service standards of Wall Street. We have seen in the continuing stories about the scandals in Wall Street that the center of greed in the country today is Wall Street.

It's time for the public and stockholders of media companies to start demanding a higher standard of public service. Better public service and balanced news that has integrity does not mean lower profits, just less greed on behalf of management.

I'd love to hear what you think. E-mail me at EmailAddressMain

Posted by Charles Warner at 11:53 AM | Comments (0) | Print |

Saturday, November 22, 2003. Media

Saturday, November 22, 2003. Media Concentration Rules
The New York Times on Friday, November 21, had a story on the first page of the Business section with the headline "Making a Mockery of Media Concentration Rules." The story was about a company that owns television stations, Nexstar, that goes way beyond the FCC media concentration rules now in existence in at least one market, Wichita Falls, TX. Wichita Falls is classified as a small market under the FCC rules, and under the FCC rules, dual ownership of TV stations is prohibited. However, Nexstar has been able to get around those rules and controls three of the five television stations in the market.

The Times story was revealing in detailing how Nexstar was breaking the rules in spite of an FCC attempt to enforce them. However, it was the last paragraph of the story that was the most revealing to me; it read: "The strategy does not promote competition, but it is convenient. 'They will group the stations together at hugely discounted rates,' said Craig Draper, president of the DesignWorks Groups, a Wichita Falls ad agency. 'It's a lot easier from my standpoint, where I don't have to have three meetings."

That last paragraph is a nice summary, in my opinion, of what's wrong with both media concentration and advertising agencies. There are five TV stations in Wichita Falls, and an illegal combination of three of them affords them to give "hugely discounted rates," which, of course, gives them a huge unfair competitive advantage over the other two stations and makes it hard for the others to make a living. Second, what are Nexstar's motives. Isn't the whole idea of monopoly power to be able to control the market and charge higher rates? Let's see, Nexstar's thinking might go something like this, "We'll own three TV stations, discount their rates to put the other two out of business, then we'll buy them, own all five stations, and give even bigger discounts." I don't think so. Predatory pricing to put the other stations out of business, yes. Continuing to lower rates when they have a monopoly, I don't think so.

When two competing newspapers in a market enter into a joint operating agreement , like what happend in Detroit in the 1980s, do the two combined papers lower their rates? Of course not. The day the JOA was approved, both papers doubled their rates. This is what advertisers can eventually expect in Wichita Falls. Monopoly pricing is inevitable.

But with broadcast television audiences declining and television stations and networks trying to raise their rates to make budgets, that means that local advertisers will pay higher CPMs (cost-per-points,or CPP, in local TV) for the emperor's invisible clothes.

Do advertising agencies care? Agencies, who are supposed to have the best interests of their clients at heart, should welcome lower rates because it saves their clients money. But what was the reaction by the agency in Wichita Falls? That the near-monopoly was more convenient so the agency head could have one instead of three meetings. Money didn't matter, his convenience did. He probably would like rates to go up, then he could spend more money more conveniently and make more in commissions more easily.

Clients of DesignWorks Groups should fire the agency for caring about convenience above them, and the FCC should break up the three-station ownership in Wichita Falls.

Posted by Charles Warner at 10:13 AM | Comments (0) | Print |

Friday, November 21, 2003.

Friday, November 21, 2003. Unconventional
Television Week had a story a couple of weeks ago about Sean Cunningham, president of the the Cabletelevision Advertising Bureau (CAB), who announced that he was cancelling the organization's annual national convention this year and was going to invest the money in "some heavy duty number crunching instead" in order to accelerate the the flow of advertising dollars from broadcast television to cable.

In the weeks following the CAB's startling announcement, cancelling partying for research, the press was full of stories about the decline of boradcast television network audiences, especially men 18-34. When Nielsen first reported these declines, the networks were in denial. "There's something wrong with Nielsen," David Poltrack, the head of research at the CBS Televsion Network and dean of the network research heads, cried in complete denial, like an NFL player yelling at a referee about a call that he was out of bounds. Well, the instant replay is in and it shows Nielsen's early call was right--the audience for the broadcast TV networks is decling faster than ever.

The Jack Myers Report headline today was "Network Scatter Concerns Spreading to First Quarter," and the story detailed how the scatter market was looking a little stronger going into the Christmas buying searson after "...ratings erosion, which has left networks short of their budget goals." And Jack goes on to report, "The four large broadcast networks are reportedly experiencing fourth quarter (calendar)budget shortfalls ranging from $10 million to $40 million. NBC has been impacted by a reported $90 million in fourth quarter options (concellations) taken by advertisers." And, "...but NBC has experienced 12 percent ratings declines with significant erosions on their most valuable night, Thursday. Audience deficiency units reduce available inventory for sale, placing increased pressure on network sales departments to increase costs-per-thousands."

The Wall Street Journal had a story on the front page today with the headline "As Technology Scatters Viewers, Networks Go Looking for Them: With Its Ad Model at Risk, Industry Turns to DVDs, Video on Demand , Games." And the subhead, "The Trouble With 'Friends.'"

So it looks like the broadcast network's arguing with the referee were just whining, as they now admit their audiences are going away, despite their loud protestations. Why else would they be giving makegoods and trying other methods to increase their audiences like offering DVDs of their hit shows?

The CAB is making a smart strategic move to kick the networks while they're down and investing money in research to show agencies, and more importantly clients (because agencies have a vested interest in network television), that the emperor, in fact, has no clothes, and that a lot of money spent in broadcast television network advertising is wasted.

And what are the networks doing in response, as Jack Myers reports, they are raising their CPMs in order to make their quarterly budgets. Now, how smart is that?

Posted by Charles Warner at 9:09 AM | Comments (0) | Print |

November 21, 2003

Friday, November 21, 2003. Will

Friday, November 21, 2003. Will Keshawn Be a Secret Weapon Against Deion
The New York Times reported today that: "Network Offers Spot in Studio: Keyshawn Johnson, Tampa Bay's unhappy and deactivated wide receiver, will appear on Fox's National Football League studio program on Sunday, and could be a contributor through the rest of the season. 'We're starting with this week and we'll see where it goes from here,' said Scot Anderson, producer of 'Fox NFL Sunday.' He added: 'I'm happy with the four guys we have, but I'd like to see how things play out with Keyshawn. It can't hurt as long as we utilize him correctly.'"

I can hear that last sentence echoing in the halls of ESPN after they hired Rush Limbaugh for its NFL show and in the halls of CBS after it hired Deion Sanders for its NFL studio show. Notice I didn't call it a program; I called it a show. It's not sports programming, it's show business. I suppose it's good show business to fight fire with fire, stupidity with stupidity, like the movie studios do. "You blow up ten cas and kill twenty people with body parts flying all over, we'll blow up twenty cars and kill a hundred people with body parts flying all over," I can hear some studio exec saying.

Fox began by pairing Terry Bradshaw with James Brown on their NFL show. Brown is a smart guy, Bardshaw is a self-absorbed egomaniac who wants to put on a show and be the center of attention, and the more people Fox adds to the show, the more he clowns to get attention. It's about him.

So CBS counterpunches with a self-absorbed egomaniac, Deion, who says stupid outrageous things to call attention to himself. It's not about football; it's about him.

Does Fox think Keyshawn will be any different from the way he acted when he was with the Jets and the Buccaneers, teams who had to get rid of him because he was such a destructive, selfish force on the team. It wasn't about the team, it was always about Keyshawn.

It's no longer about football, it's about who can put on the most outrageous show, be the most self-absorbed. I can't wait to hear what Fox says when it, too, has to get rid of Keyshawn. Do you think Fxx will remember the line, "It can't hurt as long as we utilize him correctly." To that all I can do is quote John Wayne in the "Searchers:" "That'll be the day."

Posted by Charles Warner at 9:50 PM | Comments (0) | Print |

November 14, 2003

Friday, November 14, 2003.

Friday, November 14, 2003. Cheating
The big sports story today was that the Major League Baseball players had surpassed the 5 percent threshold for drug testing this past year, which means that next year there will be more testing for banned substances--primarily steroids. The sense is that the public wants drug testing and Major League Baseball wants drug testing, but the players don't. Why? Because many (well, at least over 5 percent of them) have been cheating--bulking up on steroids so they could smash crowd-pleasing home runs.

But if home runs by chemically enhanced hulks are what fans pay to go see, and MLB wants more fans paying to see games, why are these two groups in favor of banning performance enhancing steroids? I may be naive, but I think it's because Americans have a basic sense of fairness. Especially in baseball where the statistics of historic stars are revered.

I believe that fans think it's OK for Roger Maris to hit one more home run than Babe Ruth in one season. Maris didn't look bulked up and he had a swing as smooth as honey (and Mantle hitting behind him). That it's OK for Hank Aaron to hit more total career home runs than the Babe. Aaron certainly didn't look bulked up (slightly paunchy when he hit #719, but not doped- up bulky) and he had wrists faster than a Pentium 4 computer chip. Mark McQuire went from big to enormous in his baseball career and admitted that he took a performance enhancing substance, although not a banned steriod. Sammy Sosa is at least four shirt sizes bigger than he was when he broke into baseball. And Barry Bonds...well. A great hitter, yes, but look at his size now compared to when he broke in.

It took McQuire 37 years to shatter Maris's record of 61 home runs by 9. It took Bonds only three more years to break McGuire's record of 70 home runs by 3. What happened in those 40 years to improve home-run hitting performance so dramatically? You don't have to be ESPN's Peter Gammons to figure it out. Was it steroids? Well, maybe. But more than dope, it was big money and big (really big) greed.

As televised baseball grew in popularity as an advertising vehicle to reach men, especially young men, beer marketers and others bid up television rights and, eventually, cable rights. Escalating TV broadcast rights fees meant that teams had more money to pay players, and player's salaries escalated. MLB players who could throw a 100-mile-an-hour fastball for strikes or who could smack 50 home runs a year could make enough to live like a Rockefeller, Whitney, or Vanderbilt. Although, the Rockefellers had more sense and decorum than to let their progeny live like noveau-riche baseball players, rock stars, or Internet IPO executives.

Wherever there is big, easy money, greed is not far behind. Doping up doesn't help a pitcher much--pitching is mostly brains and inherent talent--you can either throw hard or throw a curve ball or you can't. Hitting home runs takes strength, and dope can help, so it's the home-run hitters who you see bulking up. The more home runs, the more money, even if you have to cheat a little to get it. And with home-run records comes glory. Add glory on top of money and you have a deadly combination that incites maximum greed.

But when Bobby Bonds beats his Godfather Willie Mays's career home run record will his glory be hollow? Can he face the naturally talented, non-bulked up Willie?

Any business that holds the promise of huge piles of money enflames Midas-like greed. Enron, WorldCom, Tyco, Wall Street investment bankers, and, now mutual fund managers, all were blinded by greed. They wanted to live better than the Rockefellers, Whitneys, or Vanderbilts without inheriting money or working many years for it. The motto of these greedy people (athletes, movie stars, corporate executives, politicans, and Wall Streeters) is, "Greed now!"

But the American public is getting fed up with the greed and with not playing fair. It's OK to break sports records, make a lot of money, gain glory, and have power, but do it the old fashioned way--play the game fairly and work for it. I think public opinion is turning against the overly greedy who cheat to beat the competition. The folks will want steroids banned, they'll want corporate and Wall Street cheaters jailed, and power-greedy politicians voted out.

But there is another form of greed that I believe is not being noticed enough...yet. And that's media greed. Media greed comes in a several insidious forms: (1) Overcommercialization, (2) pandering to vocal fringe groups, right-wing conservatives, poor taste, and puerile and prurient interests, (3) embedding commercial messages, and (4) putting shareholders' interests above the public's interest.

Overcommercialization comes in the form of clutter--the increase of commercials on radio and television. There are not only more commercials in terms of minutes of commercials, but more units, sometimes up to 17 units (including promotions) in a single commercial pod on TV. The clutter in radio is expanding as it is on many cable channels. The clutter is driving people away -- to TiVo, to the Internet, to PBS and NPR, and, believe it or not, to books. Plus, the people the clutter is driving away are bright and have disposable income. Broadcast television is now left with only the very young, the very old, and the very poor watching (except for a few big events and during a disaster or murder trial--a great place for commercials, next to death and destruction, right?).

Pandering drives away bright people with money, too. To say that most TV is in bad taste is an oxymoron, and there is little in commerical radio that keeps you awake that is listenable.

I believe that these two trends (overcommercialization and pandering), impelled by greed, will eventually cause a diaspora of upscale consumers to other media, primarily to newspapers, magazines, and the Internet.

It's also greed that is propelling another trend--embedding. I'm using the term embedding to cover a host of sins. On October 22, in the Wall Street Journal,Suzanne Vranica and Julia Angwin in their "Advertising" column defined it well. They wrote: "...a growing list of marketers ...are expressing dissatisfaction with traditional TV advertising. Struggling with audience fragmentation, increasing clutter, and the proliferation of such devices as TiVo, marketers are eager to have their messages embedded into the entertainment content...Frustrated marketers are searching for sponsorship agreements, product placement, and elaborate tie-ins with TV programs. The demand is so strong that some agencies...have launched divisions dedicated to drumming up entertainment-related promotions. And the networks are listening."

But the writers go on to say that, "Some viewers are protesting. 'Embedded advertising is taking over television,' says Gary Ruskin of Commerical Alert, a nonprofit group founded by consumer activist Ralph Nader. 'It's inherently deceptive.' The consumer watchdog group has asked federal agencies to investigate current product-placement practices on TV."

But advertisers and their agencies are fighting back. A November 13 Ad Age story titled "Advertisers Attack Nader Group's Ad Demands" and the sub-head, "Call the Labeling of Product Placement on TV 'Ludicrous." And here's the lead graph: "Advertising groups are calling a consumer advocates requests for better disclosure of product placement in TV shows 'ludicrous' and 'radical' and warn that the demands would make the programming 'virtually unwatchable.'" That last phrase should have read "would make the programming even more unwatchable."

TV programming is unwatchable now and is losing viewers in droves. As audiences become smaller, program prices are rising. So there is pressure for more profit, thus, more commericals and embedded advertising--greed again.

And it's happening in radio, too. While I listened to the Yankee games this last summer, I got sick of hearing, "That was the 15th out. A call to GEICO will save you 15% on car insurance," or "this call to the bullpen is brought to you by Cingular. A 15 -minute call....etc." or "Hideki Matsui's at bat is brought to Benihana." Next season they'll probably have "Palmiero's hit was brought to you by Viagra" and "Garciapara's batting glove adjustment brought to you by Prell shampoo, the shampoo his wife, Mia Hamm uses." It's gotten out of hand and it will get worse.

This third trend (embedding) could hurt magazines and the Internet if they are not careful. There is a fine line between contextual placement and deceptive embedding, but I'm not sure where the line is. And that's why I support the Nader group's effort to bring the dialogue out in the open and to speak for us poor suckers, the listeners and viewers. Nader and his group are often too strident and radical in suggesting government regulation of advertising, but at least they are trying to speak for consumers and raise the public's consciousness of the issue of overcommercialization. I hope they are successful in slowing down or even stopping the trend.

I won't go into media pandering, because anyone who isn't aware of it, deserves to be pandered to.

Finally, greed drives media companies to make profits (and often unconscionably high profits) for shareholders (and themselves through stock grants and stock options) and not care about serving the public interest. For example, all of the CBS-owned television stations and most of its owned radio stations at one time had company-mandated community affairs directors and editorial directors. Few CBS TV and, especially, Infinity radio stations, if any, do so now. Profit pressure and greed have driven television and radio stations to not playing fair with the publicly owned airwaves they are licensed to use. We all ought to say, "I'm mad as hell and I'm not going to take it anymore!" Let your stations know you don't like overcommercialization and the greed that causes it. Show them that there are consequences to their behavior and turn to non-commerical TV or radio.

Or read a good blog.

Posted by Charles Warner at 10:44 PM | Comments (0) | Print |

November 13, 2003

Thursday, November 13, 2003. Viral

Thursday, November 13, 2003. Viral Marketing
When I was a boy growing up in Battle Creek, Michigan, I used to listen to "The Shadow," "The Green Hornet," and "Captain Midnight" on the radio every afternoon. Living in Battle Creek was magical, because Kellog was there, and it sponsored a lot of those wonderful, addictive adverture serials (not cereals). A friend of my dad's worked at Kellog in the promotion department, and the friend (Jim McQuiston) would give us cool promotional items like decoder rings and lie detectors that you normally had to send in box tops to get. I thought it was the ultimate in cool (actually, we said "neat" instead of "cool" back then) to be able to get a decoder ring for no box tops.

So, I shook my head in amused amazement when I read in the November 10, issue of Advertising Age a story with the headline "Mazda goes to viral to tout new models." Here's what Jean Halliday wrote: "Mazda is aiming to generate buzz for upcoming models with online viral videos...studying concepts for online-only videos for the four- and five-door versions of the 2004 Mazda 3, hoping consumers will find the films entertaining enough to pass on to friends."

Wow. When I was a kid Kellog had to pay for advertising (it actually sponsored an entire 15-minute program, which its advertising agency bought from the radio network--the whole 15 minutes--and the agency usually produced the program). Then came television and there were no more sponsored programs, but individual commercials; first 60 seconds long, then 30 seconds, now 15 seconds. Then came TiVo and you could record and then skip the ads. That was a good idea, but of course you wouldn't get to know about any decoder rings (unless you lived in Battle Creek). Then came the Internet where you could click on the ads and buy stuff.

But you could skip Internet ads, too, so they stopped working very well for selling stuff. But the big companies found out something really cool, that they could save a lot of money by disintermediating. Disintermediating means that companies can eliminate a lot of sales, service, and middleman jobs by getting consumers to do the paperwork and checking-out themselves online. For example, airlines could cut out travel agents and a cut a lot of check-in jobs by letting consumers book their own tickets online, select a seat, and print out a boarding pass.

Viral marketing means that advertisers can create an intriguing message and not pay for distributing it, but have consumers distribute it for them. Now that's really cool. Mazda's "Venus Flytrap" video is kinda funny--check it out.

If you checked it out, I just became a viral marketer. I passed on Mazda's message and it cost Mazda a tiny amount for distribution. We're viral. We disintermediated television networks, cable networks, and all of the concomitant sales and service people. We disintermediated advertising agency media buyers and traffic departments. What incredible power we have to put all those people out of work, thanks to the Internet. Marketing is truly changing by putting advertising and marketing in the hands of consumers. It's almost as cool as a decoder ring.

In the current (November 2003) issue of the Harvard Business Review there's an enlightening article titled "The Customer Has Escaped," which is about how "traditional go-to-market strategies don't work because they assume customers will stay in the channels that were designed for them. Time for a fresh look at how shoppers really behave." If you watched the Mazda R8 video via the link I gave you, then check out the HBR article to find out why you did it.

Posted by Charles Warner at 5:11 PM | Comments (0) | Print |

November 12, 2003

Wednesday, November 12, 2003.

Wednesday, November 12, 2003. Tuned Out
My Tuesday blog was, too long. I'd better be careful, or the two or three people who read it won't come back. Even my wife won't read long blogs.

Deion Sanders wants to be the Atlanta Falcon's coach, because he claims he can do a better job the current coach, the venerable Dan Reeves, who has a poor record of 2-7 in the NFL so far this year. What I'm angry about is not that Deion made such a stupid statement--if anyone has listened to Deion over the years, they know he's stupid, self-absorbed, and outrageous. What got me is that Dan Reeves, by all accounts a nice gentleman and a good coach, responded. Reeves said in an interview that, "Deion certainly doesn't understand what coaching is all about. I'll guarantee you Deion Sanders cannot walk in and start coaching the Atlanta Falcons anywhere close to the way I can."

Why did you dignify that smug jerk with a response, Dan? The only reason Deion Sanders made that statement is call attention to himself. Everyone in the world, even my beautiful 7-month old grandaughter knows that you can coach better than Deion. Why dignify his bluster by taking him seriously and responding? Responding to such a stupid remark might be the best indication that you're not a very smart coach.

What's going on here? Why did ESPN hire that hate-monger Rush Limbaugh to comment on NFL football? ESPN should have known he was going to say something that would repulse any thinking person. Why did CBS hire Deion Sanders as a football analyst? Didn't the show producers see "Forrest Gump"? "Stupid is as stupid does." Forrest wouldn't have put Deion on the air, wouldn't have given him a national forum to call attention to himself. Now CBS can't fire Deion without him screaming "racism!"

Television is losing viewers, especially 18-34 male viewers, and the networks are desperate to put anything controversial, anything exciting, anything that will keep viewers coming back on the air. Did it ever occur to these people to hire someone who had something intelligent to say?

Shame on you, Dan, for responding, shame on CBS for hiring Deion, shame on the sports media for playing up the story, and shame on viewers for watching the CBS NFL football studio show (at least ESPN fired Rush). Bring back Phyllis George, she's smarter than Deion Sanders and can probably hit a major curve ball as well, certainly no worse.

Posted by Charles Warner at 1:20 AM | Comments (0) | Print |

November 11, 2003

Tuesday, November 11, 2003. Turned

Tuesday, November 11, 2003. Turned On
Well, the ultimate that can happen to a blogger has happened. Someone who I admire greatly read my blog! In Sunday's blog about how I hated Michael Kay's on-air self absorption and non-sports silliness, I mentioned by favorite radio host, Jonathan Schwartz. I call him a host because he is not a self-absorbed, egomaniacal star, or a personality who lives by shocking and pushing the envelope of good taste, he is a host who gently and intelligently invites listeners to share some popular musical experiences with him, like a good, well-bred, courteous host should. A friend of mine, who is a brilliant writer and with whom I share the experience of the AOL-Time Warner train wreck, knows Jonathan, sent him a link to my blog, and Jonathan read my blog. Wow! Jonathan Schwartz read my blog!

I replied to my friend that I never left Jonathan--I listen every weekend I'm in town. Listening to Jonathan on WNYC, 99.3 FM, is one of the joys of living in NY (by the way his weekend programs are also available on XM Satellite Radio -- lucky XM subscribers). On this past Saturday's program he did a series of Sinatra recordings and he had three of the most perfect segues I've heard (and I was in the radio business for 15 years). Segueing from record to record is a lost art in today's commercial-loaded radio. It was like looking at a gorgeous scrimshaw--no one does it anymore.

The segues were between Sinatra records, so that gives you a clue as to what an old fogey I am--enjoying records by Old Blue Eyes or The Chairman of the Board, as William B. Williams used to call him. Dating myself again. Yes, I used to listen to WNEW radio when it ruled in the New York airways in the late 50s and early 60s. It was great radio. And I listened to Jonathan Schwartz and Scott Muni when they were with WNEW-FM. I can even give you the line-up of DJs on Rick Sklar's WABC (I hope you sung the jingle in your head like I do when you read the call letters). Where have all the great DJs gone? (Cousin Brucie staggers on on WCBS-FM, but not with the same panache, or hardly with the same youthful enthusiasm.) Have radio personalities morphed into Don Imus, Howard Stern, Rush Limbaugh, and Michael Kay?

Another writer I admire is Jack Myers, who writes the daily Jack Myers Report, which is read, I think, by just about everyone in the media in New York. Jack has some terrific insights into the media business, especially network television and cable television, and the economics of the media. He's also good about spotting trends early. But because he sells his newsletter and research to corporate media clients, he really can't afford to diss them, and he occasionally runs some pretty obvious puff pieces about his biggest clients. But I forgive Jack, because everyone has to make a living (except me; I'm retired so I can say what I think) and because at times he's brilliant.

On Monday, November 10, the Jack Myers Report was particularly good, in my view, and coincidences of coincidences, he wrote about radio and mentioned , of course, Jonathan Schwartz, as well as William B. Williams, WNEW, and WABC. Jack wrote an "Open Letter to the Radio Industry & Seven Strategies for Rebuilding the Industry." It took some courage to take some of his clients in the radio industry to task, and I give him a lot of credit for that. His ideas were generally on target, I think. But, naturally, being the curmudgeon blogger than I am and the radio industry veteran that I am (and I am writing this on Veteran's Day--I'm also a Veteran of the Korean War and went to Columbia on the GI Bill), I can't help but comment on Jack's prescription for the radio industry's health.

(I'm probably unduly proud of my seque from writing about Jonathan Schwartz to discussing what's wrong with the radio industry, but I thought it was cool.)

First, Jack starts his Open Letter by quoting an interview David Letterman did with Howard Stern, "radio's biggest star" as Jack called him. I wish Jack hadn't used Stern as his expert spokesperson for what's wrong with the radio industry, because part of what's wrong is egomaniacal trashmouths like Stern. Because it is blue, crude, anti-intellectual, boors like Stern, Imus, Limbaugh, and Kaye who are driving well-educated, higher-income people to NPR, to public radio where intelligent thoughtful hosts like Jonathan Schwartz and Terry Gross entertain and enlighten us. To say nothing about "Morning Edition," "All Things Considered," and Scott Simon and Lee Ann Hanson's "Weekend Edition."

In many cities "Morning Edition" is in the top three in the ratings for AM drive programs. Non-commercial stations do not appear in the regular Arbitron rating reports, but specially ordered ratings reports show NPR has huge audiences. Just like commercial network and local broadcast television has become eye candy for people with few brains and less money, commercial radio is becoming ear candy for the same type of people.

Near the beginning of his Open Letter, Myers writes, "At both Infinity and Clear Channel, presidents John Sykes and John Hogan are trying to innovate and develop new formats and programming models. But the realities of the business today make their tasks near impossible. The industry is desperately in need of a new playing field. It's too late to try to simply play the game differently. The game is broken. Radio as a medium is on a downward slope. It's time for a completely new game to be developed, tested, impletmented. Here are some new rules for rebuilding the radio business." Jack Myers's seven rules, or strategies, are: (1) Forget Washington, (2) Institutionalize innovation, (3) Invest in listener research studies focused on accountability and return-on-investment, (4) Run your business for the audience, not Wall Street, (5) Radio needs to rethink its position on clutter, (6) Brands, Brands, Brands: Where are the radio brands? (7) Be interactive and think nationally. Jack ended his Open Letter with this paragraph: " There are no short-term solutions to the problems facing the radio industry. But until innovation, creativity, and brand development decome instiutionalized with the organizations of the major radio companies, real solutions will be shot down by overwhelming economic and regulatory realities long before they bear fruit. It's time to bring some free-form management into the radio business with a commitment to long-term support." Well said, Jack--at least at the end.

I agree with some of Jack's points. Those I agree with are: (2) Institutionalize innovation. Jack writes about how television invests hundreds of millions in developing scripts and pilots," but radio invests nothing," and should make a major investment in developing new product. That I agree with. He also suggests that "advertisers should be brought into the development process." I don't agree. Instead of Jonathan Schwartz talking about his father's (brilliant song writer Arthur Schwartz) and his own friendship (as a boy) with Sinatra, we'd hear Howard Stern talking about his memories about his friendship with August Busch and how the brewing scion brewed better beer. Or the Chairman of the Board would be Jeff Inmelt (of GE), not Sinatra.

(3) Invest in new listener research. I agree with this. The Cable Television Advertising Bureau (CAB) cancelled its convention this year in order to spend its money on research. It wants to accelerate the move of ad dollars from network and local broadcast television to cable. Good idea. The Radio Advertising Bureau (RAB) should do the same thing. Its conventions have become meaningless, self-glorifying, back-patting sessions that genulfect to the major station groups. Good, solid research would be a much better investment.

(4) Run your business for the audience and not Wall Street. What a novel idea. Do you think Clear Channel and Infinity will ever think of their listeners before their investors? In her wonderful book, There Must Be a Pony in Here Somewhere? about the disastrous AOL Time Warner merger, Kara Swisher writes about the greed and arrogance of the AOL people at the time of the merger. Everything AOL did was based on getting the stock price up, every decision was based on how it would affect the stock price, and, of course, the zillions of stock options that top executives had. Do you think Mel Karmazin and his radio henchmen care about listeners or about the people who work them. It's all about the stock price. Every decision is made to impress Wall Street. Soon after Karmazin announced to Wall Street that Infinity's radio profits were down and were not quite going to make its targets, his Infinity henchmen ruthlessly, cruelly, boorishly fired several people I know personally. One, George Nicholaw, the general manager of KNX Newsradio in Los Angeles, who had led the station brilliantly for 48 years, won innumerable awards for editorials and community service, made the station the number-one news station in Los Angeles, and had delivered about $800,000 in profits to CBS and Infinity over the years, was dumped unceremoniously and brutally. He didn't deserve that. And the radio audience doesn't deserve the obnoxious, cookie-cutter, over-commercialized programming Infinity is foisting on it. Care about the listeners? Forget it. Radio is dying (or at least badly wounded) because people are going to the Internet or to commercial-free satellite-delivered radio, like Sirius and XM--XM where Jonathan Schwartz's show appears.

(5) Radio needs to rethink its position on clutter. Right on, Jack. Profit pressure from Wall Street (and greedy executives) have forced radio stations to increase clutter enormously. Young radio listeners turned to FM in the late 60s and 70s because it had less commercials than AM radio. They hated commercials. FM made a living for years with a "less commercials" environment. But like my father used to say about me, radio can resist anything but temptation. FM radio began to inch up commerical loads. FM radio tried to trick listeners (still do) with "50 minutes of music every hour," or "fewer commercial interruptions," or by bunching seven or eight, or more units into a single pod, then selling "long music sweeps" in between. Many AM stations, especially talk and all-news stations, run a full load of 18 minutes of commercials in an hour, which, in this era of 30-second spots, means a possibility of 36 commercial units in an hour. With up to a third of an hour devoted to commercials, many of which are screamed at you ("I'm tearing up this dollar bill!", "Raceway Speedway!") or that push products that I think have to be illegal or, at least, immoral ("better and faster acting than Viagra!"), it's no wonder people are being driven to the Internet, their iPods, XM, Sirius, or public radio. Commercials today sound like audio spam, and for the same type of products. Many listeners think a lot of radio commercials are in as bad taste as Holocaust survivors thought the song "Springtime for Hitler and Germany" in the Producers was, or Howard Stern is. (As an aside, some young people who saw Howard Stern's movie "Private Parts" asked me if I was the general manager of WNBC who fired Howard. My reply was, "No, one of the few regrets I have about my radio career is that I didn't have the chance to fire Stern. But I have respect and a little envy for the guy who did.") Radio not only needs to rethink clutter, but also to rethink what advertising it lets on the air. I'm not suggesting that a station needs to be as stuffy and boring as WQXR, but at least a station that wants to influence people with brains and money should be able to advise its advertisers which type of appeals work best. One thing that radio commercials could do would be to drive people to an advertiser's Web site to purchase products or learn more about them. Integrating radio with the Internet would be the smart, convergent thing to do.

(6) Brands, Brands, Brands: Where are the radio brands? Jack recalls some of the great radio names of the past--Jonathan Schwartz, William B. Williams, WNEW-AM, WMCA, and WABC and suggests that Infinity and other big companies develop radio brands from their current label of brands, like MTV, VH1, CNN, and ESPN. Or why not Discovery Radio, he asks. The only one of these brands that seems to be making it nationally is ESPN Radio, with the exceptions I mentioned in my November 9 blog (I have no doubt that the national Tony Kornhouser show would be better than the local 1050 ESPN Radio Michael Kaye show). Radio is a unique medium and must develop unique brands; brands that do not require video for their success. The new model for successful radio is not Disney, ESPN, or MTV, it is NPR. Radio will only improve and bring back listeners with brains and money when it tries to enlighten people rather than debase, degrade, and interupt them.

The biggest problems with radio that Jack Myers didn't point out (he couldn't and stay in business if he did) are not in the seven areas he wrote about, the biggest problems are firmly seated where the biggest problems of all industries are, in top management. With top management that is in the thrall of Wall Street and their own greed. Things won't change unitl top radio management changes. Maybe Bill Gates could buy all the radio stations in the country and give them back to the people, and then tell the station's appointed managers that the purpose of the stations was to serve the public good, convenience, and necessity. What a concept.

Posted by Charles Warner at 7:17 PM | Comments (0) | Print |

November 9, 2003

Sunday, November 9, 2003.

Sunday, November 9, 2003. Turned Off
There was an item in Personal Business in the Sunday, November 9, New York Times that reported a study of 3,634 Web logs, "known as blogs" (the Times is too stuffy just to call them blogs, I guess), that indicated that "two thirds of them had not been updated for at least two months, and a quarter of them had not been updated since their creation."

The first thing I did after reading this item was to run to my computer to post a blog, because I don't want to be outdated. But what does it matter? I suspect that my blog has a tiny readership--myself, my wife only when I prod her, a couple of students in my two online classes, and two or three loyal friends. So with such a low readership, why do I care, why do I rush to update my blog if it has such a tiny audience if any at all? Someone asked me if there was a way to count the traffic to my blog. I told them that I can't count hits on Blogger.com's free service, and even if I could, I don't think I'd look, because it would be too big a blow to my ego. So why blog? Because it helps me crystallize my thoughts and ideas. It is good writing practice, and it forces me to keep up with current events and trends, especially in the media and management and sales related topics; otherwise I might get lazy. Also, I believe I should update my opinions because they change, and I want to let my one or two readers know that I've changed.

One opinion that I have changed is that 1050 ESPN Radio in New York is my favorite radio station, and that Michael Kay, the station's 10:00 am -1:00 p.m. host is a good sports talk show host. I hate to have to say it, but I've stopped listening. In the spring and summer of this year, when I first started listening to ESPN, it was a refreshing difference from the rude, interruptive, angry, pushy talk-show hosts of WFAN-AM, 660 (it used ot be WNBC). I had never liked the crude and self-absorbed Don Imus in the morning. I felt ESPN 1050 was doing it right by having sports talk in the morning and I loved Michael Kay's show. He is smart and extremely knowledgeable about sports, especially Yankee baseball. He was the Yankee's radio-play-by two years ago and does Yankee games on TV on the YES network. He was opinionated, which, of course is what you want on a sports show, but I thought his opinions were based on an in-depth understanding of the sports business. He was refreshingly polite to callers, who seemed generally more intelligent than those on WFAN.

This fall WFAN and, especially Michael Kay changed dramatically. I think success went to the station's and Kay's collective heads. In September I noticed Kay talking longer and longer about personal inside stuff instead of sports. He would take off kidding his producer or his sidekick who did local Sports Center updates. Sometimes the kidding was silly, sometimes cruel, often in questionable taste, but it always went on too long. I didn't tune in to hear Kay kidding his producer unmercifully; I wanted sports. If I wanted tasteless kidding, I could turn into Imus in the morning. One morning in Ocober, Kay said he was angry and was going to let "the competition" have it--take off on WFAN (without using the call letters). What followed was a diatribe about how WFAN wouldn't run a commercial for the YES network with his name in it. He was very angry, virtually out of control. He said that his show was "kicking their ass" and talked about the station's huge rating increases (somewhere in the neighborhood of 70%) and his show with an 86% ratings increase. His attack was nasty, angry, and, worst of all, based on a perceived personal slight. It was about him, his feelings, his ego. His ego. His ego. He ranted about the slight to his enormous ego for what seemed like 40 minutes--incessesantly, interminably. I wanted to hear about the baseball playoffs, not him.

He talks about his "show;" he can't say enough that it is "The Michael Kay Show." Like an addict, he can't get enough of hearing his name. He likes hearing it sung best, and goes on and on about the show's introductory song and how it is rewritten from time to time. I suppose it's rewritten so it can repeat his name over and over and over. His addiction to hearing his name is overwhelming. On two recent programs he didn't get around to talking about sports for over an hour. He talks about inside stuff, not sports; he belittles his producer (inferring that he's gay sometimes). I don't want to hear this silly crap, I want sports. He probably thinks it's entertainment, but it's irrelavant, silly crap.

The station seems to have lost its discipline. It ran a promo about a contest it was running, and a female voice talking about the contest, said, "Doesn't that make your nipples hard!" I'm not a prude, but that's just in bad taste and it's not funny. It seems as though no one has any professional discipline, especially Kay. He's a self-absorbed egomaniac that thinks he's more important than the station, that ESPN radio's and his rating increases are due to his show, to his personality. Well, I have news for Mr. Kay; by thumping his chest and talking about himself instead of sports, and by hanging up and being nasty to callers, he is sinking to the rude, crude level of WFAN. His arrogance and self-absorption is a transformation of his personality and 180 degrees from his original, pleasant style, which is what attracted me and, I suppose, other listeners. Well, I'm leaving and I suspect others will, too. Maybe not. But those who stay with his rude and egomaniacal, undisciplined non-sports rambling will be those who like WFAN's style and it would be unfortunate to see the station sink to the lowest common denominator of sports talk. I'm going back to Jonathan Schwartz and NPR radio, I guess, but do so sadly. It could have been so great if 1050 ESPN Radio had remained humble and had tried to do sports talk differently -- with style and class. Now it's just a bunch of undisciplined egomanical, self-absorbed stars talking too much about themselves and their on-air buddies, not sports.

Posted by Charles Warner at 6:33 PM | Comments (0) | Print |

November 3, 2003

Monday, November 3, 2003. Go

Monday, November 3, 2003. Go Web, Young Man.
In Bob Tedeschi's "E-Commerce" column in today's New York Times on page C 11, the headline reads, "New advances mean that advertisers are able to quantify the impact of their online marketing campaigns." Tedeschi writes, "Marketers have long said that they would increase their online advertising budgets if Internet sites would do what they promised to do years ago: quantify the effects of an ad campaign on sales, brand awareness and other factors like the consumer's intent to buy."

"With each passing month, online companies are increasingly able to do just that. The question is, will marketers actually respond?"

"Google is the latest Internet company to make good on the promise. A new feature allows advertisers to copy a string of software code from Google'w Web site onto pages of their own sites. When users click on the advertiser's link from Google's Web site, Google follows the user's progress. Like other companies, Google does not collect personally indentifiable information on the user."

"Advertisers can log on to Google to view graphs showing how many visitors bought an item, signed up for an e-mail message or sought other information deemed significant." And further on in the column the director of Google's marketing said, "We didn't want them to either overbid or underbid," referring to the auction process by which advertisers pay for Google's ads. The marketing director said that the new system was working because the new service had, "generally increased their bids, rather than decreased them."

In the column, Tedeschi writes that others like DoubleClick, LinkShare, and CNET Networks are offering similar services, which they believe will answer advertisers' question which Web startegies produce the most sales? This, of course is the Holy Grail of advertising measurement--what works. No more, "I know half of my advertising works, but I don't know which half."

Last week the big news was that the television networks were complaining bitterly that Nielsen's rating data was obviously flawed, an aberration, after the Nielsen ratings indicated that men aged 18-34 were watching 8 to 12 percent less prime-time TV than they did last year. Even worse, the men 18-24 demo was off about 20 percent. The networks were furious and claimed "bad data" as they faced the possibility of giving lots of make goods on rating guarantees. This news gave advertisers another reason to be unhappy with network television, which they are beginning to question after a long love affair. The ratings drop news will give advertisers another reason to switch money to other media, especially to media that can show them a direct relationship between advertising and results--Interactive, for example.

Well, the networks might be right, and the men 18-34 ratings decline might have been due to the small Nielsen sample or another error. On the other hand, what if the decline is real? Even though it is inconceivable to the networks that young men are abandoning their wonderful programs like"The Next Joe Millionaire" and the highly promoted "Skin," it really is conceivable if you know what these young men might be doing. They are going to the Internet.

They are download songs on to their new iPods that can now hold 10,000 songs, and it takes a long time to download 10,000 songs. They are playing videogames. Kevin Delaney in his "Portals" column in the Wall Street Journal on November 3 reported that the "US videogame industry is larger than Hollywood's domestic box-office receipts and is closing in on music sales." Network executives don't know that. They think everyone must want to watch their wonderful programs. But why should young men watch those silly programs when they can view porn, play games, download music, play Fantasy Football, search for their friends on Google, get in a chat room with chicks (?), or get into the action on eBay.

All of those sites carry advertising, often compelling, contextual advertising, that a young user can interact with, get involved with, and, now, the advertising can be tracked so that advertisers know what works with these young men. The teeter totter is tipping a little more--lower goes the TV side and up goes the Interactive side. If you are in that 18-34 demographic and are planning on getting a job or have a job in sales, remember how you are spending your time now, and get an Interactive sales job.

Posted by Charles Warner at 11:39 PM | Comments (0) | Print |

Monday, November 3, 2003. Hat's

Monday, November 3, 2003. Hat's Off to Joe
My hat's off to Joe Torre. And I'm tipping my hat for everyone who has a meddling, egomaniacal, narcissistic boss. Way to go, Joe! On Saturday, November 1, the New York newspapers were playing up the story about Joe Torre, the Yankees manager, telling his boss, team owner George Steinbrenner, to butt out, or shut up, depending on what paper you read.

Most of us have or have had egomaniacal bosses, maybe not as bad a Steinbrenner, who we'd would have loved to tell to stop meddling the way Torre did. Of course, most of us don't have firm three-year, $16.5 million contracts, either, which is why Joe can get away with it. So the question is, how do you deal with an awful, autocratic boss if you don't have a firm contract and want to keep your job?

Sports, entertainment, and the media tend to attract people who crave the spotlight--narcissists and egomaniacs who seek power and glamour. Because the media are so powerful, they attract people who crave power and money, and when they get in positions of power, they relish using it to tell other people what to do. How do you deal with this type of boss?

The first step is understanding them. I recommend an article and a book by Michael Maccoby. The article is "Narcissistic Leaders: The Incredible Pros and Inevitable Cons" in the January-February 2000 issue of the Harvard Business Review and can be ordered on the HBR Web site. The book is The Productive Narcissist: The Promise and Peril of Visionary Leadership. Another book I really like is Dealing With People You Can't Stand: How to Bring Out the Best in People at Their Worst. by Dr. Rick Brinkman and Dr. Rick Kirschner. For a shorter read, look at the paper on my Web site, "Dealing With the Problem Boss," by Walter Kiechel when he was with FORTUNE.

Here are two other relevant articles from the Harvard Business Review that you might find interesting on the subject of understanding and dealing with bosses who are power-hungry jerks: From the September 2002 issue, "A Better Way to Deliver Bad News" and from the October 2003 issue, "The Harder They Fall." The latter article has some neat psychological insights on why such powerful leaders as Kenneth Lay, Bernie Ebbers, and Dennis Kozlowski fall so hard. You can go to the HBR link in the above paragraph to order these articles.

If this blog sounds like a commercial for the Harvard Business Review, it is. I don't see how any manager in the media, or any other business, for that matter, can get by without reading it. One of the best things about the magazine is that the articles generally aren't just off-the-cuff opinions by journalists and freelance writers like many so-called management magazines are, but are articles based on solid research. Also, many of the great management and strategy books in recent years have first showed up in the HBR as summary articles before the book was published. Such was the case with the best management book ever written, What Really Works by Joyce, Nohria, and Roberston.

This is not just my opinion, but Tom Stewart, the editor of the Harvard Business Review told me over dinner several months ago that he thought the research What Really Works is based on was the best ever. So, I'll take the word of a guy who knows more about management than anyone I know.

Another book on management that I like is called Execution: The Discipline of Getting Things Done by Larry Bossidy and Ram Charran. I'm having the students in my online Media Management and Leadership courses for the University of Missouri School of Journalism and The New School University read both What Really Works and Execution this year.

I'm suggesting these articles, magazines, and books because perhaps you, and most managers, don't have an iron-clad $16.5 million contract or the clout that Joe Torre has, so you've got to be a little more subtle and diplomatic and need to learn a few new techniques. But I hope you don't work for as spoiled a baby, as narcissistic, as egomanical, and as meddling a jerk as George Steinbrenner is. Good luck.

Posted by Charles Warner at 3:26 PM | Comments (0) | Print |

Monday, November 3, 2003.

Monday, November 3, 2003. Performance-Based Pay
The headline of an October 17, 2003, New York Times story read, "Klein Assails Job Protection for Teachers." The story was by Elissa Gootman and in the second graph she wrote, "Mr. Klein denounced seniority rights, tenure, and pay scales that are blind to teachers' subject matter as 'the three pillars of non-meritocracy.'" I really liked that phrase, "the three pillars of non-meritocracy." It's better than pejorative phrases such as cliff-dwelling, dinosaur, out-moded, or non-productive that I have always applied to concepts such as seniority rights, tenure, and pay scales that are blind to qualifications or performance--three ideas that unions typically stress, as do academics in universities.

The original purpose of unions (including academic unions) was to protect workers from exploitation by greedy and unscrupulous management--a good thing. But the pendulum has swung the other way now and unions are about preserving job security regardless of performance. Unscrupulous and greedy unions (academic, unions too) and their members are exploiting organizations (New York and corporations)--a bad thing. As an academic (I hold an endowed chair at the University of Missouri School of Journalism), I have seen the negative effects of seniority rights, tenure, and non-performance-based pay scales.

In many media sales organizations, especially those which have commission pay systems, where you would think performance-based pay scales and meritocracy would reign supreme, union type seniority rights, tenure, and non-performance-based pay scales are firmly in place. Let me explain.

An axiom that few managers in media sales seem to understand is that you get the kind of sales performance you pay for. If car dealers pay salespeople a commission based on the amount of profit a dealer makes on a each car (and an inclining scale in which percentage of commissions increases as profits increase), then salespeople invariably will take the greedy route and charge clueless buyers the most they can--bad for consumers. If media sales organizations pay a commission on what salespeople sell, the revenue they generate on each order, then salespeople will sell for share--to get the highest share of an advertiser's budget on each order--which inevitably leads to lower rates.

Paying based on commissions also puts a premium on salespeople's assigned lists, which, in turn, leads to seniority rights. Usually salespeople with the most seniority have managed to hang on through several management regimes and palace revolts typical in media sales organizations and with each change in management and each time a salesperson leaves (willingly or unwillingly), the senior people add a plum account or two to their lists. By hook or by crook, their lists grow and these senior salespeople protect these lists with the same ferocity a mother bear defends her cubs. The reason lists are so important is because 80 percent of any media sales organization's revenue comes from just 20 percent of their accounts. (The Pareto principle--he had no idea how right he was.) So salespeople's income is directly related to how many of those 20 percent they can glom on to. It doesn't matter how good salespeople they are, if they have a great account list, salespeople don't have to work that hard and make a lot of money.

The other problem with big lists in a commission-based pay systems is that when salespeople get a good account list, they become dependent on those accounts for their BMWs and Rolexes, and they will do anything necessary to keep those accounts, which usually means lower rates and giving in to demands for favorable positions, added value, and special treatment. Management loses control and salespeople take the side of an agency or account against management. Management is also quite reluctant to fire or even mess with senior salespeople with heavy lists and good, long-term relationships at major agencies, and, thus, create tenure.

So, paying commission leads to seniority rights, tenure, and non-performance-based pay. It's like the New York teacher's union, only worse, because media salespeople make a lot more than teachers and don't have to work as hard. If you are interested in learning more about effective compensation systems, read my paper "Compensating Broadcast Salespeople: Some Recommendations." If you want to learn why selling for share can be a disastrous strategy, read my paper "Sell for Rate in Local Television."

Posted by Charles Warner at 12:47 PM | Comments (0) | Print |