by Daniel Anstandig

Future success can be accomplished with a new way of thinking and an adjustment to radio’s business model. The most arduous obstacle between our current status and future success is our thinking. Changing philosophies is difficult, and our industry is still clearly mired in legacy systems.

Nearly forty weeks of my year are spent visiting radio stations around the world working on digital strategies. We work on multi-platform strategies (on-air, online, mobile) and training/education of programming, promotions, and sales departments. As our team enters the walls of different radio stations around the world, we find one commonality: The most progressive and successful radio executives are clear that radio’s business model is perfectly constructed to achieve its current results. In other words, the declining results are consequent of a deteriorating business model, and they’re finding new ways to accomplish their goals.

In other words, “If the business model isn’t working, try smarter.” Look for ways to expand your business beyond the product offerings and customer base it serves today.

The international bestseller Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne has given companies around the world a framework for transforming their future. We use the book to spark conversations on business-development among our clients.

The premise of the book is a distinction between strategic “red oceans” and “blue oceans.”

Red Ocean Strategy

Most of the radio industry is working harder than ever to achieve the same results that they did five years ago. They’re operating in what would be characterized as a RED OCEAN.

“Selling 30s and 60s” is a red ocean.

Red Ocean Strategy means that you:

• Compete in existing market space
• Beat the competition
• Exploit existing demand

“If the business model isn’t working, try harder.”
The “Hit Budget, Beat Market, Grow Share” mentality fits into this archetype.

Blue Ocean Strategy means that you:

• Create uncontested market space
• Make the competition irrelevant
• Create and capture new demand

In other words, “If the business model isn’t working, try smarter.” Look for ways to expand your business beyond the product offerings and customer base it serves today.

Cirque du Soleil is an example of a company that was established with a “blue ocean strategy.” In 1984, the company was founded as a competitor to Barnum and Bailey—traditional circus operators. Their aim was to reinvent the circus business, eliminating the animal shows, star performers, aisle concession sales, and multiple show arenas that would have positioned them to compete for the same demographics and psychographics of traditional circus attendees.

Instead, they created themed performances, a refined environment, and decided to focus on blending opera and ballet with the circus format. Their shift in strategy led their version of the circus to an entirely new customer base, including executives and corporate events.

Other examples of companies who have achieved success in blue oceans include Netjets, Southwest Airlines, Curves, Home Depot, and Dyson. Their case studies are cited in Kim and Mauborgne’s book.

At McVay New Media, our “Blue Ocean Strategy” for radio looks like this:

This is the model we use to inspire our strategic plans for radio.

ELIMINATE

iPod Programming Mentality – As Rockie Thomas, Interactive Consultant at McVay New Media says, “The best way to beat an iPod is not to be one.” Create unique programming that cannot be replicated with an “iShuffle.” That means artistic integration of personalities and promotions, radio’s durable competitive advantage.

Tired Positioning – The next three sentences will save you $5000 in focus groups. We find repeatedly that no one believes positioning statements that say “#1,” “Best,” or “Most.” There are simply too many entertainment options in the world (radio, television, internet-radio, mobile audio, on-demand, iPods) that no one can gain mileage through “biggest and best” positioning. Instead, sell what makes you different and special.

REDUCE

Predictablity – Consistency is the cornerstone of good programming, but when our stations become overly predictable and tediously repetitive, we lose emotional impact with our audience.

Fear – As Einstein said, "The single most important decision any of us will ever make is whether or not to believe that the universe is friendly." Celebrate the small successes, and get the feeling of “winning” in your hallways.

Reactionism – Take a proactive and visionary outlook on radio’s future. Rather than reacting nervously to the changing world of media consumption, we can be proactive in observing trends and planning for our audience to enjoy our work beyond AM and FM.

RAISE

Active Listener Participation – Introduce new ways for the audience to interact beyond being the tenth caller. Comic Wonder (www.comicwonder.com) is an excellent example of reaching outside the request lines for audience involvement. Listeners can win prizes by participating in competitive joke telling on radio station websites. Look at 1037kissfm.com, Entercom’s Milwaukee Top 40 property, for an example of the tactic in action.

Sticky Local Content – National content feeds on your website offer little differentiation from any other website in the world. Think local. What can you do that Google, Yahoo, and NBC.com can’t accomplish in your market? Think sticky. What can you do that compels yours listeners to come back to the website again later?

In on-air programming, especially at stations targeted to P18-34, show prep can no longer be comprised of browsing other mainstream media for news. Effective programmers and personalities need to immerse themselves in the consumer world. Facebook and MySpace are no longer “cool” by the time 60 Minutes does a story on them.

We simply need to have fun as an industry again.

Accountability – Marketers want to know sequential actions and predictive behavior. The world is too technologically advanced for that expectation to be unrealistic. They want to buy in context and track behavior. They have a near endless supply of new digital inventory to choose from with all varieties of vertical networks, contextual networks, widgets, social utilities, and other modalities. Each delivers complete accountability. Radio must begin to offer accountability and exact reporting of performance related to on-air and online campaigns.

Fun - We simply need to have fun as an industry again. Every day, I wake up excited about what I do. How many people in radio can say that they wake up excited each day to go to work? The audience knows the real answer to that question. Perhaps that’s one reason that other media are gaining share. People (young or old) want to be surrounded by others who are having fun. One thing that I enjoy thoroughly about McVay New Media is that our team loves to laugh and be creative. When I visit clients with Rockie Thomas and Sean Lozensky from our new media team, clients tell us that we are animated and enthusiastic. That’s our most important goal. We believe that success follows infusion of passion.

Compatibility with Younger Audience – Last year, the three top billing radio stations were KROQ/Los Angeles ($67.6 million), KIIS/Los Angeles ($65.9 million), and WLTW/New York ($62.8 million). At KROQ, 68% of their AQH audience is under 34 years old. At KIIS, 73% of their AQH audience is under 34 years old. At WLTW, one out of five listeners in their AQH audience is under 34. Our viability in the future will depend largely on our relevance to younger media consumers. There may be no more compelling reason to strive for successful integration with digital media.

CREATE

Integrated Sponsorship Opportunities – Combine on-air and online touch-points in the campaigns you offer advertisers. Raise interest in their product via on-air spots, online sampling / video, and e-mail database / direct marketing. Offer unique marketing opportunities to clients that take them beyond a typical “spot” advertiser.

New Ways to Listen – Use streaming, mobile audio, and on-demand downloads to package your content differently. Then, each listener can choose how they would like to consume your programming. In other words, create more entrance doors. Post “listen live” links in all of your company e-mails. Post exceptional morning show content / interviews online in podcasts. The vision here is “more on-ramps to your audio content beyond AM and FM.”

Music Discovery / Instant Purchasing – Radio sells a lot of records… for other companies. Create music purchasing opportunities—and opportunities for listeners to discover new artists on radio station websites. Music2Go is an exceptional manifestation of this idea.

New Pathways for Social Networking – Radio was the original social network. The “chat rooms” of yesterday were talk radio hosts with a microphone and open phone line. Now, our listeners are connecting directly with each other. Consider opening social networks of local interest to engage listeners and create community among your audience. Don’t try to be MySpace. Instead, launch a social network with local relevance. For instance, in the Rocky Mountains, you might launch a social network based on skiing and outdoor activities. If you are an Adult Contemporary radio station, you might launch a social network based on Family Activities.

Miles of new exciting “blue ocean” awaits radio. This is the year for radio to leapfrog into the future.

email Daniel Anstandig