OK, it's great that Alicia Keys, Ludacris, Nelly, Ashanti, Hoobastank and Avril Lavigne are thankful to radio for helping them become stars. And it's a darn shame that XM and Sirius refuse to play any of their music. What's that? They're on satellite radio, too? And MTV? And the Internet? In other words, they're not exclusive to radio. So where's the value proposition in the new PR campaign for radio that's been rolled out by the major groups and NAB (1/11/05 RBR #7)?
Satellite radio has been pitching two things to consumers - - lots of types of music and no commercials. Terrestrial radio doesn't have the channel capacity to match satellite's offerings of niche formats. But when it comes to the big audience draws - - CHR, Rock, Country, Urban and such - - terrestrial and satellite radio are playing the same artists. Satellite's pitch is "no commercials" - - but, you have to pay 10-13 bucks a month for the privilege.
Terrestrial radio's value proposition is obvious. It's even better than Wal-Mart's "Always Low Prices." Radio is FREE! It costs the consumer nothing, nadda, zippo, the big goose egg. What could be better than that? But there's nothing in the new PR campaign to tell the public why terrestrial radio is such a great deal.
In truth, the new campaign is not so much for consumers anyway, but to assure Wall Street and Madison Avenue that radio is doing something to combat the "threat" of satellite radio. Actually, as Jeff Smulyan noted again last week, iPods and the like are more of a threat, since they keep young people from developing the habit of listening to radio.
Satellite radio is as hot on Wall Street as dot-com companies were in the 1990s. We should find out later this year whether another stock bubble is about to burst. At some point in 2005, XM should hit four million subscribers - - the magic break even point, or so the satellite companies have been telling us for years. We can't wait to see whether XM will then become operating cash flow positive - - and what excuse it will offer The Street if it doesn't.
But regardless of whether satellite radio actually survives and becomes a real challenger, terrestrial radio has plenty of problems that it needs to address - - as detailed in our Bounceback section yesterday by station owner Russ Oasis and today by program syndicator John Clark. A new PR campaign, even one that gives people a reason to listen to radio, won't solve those structural, management and creative problems.