By Rick Greenhut
In this Classic Intelligence Brief from Sept. 17, 2009, then-iBiquity Digital Corp. Director of U.S. Broadcast Sales Rick Greenhut shares his thoughts and observations on how the radio industry must see its true brand value and purpose by recalling the ultimate failures of the U.S. railroad industry in the 1950s and 1960s.
Greenhut’s current role is as Broadcast Business Development Director for HD Radio at DTS, which in September 2015 agreed to acquire iBiquity in a $172 million transaction.
Back before the last Ice Age, when I was in college, I remember my old marketing professor using the example of the American railroads to illustrate an industry that didn’t recognize what business they were really in.
When air travel became a faster and more profitable way to move passengers and high-value freight, railroads stubbornly ignored countless opportunities to segue the high-end part of their business to an in-house airline. When over-the-road trucking became more efficient for moving bulk freight directly to the end user, the railroads lobbied against any bill that allocated federal dollars for highway building. When President Eisenhower signed the bill creating the interstate highway system, they still ignored this very real threat to their business and declined to add trucks to their fleet of rolling stock.
Why? Because they thought they were in the “choo-choo train” business, when in reality they were in the “moving-freight-and-passengers-in-the-most-efficient-way-possible” business. They didn’t recognize that their name and market presence constituted a brand and not just a collection of locomotives and freight cars. With their collective heads in the sand, they let their business be driven to the brink of extinction by their refusal to acknowledge the changing marketplace.