NEW PLAYERS IN TOWN – Part 1 Greg Diamond New competition is something we are either dealing with now or will likely be forced to deal with in the future. The recent Southern Alberta decisions where a total of 9 new radio stations were approved may have been slight aberrations, but were still in keeping with the Commission’s trend of the past few years. New competitors are inevitable in all but the smallest of markets. It’s no longer a question of ‘if’, but ‘when’.
Note that all the following points are exacerbated by market size. The smaller the market, thus less stations, the greater impact the new player will have. A new station in Tuktoyaktuk will occupy a formatic hill, whereas a sign-on in Toronto will likely be forced into an all-polka niche (good CanCon, though).
So, what can you do to prepare?
Don’t Wait
The earlier your preparation starts, the better your station will be positioned to deal with the new market landscape.
There have been a number of instances where an incumbent station waited until the competitor was almost up and running before repositioning itself. This will not work. For anything more than a slight formatic focus, a reposition will immediately throw a large chunk of the audience up in the air. In essence, the existing station starts the confusion inherent to a sign-on and the new competitor profits from it. If a major reposition is needed, do it far enough in advance (at least 6 months) to allow the market to settle before the new station arrives.
Initial Discussion
The General Manager, Program Director, General Sales Manager and a Head Office representative (if applicable) should sit down and with a cold, clinical eye, examine the market and where the greatest revenue and strategic opportunity exists.
The larger the market, the greater the need to enlist a qualified research company to assist in your station’s most effective position. A word of warning, though - research is only as good as the objectivity of the people using it. All too often, broadcasters try to interpret the findings to fit their preconceptions. This will defeat the whole purpose of the research. Also, don’t ever ask a question if you’re not prepared to act on the results. “Can you name a radio station in this market that plays too many commercials?” is a question that has appeared in countless studies, but when the predictable answer comes back nothing gets changed.
Smaller markets may not find it necessary to use research given that the limited number of signals usually means the decision falls on gender/age group lines.
The question to ask is what do you need?
It’s at this point where the overriding statement for this entire exercise comes into play - be realistic!
The quicker you can come to terms with the fact your share and revenue will suffer, the quicker you can decide what you must keep to remain viable over the long run and what you should relinquish. But it’s not all bad news. Anything that shines a spotlight on radio is a good thing as the medium then becomes more top of mind. A new station will definitely put a focus on radio in your market. Plus, competition enables the audience to make a comparison and the incumbent can look great and sometimes win!
In larger markets, the same thing applies. Give up what you know you're going to lose. For example, if you have one or two new competitors that will pick away at your lower demos adjust upwards a bit and don't try to be everything to everybody. Now is not the time to over reach and in doing so make the station far more vulnerable to attack.
The decision of what you cede should be clearly agreed upon by all parties. This will save you potential finger pointing down the road when everyone will have better things to do - dealing with the new guys.
This meeting will not be easy. Everyone will likely have to give up something to reach a consensus that’s best for the station - keep an open mind and check your emotions at the door.
Once the decision is made, bring the managers together with the sales staff and then the programming staff to lay out the plan. Explain the reality of the situation, what the outcome will be, and the fact it’s no one’s fault - it’s a market adjustment that everyone will have to understand and buy into.
Next month, we’ll look into the nuts and bolts of the matter by laying the groundwork for the new competition and what you can expect once they arrive. We’ll also list the “Four P’s” – principles to employ to make the situation as painless as possible. |