SABO SEZ: They Want What You Have
By Walter Sabo
a.k.a. Walter M Sterling
Host, Sterling Every Damn Night
WPHT, Philadelphia
Sterling On Sunday, Syndicated, TMN
Dozens of brand-new audio hardware and software companies have been launched during the past 20 years. These start-ups are usually funded by venture capital money. VC money is not invested to return a profit, it’s poured in to – pour it in. Their money is “different” than the cashflow that fuels your business. Start-up money buys time to profit.
Amazon lost money its first 10 years. Spotify launched in 2008 and turned a full year profit for the first time – last year.
MOST venture-backed start-ups do not make it to profit, they close.
With virtually unlimited funds and no deadlines, what are the strategic markers for success of most fresh, new audio businesses? Having performed due diligence for many start-ups, this is an informed summary of their goals:
— Significant distribution of the product.
— Robust, broad-appeal content offerings
— Proven metrics for securing advertising dollars
— Positive cultural impact
— Embraced by late-stage adopters
— Advertiser credibility
Hold radio to the above checklist. 92% of the population has a radio – more households than own a TV. Radio’s distribution is elegant, wireless, and free. Streaming? Yes, radio has streamed to the car since 1938. How’s UCONNECT or APPLE PLAY working in your KIA? Buffering now? Bluetooth pairing? At-home streams cost about $1,000 for a computer, $100 a month for WiFi, $150 for software upgrades and repairs. Radio distribution: turn it “ON.” No startup audio service will match radio’s distribution system.
Mature means predictable. Content offerings on radio are understood, accepted, and quickly adjusted if not appealing. Audio start-ups are rarely run by execs with audio entertainment experience. Their execs tend to be recruited from two groups: techs and discoverers. Techs because somebody has to make it work. Discoverers because you would be shocked at how many audio newcomers were funded on the wacky premise that AM/FM fails to see how badly Americans want to hear brand new music! Lurking among workers within the streaming and satellite communities is the harsh prejudice that pros with actual radio experience are satanic dinosaurs.
Most start-ups flirt with doing good for the country, ie; positive messaging, lots of jazz or world music. AM/FM has hardcore positive impact witnessed by the fact that most public radio stations enjoy ratings dominance. No other medium – none – raises more money for community charities than AM/FM.
Driving a new product past the innovators, early adopters, early majority to late majority is the path to success in any industry. AM/FM reached late majority when Bing Crosby had his own show. How’s mom doing with Spotify?
Advertiser credibility: Procter & Gamble returned to radio in the early 2000s. Last year P&G landed near the top of radio advertisers. Procter has no sense of humor or time for nonsense. If P&G buys a lot of radio, end of story. Again.
Not legacy media. Proven media.
Walter Sabo has been a C Suite action partner for companies such as SiriusXM, Hearst, Press Broadcasting, Gannett, RKO General and many other leading media outlets. His company HITVIEWS, in 2007, was the first to identify and monetize video influencers.. His nightly show “Walter Sterling Every Damn Night” is heard on WPHT, Philadelphia. His syndicated show, “Sterling On Sunday,” from Talk Media Network, airs 10:00 pm-1:00 am ET, and is now in its 10th year of success. He can be reached by email at sabowalter@gmail.com.
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Here’s the script: