Industry Views

NAB Out of Step on Non-Competes

By Walter Sabo
Consultant, Sabo Media
A.K.A. Walter Sterling
Radio Host, Sterling on Sunday

It’s tough enough for radio talent to navigate stable careers in these days of consolidated station ownership, personnel cutbacks and drastic salary reductions – but the NAB’s newly stated stance on non-competes adds insult to injury and is out of step with the interests of beleaguered professionals still hanging on for dear life in the programming sector of this industry. I understand that the National Association of Broadcasters is at heart a lobbying group representing the interests of the medium’s ownership but, c’mon – non-competes really are of another era and egregiously unfair.

This week the NAB announced that they were not in favor of the FTC ruling to ban non-compete clauses that prevent radio talent from crossing the street. The FTC is proposing the ban on non-competes for a broad section of industries compelling dozens of industry lobbies to sign a letter to Congress in opposition to the ban.

The lobbyists’ letter says that the FTC’s rule would invalidate millions of contracts around the country that courts, scholars, and economists have found entirely reasonable and beneficial for both businesses and employees. “Accordingly, we ask you (Congress) to exercise your oversight and appropriations authority to closely examine the FTC’s proposed rule-making.”

Government interference with the practices of any industry, especially in the area of freedom of competition, is never a good idea. The NAB and other industries believe banning non-competes constitutes FTC overreach. And that is a solid argument. However, the NAB also suggests that broadcasters present a unique case for non-compete clauses due to the “substantial investments broadcasters make in promoting on-air talent.” That’s where they are grossly behind the times.

Maybe in TV. But it has been decades since any radio company has made any investment in promoting their on-air talent. Do you have a $500 “name” jingle? Where are the billboards? Whatever happened to TV and newspaper ads?

Non-competes are deployed in most industries to protect trade secrets. All of radio’s trade secrets are on the air!

Walter Sabo, consultant, can be contacted at Sabo Media: walter@sabomedia.com. Direct phone: 646-678-1110.  Check out www.waltersterlingshow.com.

Industry Views

Pending Business: Being Realistic About Podcast Revenue

By Steve Lapa
Lapcom Communications Corp
President

It looks like the podcast business is hitting those ever-present speedbumps.

No, I am not predicting a demise. I’m just asking why there weren’t a few more hardball questions.

If you sell or manage with eyes wide open, you’ve already read what the February 15 New York Times article chronicled. The cutbacks, drops, and hiring freezes hitting the double-digit-growth podcast business has some in the radio business saying, “Told ya so.”

Who has the chutzpah to say that to Tom Brady and Michael Strahan of Religion of Sports, or Michelle Obama of “The Michelle Obama Podcast?” When your bank account is on fumes, you speak the economic truth. The formula of star power driving unique audio content didn’t instantly convert to super-sized audience levels attracting super-sized revenue. What did VOX, Spotify, Amazon, NPR and other well-respected players miss?

— Never assume, (because assuming…) An out-of-the-box assumption listeners would pay for content to create a separate income stream, didn’t really take. Even the most aggressive marketer would think twice before assuming that listeners generating millions of downloads of free podcasts would suddenly pay to listen. Maybe a select few passionate followers would, but could you change the historic perceived value of the masses? When it comes to paywalls for play, be sure to test, adjust, and re-test before you project income.

— Ad sales sell out levels. A typical podcast has about a quarter of the inventory available in a typical hour of most news/talk and sports talk programs. Yet despite podcasts with limited inventory and higher CPM for host-read ads inside the podcasts, the projections from those well-respected companies tanked. The reason is elegantly simple. Too much podcast inventory chasing too few dollars.

— It’s the economy, stupid. Thank you, political strategist James Carville. The story goes the phrase was on a sign in Bill Clinton’s campaign headquarters and helped Clinton beat Geroge Bush in 1992. Did any of the gurus consider the economy?

— Who would have thought print newspaper sales have something in common with podcasts? Did anyone consider the impact of endless ad inventory becoming a commodity despite celebrity content? Never easy to predict which celebs will convert from the big screen or TV to podcast audio.

I had the privilege of producing cast members of Discovery’s “American Chopper” in a 39-episode podcast series. Even those crazy motorcycle dudes were challenged bringing their millions of TV and online fans to the podcast world. Hindsight is 20/20. Let’s never stop learning so we can always aim for higher earnings.

Steve Lapa is the president of Lapcom Communications Corp. based in Palm Beach Gardens, FL. Lapcom is a media sales, marketing, and development consultancy. Contact Steve Lapa via email at: Steve@Lapcomventures.com