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Tuesday, April 26, 2016

Qapla! We've disrupted the RW radio advertising model

By Spocko

 My friends at Media Matters For America put up this video pointing out that Rush Limbaugh is no longer the goose that laid the golden egg. In fact, he hasn't been for years. It's news now since he is in contract negotiations.  It's too bad some media outlet won't dig deeper into what happened to Rush and the AM broadcast radio business.  Right wing radio is no longer a safe place for most consumer advertising. How this happened and what it means might be a good story--if they cared to write it.

They could examine the impact of the revenue decline, but also the reasons behind it.

I don't expect anyone in the media to "follow the money." since the money raised for political candidates goes into media buys. But if one did, they might find that lowered revenue expectations and dark money are now keeping Rush afloat.

The political press will talk about how powerful Rush still is and how he and his brethren (cistern?) helped bring us the extreme right wing GOP presidential candidates. They can ignore the lost advertisers, since that is not their metric for power.

The business press might write about the advertisers that left him. They will then dutifully report any details the new contract reveals. But they will only do macro-level reporting, since the corporations that distribute Rush's show are privately held.

If Rush was employed by a public corporation, with reporting guidelines and analysts covering the company things might be bit different.
But then again, as I pointed out to Rupert Murdoch during Newscorp's 2010 quarterly conference call, big public companies can hide losses too. (Rupert and Me: I question the Newscorp CEO about subsidizing Glenn Beck)
 In American, unless you have a different metric for success, your product or service is supposed to eventually generate revenue quarter after quarter. And if a product that did generate revenue stops or slows down, steps are taken to get the asset to return to profitability. If your product continues to lose more money than it generates, something has to change.

However, if your metric for success is not money, your product can lose 100's of millions of dollars each year and every year just like the New York Post and the Washington Times.

Expecting a specific product (or radio host) to make money is only a problem if they are expected to. Private entities can change the rules anytime they want to.

Take for example right-wing think tanks. Their job is to push the ideas and viewpoints of the funders. Nobody expects them to make money, if they do it's a lucky accident. Let's say one of their authors writes a book that the public actually buys. Score! If the book only sees the inside of swag bags at CPAC, the authors still get paid.

What was an asset is now a liability. 

Back in 2004 when I decided to "take on" right wing radio, I knew that nobody cared what I thought. I was told, "If you don't like it, turn it off!" But I knew that the people running the station did care what one group of people thought, the ones paying them money. The advertisers.

And the people with the money cared about their brands.  I simply showed them what they were paying for on the shows. Is this what your brand is about? If not, don't taint your brand. They could choose to stay or go. No threats, no boycotts.

The radio hosts could also choose to keep saying the same things, just not with that advertiser's money. No censorship, no government regulations, just market forces.

The hosts could have made different choices, but they didn't.

I imagine at some point Rush was asked to reduce his sexism and his bigotry. After missing forecasts for a few quarters distributors might have begging him to tone it down.
 "What!? Tone it down? Me, apologize!?  US Senators call me to apologize. Nobody tells me what to say on MY show!"
Maybe they tried to find some leverage to break his contract, because that is what they do with "labor" that is costing them money.  But maybe his lawyers were smarter, "You signed a contract, you have to keep paying Rush or we'll sue for breach."

So then the distributors had to take the very significant financial hit from the advertisers leaving. Over and over again. Lowering expectations again and again. There probably are some very pissed off people because of this. Will they take it out on Rush in the contract? Sure, somewhat, but no matter what is announced we won't really know the details.

Bullies think like bullies. They'll make verbal, legal or physical threats

I found out that when you impact a revenue stream people notice, and hit back, hard. Bullies don't just rollover and back down. Because if they can't fix the source of the problem, the host(s), they try to get rid of the people who pointed out the problem. In my case it was verbal and legal threats.

Instead of the distributors dealing with Rush's brand tainting comments, they went after the people who alerted advertisers to what he was saying.  My friends in the #stoprush group, who did all the real hard work contacting advertisers, got targeted by one of Rush's PR bullies.

In this story about what happened, that the media won't do, they might look at what the distributors and stations have done following these massive material hits to their revenue. They could look at how they found new revenue from places like the Heritage Foundation, conservative schools and other one-step- removed-from-dark-money people.

They could write about how stations bulked up on political advertising at full price from old rate sheets while making money for creating the ads as well.  They could document the barrel scrapping and the search for more and bigger boner pill companies. If there isn't a gold seller ad to run they fill up with PSAs, non-profit ads and annoying Kars for Kids spots.

They might even look into how their failure to address the real problem spilled over into successful stations which they then destroyed. These are the unintended consequences of a wildly successful program to defund RW radio.

Qapla! (Success in Klingon) 

Sometimes people point out that Rush is still on the radio, he still has tons of money and millions of listeners. Or that money still gets to him and his distributors, just via dark channels.

As I wrote back in 2007 when I got a letter from Bank of America about pulling their ads from KSFO, convincing mainstream advertisers to leave showed the money people that RW radio views are no longer safe to publicly get behind, is a very big deal.

To everyone who worked (and continue to work) to make this all happen I say. "Qapla!" and live long and prosper.