Last night, I sat and drank next to a guy at my local watering hole. I had seen him there before and last night was really the first time we had spoken. I didn't know who he was, or what he did, but was very surprised to find out that he is the program director of one of the top, and most famous AM radio stations in all of Japan. Now before you say, "Hold it, Mike! AM radio!? Boooooring! I'm turning it off!" Then let me ask that you read this story to see an example of how not to do things.
SPIKE JONES - BEETLEBOMB
WHO IS THIS GUY? DON'T KNOW,
BUT LOOKS LIKE THE TYPICAL FM RADIO LISTENER
This is a real-life example of failure. Not of the AM radio station, but of stations that mimic them.
I had gone to one of my favorite drinking holes in Yoga, a Izakaya named Sakura. Sakura has been in the same place for nearly 30 years. It is a very old fashioned neighborhood drinking hole in the wall.
I always like to go to these places like Sakura early as that allows me to drink quietly before the crowds, to talk to the owners about what's really going on with the Japanese people in the neighborhood (I've never seen any foreigners there), and it allows me to reflect on various things.
When I entered the bar, there was one other gentleman sitting there drinking. I had seen him there before. And, as with the last time I saw him, he was already pretty drunk when I entered.
Since I had seen him before, and since Sakura is a very friendly place with a "family" type of atmosphere, I said, "Good Evening" to him. He was, as before, pretty fashionably dressed (for a nearly 65-year-old guy) and was deep in conversation with the bar owner. I started listening to their conversation. He was talking to the "Momma" of the joint and explaining something about a sponsorship with a world famous sports wear maker - thereby explaining why he was so fashionably dressed. He explained how the sports wear maker traded clothes for advertising and how the old model of advertising (paying for commercials) was dead.
I knew from just hearing a bit of his conversation that he must have been in broadcasting and knew what the hell he was talking about. I joined into the conversation. I was surprised to find out that he was working at one of the most famous AM radio stations in Japan.
I asked what he did and he told me what his position was at the radio station. I was shocked when he told me his title and job and gave me his card. Now, don't misunderstand, this is not some crummy little radio station in Japan; there's not a person over the age of 12 who hasn't heard of this radio station. They broadcast horse racing and professional baseball too. This station is one of, if not thee, most famous of the (generic) AM radio stations in Japan.
Well, the old guy went on and told me all about his problems at work with declining revenues and sponsorships. I listened and didn't say anything about having worked at an FM station before (actually, in the late 1980's, I did host a radio show for three years on that very same AM radio station... I think... Or was it the competing station? I can't remember because in Japan they all sound alike.
In fact, all of the radio stations in Japan all sound exactly alike, be they AM radio or FM radio. The only way anyone can tell the difference between one station to the next is by looking at the number on the radio tuner or waiting until that station's call letters and name are announced.... Yawn....
Anyway, the guy went on and told us about how, about 4 years ago, that this station had made the genius move in a policy switch to target only 35 ~ 55-year-old people with a emphasis on mostly males. This little tidbit of information just floored me. Why?
Well, because, here is a very old school AM station that's been around since the late 1950's. They are one of the four or five dominant radio stations that everyone has heard of. All cars in Japan have AM radios (FM radios are rare). Everyone knows this particular station.
With that ancient history and the fact that this station broadcasts boring stuff like professional baseball and horse racing that interests old people, you'd think that their policy was always to target 35 ~ 65-year-old men. But no, you'd have thought wrong.
So why is this interesting and why is this an example of how not to do things with an emphasis on branding? Well, because, it's not so much that this old, dusty, tired and worn out old war-horse of a radio station picks such a policy, it's because, about 4 years ago, about the same time that this old guy says his AM radio station embarked on this policy, a FM radio station announced that they were doing the exact same thing!
Yes. About 4 years ago, the so-called international FM radio station in Tokyo, InterFM, proudly announced that they were going to target 35 ~ 65-year-old males. Talk about a bunch of parrots!
AM radio is supposed to feature talk radio and target older people. FM radio is supposed to feature music - and, in the case of a supposed "International radio station" like InterFM, they're supposed to target a younger audience and not broadcast things like horse racing.
But, unbelievably, InterFM did start broadcasting horse racing! Have you ever heard of such a thing? A FM radio station broadcasting horse racing? And not in the native language of the host country. Absurd.
Now, considering the above, you can see why this is a lesson in how not to do things.
If your company is a smaller or a newer company in a well-established market and you want to succeed in that market, if everyone is selling turnips, you'd better find something else to sell or you will be out of business.
InterFM? Targeting 35 ~ 65-year-old males? What a brilliant - and so incredibly original - business strategy.
Why do they even bother? If they are not going to even try to make money or set out a niche in their market then it's time for them to shut the power down and go off air.
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For more on the death of major broadcasting in Japan here's more information:
Last year, in 2010, for the first time in the history of this country, two major broadcasting stations were allowed to go bankrupt. Those stations were Radio-I in Nagoya and Love FM in Fukuoka. Those two events shook the Japanese broadcasting industry to its bones as the old school broadcasters have always thought that no matter what happened, the government would bail out the stations.
SELECTER - ON MY RADIO
"It's just the same old show... On my radio..."
There have been times in the past when stations got themselves into serious financial troubles, but, when push came to shove, either the Japanese government bailed the stations out or they guaranteed loans for the stations or arranged a group of companies to cooperate to buyout or support the station.
With the current poor economic situation and the Japanese government in debt over 200% of GDP, the well has run dry. There are no more funds to bail out these businesses.
This is actually the way things should be. The government should not be bailing out insolvent businesses as that just causes distortions in the market and causes management to continue with their incompetent practices.
A bankruptcy allows for the bad management to be washed out and replaced with new management. Bailing out a business (in this case a broadcasting station) or arranging loans, etc. allows bad management to continue in their positions and creates a false security for them. This creates a situation whereby the stations continue in their old and tired ways of failure.
I can give you a shocking example of this. In 2006, when a major Tokyo TV station took over a FM station, I was at a meeting where the guy who had been Program Director at that FM radio station for over ten years (ten years and lost $140 million USD) actually said to the TV station president - who had no become the president of the radio station;
"We don't have to get good ratings or make money as, even if we lose money, some other company will come in - with government support - and bail out the station and we'll all get to keep our jobs as we can't be fired under the labor laws (of Japan). So there's no reason to make any money."
He said this like an excited boy who wanted his new friend in on his "secret." Both the new president of the radio station and I were surprised. No, surprised isn't the word I'm looking for here. I think my jaw dropped and bounced on the table top. It was a shocking admission.
If the kids want to hear new, cool music in Japan,
it's not on the radio. They have to read magazines!
The new president was also dumbfounded to hear this sort of thinking direct from the horse's mouth from a person in management. I had worked with this guy and that station for years and knew that they were incompetent and not interested in making money or getting good ratings. But I was completely surprised that he was so foolish that he'd so readily volunteer such information - so innocently - as if it were common sense - and as if it were useful knowledge. Did this Program Director actually think that the new president had bought this radio station for his fun and not to make money?
Of course, it goes without saying, that this Program Director was removed from his position quite soon after that.
It had always struck me as amazing how someone like that could keep their job in the decade or so that I knew this gentleman. He was a nice guy, for sure. But a completely and totally clueless and incompetent businessman.
As an aside, for those of you who live in Japan and have always wondered why, say, Japanese FM radio is so bad, then there's your answer: The management of these stations all think like the Program Director above; there's no reason to worry about your station brand, ratings, sales or making good programs. The station management only have to worry about protecting their own personal positions. This is how the situation is on the ground in these broadcasting stations. This is the reality for these people.
That's why, in a nutshell, Japanese TV and radio are so bad. It is also just one more symptom of why several of these stations will not survive the digital conversion. I've written about that here, here and here.
Now, if you read between the lines of the latest headlines, you can see that the Japanese Government is setting up the system for a collapse of radio stations.
The Ministry of Internal Affairs and Communications said Friday it plans to allow one company to own up to four radio stations by relaxing its ordinance on the principle of banning multiple ownership of mass media. The amendment is designed to permit a company to hold an entire equity stake in each of four radio stations, whether they are AM or FM stations. The current ministry ordinance bans a company, which has a 10 percent or larger stake in a radio station, from holding more than 10 percent of shares in another station in the same service area. On a nationwide basis, a company is allowed to hold a stake of more than 20 percent in no more than two stations. The ministry decided to relax the principle in order to help radio stations as the widespread use of the Internet has caused many of them financial difficulties by eating into their advertising revenues. The drafted amendment, which would also allow radio stations to merge with each other, is expected to be put into effect in late June after being examined by an advisory panel to the communications minister.
The Japanese government recognizes the writing on the wall. Most of these stations under the current system are insolvent and cannot survive much longer. The economy is so bad - and the Internet has changed the game so much - that industries outside of broadcasting (the ones that the government traditionally went to for money) are no longer able to afford it, nor are they interested in broadcasting anymore.
Traditional broadcasting is a dinosaur. All the FM radio stations in Japan are seriously bleeding money even now - even J-Wave in Tokyo. When digital broadcasting starts and they lose all their sponsors, they are dead. I explained that in detail here.
RAMONES - ROCK & ROLL RADIO
Well, actually, no. No one in Japan remembers any rock & roll
radio because Japan has never had any.
FM stations in Tokyo cannot survive past 2015 in their current configuration. The government can change the rules all they want to try to keep them breathing but the fact remains the same: Traditional broadcasting days are numbered. FM radio in Japan is already at death's door.
TV stations like TV Tokyo, TBS and TV Asahi are not far behind.
