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January 22, 2010

Why Air America Failed: Superb Assessment by RBR

Filed under: Business expertise,Entertainment — Laurie Morrow, Ph.D. @ 9:48 pm
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Radio Business Report offers a superb assessment of why Air America failed:  they had a terrible business plan.

In the wake of Air America Media shutting down, there has been much gnashing of teeth over the loss of a “progressive” counter to the allegedly entrenched “right-wing” control of talk radio. But the real reason Air America failed has nothing to do with politics – at least not with politics as content.

Quite simply, Air America failed in the radio BUSINESS because it was never run by radio people. From the very beginning the venture was run by liberal ideologues who were on a quest to rescue America from Rush Limbaugh and prevent a return to Reaganism. Oddly enough, Ronald Reagan Jr. actually ended up being on their side and was one of the hosts who lost his job in the shutdown.

We angered the original founders in 2004 by declaring that their business plan was flawed and couldn’t work. As it turned out, it was even more flawed than we realized, since the actual cash committed to the project was a tiny fraction of what had been publicly claimed.

Over the years, Air America has careened from financial crisis to financial crisis, from owner to owner and even one Chapter 11 bankruptcy before the current Chapter 7 liquidation. Through it all one thing was consistent – the political ideologues were running the show and the broadcasters involved were merely hired hands.

You can read the rest of this column here.


November 7, 2009

Keith Lane among the Lizards

In “Living the Creative Life,” a compelling interview by Shawn Read at CDIABlog,  that maddest and most delightful of madmen Keith Lane recounts a recent experience pitching to a major corporation:

. . . I got a call from an unnamed corporation, a CEO, let’s call him Chaz, that offered me a new advertising campaign. It was a freezing cold sleety day. My windshield wiper snapped off.

I pulled into the building.  The wind was blowing 50mph. The parking lot was filled with European cars. I went into this boardroom. Even the women at this place were named Chaz, everyone had the same gray suit. I was soaking wet, freezing.

Chaz, the head of the company, said, “I’m so glad you could make it. Our sales tumbled due to the horrific economy. We’d like to rent your brain for three months. You develop our entire ad campaign and we’ll gladly reimburse you if the economy turns around.”

I then pulled an Alec Baldwin from GlenGary Glen Ross.  I said: “Put your blackberries down.”

It was dead silent.

“You are a for-profit corporation.  I do a lot of pro bono work. You all garner really nice salaries. If you all took 20% pay cuts, you could afford me.

“Or:  you could leave everything and come work for me for three months for free, and then, maybe, I’ll pay you. Want to take me up on that offer?”

Dead silence. Corporations who are employing this reptilian strategy need to stop doing this to people in the creative industry because it is disgraceful behavior and they should be ashamed of themselves.”

Kudos! to Keith, for standing up to these Lizardim, and to Shawn Read, for a great interview.

Keith’s account got me wondering:  what prompted Chaz & Co. to consider making such an absurd and insulting suggestion?

They’d hardly go to a restaurant and say, “We’ll have the coquilles Saint Jacques, and if you are so fortunate that they meet with our approval, we may pay you for the meal.”

Perhaps the business world’s increasing reliance on interns is responsible for this assumption that they can get something for nothing.  In a down market, poorly managed businesses develop a kind of myopia; they make decisions with long-term impact on the basis of short-term thinking.  Rather than focus on the profits great creative work will generate over the long term, they fixate on the bottom line for the next quarter.  Rather than hire a professional with significant personal investment in his own and his client’s success, the Chaz’s of the world think:  “We can get an intern to do the same work for free!”

Now, Chaz is subject to no such confusion about value when it comes to his personal financial choices.  You’ll not find him going to the local école de beauté to get a $10 hair cut.  When it comes to what really matters to him — his personal brand — he invests well.

But when it comes to making decisions regarding the corporation that pays him lavishly enough to keep him in Gieves & Hawkes suits & have a standing weekly spa appointment at the Cranwell, for Chaz & Co., cheap trumps quality.  Unlike his personal brand, when it comes to the business he works for, he’ll put the image of his company at risk, at a particularly perilous financial time, entrusting it to those least able to procure decent compensation.

In 5 years, Keith Lane Creative will still be around, and will be pursued with even greater vigor by wise clients who know what talent’s worth.  Chances are, Chaz will have found another comfy rock on which to absorb some warmth and seem almost human.

What won’t be around, however, are corporations that don’t understand there are few business risks more perilous than trusting your company’s image to those with talent so minimal they have to give their work away.

October 16, 2009


C. K. Prahalad, who holds the Harvey C Fruehauf chair of Business Administration at the University of Michigan, has been named #1 of the top 50 business thinkers in the world by the Times. Professor Prahald is  best known for his book The Fortune at the Bottom of the Pyramid:  Eradicating Poverty Through Profits (Wharton School Publishing), in which he argues compellingly that market promise lies most in the “aspiring poor” of the developing world:

The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income consumers. It is the billions of aspiring poor who are joining the market economy for the first time” [Prahalad] explains. A market at the bottom of the pyramid could be co-created by multi-national and domestic industry, non-governmental organisations and, most importantly, the poor themselves. They would then have choice over their lives and the products they use. He points to Hindustan Lever’s success in marketing soap-powder and detergents in smaller, cheaper units. This created prosperity downstream through new distribution mechanisms. Too often poor people are patronised, Prahalad wants them to have real power in the marketplace.

To learn more about Prahalad’s thinking, watch this compelling interview with him at McGraw-Hill’s website, here.

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