While most of the news is focusing on Memorial Day, I have been listening to archives of one of the better "talk-radio" format podcasts that I've found, Free Talk Live. The show got a call from a disabled veteran who told a "horror story" about his latest purchase at Best Buy, which ended up with the General Manager of the store allegedly telling him that "If we went out of our way to make all of our customers happy, we'd go out of business". If this manager actually takes this stance, he will surely be out of a job soon; either because he gets fired, or because this sort of policy will lead Best Buy down the same road that Sears, Montgomery Ward, and others have gone through. In their failure to adjust to a business world with seemingly infinite competitors all willing to go a little further to serve their clients, their business would dwindle down to nothing.
Certain segments of the corporate world have not had to make these adjustments, because they enjoy government imposed monopolies and competition limitless. In Mexico many of the essential services were, and some still are, run by means of a Government enforced monopoly. As is the case with most government enforced monopolies, they had the attitude of "you'll take what we give you and you'll like it". Customer service was virtually non-existent, because it didn't need to be. You either payed Telmex, or you didn't have phone service. This type of egregious abuse of consumers can only be accomplished with the help of the government, because without its intervention entrepreneurs would swiftly move in to fill the service gap created.
The media & entertainment industry in this country enjoyed to a certain extent the same sort of government enforced monopoly. You had to purchase the rights to the airwaves, be it radio or television, and the steep price meant only the largest of companies could compete. These companies didn't suffer the big blow of internet competition, because the bandwidth wasn't really available to stream their content in real-time, so they continued with the "You'll take what we give you" mindset.
However, as bandwidth started increasing, so did internet radio stations and on demand video streams. Any one of us can now get radio stations that are extremely specialized to our own personal tastes, and watch exactly the show we want, when we want to watch it. The case of the radio is particularly interesting, because past copyright laws allowed these net radio station to deal directly with artists, many of whom are not on "major labels" and work out agreements that would allow them to broadcast their music to small specialized groups for very low costs. It benefits the artists, who are unlikely to get played on traditional radio; it benefits the net radio stations, who can offer a huge variety of content to their listeners; and it benefits the listeners, who can now choose from huge variety of music, instead of whatever the top 40 is.
What is shocking, or maybe not so shocking, is that these titans of the radio industry instead of realizing that this is the trend of the future, and figuring out how to use their extreme resources (when compared to most net-radio businesses) to find a way to make it even better for the listeners, are doing everything they can to shut down these new net radio stations, by lobbying to increase the amounts of royalties these stations have to pay by between 300% and 1200%, according to Savenetradio.org, an organization created by net radio companies trying to fight the changes that would put them out of business, and force consumers back to the same stale top 40.
It astounds me the lengths that these companies are willing to go to to avoid change, and to avoid giving their customers better service. I'm pretty sure that whatever budget these companies have to fight change, far exceeds the budgets that the change-makers have for operation of their organizations. NBC's is one of the Television broadcasters that has embraced change, showing most of its major shows for free, in high quality, streaming on the internet. It shows what these large companies could do to offer their customers a legal alternative, that ends up being much better than the illegal choice. Clearchannel et. al could probably offer thousands of customized radio-stations, with a music catalogs extending far beyond what something like Soma.FM could have, and probably in better quality, but instead they choose to stick to their old ways, and expect that the government will do what it's always done, and protect their business.
They need to learn the new mantra of the internet age: "If we don't go our of our way to make each customer happy, we'll go out of business".
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Friday, May 30, 2008
