Today, after nearly a year of rumors, the Progressive Liberal radio network "Air America" filed for Chapter 11 bankruptcy protection and reorganization, citing $20 million in debts and assets of only $4 million.
When they launched, I predicted that the network would be a failure because the message sucked and no one wanted to hear it. While that is at least true on a political perspective, it isn't why Air America is bankrupt. They're out of money because they have a horrible business model.
Now, keep in mind I know nothing about the broadcasting business. It occurs to me, however, that when a show goes into syndication--radio or television--individual stations buy the rights to broadcast that program. Then, they sell advertising to make that money back and (hopefully) turn a profit. That's true of network programs you watch re-runs of in the evening hours before prime time, and it's also true of big-time talk radio like Sean Hannity, Glenn Beck and El Rushbo.
That isn't what Air America did.
Air America, in their infinite wisdom, they decided to "rent" the airwaves of stations to broadcast their programming. Why? Simple: Liberal talk doesn't sell. Conservative talk is immensely popular. I'm guessing they knew they wouldn't be able to sell Air America to stations, so they got on the air buy paying the stations directly to take the programming. They could have even bought a series of smaller stations in select cities to broadcast their signal and secure a market if they could have raised the capital, but they didn't.
Typical Liberals. They did it backwards.
As a business, if you're paying people to take your product then your product isn't worth buying. It's that simple. The people who started Air America didn't understand the business of talk radio, didn't understand the marketplace that drives talk radio and they certainly had no idea who their target market was.
Liberals disparage big business and big profits and yet they still want to be in business. Last I knew, there was only one goal to being in business: making money. It's a wonder to me how they've managed to last this long.
For the time being, Air America is left treading water as they reorganize. Unless they initiate a drastic change in the way they do business, they should expect more of the same: a mountain of debt and no money coming in.
Perhaps what Air America needs is someone who actually understands the radio business.
I could be wrong, but I'm just sayin'...
UPDATE: The article in today's Washington Post has plenty of spin and denial. I love this section:
"This has more to do with how [Air America] structured its business," said Tom Taylor, the editor of Inside Radio, an industry newsletter. "They had to invent the business model because no one else had, and they made some mistakes...It's like they say about pioneers--they're the ones with arrows in their backs."
My word...now they're "pioneers!" Incredible. They invented a business model, alright. I will give them that. It was a business model...it just wasn't a very good one. So what if it practically guaranteed their failure as a business---they're pioneers!
If Air America truly wants to succeed, maybe they should hire someone who (*gasp*) has run a nationally syndicated network of Conservative talk shows to learn how it's done? If it's business, you want the best person for the job, right? If Conservative talk dominates the medium and Conservative talk is successful as a money-making enterprise...then why not take advantage of that expertise and a business model that works? This is business and not politics. If the goal is to make money--as it always is with business--shouldn't Air America be prepared to do that or get out?
I think Al Franken's head would explode if that ever happened.
William Smith
ConservativeBlogger.com
