It was just another Saturday in The New York Times, but the headline was as powerful as the news out of Iran or the White House. Starting this fall, the more than 8,600 Starbucks stores that have traditionally carried the Times, the Wall Street Journal, and USA Today will cease to do so. Starbucks did not provide a rationale for this new policy change, nor did The New York Times seem to have a clue. As they reported, “Starbucks did not give a reason for the change,” sounding about as surprised as millions of latte drinkers.
I've heard people point out that newspapers will still be available to Starbucks customers on their mobile phones, tablets, and laptops – frequently seen throughout their stores. But the decision to stop selling physical newspapers at Starbucks goes further than a loss of revenue. It's an acknowledgment that newspaper readers are not part of the Starbucks demographic or lifestyle.
A little back of the napkin math tells you if every Starbucks store sold 5 copies of the Times each weekday, it would come to a loss of roughly 43,000 papers a day. Against daily sales of 487,000, that's nearly a 10% bite – not an insubstantial hit to their circulation. But beyond the bottom line, the bigger loss is one of proximity, presence, and even face.
This would be a tough one to swallow for any media brand, especially traditional outlets like physical newspapers. They're literally in the fight of their lives every day. A rejection from Starbucks is just another sign to their readers, their advertisers, and their staffers that their business is endangered.
Radio people ought to be able to relate. Since our company began our industry focus on the car dashboard more than a decade ago, we've heard broadcasters fearfully ask whether automakers might one day stop including AM/FM radios as standard equipment in their new makes and models. AM radio has already come under fire by BMW and Tesla – both of whom have eschewed amplitude modulation in their electric car models.
It's not impossible to imagine the day when automakers amp up their focus on revenue, especially media outlets that provide money in exchange for dashboard “real estate.” And if that day approaches, the radio broadcasting industry better have a solid relationship with global car makers.
Reading The New York Times story, it's hard not to get the impression the publishers may not have been in regular contact with the Starbucks marketing team. Perhaps, they even took it for granted that “All the News That's Fit to Print” would forever have a place on racks next to Starbucks' cash registers. Not even knowing the reason why their physical newspapers were tossed speaks to a weak relationship with a key vendor/distributor.
And in fact, it should serve as a cautionary tale for radio broadcasters. For decades, automakers have included broadcast radios as standard equipment in nearly all their cars and trucks. And who has made money from that relationship? Certainly not automakers.
That's why efforts the NAB have undertaken in the past few years to reach out and connect with car companies, their executives, and their suppliers should be supported by every broadcaster. Relationships matter. They may not guarantee radio's place in the dashboard for time immemorial. But they will most certainly keep the radio medium top of mind and present in the minds of the auto community.
Part of the fallout from the Digital Age is that decisions are made faster and with less forethought. The whole idea behind agile brands is their ability to make quick pivots when desirable or necessary. That doesn't always lead to great decision-making as Starbucks and the Times may come to find out.
But for the future of radio's presence in dashboards, the potential fallout would easily surpass the 10% threshold, promising a long nuclear winter of pain and anguish.
A smart mobile and voice strategy, as well as developing strong, local brands that matter to consumers go to the heart of radio's survival in cars – and in other locations.
But so does the industry's engagement with the automotive powers that be. That means a continued strong presence at CES, the biggest auto shows, and other get-togethers that involve automakers – their executives, engineers, and marketers.
But local broadcasters shouldn't just count on their N Street reps to lobby on radio's behalf. There's partnership opportunities via local car dealerships and dealer groups. And while these include monetary rewards, they also go to heart of broadcasters establishing stronger ties to hometown car and truck sellers, the conduit to the big automakers.
There's also no better time for America's radio honchos to reach out to Detroit to keep those fires burning. Many of radio's closest competitors – SiriusXM, Pandora, Spotify, and others – have set up shop in Metro Detroit. The NAB should, too.
And maybe someday, the Radio Show will make its way to the Motor City.
Now that's a headline we'd like to see.
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