The following appeared in a memorandum from the manager of KNOW radio station.
“Several factors indicate that KNOW radio can no longer succeed as a rock-and-roll music station. Consider, for example, that the number of people in our listening area over fifty years of age has increased dramatically, while our total number of listeners has declined. Also, music stores in our area report decreased sales of rock-and-roll music. Finally, continuous news stations in neighboring cities have been very successful. We predict that switching KNOW radio from rock-and-roll music to 24-hour news will allow the station to attract older listeners and make KNOW radio more profitable than ever.”
Write a response in which you discuss what questions would need to be answered in order to decide whether the prediction and the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the prediction.
If I want to increase my income, I must either sell more services or sell for less. KNOW radio has the ability to do both. Older listeners are valuable because they spend more money than younger listeners, so KNOW radio can attract more listeners by making its programming more appealing to older listeners. And, since music stores are reporting decreased sales of rock-and-roll music, KNOW radio can make concessions to older listeners by changing its format to something more agreeable to them, which might increase the station’s profitability. Furthermore, switching to news programming will not hurt KNOW radio financially because news is less expensive than rock-and-roll music.
There are at least two questions that would need to be answered before KNOW radio can establish whether its prediction regarding its success in the future is reasonable. First, the managers should be asked to define ‘success’. Success for KNOW radio might mean increased revenue from listeners, or it could mean increased time spent listening to the station. If increased revenue is their goal, then they have to consider factors such as the demographics of their audience and the cost of advertising. If increased time is the primary focus of their strategy, then they must explore whether the station’s current format is attractive to all age groups. Another question that needs to be asked is whether the prediction is based on a logical analysis of the facts or on assumptions. If the managers are basing their prediction on assumptions, then they should explain their assumptions and show evidence that supports those assumptions.
The managers’ claim that KNOW radio will only succeed if it switches to news programming is questionable. They have not considered the possibility that listeners who currently listen to KNOW radio might decide to switch to another radio station that offers music they like better. In addition, the managers have not considered the possibility that listeners might choose to listen to rock-and-roll music on online stations. While the managers’ claim that KNOW radio is losing listeners is based partly on facts, they do not present evidence to support that claim. KNOW radio might be able to increase its listenership by offering music that is more appealing to older listeners. The managers’ statements about the demographics of their listening area also appear to be based on assumptions. If KNOW radio does switch to news programming, it will need to rely on advertising to keep itself going, but advertisers are likely to have difficulty finding an audience for news programming.
The managers’ claim that KNOW radio will lose listeners because it offers a radio format that is not popular is questionable. They argue that other radio stations are successful because they offer news programming. However, those radio stations might have tried to attract listeners by offering music that they dislike less, and the managers fail to mention whether other radio stations are successful because they offer music that they dislike more than rock-and-roll music. The managers also ignore the fact that rock-and-roll music remains popular in many European countries. It may be popular in the United States, but its popularity may be waning. KNOW radio’s managers should explore those possibilities before concluding that their radio station’s format is obsolete.