As many of you know, I live in Scottsdale, Arizona, home to many of the worlds finest golf courses and one of the true golf mecca's of the United States. Unfortunately the scores of magnificent courses such as the TPC, Grayhawk, Troon, Desert Mountain, Estancia and others are wasted on me as I've devolved into a really bad golfer and one that is better suited for the bargain municipal rates for hackers.
However my son Eli is a very good golfer and he recently moved into an apartment directly across from one of the many premier resort properties in the Valley. One afternoon he went over mid week to hit some golf balls on the range and was informed that the rate was $50 for an hour of hitting, a price that makes sense for resort guests on expense accounts or company trips, but is way out of line with other courses in the area. As he inquired if they had a local rate, twilight rate, etc, he was told each time that that was the price for hitting golf balls, no deals, no adjustments. Just as a basis of comparison the rate for a round of golf at that same course was $185 for what is a good, but not tournament level resort course here in the Valley.
My son, upon being informed as to the firm pricing, looked out at the range and pointed out to the guy that on a Saturday morning in season they didn't have a single person on the range, in fact it was totally empty. There was no one in the pro shop and there was no one at the golf carts and starters area either. In fact, it looked like a ghost town and he was the only potential customer, but was leaving, because they wouldn't bend on their $50 range ball fee. A classic example of pricing totally out of whack with what the market expects to pay in a new leaner, tougher and competitive environment. I am sure somewhere in that big corporate golf management firm there was a corporate guru talking about pricing integrity and not diminishing the value of their brand, as the course stood virtually empty on a perfect spring day in the middle of golf season in Arizona.
What does this all have to do with any thing you might ask?
Well, in my role as Chairman and CEO of The Legal Broadcast Network I am involved in most of the pricing decisions regarding our channel sales, enterprise packages and advertising rates. As we are a bit smaller then say, CNN or the NY Times or even National Law Journal, I am a lot closer to our customers, clients and prospects and what I'm hearing from a lot of our clients is that the old media model and pricing is about to go down hard. Basically, a lot of the advertising space or air time that was sold for exceptionally high CPM rates over the last three years, is going to have to be discounted or it's going to be as empty at that driving range my son was looking at the other week.
People and businesses will need to continue advertising, probably more now then ever as the urge to retrench and cut back in marketing is the single worst mistake many firms can make in a tough market. As we have discussed before and has been covered by Wharton articles on the topic, the lost market share and sales can take years and huge amounts of money to recapture when a firm cuts back in tight times. No, the smart firms are going to be looking at budgets, pricing options and media that deliver measurable results. The question is, what firms are going to be able to deliver audience and partner with content creators at a profit for the broadcaster and with high value for the content partner or advertiser?
Part of our strategy with Legal Broadcast Networks new studio is to allow greater collaboration, more diverse and high quality content creation and to do it at a lower per unit cost then virtually anyone else in the new media marketplace. Our show out put is about to triple while our unit cost for creation has been cut in half, allowing us to offer a variety of new packages for our clients and partners that dramatically upgrade their existing capacity as well as giving us the option of introducing more cost effective packages for those of you who are tired of being told it's $50 to hit golf balls.
I continue to be amazed at those in the old and new media world who have yet to come to grips with the fact that our nation and economy is in a totally different situation right now, and that this isn't going to be just another minor recession. No, this is a fundamental shift away from the corporate extravagance and waste that subsidized a lot of bad advertising, vanity productions and new media ventures. If a media firm is not in the measurable results business as opposed to the " baffle them with BS " business, they won't be in business for very much longer.
Like the driving range in the picture below that charges $15 for an unlimited bucket of balls and can't keep the crowds away, The LB Network studio is going to continue it's business plan of driving down the cost of production and distribution so that more and more lawyers, legal marketing firms and activists or organizations can take advantage of our dramatically expanding audience and distribution network here on The Legal Broadcast Network. Watch for our new channel announcements on April 1, 2009 along with a new level of pricing and distribution that is going to get even more of you into the game.
Remember, we want you to be part of our network, whether you choose a free profile in the social networking page, partner with us as a commentator, develop a branded channel or simply want to advertise on our growing list of properties. Hopefully our competitors in the old media and broadcast models continue to charge $50 for a bucket of balls, I certainly appreciate the head start.