Sunday, August 19, 2012

BIG’s Blog: Jay Leno Gets A Pay Cut

Recently The Tonight Show announced that it was trimming about 10% of the staff of The Tonight Show. In fact, Jay Leno took a significant pay cut to keep even more staff from being let go.

So what’s going on here?

Bottom line, broadcasters are finding that fewer and fewer people are tuning into television shows, which means they can’t charge advertisers what they were charging five years ago. Broad-based forms of media – like TV – are seeing audience plummet. The irony is that people still want to watch the shows, but just not via traditional broadcast or cable channels. People are finding the shows through online digital platforms like Hulu, YouTube, and even Netflix.

But the old broadcast business model, like that of other traditional forms of non-digital communications like print newspapers, can’t keep paying high salaries for talent and big staffs if revenues continue to decline.

Sound familiar? Is there a fundraising group, especially those that have historically depended on direct mail that haven’t had to cut overhead?

But just like The Tonight Show, there are still lots of people that want to see Jay Leno; they just don’t want to watch it on television.

Same for your organization. The demands for your mission aren’t shrinking; they are probably growing… even as your direct mail revenue slides. It’s not that your mission isn’t compelling; the problem is that fewer and fewer people are reading and responding to direct mail.

The Tonight Show will have to realign its production costs with revenues and will have to figure out a way to monetize (make money) through online outlets.

So, too, most charitable organizations will find they need a new strategy to be effective at growing and developing supporters and donors in the digital world.


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