A fable of pies and TV stations

cherry tart

© Depositphotos.com / Bedolaga

Once upon a time, there was a baker of cherry pies. There were dozens of fresh cherries in each pie, which were very popular with his customers, and his bakery prospered.

Then one day the baker was visited by an accountant, who examined the baker’s finances. “You’re doing well enough,” the accountant said, “but look at what the cost of all those cherries is doing to your bottom line. You could double your profit on each pie sold if you just reduce the cherries by 20%.”

The baker listened to the accountant and followed his instructions. Sure enough, in the first week, his profits doubled. But starting in the second week, his customers noticed the change, and a growing number of pies went unsold. Total profits slid to where they had started, then continued lower.

The baker called the accountant to ask what to do next. “To get those profits back to where they were, I calculate that you’ll need to cut another 30% of cherries from those pies,” the accountant replied. The baker agreed, and again, his profits rebounded for a week before sales slumped even further. These cycles continued until the pies contained almost no cherries, every customer abandoned them, and the baker went out of business.

The moral of this fable is that you can’t grow your business through austerity. As Yogi Berra once put it, “If people don’t want to come out to the ball park, nobody’s gonna stop ’em.”

There are a lot of business people today who don’t understand this. Or perhaps it’s fairer to say that to them any short-term gain is worth losing an unknown percentage of the customer base. In particular, a lot of over-the-air TV stations don’t get it.

The Pew Research Center’s State of the News Media laid it out last month. “The effects of a decade of newsroom cutbacks are real – and the public is taking notice.” Stations are programming larger blocks of news but with a smaller budget, and the resulting filler is driving away viewers. But stations are reacting to these shrinking audiences by, you guessed it, cutting back even further on news budgets.

TV news departments should see the decline of newspapers (another austerity failure) as an opening to ramp up coverage and become the trusted beacons of local journalism. When audiences learn where to turn for the inside scoop on what affects them at home, the ratings they’ll drive should reward any station bold enough to make that investment.

Or all the corporate-thinking news departments will continue to care only about meeting their next quarter’s numbers by trimming a couple more staff members. That’ll work only as well as did for the baker, until there’s no one left to buy what’s left of his pies.