Another quarter goes by and radio revenues are flat…again. This is the fifth straight quarter where Erica Farber has had to release unhappy news, something that no one in sales – from your GSM to the CEO of the RAB – ever enjoys doing. Broadcasters can blame Mother Nature for part of Q1’s tepid performance, but when you have “flattish” results for more than a year, it has to be more than lousy weather driving mediocre returns.
Of course, there’s a story within the story – spot and network revenue are down. Digital, however, continues to grow – up 16% in Q1. And that’s precisely the crossroads where the radio industry sits – whether it’s the programming department, the sales cubicles, or the digital wizards who are all trying to make adjustments to the plane while it’s airborne at 35,000 feet. It’s not easy to adapt a legacy industry that is in a state of constant change, and yet, that’s the mission that all of us in radio broadcasting share.
Despite the obvious implications of these results from the RAB and the continuous flat environment in which radio now apparently lives, there are many in the industry who continue to staunchly cling to the tenets of the past, refusing to embrace the changing media world in which we all live. Radio fundamentally has incredible strengths, but in a disruptive information and entertainment environment, clinging to convention is a recipe for…well, staying flat.
We laugh at those who were members of “The Flat Earth Society,” but in fact, “The Flat Radio Society” continues to be well-populated, supported by beliefs that ran out of reality steam years ago. Here are some of those “flat radio” philosophies that can still be heard today:
- We are not going to trade analog dollars for digital dimes.
- We need to start making money from our social media “likes” and “followers.”
- Radio will always be the dominant player in the car.
- Good sellers can be trained to sell anything – including digital.
- We run our two stopsets an hour where everyone else does. What’s wrong with that?
- I’m great on the air – who really needs this social media stuff?
- Mobile apps are just another expense that won’t generate any revenue.
- We don’t need social media help – we just brought in an intern from the local college.
- We don’t really compete against those pure-play jukeboxes.
- Our stream is fine – I listened to it last month.
- Radio will always be the place where consumers discover new music.
- There are 3 or 4 radios in the average American residence.
- We don’t send our managers to conferences because they just go there to job hunt.
- We dominate this market – consumers have no other viable options for entertainment and information.
- We don’t really compete against public radio – besides they’re winning because of government handouts.
- There’s not enough time in the day to acknowledge listeners on social media pages, much less answer the phones.
- Consumers understand that commercials are part of the price they must pay for listening to free radio.
- We’re very active in social media – we use it extensively to promote our contests and to set listening occasions.
- We have great relationships with the local car dealers – they love our remotes and sales contests.
- I’ve got all the research I need right here in the rating book.
- Drivers will always rely on radio for our accurate traffic info.
- Local doesn’t really matter – it’s about entertainment.
- We don’t need to market our best stations – everyone knows about them.
I could go on. But so could you. We have a comment section right below, and I invite you to add your “Flat Radio Society” sayings. Let’s not get personal, but let’s also examine those philosophical anachronistic thoughts we all have. And if you think that Jacobs Media has a head or two in the sand, here’s your shot.
Our demons are stubbornness and fear, and yet, we’ve got the people, the innovativeness, and the desire to remain competitive – even as the world changes around us. If radio is to move forward as an industry, we need to overcome the traps of the past, see the present for what it is, build on the medium’s inherent assets, and imagine a future where we do a better job of serving listeners, advertisers, and communities in ways that are truly in-sync with where our changing media world has moved.
Otherwise, the future will be…flat.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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“Pandora and Spotify aren’t ‘radio'”.
Check! It’s on the list! Thanks, Tory.
I just got done arguing on Facebook with a know-nothing about that…
Well said Fred. This is a clear and honest look at the legacy issues that are holding radio back, and the opportunities that are in front of the industry to start a new cycle of growth….. Social media is the new channel that if harnessed correctly adds another important community building and audience engagement mechanism. For both local communities in the terrestrial broadcast radius, and the new stream and web digital audience. Broadcasters engage on air with the audience and now can also engage in real-time via social streams. Heres a great article on how real-time engagement is the new real-time marketing https://spiderqube.com/blog-post/?id=32&k=is-#realtime-#engagement-the-new-real-time-marketing?
Broadcasters are no longer in the radio business. They are in the content business w/ radio being one of the delivery mechanisms for reaching their audience.
Heres one for the list “our web sites are fine the way they are looking like every other radio web site”.
Peter, thanks for the kinds words and for including the article – which is spot-on – and reminds a lot about many of the principles Lori Lewis talks about with our clients. The “listen+engage” piece is especially apropos to radio, but trying to get broadcasters to listen to listeners is a mindset shift that still needs a lot of work.
Thanks again, and also for adding to the list!
I’ve been in radio so long and heard this said so many time Fred!”…trying to get broadcasters to listen to listeners is a mindset shift that still needs a lot of work.” Why not get back to the entertainment factor with personalities, creat “LOCAL listener loyalty all over again and add less spot load plus, get creative on the outside like remotes becoming new again. Make radio fun again…use it for it’s strength…music, local info, etc. Radio should be FUN again not only to the listener but the personalities!
You’re echoing some of the thoughts I brought back from Dublin at Radiodays, Danny. Broadcasters around the world have their issues just like we do in the States. But they very much focus on their markets and talent. And yes, they’re having a great time. Thanks for reaching out.
I call what you’ve described the “Caesar Syndrome,” where those in control seem to think all they need is to declare something is true. How about the classic “We’re bringing in syndicated talent because it improves the quality of on-air persons in your town.”
One of many “flat radio” statements that really annoys me is “radio was the original social medium.” Not only is this flat-out wrong (or maybe the letters and opinions published in newspapers hundreds of years ago don’t count), but radio lost any claim to being social when it went to flat voice-tracking and ignoring what listeners really want. Radio operators all the way up and down the line need to stop thinking in yesterday’s terms and focus on the change that is inevitable…and already here.
Reed, I have the same issue. Radio was a lot of amazing things in people’s lives, but it the definition of broadcasting is putting out content to “a mass undifferentiated audience.” Social media is personal, one-to-one, and about real people. True, radio has been a cultural force in millions of lives, and now has that opportunity to be a true social medium. Thanks for taking the time.
Great list, I’d add “The pictures are better on the radio”
Good one!
Fred, you hit a home run with this. I just about spit out my coffee with the first line: “We are not going to trade analog dollars for digital dimes.” It’s those digital dimes that are keeping the radio industry from dropping into a free fall. In any other economy, flat for five consecutive quarters would be considered a recession/depression. Fiscally responsible leaders will jump in and put their collective heads together to resolve the problem (see 2008). Let’s hope and pray radio’s leaders will jump in and realize their industry needs to change with the times. We don’t have to re-invent radio, just get back to being great at connecting with the listeners. In ALL possible ways.
Thanks Fred!
Thanks, Jamie. These are all things we can do – and like a lot of people, this flatness is a real bad thing that affects us all.
“Radio has survived TV, LPs, 8 tracks, Cassette Tapes, CDs, iPods – the Internet is no different”
Great list, Fred.
I hope tomorrow will be “Round Radio Society” with an accounting of forward looking attitudes the industry should embrace to invent it’s place in an exciting Digital Future. 😉
Hey, Jeff, thanks for the comment and the addition. I hope the emphasis of our blog these past many years has been to provide positive ideas to move the industry forward. Even on “provocative” posts like this one, balance is key to this effort having value. Thanks again.
I found this article to be extremely interesting and painfully true. There are many factors that keep a radio station from advancing in both the ratings and revenue department. One is laziness. It’s a lot easier to go down to the local diner, order a cheeseburger and coffee and wallow in a pool of self pity with your fellow employees. Another is the fear of trying something different, be it a new kind of format, promotion or contest. It’s a crowded field out there. YOU GOTTA GET NOTICED!!!! In conclusion, radio must accept that very accurate saying, “We have met the enemy. It is us.”
Curt, thanks for the comment. Yup, many of the wounds are self-inflicted. The ways in which we break out of this flatness is too stop acting that way. And you deal with that head-on here. This is the time to start throwing the ball down the field.
Bravos, Fred. Thanks for another important post. Let me suggest another perspective on “flat.” It’s not an issue of one quarter or five. Truth be told, Radio has held a single digit share of the total US ad spend for decades. No matter the industry initiative, and there have been a great many, Radio’s share has remained about the same – flat. Contrast and compare with Internet share. From nothing to #1. Internet spend was greater than broadcast TV for the first time last year. Cable TV, Newspaper and Radio filled out the 2013 top five. Combining the Broadcast and Cable TV spend one can make the case that “TV” is still first. Note: the largest segment of Internet spend, Search, exceeded Radio’s total take in 2013.
One critical flaw here is in our operating definition of reality. Radio continues to evaluate performance in a vacuum. Our Radio vs Radio metrics represent an acute myopia. Moreover, these superficial box scores drive potentially destructive behaviors. The majority of our sellers show up for work with one mission, to steal dollars from the Radio guys across the street. We’re playing a zero sum game. This is a long-standing problem which starts at the top. What we allow we encourage.
Let’s pause and take in the big picture. Reality as it is, not as it was or as we wish it to be. Amid this sea change – the disruption of marketing and advertising as we have known it – Radio needs to protect its future from its past. Two elephants in the room. The irrational primacy of EBITDA. Let us take a page from Bezos’ playbook. Drive topline and put some profit into R&D. Radio can still deliver a solid, respectable margin (time to let go of those now crazy 1990s margins). WE. In Radio there is no “we” and there never has been. It’s every station, every cluster, every ownership fighting for itself.
My sense is this can all be turned around. We live in exciting times pregnant with incredible promise. Here’s one example of what’s possible. Two guys start a company in 2009 and grow it to 400 million users without spending a dime on promotion or advertising. They sold their company, WhatsApp, to Facebook for $19 billion which was more than Radio’s total 2013 revenue.
Finally, kudos to Reed Bunzel. Chasing his comment, permit me to recommend a good read. Writing on the Wall. Social Media – the first 2,000 years by Tom Standage. As Gary Hamel says “Perspective is worth 10 IQ points.”
Dave, I always know when I’ve written something worth reading when I receive one of your thoughtful comments. It stands very nicely on its own, and the theme that radio keeps chasing “radio dollars” goes a long way to explaining the “flatness.” And I believe a lot of people concur with your notion that radio still has incredible potential to reinvent its model. Not everyone has massive debt, and you are correct that there’s still so much potential for the radio business to reinvent, innovate, and grow. Thanks so much, Dave.
Hi FRED,
Your “Flat Radio Society” list certainly covers it! You could add more but what’s the point. It is amazing how many still cling to, and espouse the old tenets, and are ardent members of the “society”.
It’s simple really, adapt or die, and get over not being the only choice in town anymore. “Radio” can act like a BLOCKBUSTER who never embraced the idea of “on-demand”… or a KODAK EASTMAN who never gave credence to mobile and digital cameras etc… the list goes on, or be at the centre as an innovator in all that is evolving and available.
And JASON CALACANIS’ Keynote “State of the Media 2014” speech at the RAIN SUMMIT WEST in April should be compulsory viewing … https://www.youtube.com/watch?v=GsbSTzWSnMw
Jason’s POV is always fascinating. He has spoken at two Jacobs Summits, and always rocks the room. Several years ago, he told the radio-centric audience in the room, “It’s over. You’ve lost. Your business model has failed.” And then he proceeded to map out the next steps for the medium. No one listened.
And of course, his acknowledgment that apps have become the big smartphone activity over Safari, Chrome, and IE confirmed a lot of our beliefs. I love the quote, “People don’t open browsers – they open apps.” There’s a group down the hall from me at jacAPPS who enjoyed hearing that.
Lee, thanks for taking the time to add to what is becoming a very interesting day of back and forth observations – all of it constructive.
The problem is simple. first there is too much consolidation. Secondly there is very little local news or programing. On the FM side the titles of songs and preforming artists not even mentioned. On the AM side each clear channel station has the same syndicated right wing programs. WLS Chicago has the same people as WJR Detroit. The only real local programs are sporting events. . Sometimes going back to what made radio great is really moving ahead. More local ownership more local talent is needed we must get away from the Clear channel model, which has automated radio. Sometimes addition can be made via subtraction. Radio needs to move ahead but don’t throw the baby out with the dirty water. You can talk till the cows come home but the truth is that the 1996 FCC act is one reason that radio is flat. I know many of you do not want hear this but its true
I think that your assessment of the Telecommunications Act of ’96 is on the money. Is the industry better off today than it was back then? That said, consolidation couldn’t have come at worse time for the health of the industry, given the media and technology revolution that was underway. Companies took on massive debt at precisely the time when more research, development, and talent searching was necessary. And sadly, consolidation has not led to innovative radio formats, even though there are “dog FM” stations in most markets, bonused and packaged so that clusters can get the buy.
Be that as it may, smaller, more nimble broadcasters (and there are many, many still left) have to prove their value proposition – not by aping nationalized programming – but by growing their own, digging into the local marketplace, and creating a real difference. That’s a tougher road to hoe, but it is the best counter-punch to what the big guys are doing to scale their programming and pay off their debt.
Thanks for reading our blog, John, and for taking the time to comment.
How about “I’m in compliance with every one of my lender covenants” or the time honored “we just need to tell our story better”, or sell the “sizzle, not the steak”
All good. (You haven’t, by any chance, uttered any of these yourself, have you?)
Nah. My favorites are “in the valley of the blind the one eyed man is king” and “they don’t pay on the halftime score for a reason”
🙂
‘Flat, is the new Up’. If ever there was a phrase guaranteed to limit ambition, that’s it. Holding pattern. Stem the flow. Defend the heartland. Retrench.
I have come to truly despise the word “flat,” Mike. You are spot-on that it can numb you into thinking you’re doing OK – all things considered. Thanks for reading the post & commenting.
Some interesting points, but the main problem — the main reason radio isn’t competitive — is that nobody has done radio that’s any good for 20 years or more, at least not that I’ve heard. Communicating on the mike is an all-but-lost art. Furthermore, there are demographic problems to grapple with: Changes in past birth rates have now caused a temporary flattening in population growth contrasted with the huge Baby Boom population cell. It’s going to be a couple of decades before this “roller coaster” (huge up and down swing) phenomenon levels off. Radio stations were purchased in the mistaken belief that audience numbers would forever climb. Now owners are stuck with signals that can’t pay for themselves at these cost-per-point levels.
Tom, thanks for the comment. In all fairness, I think there’s a lot of great radio still happening out there – just not as much as there was. You have to look for it, and if you’re living in/visiting many markets, the quality has suffered, there’s no local context, and very little personality that sets stations apart. We are in agreement that radio’s obsession with the 25-54 demographic has very much excluded young people. The largest one-year age in America right now is 22 – not 52. We have a post coming up in the next several days that addresses this very demographic dilemma. Appreciate you taking the time.
Hello Fred. I have watched this phenomenon repeat itself multiple times since I first worked in radio, and later in ad agencies, starting in 1978 at the age of 21. However, I was not alluding to the exclusion of the *low* end of the demographic scale. Quite the opposite. Ours is a youth-worshiping culture, and radio is no exception. If radio is giving short shrift to anybody, it’s those who are 52, not 22.
Incidentally, that category you cited, “25-54” — have you ever considered how people take that grouping as though it has been handed down from on high on a stone tablet? Ditto 35-64, or 18-34…. any of them. When was the last time anyone sat down to actually analyze those demarcations to determine if they should even be sliced up that way? What in the world does someone 25 have in common with someone 54, for example — whether we’re speaking of musical tastes, income, or type of shoes most frequently purchased? And speaking of which:
Music (like other art forms) has been steadily devolving for the past 50 years or so. What passes for “music” now is typically a mash-up of computer-replicated, non-acoustic instrumentation; strident, deafening percussion; primal, stultifying rhythms; and banal recitations in dull-witted monotones — frequently off-color if not plainly obscene. Of course, as the old saying goes, every generation becomes its parents: The specter of elders being scandalized at their youngsters’ tastes and culture isn’t new. My parents thought my music was noise. And to a considerable extent they were correct: A lot of it was “junk food.” Still, it was harmless, even if occasionally nerve-wracking. But not so today: The coarsening and dumbing-down of today’s younger generation has been greatly exacerbated by the music they listen to. And rather than fight back and try to edify and uplift our youngsters, the electronic media have totally capitulated. Radio (specifically the youth-oriented segment of it) has aided and abetted the downward intellectual and cultural slide, rationalized and justified by the pursuit of the money.
If it’s “Radio For 22-year-olds” you want, simply build a wall of thunderously loud, brain-frying noise 24/7. But don’t expect to sell anything with it, because with an average attention span of roughly eight seconds, the kids generally can’t or won’t comprehend anything remotely resembling a commercial. In addition, thanks to still-in-force FCC regulations covering decency, much of what they would PREFER to hear on the air is prohibited (or at least must be chopped up with bleep-outs). Therefore, their visits to the airwaves are generally of brief duration, as they usually switch over to some Internet-based content with unfiltered, far more profane content.
wow. just wow.
so glad I revisited – this comment made it more than worth it. 🙂
Yeah, you’re a sucker for lightning and thunder. Please check out my comment, and tomorrow’s post. Thanks, Jeff.
Tom, I agree with much that you’ve written here (thanks for taking the time). Yes, Boomers are being ignored and overlooked by marketers. That is something I’ve written about a lot here, and as the “father of Classic Rock” (if you will), I feel the pain of overemphasis of a youth culture as much as anyone.
The 25-54 insanity is another frequent topic, and your point is well-taken. A 30 year age spread is senseless. But radio didn’t start that mess; it just reacts to it.
Where we differ is on the whole 22 thing – and that’s the topic of tomorrow’s post. The U.S. Census doesn’t lie. Every industry has to deal with them and figure them out, if nothing else because of their sheer numbers.
And if you think about it, some of the same things you’re saying about today’s 22 year-olds were probably being said about us Boomers when WE were 22 and Boomers were coming into play. We were a bunch of dirty hippies, taking drugs, and listening to loud acid rock. The marketers in the late ’60s weren’t any more excited about appealing to Boomers. But you have to do what you have to do with a population of this size.
Every generation is unfairly criticized when they’re in their teens and twenties. It’s just human nature. I have a couple of Millennials that are usually under my roof and I can tell you that while they have many more choices than we did, they gravitate to quality stuff. Whether you (or other readers) agree, however, is mostly moot. They are a mega-generation, and we’d better figure what they want AND what it will take for them to want to work for us.
Please read tomorrow’s post, and feel free to opine again. Thanks for your thoughtful comment.
Thanks for the reply, Fred. Just a quick clarification/elaboration: I sneaked my age into the prior post, but more disclosure is in order. While I am of the “boomer” generation (the latter end of it, anyway — 1957), I don’t identify with “hippies, taking drugs, and loud acid rock.” I’ve always been strictly suit and tie (even in college classes, if you can believe that), always drug-free, and I know more about the works of Perry Como and Jo Stafford than of Led Zepplin and The Rolling Stones.
In any case, there is a practical consideration as well as a number of philosophical ones when it comes to marketing to either end of the current generational divide, and it’s eminently practical and insurmountably final: The oldsters are the only ones with any real money.
The up-and-coming generation saddled with enormous debt and largely under-employed is one of the chief reasons the national economy is currently in the sewer.
I think your last line speaks volumes about the state of these twentysomethings, and perhaps why things are the way they are – the lack of loyalty, the movement away from organized religion, and rapid job changes are understandable. As marketers, we have to be sure we’re creating products as brands and as a medium that is congruent with where the bulk of the population now resides. Thanks again for the time and the thought process.