Perish the thought, right?
The last time a recession roiled this country – that is, the Great Recession – broadcast radio suffered mightily. Talk to any radio CEO (or CFO) and they'll likely agree many markets lost about one-third of their revenue base as a result of the crash. More than a decade later, most have not recovered from those losses.
It's one of the reasons why the last 10 plus years, many radio companies are still scrapping, trying to balance the expense of producing serviceable content with the costs of personnel, health care, and of course, the ratings. In recent years, we've had a seat at many of these conference tables, and I will tell you that being a broadcast corner office denizen these days is one very challenging job.
Today, I'm honored to be at Radio Ink's annual Forecast 2020 event in New York City. And I'll be moderating this year's CEO session, featuring Mary Berner and David Field, two execs who have had interesting years. But rather than talking about the U.S. economy, EBITDA, and stock prices, we'll be discussing the content opportunities and challenges that impact the radio broadcasting industry.
But in earlier sessions, many panelists and keynoters at Forecast 2020 will no doubt be talking about the looming economy, the chances for another recession, and similar topics that affect bottom lines, Wall Street, and the health of the radio business.
But there may another side to an economic downturn. And that's revolves around the growing expenses most of us are incurring every month, thanks to subscription content services.
Many consumers are paying for content across multiple platforms – Netflix, Spotify, SiriusXM, the Wall Street Journal to name just a few. Add in HBO, Hulu, Pandora, Showtime, and now Disney+, and your credit card balance is feeling the strain. In this pay-for-content media economy, it's become the norm.
Until, that is, when the next recession hits.
That's when consumers typically begin to painfully analyze their expenses – especially those little luxuries that add up. It's the time cut back on those lattes, valet parking, and that pair of running shoes we really don't need.
So, it won't be remarkable that when the economy goes through its next inevitable downturn, whether it's next month or next year, there will be pressure on consumers to tighten up, watch their expenses, and keep their credit cards from spinning out of control.
It's logical to assume that all those content fees will be scrutinized. In a growing economy, it's easy to let them keep piling up, avoiding the hassle of cancelling a subscription. But when the going gets tough, these media extras may get going.
Enter broadcast radio.
Each year in Techsurvey, we ask our thousands and thousands of radio listeners why they're still choosing to tune to AM/FM radio stations – commercials, talk, music repetition, and all.
We used to see music and personalities top the list. And while they still hold high ranks, it's now in-car access at the top of the heap. But the #2 driver: radio is free. It's especially true among Millennials – the generation that knows a little something about subscription fees.
Millenials are known as the “cord cutters” – and for good reason. Their strategy is to save money by adding a la carte content.
All that makes sense until virtually everyone has their hands in their pockets, asking for a few bucks a month to keep the content train running.
Except broadcast radio, that is.
It's a medium that has been around all our lives, it's dirt simple, and it delivers entertainment and information with no charge (and no use of data). And yes, it's FREE.
But if you think about all the positioning statements you're heard on the air (and the ones you've written and produced), this is a benefit that is never mentioned.
Now having said that, I'm reminded of a billboard WMMR ran for Preston & Steve at least a decade ago. A certain Philadelphia morning icon had left the broadcast airwaves, and moved over to the greener pastures of satellite radio. And of course, to listen to his show now required a monthly payment.
The board's slug line didn't include the word “free,” but it made the point the show didn't require a financial outlay in order to listen. The campaign resonated back then, and would likely make an even stronger point in this rapidly escalating subscription economy.
Do I really hope there's a recession on the horizon? Of course not.
But it would be nice if the broadcast radio business would wake up to one of its growing advantages while the economy is still on the plus side.
The world of media, entertainment, and content have been disrupted as companies seek out scale. There was a time when everything online was free – the New York Times, Napster, But, alas, that time has come and gone.
One of broadcast radio's true “value added” assets is that it's free.
Maybe it's time to start marketing it.
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