As my Uncle Bert used to say, “If you wait long enough, everything comes back into style.”
Maybe he was talking about radio and the amazing press run the industry has enjoyed over the past few months.
It seemingly began with the 93% reach number that made the rounds back in June, backed up by the credibility of the Nielsen imprimatur.
And it continued a few days ago in an excellent article by Rikki Novetsky in Medium with this smiley face title:
“Almost every American still listens to radio. Here’s why.”
Novetsky’s article looks at some of the struggles that public radio is experiencing as streaming is down while podcasting is up. But the strength of her story is focused on her non-radio view of radio:
“Based on the Nielsen statistics, it seems there is something about listening to a voice while also driving in a car, taking a run, or sitting at work that has maintained a lasting appeal amongst Americans.”
And that shared, common experience impacts radio’s new competitors. In a blog post last June about the debut of Apple’s Beats 1, we ran a quote from their main DJ Zane Lowe:
“Part of the last three months has been desperately trying to come up with a new word that’s not radio. We couldn’t do it.”
And then earlier this month at the Podcast Movement conference in Fort Worth, Seth Resler sent out this tweet about podcaster Roman Mars’ speech:
So maybe radio is back in vogue. It may not have as much momentum as it had in those old “Radio. It’s Red Hot” days from the ‘70s. But as more and more analysts realize that one heckuva lot more people make radio a part of their media and cultural lives than Pandora, Sirius/XM, Spotify and BuzzFeed, you can feel a warm glow.
But let’s not get irrationally exuberant here. Because Rikki Novetsky also quotes another love letter to radio that appeared in Neiman Labs back in February, penned by Joseph Lichterman:
“Radio has traditionally been a local business – bound by the strength of a transmitter’s signal the same way a newspaper was defined by how far delivery trucks drive in the morning.”
Radio is still a local business, and its FCC licenses validate that fact. But there’s also no mistaking that many radio stations and the companies that own them have gotten off message over the last couple decades as economic pressures began to eclipse service.
The same analysts high-fiving radio in recent weeks and months almost invariably point to some of radio’s key assets – local market presence and proprietary personalities. Those are the assets you don’t hear on Spotify, Pandora, or the “70s on 7” satellite radio channel.
Yet, too many stations have mortgaged those benefits in order to please Wall Street or their boards of directors at precisely the time when they should be the defining differences between broadcast radio and everybody else. Smaller markets have been ravaged by cost-saving efficiencies that make cross-country road trips a mindless blur of unmemorable syndication, incapable of reflecting a hometown ethos.
Investing in local market personalities and infrastructure rather than networks, voicetracking, and other so-called efficiencies fulfills the industry’s promise. But over time, many broadcasters have veered away from that philosophy, leaving themselves vulnerable to the tsunami of choice and personalization the web brings.
So let’s take a moment and appreciate the fact that some national publications and writers are realizing radio’s value. But let’s also ask ourselves whether we’re doing everything we can to take advantage of the medium’s inherent strengths and deliver a product that is truly unique, essential, and connected to the people and the communities we serve.
The hype is great and it feels good – for a change.
Now we have to live up to it.
Thanks, Steve Goldstein.
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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“Now we have to live up to it.”
How research and opinion pieces need to point out that radio is squandering its key assets before it does an about face and doubles down on why people still love it? How long before people realizes that so much of what they come to radio for has become a mirage?
Sorry but to paraphrase Donald Trump, “these guys are idiots…they’re lightweights”. Its not as if any of these operational efficiency poster boys are turning out one great quarter after another. When flat is the new up, what do they have to lose by changing course?
Someone should and hold radio’s leaders accountable for decisions that seem to make no sense on any level.
Bob, I appreciate the frustration. I’m many ways, radio companies can be stratified by those who understand and strive for the local piece and those that are cutting those corners.
I find it fascinating that so many writers and analysts continue to point to the value of that hometown connection. Yet the quest for “efficiencies” often flies in the face of that obvious strategy. It’s precisely how many great brands succeeded in the 70s and 80s, and could once again thrive today.
Thanks for the comment.
Another great piece Fred and I appreciate the positive message.
Now let me contradict that. : )
The argument that consolidation paired with the involvement of investment firms being the downfall of radio is nothing new, but I wonder when the industry gets to a point of no return. When things have spiraled so far out of control and so much debt has been accumulated that there truly is no way back. These large owners had their own version of the mortgage bust when they overpaid for stations to monopolize markets only to watch the price to purchase stations crash. The aftermath has been a bloodbath of talent, both on-air and sales, in every market.
As much as I appreciate what iHeart, Cumulus and others are doing to stay relevant in a changing media landscape most, if not all of it, revolves around national brands. Popular national brands are certainly needed and I would even argue that radio needs more national and regional brands to highlight the relevancy of radio. But the perception is that local perspective and personality is being sacrificed for a few brand names that are then pushed on a market in order to save money on salaries and snatch up national advertising dollars.
Are the largest owners in radio too leveraged to invest in both national and local talent? The way they have been running their companies seems like the answer to that question is yes. I’m not Warren Buffett and an investment firm would never hire me but I don’t see a way around the debt. I hope smarter people than I have a plan to get past that massive problem and to do it through a combination of local and national radio talent.
Sorry to bring down the conversation Fred.
Sean, on the contrary, you’ve elevated the conversation by raising practical economic concerns. Not every company is facing massive debt. And those broadcasters seemingly have an advantage. What they may lack in scale and heft are made up in flexibility and the ability to invest in what matters.
The next few years will most certainly delineate companies and the ultimate winner and losers.
Thanks for making these observations.
Thanks Fred. That is a great point about the opportunities for companies that aren’t carrying a heavy debt load, they may very well be the future. The Scripps acquisition of Midroll and Hubbard’s investment in PodcastOne are prime examples of the ability of companies with manageable debt to expand into new, meaningful businesses that will work alongside and improve their stations.
Since I am a big believer that if you aren’t part of the solution then you are part of the problem I’ve decided to try and answer my own question – How can large radio owners invest in local and national talent with the albatross of debt hanging around their neck?
Number one would have to be by monetizing new products like podcasts and making money off of YouTube channels. This would involve investment by the talent and, as you’ve pointed out in this blog, hiring people with skills not traditionally associated with radio. To get the talent invested owners could incentivize the new opportunities by offering a portion of the profits from these new outlets.
Number two, sell some stations! Of course owners will take a loss on these sales but they can write it off, put the money towards paying down debt and think of the money they will save by not having those salaries and benefits on the books. This will also allow new players to get in the game and an increase in competition will hopefully fuel innovation.
That’s all I’ve got so far but I think it’s a good start.
It’s good to see those wheels turning. Thanks for the comments, Scott, and reading our blog.
Leverage was a much bigger issue 5-6 years ago than it is now. Most radio companies have comfortable debt loads now and can’t use that as a reason not to invest in the aspects that listeners cite as the main reason they listen to radio – rather than systematically dismantle them.
There are two exceptions – Iheartradio has a debt load that they will never get out from under – a balloon payment roughly 10 billion due in a couple of years with just enough cash flow to meet debt service. Cumulus is also deep in debt, for the most part due to overpaying for the ABC stations.
Most other radio companies don’t face any real debt problems and have the free cash to double down on localism if they want to. The question is…why don’t they want to?
I believe there are signs of investment and vision throughout these companies, Bob, but you have to look for them. Sean Waldron’s last comment talks about Scripps and Hubbard, and there are others that are engaging on many different levels. As Rikki Novetsky (and others) continue to point out, the “secret” is radio getting back to doing what got it to the dance to begin with. I think we can agree the next 3-5 years could tell the tale for the business. Thanks for staying on it.
I really love the optimism expressed here. I don’t think I have ever met anyone in the business who wouldn’t want to be part of an “Always live, always local” success story. I do agree that the next 3-5 years will be very tell-tale as far as where the industry is heading. On one hand we have optimistic research that is telling us that improving the product could very well tilt the odds, but on the other hand, have we had too many years of coddling the bottom line by cutting head count (and thus, quality) rather than improving the product?
Where I am going with this, is that the next generation of potential radio listeners are a very fragmented bunch with a penchant for modern means of delivery of their entertainment. Where terrestrial radio fits into that, will likely be decided in the next half decade. My hope is that the expectations of what the next generation of listeners considers “good radio” hasn’t been brought down to a level where they don’t really know the difference, or worse for us, they don’t really care.
What I am hoping for is that this starts a trend where stations make the move to keep the quality level high, presenting product that engages the listeners on a local level, and build a brand loyalty that translates into ratings and dollars. This way, everyone is happy (except, maybe their competitors).
Kurt, thanks for the thoughtful comment. I share your belief that the clock is ticking, and that as consumers buy new cars and as smartphones and tablets become ubiquitous, consumers decisions are being made that deeply affect media – especially local radio and TV stations, as well as flagging newspapers. Those budgets cuts manifest themselves in many ways, eliminating incisive managers and brilliant content creation. Much appreciated.