I've been at my new job at ABC radio for about a month now and it's great; I'm really enjoying the fact that as Vice President of ABC Radio Networks' Affiliate Relations department, I can interact with so many radio stations across our grand land.
The lessons I learned through my years of working at Bridge Ratings I brought with me and after a few weeks communicating with a much more diverse group of stations than I ever have before, here's what I've learned:
1. Regardless of market size everyone has the same problems and opportunities.
It wasn't always this way, you know. Before consolidation took our industry by storm, major markets and stations in the top 50 had far different considerations in operating their businesses than did operators in markets 51 and below. Pre-'96, top 50 market stations had operating budgets that included marketing, promotion and research. They also had personnel resources that allowed them to be extremely competitive and allowed them to keep their eyes on the various balls they had to juggle. Major market operators only recently have had to deal with managers overseeing multiple stations. Top 50 stations in those days actually had time to plan and strategize for the future and act upon those strategies. They also have years more experience operating multiple properties than do their big market cousins.
Medium and small market operators have always had to work harder at making their businesses work. They did so with good old fashioned sweat and creativity along with building relationships. They still do it this way today.
2. Medium and small market operators are more aware of the importance of reflecting the local audience.
While this has been a staple of broadcast operations for-ever, somewhere along the line major market radio pushed it to the back burner. Now, I'm generalizing here because there are some major market operators who have not only remembered this important element of serving the public interest, they use their major market resources to make a difference in their towns and cities.
Local radio has always been compelling. The genericizing of American radio which has been pushed along by companies with such huge footprints as Clear Channel have literally taken the spine out of these stations which no longer sound like their communities. These stations provide impetus for all listeners - not just Gen-X, Y and Z - to seek alternative entertainment by virtue of the obvious lack of interest in their local communities.
3. Major market management drink their own kool-aid.
These people are so impressed with their climb to the top many have forgotten their roots. I was visiting a small market operator a couple of weeks back and I was taken by his continued passion and optimism for our business.
On the other hand, not a phone call I have with major market managers doesn't include a doomsday outlook. Small market operators don't fear Internet and satellite radio like their big market brethren. Perhaps there is some legitimacy to this perspective since there seems to be wider consumer acceptance of these technologies in the larger markets, yet I have spoken with some major market management who understand that it is NOT Internet radio and it is NOT satellite radio that has caused terrestrial radio's ills.
My view of the radio landscape is undergoing some adjustment simply because I am now exposed to a broader perspective and I love that. In fact, this broader perspective has allowed me to share some of the small and medium market wisdom with the big boys who seem to react positively to a fresh perspective.
I look forward to being exposed to the inclinations of all of the broadcasters I come in contact with these days and sharing them with each other in a way that perhaps has never been done before.
After all the things I learned through the consulting work I've done through my Bridge Ratings experience, I didn't have the ability to share with the industry the insight of so many others.
The insight seems to be helping gain perspective which we can all use from time to time.
Sunday, December 2, 2007
Thursday, September 13, 2007
What's Good for the Radio Goose....
Since February's announcement that Sirius satellite radio was interested in acquiring XM, we've seen many twists and turns in Mel Karmazin's effort to convince the FCC and others that a merger is in the best interests of consumers. In Mel's usual style, he has done an expert job of laying out the rationale and presenting it in an intelligent, non-offensive manner.
However, as we near the end of 2007, we seem to be very close to a decision on this event and as I mentioned in an earlier blog, my money now is on the merger getting approved.
The National Association of Broadcasters has done a respectable job of countering satellite radio's rationale in favor of a merger, but the time has come for the NAB to face the "Rule of Consolidation".
The fact is that the NAB has lobbied for consolidation of the radio industry since the early 90's and got permission for radio companies to begin buying up each other in a 1996 act of Congress.
The argument was that not only is consolidation good for the business - it's good for the consumer.
Now, eleven years later, many in our business - even on Wall Street - believe that this wave of consolidation has had negative repercussions on the financial well-being of the radio business.
Again, in the last two years, the major radio companies have been stamping their feet for further consolidation. It seems that owning 8 radio stations in the biggest radio markets wasn't enough. There are those who want to own 10 or more stations in the same market.
Yet when it comes to satellite radio consolidating, the radio industry says "no".
The radio industry is concerned about this proposed merger for many reasons...but none of them are truly onerous.
If the radio industry manages their business properly...
Bridge Ratings has been studying consumers' reaction to the proposed merger since it was announced in February. Over time and 5 studies, current satellite radio subscribers have become less concerned about the impact of such a merger. Potential satellite radio subscribers are confused, but most will delay their decision to subscribe until a decision is made. This is one reason why year-to-year satellite radio subscriber rates have fallen so precipitously in the last year.
The only negative impact the merger has had on the satellite radio companies is that the news of a potential merger has derailed the sector's growth. That's only temporary.
Satellite radio is a niche business and a merger will not automatically make it a broad-based appeal business.
If consolidation was good for the radio goose why isn't it good for the satellite gander?
However, as we near the end of 2007, we seem to be very close to a decision on this event and as I mentioned in an earlier blog, my money now is on the merger getting approved.
The National Association of Broadcasters has done a respectable job of countering satellite radio's rationale in favor of a merger, but the time has come for the NAB to face the "Rule of Consolidation".
The fact is that the NAB has lobbied for consolidation of the radio industry since the early 90's and got permission for radio companies to begin buying up each other in a 1996 act of Congress.
The argument was that not only is consolidation good for the business - it's good for the consumer.
Now, eleven years later, many in our business - even on Wall Street - believe that this wave of consolidation has had negative repercussions on the financial well-being of the radio business.
Again, in the last two years, the major radio companies have been stamping their feet for further consolidation. It seems that owning 8 radio stations in the biggest radio markets wasn't enough. There are those who want to own 10 or more stations in the same market.
Yet when it comes to satellite radio consolidating, the radio industry says "no".
The radio industry is concerned about this proposed merger for many reasons...but none of them are truly onerous.
If the radio industry manages their business properly...
- A merged satellite radio company will not significantly impact its listenership
- A merged satellite radio company will not impact radio's revenues and profits
Bridge Ratings has been studying consumers' reaction to the proposed merger since it was announced in February. Over time and 5 studies, current satellite radio subscribers have become less concerned about the impact of such a merger. Potential satellite radio subscribers are confused, but most will delay their decision to subscribe until a decision is made. This is one reason why year-to-year satellite radio subscriber rates have fallen so precipitously in the last year.
The only negative impact the merger has had on the satellite radio companies is that the news of a potential merger has derailed the sector's growth. That's only temporary.
Satellite radio is a niche business and a merger will not automatically make it a broad-based appeal business.
If consolidation was good for the radio goose why isn't it good for the satellite gander?
Wednesday, September 5, 2007
Will Traditional Radio be Invited to the Wi-Fi Party?
As a proud owner of an iPhone I was thrilled to hear that Steve Jobs had cut the price of the 8 gig iPhone by $200 just in time for the upcoming holiday season. Boy, that makes me feel just great!
But wait....as radio broadcasters, we should we feel good or bad that Mr. Jobs didn't 'refresh' his new Fall iPods with FM radio receivers.
The radio industry shouldn't feel slighted that FM radio seems to be at the back of the line of applications that are waiting to be included in America's favorite audio toy. We need to be realistic; it's just never going to happen.
Why is this?
Bridge Ratings has conducted studies over the past two years on iPod and MP3 use and believe me when I say that very few users of these devices want a radio in them. It just is counter-intuitive. Focus groups have been asking why it would make sense to put a radio in an iPod.
Steve Jobs has seen the research too. He's not even contemplating adding a radio to his iPods. Because Mr. Jobs doesn't ever look back. He has the luxury of doing what radio management hasn't had the chance to do in over 7 years - look to the future.
Of more concern to traditional radio is the new iPod Touch which comes with Wi-Fi capability and a Safari browser - the best mobile device browser out there. It's on the iPhone and it makes surfing the Internet effortless.
And now a music-playing device has the ability to go to iTunes and download music direct to the player. How far away are we from a time when these same devices can surf over to an Internet radio website and in a Wi-Fi hot zone listen to Internet radio. Not very far.
Generally, the radio industry has done a decent job and has dedicated some resources to its Internet radio efforts. This has occurred in mostly large and some medium markets. The remaining markets/stations haven't taken the step because they are intimidated by the streaming/copyright expense issue and they really don't know how to do an effective job of delivering an Internet radio product.
But if you can feel that Wi-Fi enabled MP3 player train bearing down on you, you are not alone, traditional radio. It's coming and coming fast and as far as Internet radio is concerned, traditional radio's greatest weakness is the vast choice (thousands) of stations available on the Internet. Practically every taste is served. And soon it will be served in a small hand-held device.
Traditional radio's greatest strength is its brand and the current distribution system of blasting its programming across metropolises (is that a word) up and down our great land. Radio's bright leaders should take these Steve Jobs press conferences to heart because each time Jobs steps on that stage, radio's exclusivity and relevance shrinks.
If you have not instituted an Internet radio effort for your company or station, don't wait too much longer. The pervasiveness of portable devices that can bring the world of radio to a hand-held music player or mobile phone is on the horizon. In fact, some already do.
You want to be invited to that party.
But wait....as radio broadcasters, we should we feel good or bad that Mr. Jobs didn't 'refresh' his new Fall iPods with FM radio receivers.
The radio industry shouldn't feel slighted that FM radio seems to be at the back of the line of applications that are waiting to be included in America's favorite audio toy. We need to be realistic; it's just never going to happen.
Why is this?
Bridge Ratings has conducted studies over the past two years on iPod and MP3 use and believe me when I say that very few users of these devices want a radio in them. It just is counter-intuitive. Focus groups have been asking why it would make sense to put a radio in an iPod.
Steve Jobs has seen the research too. He's not even contemplating adding a radio to his iPods. Because Mr. Jobs doesn't ever look back. He has the luxury of doing what radio management hasn't had the chance to do in over 7 years - look to the future.
Of more concern to traditional radio is the new iPod Touch which comes with Wi-Fi capability and a Safari browser - the best mobile device browser out there. It's on the iPhone and it makes surfing the Internet effortless.
And now a music-playing device has the ability to go to iTunes and download music direct to the player. How far away are we from a time when these same devices can surf over to an Internet radio website and in a Wi-Fi hot zone listen to Internet radio. Not very far.
Generally, the radio industry has done a decent job and has dedicated some resources to its Internet radio efforts. This has occurred in mostly large and some medium markets. The remaining markets/stations haven't taken the step because they are intimidated by the streaming/copyright expense issue and they really don't know how to do an effective job of delivering an Internet radio product.
But if you can feel that Wi-Fi enabled MP3 player train bearing down on you, you are not alone, traditional radio. It's coming and coming fast and as far as Internet radio is concerned, traditional radio's greatest weakness is the vast choice (thousands) of stations available on the Internet. Practically every taste is served. And soon it will be served in a small hand-held device.
Traditional radio's greatest strength is its brand and the current distribution system of blasting its programming across metropolises (is that a word) up and down our great land. Radio's bright leaders should take these Steve Jobs press conferences to heart because each time Jobs steps on that stage, radio's exclusivity and relevance shrinks.
If you have not instituted an Internet radio effort for your company or station, don't wait too much longer. The pervasiveness of portable devices that can bring the world of radio to a hand-held music player or mobile phone is on the horizon. In fact, some already do.
You want to be invited to that party.
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