It seemed like a harmless question at the end of his quarterly earnings call but the answer was anything but harmless. When an analyst asked Radio One CEO Alfred Liggins how he was feeling about the radio industry, his answer morphed into a criticism of iHeartmedia.
Liggins reported that Q1 2017 pacings were down and the analyst referred to iHeartMedia’s recent report to Wall Street that Q1 was pacing up 2%. Liggins said iHeartMedia is a problem.
After Liggins said he was bullish on radio, when compared to other traditional media, he shot a few verbal daggers at iHeartmedia. “Because of the current structure of the industry, iHeart has an advantage on national business that they are currently exploiting. My personal view is that the industry needs to get restructured, you can’t have one guy controlling that much national revenue on all of our stations. At some point maybe the rest of the guys in the industry get together and figure out how to offset that. I’ve talked to a number of the other radio guys in terms of their Q1 (not iHeart), they are all in the same position as us in Q1. As an industry, from a macro-level, the health of the industry is in as good a place as any traditional media. I think the current structure, given iHeart’s dominance, is problematic for those of us that are smaller and something needs to happen. They take a lot of money off the table early at lower rates, grab share, CPMs are not growing, and it’s a problem.”
iHeart might argue that, if they are getting more national revenue, it’s because of the national platform they’ve constructed, especially since CEO Bob Pittman came aboard. The company has significantly invested in digital, events, awards shows, and programmatic, just to name a few. Perhaps they have more to offer national advertisers. Certainly Entercom CEO David Field does not feel the same way as Liggins does about iHeart. He’s been quite complimentary of iHeart on his last few earnings calls.
iHeart might also argue that they are one of the few companies aggressively going after national advertisers rather than waiting for the phone to ring. CFO Richard Bressler has said many times in his quarterly earnings calls that iHeartMedia is bringing new advertisers to the radio industry. There’s no doubt the scale and platforms they have get them in new doors.
Liggins did say radio has been the shining star of the traditional media business. He says other media, such as newspaper, magazines, and even broadcast TV, have gotten devastated when it comes to advertising. And radio has hung in there, being kind of flattish. And even if its down one or down two that’s way better than newspaper and magazines, and that TV’s success has been largely driven by retrans.
I agree with Robert Radio. As someone who spent over two decades on the Station side in a variety of capacities, and now for several years on the Agency side, I applaud IHM for their aggressive approach to gaining and growing their share. We buy locally but have clients who are national in scope. IHM is the only group to consistently approach us in a collective sense, yet respectful of how we buy markets locally. They have developed a unique system for us which is very effective. No other group has approached us on a regular basis as they have. Not to say we don’t have issues from time to time but I have to give them credit for being consistently proactive.
I-Hurt is driving down rates, we see it in our market. My business partner has been selling in the market since the 70’s–we’re seeing national rates lower than back then.
When the inevitable bankruptcy comes, the value of all of our stations will be driven down.
Wow. What a crybaby!! We are not at all fans of Bob Pittman the Self-Promotimg Egomaniac, but that said, don’t blame Pittman or iHeart for your woes. You sound like a football team whining about another team. Figure out the solution to the challenges your radio stations face. That’s your job. And there’s always going to be competition.