It all started with tips from now former iHeartMedia employees that they were being pink slipped in several markets throughout the country (we’ve received the same tips from now former CBS employees). It leaves many people in the radio industry scratching their heads, wondering just how deep you can cut into these companies and deliver a product the consumer continues to love. Then, it was time for CEO’s from some of radio’s public companies to start reporting first quarter earnings. And, to be honest, there wasn’t a lot of happy talk.
As Facebook was reporting a 51 percent increase in revenue ($8 Billion) in the quarter, radio executives were struggling with how to explain why they were either flat or down without those piles of political ad revenue from 2016 to help prop them up. While everyone in the industry knows the first quarter is traditionally radio’s weakest, there was no clear signal from any of the CEO’s that reported that things will pick up all that much moving forward. In addition to the stories that follow, here’s a sample of what we heard yesterday.
- When asked, ‘Why the softness?’ Radio One CEO Alfred Liggins said, “I don’t know the answer” (Radio One is pacing down in Q2).
- Saga CEO Ed Christian said “Flat being the up for radio is back in play” (Saga says pacing is uncertain and unpredictable).
- iHeartMedia CFO Richard Bressler repeatedly stated how surprised the company was with the softness of the ad market (iHeart is pacing down in Q2).
On the positive side, Radio Ink’s 2017 Independent Operator issue set for release on May 22, includes in-depth interviews with five Independent Operators across the country. We discuss how they succeed and make money at radio every day, how they keep good employees and what advertisers are saying about radi in their markets. Here’s a sample from Impact Radio Group CEO Darrell Calton.
“The best part of being an independent is the ability to move fast. There are situations almost weekly that we can respond quickly as decision making is done on the spot and we trust our managers to make them without having to chase down the GM or myself. Of course there is a framework for the types of decisions that require approval but for the most part our folks get it right.
“Whether it is counter programming to something a competitor has just done, strategic situational opportunities that pop up or employee emergencies of almost any type, we are prepared to deal with whatever it is and move on. Understanding that our people are the greatest assets we have is key. While there is nothing wrong with being part of a corporate environment, there is no denying that it is a different culture.
“We used to have a great football coach here in Boise. His name is Chris Peterson, now with the Washington Huskies. Coach Peterson has a philosophy which he boils down to this. Create a culture where everyone knows the end vision and recruit OKGs (Our kind of guy or our kind of gal). Because of the pace we work we need OKGs that are able to bring teamwork, coach-ability, communication, drive and passion to win to the table. With an independent we are free to asses and create the type of culture we want but more importantly change it when it stalls or does not work. That is a much harder process on a corporate level.”
Even small local owners cut back on personnel and rely on syndicated, network, or automated programming like voice tracking to save money. It is difficult to find live overnight or even night personalities.
That’s the problem: the markets. As long as radio is a Wall Street game, it will be a share game, resulting in a race to the bottom.
Maybe quality isn’t what it once was, but unlike the markets, listeners continue to respond to radio, and tens of thousands of advertisers continue to use it.
If we’re really being honest, we know that the big public companies are the problem. They’ve created a cost-cutting industry full of people afraid to lose their jobs.
Yet radio still works for hundreds of millions of listeners and tens of thousands of advertisers. But I can’t recall the last time a market manager, GM or sales manager pushed rate and said “we’re worth it.”
Instead, they cow tow above to keep their ever-decreasing pay checks.
Insanity.
While I appreciate Bob’s contention that “We’re (radio) worth it.” I have to remind: The quality of our services has been discarded and shoved off the table as of over 25 years ago.
Radio, indeed, may be worth more than its perceived value. But, the markets continually demonstrate they are not entirely impressed by what we produce.
And, if we can be honest with each other – why would they believe otherwise?
(The fear of) digital killed the radio star.
We should’ve ignored it and sold commercials. Audio is what we did best. Not anymore.
Now we worry about using “digital assets,” which reach maybe 10% of our on-air audiences.
This is actually a very simple game. Over-leveraged owners and managers have made this a “share” game. It used to be, and it should once again be a “rate” game. We should limit the inventory, max the rates, and use that philosophy as a unique selling point.
When’s the last time you heard anyone in this business say “we’re worth it.”
We need a dose of that.
I have to, generally, disagree with the adage of: “Ask them what they want – and then give it to them.”
Active, rather than passive research of a radio audience is akin to opening a vein – it always ends up messy and nothing of any value has been learned. Plus, somebody loses a couple of pints.
Wayne’s point is true. When you stop focusing on radio and dive into everything else, you’re missing the boat. Radio has so many distinctive advantages, the problem is most salespeople don’t know how to sell it and lose out, If only there was a way to educate them and businesses…..!
ENS Media’s TOMA Research and SoundADvice radio e-marketing system educates radio A/E’s and local businesses about the role and power of radio in the new media landscape.
Who wants to listen to radio when all the creativity has gone down the tunes? Someone once said TV was a vast wasteland that is now true for radio as long as radio owners – corporations keep their Playlist and formats small radio as we see it now will always suck
Because Wayne has credibility with me, I have no hesitation to move to the next, logical level.
I am eager to read another piece from Wayne that addresses the “how, specifically” portion of focussing on and serving the interests of audiences, advertisers and staff members.
Wayne’s take on this matter cannot be effectively challenged. So, the question that gets pushed to the forefront becomes: Now what?
It’s not rocket science. Although the answers may vary by market and by format, simply ask your audience, your advertisers and your staff what they want, then give it to them.
Zig Ziglar said “You can have everything you want if you just help others get what they want.”
I read Radio Ink Headline’s article ‘It Wasn’t a Great Week for Radio’ with a heavy heart.
The saddest part to me was that the headlines captured by the poor performance of the big corporate guys could damage the image of radio with advertisers, and have a negative impact on staff morale across our industry.
We all know local independent stations that are doing very well and are not, so far at least, impacted by the woes of those companies that answer to the stock market.
As I work with stations across the U.S. and Canada, I’ve come to the conclusion that the difference between successful radio properties and those that are struggling, is a matter of focus.
Those that focus on the end, rather than the means to the end, are struggling.
The ‘end’ of course is profits. But the means to that end are a result of how well we serve our three customers segments; audience, advertisers, and staff.
It doesn’t take a genius to make ‘the books’ look good in the short term by focusing on cuts to any one, or all, of those customer segments. But I’ve always maintained that only butchers and barbers can cut their way to success.
The alleged accountability and measurement created by the internet have caused the corporate world to focus on measuring the wrong thing….shareholder results and short term profits.
Independent operators who focus on super-serving their audiences, their advertisers, and their staffs, have proven that focusing on those three groups results in achieving the profits the corporate CEO’s are focusing on.
Unfortunately, the headlines captured by public companies, overshadow the results of private companies that do not have to make their results public. We have to admit that the corporate cuts to serving local audiences, advertisers and staffs, coupled with the resulting poor performance, has a negative impact on our entire industry.
It’s also ironic that those same corporate ‘giants’ have also lost focus on their core product, radio. They are grasping at digital straws to save their business. Of course we need to take advantage of the digital opportunities that exist for our audiences, our advertisers and our staffs, but not at the expense of losing focus on our core product.
There is no shortage of digital opportunities, and digital competition, and virtually everyone offers them. Our only unique offering, continues to be radio.
I have no solutions to offer when the headlines read ‘It Wasn’t a Great Week for Radio’ other that to tell those who are succeeding not to lose heart and to stay focused on the audience, advertisers and staff that make them successful. Your bottom line will continue to follow.
And yet good old HazzardAyre Radio is as steady and increasing its market share and earnings show it.