Under Ajit Pai’s FCC many CEO’s in the radio industry believe more consolidation could be on the way for the radio industry. The argument being that radio needs consolidation so it can compete on an even playing field with the likes of Facebook and Google who are mostly unregulated. The flip side of that argument is that the wave of consolidation in the 90’s has ruined the way radio sounds and put some companies in a position where they are struggling to survive. Here’s what Urban One CEO Alfred Liggins said about the issue yesterday.
Revenue is not going gangbusters for Urban One these days. Liggins said the radio industry is going through a revenue trend that needs to be stabilized and more consolidation would allow for that. And it sounds like Liggins would be a willing participant if more consolidation took place. “There probably would be some swapping of stations and we are only up against the caps in Richmond and Raleigh.”
Liggins also spoke about the debt that iHeartMedia and Cumulus are dealing with that seems to be having a rippling affect on the perception of the entire radio industry. “The two big guys (iHeartMedia and Cumulus) have a lot of wood to chop. Even if iHeart gets it’s current financing deal done they are not out of the woods, they are only kicking the can down the road.”
Liggins also said that a big reason revenue is struggling in Urban One’s Houston cluster, a market they took a $12.8 million write-down on the value of their licenses, was because iHeart came directly at them with a format competitor. And, he doesn’t expect them to stop attacking like that in any of his markets.
Consolidation, or at least the way in which consolidation was implemented, has been an absolute disaster for radio. Historically, the elimination of competition in any industry ultimately leads to stratification, stagnation, and, in the end, death. Consolidation drove talent out of the industry. It centralized programming in the hands of a few, resulting in a monolithic “sound” across the dial. It decreased diversity in programming, thereby forcing consumers to seek alternative media. It broke many of the connections between local radio and the communities it served. Sure; there were short-term benefits for some investment bankers and the like, but they think quarter-to-quarter. We’re now nearly three decades out and the victim is being bled dry. If insanity is defined as repeating the same behavior over and over while nonetheless expecting different results, then Liggins can only be described as “nuts.”
How can you get excited about being innovative, inventive, excited about beating the competition in programming, sales, service, etc. when you own the competition? Big corps like iheart don’t care out making any given station the best there is when it’s only one of hundreds in the corporation.
‘Consolidation’ has proven to be not good for anyone and the proof’s is in what’s happened to a radio, a once thriving industry which has, because of another ‘…ion’ word – ‘stagnation’ – supplemented nicely with abject greed, has managed to dwindle into the mess we call the ‘radio industry’ today. Resisting change for decades, over-commercialized stations that serve zero listener interest – the list is long and we all know it – the radio business became the business of radio long ago. It’s impossible to have empathy for a business that destroyed itself. Amazon and online shopping changed the habits of America and the world. There are many other avenues for music, news and sports beyond terrestrial radio but the industry did not and still has not recognized that the entire world has changed. As with every purchase made online representing one less made at brick and mortar stores, every listener to Sirius XM, Pandora, Apple Music, et al is another audience subtraction; another person no longer listening to radio. Listeners are out of the habit of radio and the industry need look no further than the mirror for their current sorry state of affairs. You may not agree which suggests you are either in radio or just in the dark.
Consolidation is not what is affecting radio. It’s the horribly ineffective ad copy producing zero results and making it hard to overcome when we arrive with the “good stuff”. Thankfully we are winning these battles and have expanded from two stations to five in our market since 2007. Businesses crave marketing help and most media people don’t have the skills. We still have over 90% penetration nationwide so if your clients aren’t buying then you oughta by crying!😩
Let me guess…you’re a small market, or perhaps a non-rated market. I’m certainly not disagreeing with what you are saying…However when make the statement “Consolidation is not what is affecting radio,” nothing could be further from the truth. In your market you hopefully are making a difference and selling a lot of “direct” business. However we both know that is not the case for the most part. Greedy owners who sold out their employees by selling their stations to Clear Channel, Cum-u-lust, and their ilk played a major role undermining and eliminating many very good, loyal employees who got screwed over by Corporate America’s misguided thinking. I for one got replaced by a bean-counter who had never sold an ad, or programmed a station. She was must have been pretty good with a # 2 lead pencil or else wore knee-pads.
Of course we don’t know where these comments come from – whether it be talent or managers –(I’d guess talent)-but it’s clear that most people IN radio don’t feel consolidation is a good thing. We were told early on (1996) that radio was trying to compete with newspapers for market share of revenue Then look what happened. The internet. So today they’re saying that radio is competing with Facebook and Google. What? That’s like saying radio is competing with Television and movies. C’mon. It’s all about real estate on the radio dial. My company can have 12 stations -your has 3. I can’t afford to run all 12 the correct way but nevermind-I have computers to do that. Radio isn’t “big business”. Never was, never will be. Innovation in radio is what’s lacking. Increased consolidation will only serve to lessen that innovation even more. Many of the posts here mention the listener-and they couldn’t be more correct. The purpose of a radio license is to serve the public. Not to serve the CEO. Radio is a great way to bring an advertiser’s message to a public that has the option to “buy” or not “buy”. It won’t always be that way if the trend down this road continues.
Cut to chase…Radio, post-deregulation has not been good for the LISTENERS…has not been good for the ADVERTISERS…has not been good for the COMMUNITIES that are supposed to be served…and most of all, has not been good for the EMPLOYEES of the industry. I’ve yet to hear or read a compelling article that proves or states otherwise.
You are absolutely correct. The ONLY ones that consolidation has been good for were the people who sold all their stations to Clear Channel and Cumulus etc before the economy collapsed. The only people who have benefited from consolidation since 2008 have been the people at the top of the management pyramid and those who have been bought out with huge severance packages. EVERYONE else has been completely screwed.
Consolidation would not get at the central problem if one truly believes that competing with Facebook and Google as that problem. It is simple math. FB and Google etc all take in their income from just one ‘station’ if you will. Radio One and others have multiple stations to run. I’m sure if Radio One could take their entire combined company income and put it into running only one of their stations, all would be fine. But the industry that they’re in calls for multiple stations across multiple markets. That’s the nature of the beast. To compare it to a one brand, one site, one entity competitor points out a glaring problem in thinking. That in itself may be the central problem.
And while they are allowing for more consolidation, they could also de-regulate the banks and Wall Street outfits to run on their own subjective ethics and morals. I mean, they’re reasonable and fair-minded guys, too. Are they not.
What surprises me most is that this is even the basis for a conversation or a debate.
Are both the sporting “delusions” and “denials” acceptable positions?
Liggins is certainly not at all thinking about the radio audience when he actually says more consolidation is good!! Seriously?????? Consolidation is a cancer ruining radio. With voice-trackimg, a disrespect for local talent and local programming, slashing of jobs and compensation… a nightmare to the radio industry, propogated by the likes of Bob Pittman and Clear Channel/iHeart, Lew Dickey at Cumulus, CBS and others. The FCC should mandate that 20 hours a day on all FM stations mist have a live broadcaster, that stations cannot air more than 12 commercials an hour, and more. That would help to quickly drive away the likes of the aforementioned destroyers of radio.
Here’s a fundamental adage that is taught in any half-decent MBA program: If something isn’t working, try something else. More consolidation would be good? For whom? Not the listener, that’s for sure. Consolidation destroyed radio. It’s in the wrong hands, being sucked dry. Isn’t that the real story? Liggins might be trying to bail his own boat but any serious investor would not be putting money into radio. And I’ve worked on Wall Street for 25 years. Don’t get me wrong: I love radio. Well, I used to. But I don’t recognize it anymore. And if it keeps bundling ads like crazy, the funeral will happen quicker. But that’s another ploy of the greedy who want to save their jobs rather than save what was once an incredibly fine and fun industry.
Interesting how Radio Ink had the Limbaugh story as its top headline and suddenly it’s been dropped WAAAAY off the first page even though it is getting more comments than any other story. Isn’t that unsound digital harvesting?? Come on Radio Ink. Have some guts. Are you journalists or cheerleaders? People are divided on Limbaugh — there are those who listen to him, and everyone else — so how about a story listing all the egregious things this jerk has done? He has hurt a lot of people despite a couple of heart-warming personal tales on the thread with the story. If you’re a trade mag, tell us the truth about the trade or just be honest and become a PR agency.
Kudos to you sir for calling it like it is.