Myers: Radio Is Back

In our final “Future of Radio” installment, Media Ecologist Jack Myers tells Radio Ink that with Cumulus and iHeart back on track, radio is “poised to reemerge as a player in the digital ecosystem.”

Radio Ink: How does 2019 look to you in terms of possible deal-making now that Cumulus has restructured and iHeart is nearing the completion of its restructure?
Myers: Overall, across the media ecosystem, I see more and more contraction, consolidation, and the big getting bigger. With iHeart coming out of their bankruptcy and restructuring, with Westwood One and Cumulus on track, and clarity among the other ownership groups, I believe that audio and radio are really poised to reemerge as a recognized player in the digital ecosystem. Add the growth in mobility and the expansion of podcasts, along with the consolidation and contraction, and that will result in fewer players with high profiles.

Radio Ink: Did these restructures need to happen before we saw any new investment?
Myers: Yes, I agree completely. The parabola needs to bottom out before it can turn around. Companies that have huge debt need to focus on debt payments rather than investments in the future. It’s clearer now that we are going to see increased investments in technology, in mobility, and in tying audio into “The Internet of Things” through smart speakers. All the trends are very positive economically, but like video, is being impacted by Amazon, by Netflix, and by an increase in over-the-top platforms. I believe radio and audio are going through their own technological renaissance.

Radio Ink: Do you expect iHeart or Cumulus to be selling off any stations in 2019?
Myers: I’m not sure the timing would be good because of the value of local assets. Stations that have strong local brands and strong local talent are going to find themselves more and more valuable, even as national marketers look to connect with consumers on an emotional basis. One of the few remaining places they can do that is the local radio station with a local connection to talent. I think we are still a year away from seeing the sell-off of station assets, because I believe the consensus in the financial community is that the value of radio is going to increase in the next year; so while there may be buyers, I’m not sure there are going to be sellers.

Radio Ink: Do you see the chance of any blockbuster deals in 2019, 2020?
Myers: You simply can’t bet against huge, blockbuster deals, because that is where the whole industry is headed. Who are the buyers remains to be seen, and what the decisions are of the large, traditional legacy radio companies and how they decide to define their business going forward. It’s inevitable that we are going to see more blockbuster deals.

Radio Ink: What’s your take on Townsquare, are they going to stay in the radio business?
Myers: I can’t say I have great familiarity with Townsquare, other than they have a good management team and they’ve built a brand heavily around local media. I’m not sure why right now they wouldn’t be in radio, unless they feel they can’t really participate in the opportunities with podcasting, mobility, the The Internet of Things, and with experiential. The way that iHeart has been incredibly successful in building the brand with festivals and music events. You know, if you can’t play in those games, then you shouldn’t be in the sport.

Radio Ink: What are you hearing on the deregulation front?
Myers: Not a lot, frankly. Until we come into 2020 and see where the landscape goes there’s disruption, chaos, and uncertainty. I have a friend that refers to the FCC as the Federal Confusion Commission. Bottom line, I don’t think we can predict regulation and we can’t depend on it to go one way or the other.

Radio Ink: Where do you see growth in the industry in the next year or more?
Myers: I believe iHeart has a lot of growth ahead as they focus in on podcasting and really begin to remarket themselves to the ad community in ways that will be relevant. I believe Westwood One certainly has an opportunity to grow significantly. NPR is on a dramatic growth curve, I expect that to continue. I also think companies heavily invested in video and other media like the New York Times and financial publications like the Wall Street Journal, to look at audio as a growth opportunity. Certainly, Disney will continue to invest across the board. Apple is another one. On the video side there are a couple of little hidden assets out there. Voodoo, a video platform which is owned by Walmart, and is beginning to invest in original content. Roku on the digital side and AT&T with Turner. I think all of these companies that are heavily investing in the future of content will increasingly be looking at audio; Spotify, Pandora, Apple, where is their best fit. You are either in a growth phase or you are looking for a liquidity event at some point. I think the companies that don’t have the capital to invest in meaningful growth are in the game to find an exit and those who are successfully investing have an opportunity to be much larger in the next two years.

Reach out to Jack Myers by phone at 860.596.4358 or e-mail [email protected]

Read part one in this series HERE
Read part two HERE
Read Part three HERE
Read part four with Ed Henson HERE