What Does Tom Think About Radio’s Financial Future?


Tom Buono launched BIA Advisory Services over 30 years ago, and has grown it into one of the most trusted firms in the world of media expenditures, analysis, and examining and tracking the technologies and the companies involved in local advertising and marketing.

And as technology has led to increased competition from more platforms, the need for  stations to understand the dynamics of that competition and what it will take to survive and be successful in the local marketplace has never been as critical.

Over the course of his career, Buono has been involved in the valuation of billions of dollars’ worth of communications properties, has spoken on panels for virtually all the major communications industry trade associations, and has testified as a valuation expert in many communications disputes and before Congress.

He has also been a principal in a venture capital firm, the president of a paging and SMR business, and the partial owner of a number of radio stations. He is often quoted in trade publications, business magazines, and national newspapers. As we move into a second year of pandemic-related issues and challenges, we wanted to check in with Tom for his take on how local advertisers may be adjusting their marketing strategies as they look to the lessons of the past 12 months in planning their approach to the future.

Tom is on the cover of the current issue of Radio Ink Magazine. Here’s a sneak peek at what he had to say in our interview.

Radio Ink: How would you rate the overall financial stability of the radio business?
Buono: Financial stability is a broad term, and it can vary significantly based on the type of company and who is making the assessment. It can be very different from an investor perspective, as compared to the perception of a local business using radio.

We have three large, publicly traded radio groups that have a great impact on how the financial stability of the industry is perceived by investors. We have seen bankruptcies, restructurings, and the stock values decline significantly from years ago. So investors have grounds to question the financial stability of the industry. For privately held companies, many have been solid businesses and been able to service debt and generate positive cash flow. A lot hinges on the debt leverage of the business.

From a local business perspective, as long as radio continues to produce good content and results for advertisers they will be perceived as a stable business. Most radio businesses have been great public citizens in their markets and are seen as valuable contributors to the local market.

Radio Ink: What is your advice for how the industry can improve upon that?Buono: Continue to provide a valuable service and focus on growing revenue and reducing debt. This goal is more difficult in a slow growth environment, but management must plan accordingly and execute on their plans.

Radio Ink: How can radio increase its share of the overall revenue pie in 2021?
Buono: We learned a lot from what happened in 2020 and where we are as we enter 2021. We can see which businesses have been devastated and which ones are positioned for a rebound in 2021 once this cloud of uncertainty is lifted. Focus on sales campaigns that target categories in which the opportunities are greatest to take share from other media and expand your digital offers.

Radio Ink: Which other media is most vulnerable that radio should go after?
Buono: Direct mail should be the primary target as it is much larger in terms of local advertising. The greatest growth will be on mobile advertising and online advertising, so look for opportunities to participate in this growth. Newspapers, out-of-home, and cable TV are other areas to consider in your markets, but they generate less local advertising revenue than radio.

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  1. How is it possible to comment on broadcast radio’s financial future without even once mentioning the platform that is eating FM’s lunch? Denial isn’t a strategy & does nothing to address broadcast radio’s three most lethal threats:

    1. Infinite Variety

    2. Personalization

    3. Song Skip Functionality

    While broadcasters whistle past the graveyard, Spotify, Apple, Google, Amazon & others will attract millions of your listeners depleting TSL even lower than the already collapsed level at which you’re now stuck. Denial isn’t a strategy.


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