At the Radio Ink Hispanic Radio Conference last week, Michael Bergner from the Media Brokerage firm Bergner & Company, gave the radio industry a reality check. He said the stock market is booming, businesses have never been worth so much, and none of this applies to radio.
Bergner was part of a panel moderated by broadcast attorney Frank Montero which focused on The FCC, The Biden Administration and what it all means for radio. And what Bergner says is radio needs more consolidation. “It has to happen. Radio is a melting ice cube. As a broker, there’s no money in AM Radio, the technology is obsolete, and FM is headed that way.”
Bergner said that radio is a secret victim of the COVID lockdown of 2020. “It was put on its ass. If radio was a $15 billion business before COVID, we may be back to $9 billion now. You’re not going back to $15 billion.”
Bergner said Private Equity ruined the radio business. “As an investor, why would you put money in radio.”
The NAB and a group of broadcasters have been pushing for the government to loosen the ownership caps. The group believes owning more stations will allow them to better compete with the unregulated tech giants that are taking huge piles of local ad money away from all traditional media. Not all broadcasters believe lifting the ownership caps, allowing the bigger groups to own more, will solve that problem. Some broadcasters believe deregulation caused the problem.
Our 2021 Hispanic Radio Conference was a smashing success.
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Stop crying about being a disrespected talent. The fact is that you were nothing without their transmitter, studio, website, phone lines, etc. In order for people to get to you, they went through the Company portal. If you really believe you are a talent, then try doing it without the company?! Seacrest doesn’t even have the balls to do it on his own. Rogan did it. Too many cry-baby’s that don’t actually have an audience that they can monetize. If you don’t have a big audience, then you’re not a talent…you’re an employee. Employee’s get hired and fired. Rinse and repeat.
Radio has become a jukebox of music, liners and jingles, with a few voice tracks mixed in along with 7 minute ad break. Has anyone ever asked a sponsor if they’d like to be that last ad in a 7 minute break? Talk radio is made up of right wingers and conspiracy theories, sports talk, with newspaper guys spending 15 minutes at a time beating a subject to death that they could cover in 3-5 minutes. Where are the young people getting into radio? The radio schools are mostly gone and who would pay for a 4 year degree to get into a business that offers small salaries for most? Then the talk about letting the biggest companies buy yet more radio stations and creating more of the same. How could these people buy more radio stations? Many are billions in debt and owe their souls to hedge fund guys. The radio I knew 30 and 40 years ago is gone and it’s very sad for listeners who loved and knew the people on the air.
“Has anyone ever asked a sponsor if they’d like to be that last ad in a 7 minute break?”
I have. They don’t care. They don’t just buy one spot. If they did, it might matter. But they buy a package, and the spot may be 1st in one cluster, and last in another. People tune in and tune out, so you have as much chance catching them at the end as you do at the beginning. The advertisers know what they’re buying. We offer them the option to buy the first spot in a cluster and we have no takers.
Obviously, this guy is selling small market spots for 15 bucks a pop. PPM data CLEARLY shows a massive tune-out as the stop-set continues. If you’re not PPM then you’re guessing. “People tune in and people tune out” is not a strategy. You’d be fired if you worked for me, and this was your client pitch.
The clients see PPM too. They know the research. There are no secrets. They know where they are in the spot cluster. No complaints. I would gladly put them first in the break if they wanted it. They don’t.
I politely disagree with Mr Bergner.
Podcasts are the hottest trend in 2021. If 2020 was the year of binge watching, 2021 is all about social media and podcasts, according to newly released data from a comprehensive survey of media consumption in America. Podcasts are surging. 55.9 percent of survey respondents reported listening to podcasts, up from 48.7 percent in 2020. – http://www.forbes.com/sites/robsalkowitz/2021/09/20/podcasts-are-hot-bingeing-is-down-per-new-survey-of-american-media-consumption/amp/
Similar transition for TV from appointment TV, audio is transitioning away from appointment listening to on-demand or binge-listening through podcasts. For example, NPR’s weekly Car Talk program has been taken off the air, more than seven years after the death of one of the co-hosts. The show continues as a podcast, though: a new, twice-weekly podcast will rerun episodes from the show’s early years.
The biggest challenge with audio is actual attribution data (not causative data) and engagement opportunities and data.
Kudos to Mike Bergner for not fearing to candidly share his thoughts even though he likely now will be a target for those who think shooting the messenger will generate some form of relief. As a former radio group owner and someone who still follows the industry and supports local terrestrial broadcasting, it grieves me to have to agree with his synopsis. That said, I think the Covid 19 emphasis is an oversimplification of radio’s current state of affairs. While Covid has clearly been a demise accelerator, many of the factors that now challenge the radio industry were inevitable and have been very predictable for over 20 years. Those factors have included competition from new technologies, restructuring and consolidation of many of radio’s historically reliable advertisers, demographic changes that have negatively affected the industry’s ability to hire the best and brightest people, and the inability of the large consolidators to effectively scale a business that has always been human resource intensive.
He’s right, and the reason has nothing to do with radio. It has to do with revenue. Radio has only one revenue stream, which is advertising. As long as radio is dependent on advertisers for its revenue, it will be hard for it to grow. We’ve topped out as far as inventory, and we can’t raise our rates. But when you start imagining revenue streams beyond advertising, things start to open up. This is why the TV companies have expanded their subscription services. They make money directly from users. Same with EMF and public radio. Start thinking about alternate revenue streams for radio, and perhaps you’ll start to see more of a future for the medium.
What a surprise 😲
A broker who earns his income by selling radio stations supports further deregulation.
Twice before radio experienced the FCC deregulating our industry ((1993 and 1996). Is there anyone that can point to improvement in listening levels, increased revenue or an enhancement to serving the community because of deregulation?
The only positives ( if you can call them that)are sales commission to brokers, increased stock values( at the time) to stock holders and increased cash flow because of RIF’s (reduction in force).
Is there any reason to believe a round three of deregulation would produce a different outcome?
If the definition of insanity is repeating the same behavior again and again while nonetheless expecting different results, then increased consolidation is insanity. If radio wants a “reality check,” the large players should look in the mirror. Radio ownership cut its own throat by creating a monolithic approach to programming, isolating itself from community, and degrading programming to the level of caricature via syndication in an effort to squeeze every drop of profit possible out of the business. Ownership disrespected talent, discouraged diversity of ideas, and, in its short-term thinking, allowed itself to become irrelevant. Radio doesn’t have a technology problem, it has a management problem, and that management problem is in the stratified, narrow approach of “big radio.” Proceed with increased consolidation at your own risk.
As a veteran broadcaster and “disrespected talent,” I stand and cheer your comment about our industry which is rapidly flushing itself down the toilet.
I’m thankful that I was a part of what once was considered a calling.