Radio has had little change to its programming approach in recent years, yet the media world around radio has changed dramatically. Evolution is needed. Streaming audio is a greater threat to radio than other radio stations.
Admittedly, radio competing with radio is a natural assumption because you’re in search of an audience that uses radio. The thinking is that you only have to be better than the other radio stations in your market or format to be successful. Unfortunately, that is only a microcosm of the competitive picture.
Consumers (listeners) program their own radio stations by creating channels, subscribing to DSPs, and using music services to play the type of music they like most. The same for spoken word. Podcasts, talk programs that are subscription-driven, and social media delivering “snackable” content are all direct threats.
Nielsen measures radio. While Cume is holding somewhat steady, Average Quarter Hours have been eroding, and the value of AQH is sliding. The lower TSL for radio, as it competes with digital for impressions, appears to be at the root of the revenue problems for the medium.
It would be easy for me to argue that digital impressions don’t mean that you’ve been around for any more than a click, and that radio’s selling power is greater than most other media options for advertising, or that most Americans use the radio at some point every week – all valid as radio has value, albeit challenged in a world where media consumption and competition are growing.
The audience is using radio differently and less than in the past. There has been little done to change how we program, promote & market radio.
I’ve been quoted and criticized for having said, “Radio hasn’t failed badly enough to change for the better.” What I mean by that is… the public companies continue to live quarter-to-quarter and can’t afford short-term losses for long-term growth. Unless there is a dramatic shift in listener habits, there will be a time when someone somewhere convinces their Board of Directors to allow them to make moves that will enable radio to better entertain, inform, and therefore grow their audiences. Radio has the distribution that is much coveted by everyone else.
Think about it. I’m among the many who challenge radio companies to air fewer commercials in order to create a better listening experience. It would also be a better advertising experience. The problem for broadcasters is that limited inventory requires raising ad rates, and there are competitors who purposely keep their rates low to take the majority of the buy off the table, which punishes all other stations in the market.
These self-inflicted wounds are largely unaddressed by decision-makers. It has been described by some as a “race to the bottom.”
That’s not to say that airing fewer commercials immediately increases your ratings. The content has to be at the highest level. However, “too many commercials” is the biggest complaint listeners have about radio. That, in the face of fewer/no commercials on streaming platforms, continues to lead to audience defection for radio. If we’re not going to address the proverbial elephant in the room, then we should question what can be done to attract an audience in the face of such erosion.
How do you perform at a level that the audience will sit through long stop sets, or listen two, three, four times a day. Repeat listening is what drives Time Spent Listening. Increasing your AQH should lead to higher ratings.
Content needs to be the very best it can be to overcome the irritation of a long commercial break. What can your talent do that will bring the audience back to the station? Can your talent tease upcoming content to hold the audience through a break? The odds of being successful increase when you take advantage of the availability of nationally known syndicated personalities, using local personalities who are well-known in the market, or doing something unique that resonates in a particular community. There is evidence that if a station’s content is compelling, listeners will endure long stop-sets for it.
The listeners’ short attention spans are on full display. Sparked by social media and limited time in active lives, the audience spends time on Instagram Reels, Facebook, TikTok, and YouTube to keep up on entertainment and information. Talent that can create “Snackable” content should be in demand by programmers and management.
The talent that “use every part of the cow” can expand an audience by sharing it on social media. Their brief content can be used across dayparts if presented much in the way social media takes an hour-long comedian’s performance and slices it into 20-30 short segments. Think about how easy it is to go down a rabbit hole – before you know it, you’re thirty minutes into reels.
Contesting has value in extending TSL. Offering desirable prizes, offering experiences that money can’t buy, and/or playing games that are fun and entertaining, are ways to hold an audience or bring them back with appointment listening. There is no shame in “buying an audience” as it is an age-old tactic to grow your ratings. Keep in mind that cash giveaways are strongly challenged to compete with lotteries. The government has more money than you do, and lotteries are a way to fill their coffers. Whatever the prize you offer, it has to be enticing to create tune-in or hold an audience through a stop-set.
Music stations face the greatest challenge from DSPs. The theory of instant gratification remains important for radio. That is playing people’s favorite songs frequently. The strength in that approach is that the odds are you’ll hear a favorite song every time you go to a station. The weakness is the predictability that comes with playing the hits over and over again. There’s no algorithm with radio that engages to deliver to the listener the type of songs they like most. Radio is one-to-many. DSPs are one-to-one. Radio has to continue to play the Power songs frequently, but we can increase the illusion of variety by having deeper secondary and tertiary categories.
Platooning songs, the act of swapping out songs in the secondary and tertiary categories, is another tactic that can keep your library sounding fresh. I am a latecomer to using this tactic. I wasn’t a fan of platooning until the pandemic. How radio was used changed when Work From Home became commonplace. The need for variety was magnified as in-car listening dipped, and radio wasn’t as readily available in homes. WFH introduced streaming to an audience that had not discovered the magic of the aforementioned algorithms. Which warrants a new take on how OTA (Over The Air) Radio should deliver variety. Platooning of the Non-Power categories brings a freshness to your station.
Research and Marketing. Missing from many budgets, these two elements were once a part of almost every successful station’s strategy. A commitment to asking the audience what they want and giving it to them. Understanding the audience’s desires and satisfying them. That’s how many long-lasting leading stations became dominant in their markets. That alone should be evidence enough that research is valuable to map a station’s plan of action. “Guessing” or “Copying” your competitors isn’t a logical strategy, but it’s one that is used regularly in these times.
Marketing, engaged only when the product is right-on, should be used tactically to attract sampling. Television is a tough platform to use unless you buy a consistently well-placed schedule, and you use OTA, CTA, and Social Media. Direct marketing is my favorite tool for exposing a station. Used properly, you can target areas that have the greatest likelihood of being home to Nielsen diary keepers and PPM households. Media is competing in a noisy marketplace. You cannot break through if you’re invisible.
The fact is that we’re here.
Despite some stations being signed off and licenses returned to the government, radio is a widely available medium. I remain a believer, but we need change. Look at the Cume level for radio versus Average Quarter Hour. People want to listen. We make it difficult for them to do so. Evolution is necessary if radio is to rebound. Change can be executed without the current business model being shattered. There are many successful radio stations in terms of revenue and ratings.
Unfortunately, they’re not the ones you think of first when you think about the state of the business.
Bravo, Mike, and bravo to Dave Dillon for his bang-on response. I came up through the sales side and have been on commission all my life. Don’t sell, don’t feed the family. You learn to strategize pretty quickly. Radio is a great business, it’s just as a friend of mine says, “right now it is like an overweight fellow with a heart problem who needs to go to the gym but never does.
Currently, stations have too few salespeople selling an excessive number of offerings. That can easily be fixed. There is zero training, which can easily be fixed. Terrible ads are coming out of the speakers (no offence, copywriters) that can easily be fixed. There are hardly any station/client exciting ‘listen to’ promotions airing, that can be fixed. Few stations have the testicular fortitude to run 4 three-minute stop sets an hour, which can easily be fixed. BTW, an advertiser would pay more for a spot in an exclusive, not button-pushed stop set. Programmers are playing the same old format as their competitors, living in a world of hopeium, cutting staff, and hoping revenue will grow; that can be fixed.
I could go on, but I will stop here. I could take on any radio station and start increasing revenue in 90 days and fix the problems mentioned here provided the ownership and management were determined to get to the gym and start exercising. We can make sure to see that winning is happening again for listeners, advertisers, the station, and the salespeople, like radio is capable of and should be doing.
Right on, John!
I wish you WOULD go on. You just rattled off a list of important bolts to tighten and I’d wager that you know how to tighten them all very quickly. I love the overweight + refusal to hit the gym analogy. It’s human nature to resist change, to become complacent, to slide down into mediocrity. It takes some “A Level” leadership skill to overcome that mindset and consistently strive for improvement.
Are there a lot of “A Level” leadership teams in radio? I think the answer is pretty obvious. It became a career for a lot of talkers who couldn’t deliver, in spite of the fact that radio is the most powerful marketing weapon on the planet.
It must baffle Mike McVay to help stations across the country grow their ratings substantially only to watch them not consistently convert that into equally substantial revenue and profitability growth. It should baffle us all. There’s literally no excuse for it.
The industry is full of radio lifers who’ve not hit the gym, evolved, course corrected, sharpened their skills, adjusted their approach, actively studied their own market, re-calibrated their strategy and fully trained, prepared and supported their staff to succeed. Many wouldn’t even know where to begin, but it won’t matter for much longer. They’re destined for a Friday afternoon call to clean their desk out.
I think that’s sad, but if you spend your career pretending to know what you’ re doing and not even making an effort to be better, it’s your own fault.
Mike’s message hits at the center of what’s wrong today in radio. Evolve or fail.
It’s like Sears and Amazon. One company became complacent and didn’t “hit the gym.” One company started in a garage, but consistently EVOLVED over the years to be better and better—and last year did $637 Billion in revenue.
Evolving matters.
Right on, John—Right on, Mike!
Thanks for the response and for sharing your thoughts, John. You’ve shown that your approach to sales works. The more sellers you have, the more calls that are made, the greater the odds of growing revenue. It’s easier said than done … but it is the right approach.
Mike!
That’s a riot! You were on the Chess Team in High School ! Why am I not surprised? ! The ability to think strategically gets really sharpened playing chess. Everyone in radio should play a LOT more chess.
When you say, “Radio hasn’t failed badly enough to change for the better,” that resonates with me. In my humble opinion, radio enjoyed a golden era of sharing a monopoly of mass reach media with only newspapers initially, then television. That was it. Advertisers truly had only three choices, so they eagerly handed their money to newspapers, radio stations and TV stations every single day. Do you think it took a PHD in chemistry to answer the phone and write an order at a radio station? Let’s be real. Most of the GM’s of radio stations in the early days barely finished high school.
There was no strategic thinking involved whatsoever. You answered the phone and wrote the orders and went to lunch for three hours, played golf for the rest of the day, or sat on a bar stool somewhere. Nobody was “trained” in radio management. You were hired if you were considered fun, or you knew the owner of the station. Who cares if that was how you got your foot in the door–the phone kept ringing and the orders kept rolling in regardless. Training was never a priority. It still isn’t today. How’s that for “Evolution?” Zero.
If you didn’t know the owner, some of the untrained, unsophisticated salespeople in radio became untrained, unsophisticated sales managers, then some became untrained, unsophisticated GM’s. As they climbed the ladder, their clothes became more expensive, their cars became more expensive, but their ability or willingness to think strategically never emerged. It didn’t have to emerge—because they evaded “failure” long enough…until they didn’t. The moment they hit a few bad quarters in a row and couldn’t talk their way out of it like the old days, the clock started. They eventually got broomed.
I’ve sold commercials on over 1,000 individual stations from LA to New York. It gave me a broad perspective of the entire industry. All I can say is… “Wow.”
I’ve watched plenty of once very highly respected local, regional and C-suite executives in radio, who rode the revenue wave for years as if they created it, then had no plan whatsoever when there was any kind of adversity. They didn’t think strategically. They didn’t study and understand the dynamics of the ever-changing marketplace (like a chessboard) and carefully adjust their programming and sales game plan accordingly with brilliant tactics. Some of them severely damaged their ratings and revenue before they were finally cut loose. Some of the career flame outs in radio have been pretty epic. They were like gasoline tankers that drove off a bridge and burst into a ball of fire in a movie.
I think when you spend more time with your tailor, your hair stylist and your five iron than trying to chart the best course to succeed, you’re destined to fail. I’ve lost count as to how many “big names” were sent packing after they talked a good game, but had no strategy whatsoever. This is why the biggest groups in the business are bleeding red ink in their quarterly earnings reports. They’re filled with people who literally have no viable strategy in place whatsoever. If they actually did, we would see it in their quarterly earnings…but they clearly don’t.
All of this is so deplorably unnecessary. Nobody wins. I almost feel sorry for them. Radio stations and the fifteen other platforms that they have to offer an advertiser is the most powerful single stage and multistage marketing weapon system on the entire face of the earth and always has been since about 1920. Compared to other media choices, it’s not even a race. AND YET… it’s getting its clocked cleaned by highly trained people who sell pay per click ads the size of your thumb on a smart phone. Does that even sound remotely sane?
Nobody ever tries to train anyone today—at any level. It’s archaic. The best run companies in the world develop a list of the best ways to do EVERYTHING. It’s called “best practices” and it’s not a new concept. It’s just not embraced by the radio industry because the radio industry has been dominated by people “winging it” for decades and in many ways is still stuck in 1971.
You hit a nerve, Mike. You bought up the central issue why so many radio stations and groups have been on the wrong path to success: Because they’re filled with people who’ve gotten away with bad habits for so long—and haven’t “failed badly enough to change for the better.” Well put.
It’s time to play chess. It’s time to question every single move very carefully before you make it and how it could be impacted by the rest of the marketplace. It’s time to think, collaborate, track successful tactics and teach them to others to leverage success into more success. It’s time for radio to start pondering how the most successful companies in the world prepare their teams for success every day. Winning companies are all about constant process improvement. Is radio?
Google and Facebook train their sales teams and every single manager like they were preparing for a war. In the last year, Google and Facebook (combined) literally generated more than double the revenue in a single month than the entire radio industry did in an entire year—in spite of having an 8 decade head start.
Does that make a statement? You said it. It’s time to EVOLVE.
While top level Google and Facebook executives are diligently preparing for a war, radio’s top managers are having their BMW’s waxed, then heading to the golf course.
I completely agree. It’s time to evolve. It’s time to admit this isn’t working and start over and rethink everything.
I think this is the most discussion, by far, for radio’s future. How can the way it’s managed EVOLVE into more success with advertisers, listeners and the people INSIDE it so hard working good honest people can survive in it and not live in constant fear of having their whole department wiped out on a Friday afternoon.
Thank you for your effort to get people talking about this, Mike. This is great stuff and your perspective is highly respected. (And PS, you were RIGHT about knocking the units per hour down and how it leads to higer TSL and higher AQH. You proved it. That should be done on every station now!)
Mike,
I was always on the sales side of radio, but I’ve been reading your articles for years. The overall theme, which I greatly respect, is: “Radio is a chessboard. Is every piece where it should be to win the game? What are we not seeing? What are the ramifications for each piece on the board? Is our current strategy a winning one? If not, what’s our next move? How should we proceed?” I think that’s why you’ve been so successful. You’re always questioning the quality of every decision. I respect that. A lot.
Let’s agree that programmers have never had to do more with less than right now. The budget to hire or keep top level air personality talent is limited, the budget to buy media to promote the station is limited, the budget to give away expensive prizes is limited. I get it. Programmers get tossed in the Indy 500 with a car that only has three tires and told, “Now, go win that race!” It can become an impossible assignment pretty fast.
At the other extreme, Spotify spent $1 Billion dollars on new podcast studios and talent alone. They gave Joe Rogan a $250 million contract—making him the highest paid podcaster on planet earth. The Swedish company started in 2006 and invested HEAVILY in programming. They didn’t make a profit for many years.
Then, 2024 arrived.
Spotify posted:
Net income of 1.138 billion Euros (That’s $1.29 Billion US dollars in profit)
Revenue of 15.673 billion Euros, up 18.3%. (That’s $17.86 Billion US dollars in revenue)
Reached 675 million monthly users
Rose to 263 million Subscribers
I get that Spotify has a different business model than commercial radio with most of their income coming from monthly subscriptions. That tells us that 263 million people will happily pay a fee to NOT listen to commercials, which makes a statement. Meanwhile, about 410 million of their listeners are completely OK with very limited commercial breaks—which also makes a statement.
The take away is that minimal commercial interruptions provide a more desirable listening experience and a more exclusive, more impactful advertiser experience. About 410 million people agree with this. Spotify just made a billion dollars in profit in 2024 with this strategy.
I get that it’s not a perfect apples to apples comparison to traditional broadcast commercial radio, but it’s still relevant. People crave quality programming and limited commercial breaks and today they can find that in quite a few places. I come from the sales side of the business and yet I totally agree with you that fewer commercial units per hour would be good for radio. It would give listeners less incentive to punch out. There’s also another reason that no one talks about: Radio stations don’t sell all of their inventory anyway—and never have. So, dialing back the units per hour would really not impact anything.
This subject gets people worked up and that’s not my intent here. It’s time to have a practical, civil, productive discussion about it instead of doing things the way they’ve always been done. Radio has a long history of people in management whose only strategy to grow revenue is to “Crank the rates up!” It often manifests in pushing the rate envelope too far, losing the deal, then letting the inventory go unsold. Then, sometimes that unsold inventory is purchased by a remnant inventory company for $2 per spot and this keeps filling up the stop sets. Is this a good strategy?
The end result is choppy revenue growth, if any at all, and lots of commercial interruptions per hour—pushing listeners away to other choices. Would you make more money selling a unit of your inventory for $0, $2 or $200? Times up. Lock in your answers. Seriously, this is something a fifth grader could handle. It’s pretty simple, but old habits and narrow thinking keeps this vicious cycle alive.
Reduce the units per hour, sell them ALL at a rate the market will pay and your revenue will grow, your listeners will stick with you longer and everyone wins. While some people can’t wrap their mind around that, you don’t have to sit in the front row at Harvard to see the logic.
For the record, Spotify’s share prices have doubled in the last 5 years. Check out the share prices for the largest radio groups that are publicly traded in the last five years. Some are delisted. Some are close to being delisted. Some are down over 90%. Excessive debt was blamed for a lack of profitability in years past, but several of these groups have been through chapter 11 bankruptcy and had billions in debt wiped away in the process—and still struggle to make a profit. So, what’s the excuse now?
Do you think it’s time to take a more careful look at how things are done today, Mike? I sure do. The landscape has changed considerably and radio’s overall strategy for success has not evolved much at all. The proof is in the revenue pacing reports. They never lie. They capture the complete summation of your current strategy every single morning. They’re either going up or going down. It’s pretty hard to misunderstand them.
Thanks for your perspectives. There’s always a better way to do things and the most successful companies on earth make it a priority to look for it.
Dave: Thank you for this very thoughtful response and the compliment. I am sure that it will instigate conversation that will be embraced enthusiastically by some and rejected and ridiculed by others. I’m on the “Embrace” side of the equation. A few years ago, 2018, I pitched that companies should take one station in each PPM market and reduce the commercial load to 4 to 6 minutes per/hour. Entercom (now Audacy) and iHeart were in a battle doing that to one another in Seattle. Doing an analysis … it was the only market I could find where AQH was going up. They eventually gave up the tactic. Side-note; I was on the chess team in high school. 😉