What Radio Could Learn from Vladimir Putin’s Dilemma

History never really repeats itself, but it often does rhyme with the past.

For the radio industry, today’s Internet is a challenge not unlike what the industry faced when TV began to take off in the 1950s. For Putin, the plummeting price of a barrel of oil is reminiscent of what happened in 1985 when the Saudis stopped protecting oil prices and focused instead on share of market. Then, as now, the Saudis decision is putting Russia in a corner.

Russia is dependent on oil and gas. The radio industry is dependent on the sale of radio commercials.

52% of Russia’s revenues and over 70% of its exports are oil and gas. 78% of radio’s revenues come from the sale of radio commercials.

See the similarity?

Gordon Borrell will be holding his 2015 Local Online Advertising Conference in New York City this coming March (https://www.borrellassociates.com/loac2015/) and the key note speaker will be investment banker Jim Dolan. In a comment promoting this conference, Dolan has been quoted as saying that valuations for companies with a strong digital presence will be much higher than for any company relying on legacy platforms for 50% of more of their income. (http://rbr.com/boring-in-on-digital/)

For Putin, 25 years after the last time the Saudis turned wide open their oil spigots the lessons not learned from past history have put this leader into corner. Radio has the lessons learned from the birth of TV.

Again quoting Dolan, “I think the smartest thing that legacy media managers can do is plow all of their free cash flow into digital products and services….it’s too late to knit a digital parachute when you’re falling off the cliff.”

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