I just finished listening to Jason Jennings’ podcast about how Yahoo went from being a company worth $120 Billion to its sale to Verizon for $4.8 Billion. I think the wisdom that Jason shared is very applicable to the radio industry’s journey through consolidation since the Telcom Act of 1996.
Jason says the selling of Yahoo is like a train wreck; you don’t want to look, but you just can’t help yourself. I know many who’ve said similar things as Wall Street invaded radio with its goal of “increasing shareholder value.”
So how can radio learn from Yahoo’s mistakes? What are the lessons Jason shared that apply to radio? Let me share with you the Top 5 Lessons of Yahoo:
#1) Know What You’re All About
Yahoo never really defined itself and the revolving door of CEOs contributed to this with each one bringing a different vision – or no vision – to Yahoo. Or as Jason puts it, the company didn’t have a purpose; they never knew what they were all about.
As radio was deregulated and its original mission of serving the public interest, convenience and necessity was abandoned, nothing replaced radio’s reason for existing except for “increasing shareholder value.” Not surprising as radio people were replaced by Wall Street investors.
#2) Have a Set of Guiding Principles
Radio’s guiding principles were first established by the FRC (Federal Radio Commission) and then by the FCC (Federal Communications Commission). Under President Ronald Reagan – and his government is best that governs least approach – radio’s deregulation began. President Bill Clinton would open the flood gates of consolidation with his signing of the Telcom Act of 1996.
With no guiding principles, investors were free to move in all directions; and they did, buying up not just radio stations but many of its manufacturers and service providers for radio.
It’s like the old saying, if you don’t know where you want to go, any road will take you there.
#3) Using a Business like a Personal Piggy Bank
Radio investors and many top radio executives began using radio as a personal piggy bank, only taking care of themselves and focusing on the immediate quarter with no long term vision, strategy or investment. Too many just lined their pockets and left.
#4) Trying to Be All Things to All People
Jason says “great companies stick to their knitting. You can’t be all things to all people.”
Radio was originally about serving their community of license via over-the-air broadcasting. It delivered local news, local sports, local community events, local bands and more by local radio personalities who lived in the communities they served. It was focused like a laser beam on local, local, local.
#5) Don’t Copy the Competition
Radio today is trying to copy Pandora, Spotify, Apple Music and others. Radio today is trying to also copy YouTube, Facebook, Pinterest, Twitter and SnapChat. Radio is trying to copy just about every other business advertising model and without any guiding principles has been economically treading water.
Yahoo’s SVP Brad Garlinghouse wrote his infamous “Peanut Butter Memo” in October of 2006 that pleaded with the company to narrow its focus and clarify its vision.
Brad felt that Yahoo was spreading its resources too thinly. Business Insider recently wrote “This internal memo from 10-years ago shows Yahoo still hasn’t solved its biggest problem.”
If Yahoo had a culture problem, radio by way of mass consolidation had an even bigger one. First, as Wall Street money flowed in and radio stations were bought up, each of those stations represented its own culture that would need to merge into a larger culture. Then these new larger radio groups would try to change the culture from a local scope to a national scope. National radio personalities like Ryan Seacrest, Rush Limbaugh and many others would replace local personalities. National radio contests would replace local ones. Live and local for the most part would soon only appear in the history books on radio.
Culture is created at the top. Over the last twenty-years, radio’s consolidation has seen a revolving door of top leadership. The culture of radio has been a moving target for both industry professionals and listeners alike. Culture is built over time. There is no “quick fix” for building culture.
Absent a company culture, what fills the vacuum is one of everyone for themselves.
Now twenty-years later, there are signs of new growth as people who believe in live and local, and operating in the public interest, convenience and necessity are entering the business.
In many small markets, this way of operating never got sucked into the vortex of consolidation.
Even some of our country’s biggest radio companies are focused on getting back to the core principles radio was built upon.
Radio, the first broadcast transmission system to reach a mass audience, almost 100-years later is still the leading way to reach a mass audience.
DickTaylorBlog 
Professor Taylor just gave us the Condensed Radio Play Book! Radio IS the Lazar Local Champion, with plenty of simple receivers “everywhere, wireless and free.” Culture curation isn’t “plop, plop, fizz, fizz.” I was lucky to get on air 30 years before the 1996 Consolidation. What a great adventure still to be continued. Yogi, The Great #8 advised “When you get to the fork in the road, take it!” We’ve come a long way with radio and “The Best is Yet to Come!” (Happy Birthday Tony Bennett). The Once and Future King remains unique, hitting multiple local hot buttons and leaving lasting impressions with excellent service, digital information, sports, weather, music and more. No need to copy. Radio writes the book. Ascertain and Connect! Radio is #1 and Only (jingle sting). Let’s get the big one for The Gipper as our special brand of audio delivery, RADIO HITS 100! (Cue Sarah Vaughn.) Clark Smidt http://www.broadcastideas.com
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Clark I can see you with your megaphone and pom poms cheer-leading for all the world to hear “Radio Gets Results.”
Thanks for contributing to the discussion.
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I have been fortunate to work in LOCAL radio since 1987. Even now, I am working for a stand-alone, listener-supported “Mom & Pop” FM station here in CT. We started saying “Life and Local” on the air as a slogan, just before a large, national, 100% satellite-fed station signed-on, targeting a similar audience. This station has, indeed, been LIVE AND LOCAL, with the SAME FORMAT, and same ownership since it signed-on in 1969. It is an honor to serve there. 🙂
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Thank You Willie for stopping by to read the blog and for sharing your perspective.
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As usual Dick, a thought producing post and a pretty good view of what went wrong. When you look at media companies where the CEOs have multi million dollar contracts, private planes, and have to make every decision, big or small company wide, and then you see major market stations run by people who really aren’t “radio people”, you wonder where it all turned south. You’re correct, when radio stations started becoming pieces on a Monopoly board, when values took a stupid turn up, when the only way they could then return investor’s dollars was to cut cut cut, it marked the start of a dark period in the industry. I truly hope you are right that it can and is being turned around because radio is still what it always was and it can still be that magical presence that drew us all in so many years ago.
Frank
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Thank You Frank
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Dick as you know, “necessity is a mutha” so when the FCC used to impose tons of regulations on radio we had to get real creative in order to get around them. This creativity produced some outstanding radio stations and some programming legends. We now live in a world of few radio rules which unfortunately produces no creativity.
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Dick as you know necessity is a “mutha.” When the FCC used to impose tons of regulations on radio we had to get real creative to get around them. This creativity produced some incredible radio and some legendary programmers. Today with few rules creativity has all but dried up and the only names we know in radio now are the owners. geo
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Thank You Geo for weighing with your thoughts. I quite agree with you.
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Dick, Consolidation was not the problem. It was the people who did it. They were investment bankers, not Radio people. Like your Blog.
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Thanks for stopping by Hal and sharing your point of view on this topic.
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I agree that consolidation was not Thee problem. In fact, that seemed to be an outgrowth of another early problem and *that* was treating a radio property as a Cash Cow and/or real estate investment.
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I believe it is too late. Check this out: https://medium.com/whither-news/death-to-the-mass-eb33c08dc3b6#.nszojamsc
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Interesting read. Where radio has kept up the conversation and relationship with its community of license, things are still quite robust.
Where consolidation has taken away the focus on live & local, we see that it may be challenged going forward.
Thanks for sharing that link Robin.
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Sure. But don’t worry Dick. We’ll all be miles away when the feces hits the fan.
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I agree with you on all points and would add one more. Once the audience local marketing message(s) is decided and focused, is to market and promote your product while remaining committed to it for the long term, not the short term. A problem for the radio industry today. I suspect you will see this with the new owners of Yahoo who seem to know what they are doing.
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I believe we are too late to make a difference. The deed has been done. The goal has been lost. The value has been extracted and reassigned. The emphasis is on the wrong things. Radio is cold. Radio was about people. The problem is those people, if they were good, made too much money in the eyes of the people that were writing the checks.
Radio isn’t a MacDonalds where $15 an hour minimum wagers can be replaced by a kiosk. Radio has turned into a kiosk with no soul.
Don’t get me wrong, I love radio. It has been my business for 40 years. It makes me sick to see what has been done to it. But I’m just an engineer. All I can do is keep it on the air until they tell me to turn it off.
It’s still a good living but I wonder for how much longer.
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Radio is about personalities; on the air, in sales and in management.
Thanks for adding to the discussion and stopping by the blog Tony.
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“seem” is the keyword there.
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Radio is still magic. Local IS the way to really connect, as long as the programming and production are worthy of listener loyalty. We must give them what the Pandora’s, Apple Music’s and Spotify’s cannot. Quality HUMAN content, that touches their lives in a direct way. Otherwise radio will go the way of the dodo, for being a dodo. Once corporate conglomerate radio figures this out, there may be the mass turn around I think we could all celebrate. Maybe they will let a bit of nostalgia for the radio THEY grew up with will “click” inside them accidentally and THEIR BRIGHT IDEA (lol) will be the next trend.
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Thank you Michael. Let’s hope they’re listening to you.
Appreciate you stopping by the blog and making a contribution to the discussion.
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I spent more than 35 years in Canadian morning radio. Lived on a billboard for a few weeks at a time. Did it all. The biggest response I ever had, even just two or three years ago, was giving people a chance to be on the radio. Why? Because they couldn’t do it themselves. there’s no YouTube for radio. I did evenings during a fundraiser where hundreds of kids would line up. I’d record them, and play them on the air as they went home. I received hundreds of emails from their parents about how excited they were. Downsized two years ago, I’m out of the business now. But there’s still magic. What’s missing is the opportunity to discover it
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You’re so right Brian. We forget how powerful something so simple, as being on the radio can be for listeners. Heck, I just got a “Rock of Southern California – KLOS” t-shirt and I was ecstatic when it arrived from Gary Moore. Great radio is making the emotional connection with the listener.
Thank you for stopping by the blog and adding to the discussion.
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I am standing and cheering for what Michael and Brian have said, just above this comment! YES! I remember the “magic” of radio when I was a kid… and now have the PRIVILEGE to instill that same sense of “magic” and wonder into the kids that visit this station! 🙂 Now and then, we are blessed to have groups of Homeschoolers get together, and bring tours of 20 or so kids to the station as a “Field Trip”. We roll-out the Red Carpet for them, and do everything we can to make their trip interesting, informative, FUN, and MEMORABLE! We carry a radio drama program called “Adventures in Odyssey” every day at 3:30pm. (It is amazing! Google it!) I have the JOY of gathering those groups into our production studio, and having them record a “group shout” identifying their Homeschooling Group name, and then introducing “Adventures in Odyssey”. To see the looks on their faces when they get to hear their own voices on the radio… is pure, unadulterated JOY!!!! 🙂 The parents write us glowing e-mails, too… they tell all of their friends to tun in, aunts, uncles, etc… and it just grows from there. 🙂 Being LIVE and LOCAL is definitely the heart that keeps beating in the chest of RADIO! It is what WILL keep us alive! 🙂
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What a wonderful story about how you are making real, relevant and local for a new generation.
Thanks for your contribution to the discussion Willie
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Another brilliant post, Dick. I hope the right people are listening…
As we’ve talked about, I’m afraid radio executives are believing the hype aimed against their business. Despite all the advantages radio has to offer, so many execs talk and act as if the game is over and digital (whatever that is supposed to cover) has won.
That mindset leads directly to your point #5. Radio leaders aren’t simply copying Pandora, et al., they aspire to be these companies. If you’ve got radio in your blood why the heck would you want to preside over a service that mindlessly pumps music from a hard disk into an antenna?
One look at the history of radio and you can see that its success was directly liked to the on-air characters and personalities that inhabited the business. Pandora will never be a 1-to-1 personality business. But radio can be again.
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The radio personality has always been the major attraction for my radio listening. There are other elements to be sure, but the radio personality was #1.
Thank you Jay for stopping by to read the blog and make a contribution.
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Consolidation is the problem. It is strangling innovation and stiffling talent by just carbon copying syndicated shows and pumping them out all over the airwaves in the hopes of raking in $$$$$$$. So sad.Problem though is that they don’t care about what the listeners or the community wants or needs. They just shove it down our throats. I want to hear new talent on the radio, new takes on subjects and not just the same old politics every single day. Deregulation was the worse thing to ever happen. It just only allowed the big players to stay in the game thus creating monopolies. We see this with airlines, cable TV and phones, etc. Prices have gone up but service is waaay down.
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New companies are entering the radio industry and focusing on radio’s strength of LIVE & LOCAL. Some former radio folks are re-entering the radio biz and they also are bringing “sexy” back to radio (aka LIVE & LOCAL).
The pendulum of consolidation is swinging back to a new approach to radio that is in the direction that many of us grew up in.
Thank you Robert for joining in and sharing your thoughts.
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