No Longer A License To Print Money

Back in the 60s, it wasn’t unusual for a radio station to have an operating profit margin greater than 50%. (Operating profit margin can be defined as the percentage of revenue that a company retains as income after the deduction of expenses.)

When I took over a major radio property in Atlantic City, New Jersey in the 80s, our operating profit margin targets were greater than 30%.

Being in the radio business at that time was often called “having a license to print money.”

That was then, what’s it like now?

Radio Profit Margins 2022

As we ended last year, the trades were carrying reports of operating profit margins like 8.73% (Radio One), 0.8% (Beasley Broadcast Group) and it made me wonder about the future of the radio industry.


This week the CEO of Townsquare was saying that they were “no longer a broadcast radio company,” because Townsquare was now deriving more than 50% of its total revenue and profits from digital.

In fact, digital delivered a profit margin of 30%.


In a February webinar with the Radio Advertising Bureau (RAB), Gordon Borrell told radio stations they should consider hiring digital-only sales representatives. Gordon presented research showing where advertisers were increasing their spending, and it was heavily in the digital realm.

Edison Research

This month, Larry Rosin of Edison Research, showed their research from “The Infinite Dial 2023” report showing that 75 million of America’s 214 million age 12+ population were now listening to their audio content online each month.  

The big winners in this digital online streaming music marketplace are Spotify, YouTube Music, Pandora, Apple Music, Amazon Music and iHeart Radio.

While AM/FM radio still wins in the car, its audience is shrinking due to people listening to their own digital music libraries, or listening to podcasts, or listening to digital online audio; much of it made possible by connecting their smartphone to their car’s dashboard entertainment center.


In their annual “Year in Review” webinar, Comscore says that in America there are now 239 million digital users over the age of 18. That’s 91% of the total population, up from 88% three years ago.

While we’ve come to think of “digital” as the future for technology and innovation, the reality is it’s already matured, and as such, is now in a period of “consolidation, rent-seeking and regulatory capture,” says digital researcher Greg Satell.

The Monetization Challenge

Twenty-five years ago, Edison Research recognized how the AM/FM radio dial would be changed by internet streaming, when it began its research report called “The Infinite Dial.” But to think of the world only in terms of radio or audio misses the big picture; for while the future of media and entertainment is digital streaming, the challenge of making money in this infinite content media world has become increasingly difficult.

Ankler Media CEO Janice Min put it this way for Axios:

  • “Hollywood’s calling card has always been that it makes the highest quality content in the world … And when you start to populate a fire hose, you lose some of that.”
  • “Humans are not capable of putting in the same effort when you’re making 100 movies a year.”

Certainly, the quality of radio content has gone down with all the Reductions In Force (RIFs), as fewer people now have to produce more content for multiple radio stations; plus, podcasts, blogs and social media.

Bob Iger is back as Disney’s CEO and focused how to make the mouse’s streaming business profitable; he’s not alone, as every media company is in the same situation.

No one has a crystal ball, but one thing is clear,

the future will not look like the past.


Filed under Education, Mentor, Radio, Sales

9 responses to “No Longer A License To Print Money

  1. You write: “Bob Iger is back as Disney’s CEO and focused how to make the mouse’s streaming business profitable…” Yes and he has created an uproar among the video community. In order to make people subscribe to Disney+, The Mouse has announced only older catalog live action films will be issued on Blu-Ray (regular and 4K). All new material will go to the Disney+ service. No more physical product. It just shows the importance of streaming to the industry. In radio, I recall when I was wrapping up my career as a radio personality in the early 80s. We still had live staff, and people still called the local stations to as if there would be school in the morning or request a record. Once automation came in and everything became liners (what I call walk away radio). That’s what I did.. walked away and was employed in computers. But I remain a fan.

    Liked by 1 person

  2. Victor Escalante

    The fat lady has sung for over the air radio. As you reported in one blogpost, stations have their broadcasting antenas on prime real estate that could be sold. Stations have cut fat, muscle (talent) now bones. While I’m not an early adopter, I’ve invested heavily in a digital studio and we are embracing Ai in a lot of platform processes.

    Liked by 1 person

  3. Art Versnick

    Back in my day, we were always consistent with a 30-35% NOI. It wasn’t that hard. In a way, I’m glad I’m not in that game anymore, although I do miss it at times, certainly if it was the same. Times change as you so aptly point out weekly, Dick.

    Liked by 1 person

  4. Dave Mason

    Good stuff, Dick. Funny to note that Townsquare is no longer a “radio broadcast company”. In the days of the 30-50% profit margins, did any company call itself an “AM” radio company? An “AM/FM” radio company? I know things change, but maybe the old adage “dance with who brung ya” still fits. Content from one source to many is still considered “broadcasting”. In 2023 it’s more than AM/FM-we know that. But it’s still broadcasting. Splitting hairs, I know, and the real fuel for the “broadcasting” world is content. We congregate here and discuss the challenges of the broadcasting world and yet the big companies still sit there looking for massive profits that we know aren’t there.

    Many of us got into it because of the music, the fun, the chance to share our favorite songs and stories with our listener. We left the business of making money to the sales department. But we learned from the start that if you did it better than the other folks you’d win.

    That’s the spirit that existed in the 60s, 70s, 80s. Things changed with the irony of “big business” taking over AM/FM and the digital revolution beginning at the same time turning that whole idea upside down. As long as the business model still reflects the desire to put the big double digits to the bottom line, we’ll be continue to sit in the swirling media storm of the 21st century.

    One more bit of irony. Technological discoveries advance on a daily basis and the finish line (aka: success) keeps moving. Better to redefine what that success is.

    Liked by 1 person

  5. Radio should be on the ground floor of creating content.

    Liked by 1 person

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