This past week was another tough one for so many wonderful people who worked at our nation’s largest commercial broadcaster, iHeartMedia. The “monetization purge” that took place was huge. Large markets, medium markets, small markets all were impacted in a big way.
Clear Channel
During my time at then Clear Channel Communications (2004-2009), I enjoyed working within this behemoth of a company that had every resource any radio manager could imagine at their fingertips. It was amazing, until it wasn’t.
Private Equity Radio
In 2008, Clear Channel Communications was acquired by a private equity consortium led by Bain Capital and Thomas H. Lee Partners in a massive $18.7 billion buyout. While the deal was originally agreed upon in 2006, it didn’t close until July 2008.
As a market manager, what I witnessed was control of the radio stations moving from the local management and people who lived in the market to a centralized system of control from the top. Decisions were driven by reviewing Excel spreadsheets prepared by people who never worked a day of radio in their lives or had any real understanding of how radio made money.
Less Is More
In 2009, being a market manager was trying to do more with less; people and resources, that is. I remember going to a management meeting and coming home with a thumb drive of all the people I would need to eliminate. The word of the day was “RIF” or Reduction In Force.
We eliminated the promotions department, traffic department, downsized air shifts, and our sales team of 15 was reduced to five sellers and the three sales managers were eliminated.
This process of reducing staff occurred over the first nine months of 2009 until my regional manager came in and RIF’d me, along with many other market managers in his region. Then senior management RIF’d the regional managers, before the company president RIF’d them. The coup de grâce was when private equity folks RIF’d the president.
Money saved,
but radio – not so much.
RIF’s
Radio would be forever changed after the Telcom Act of 1996. This began the downward spiral through consolidation funded by Wall Street. It was during this period of time that the acronym “RIF” would enter radio’s lexicon.
2009, 2020 & 2026
This year joins 2009 and 2020, when the radio industry also endured massive staff reductions.
RIF veterans from the first round, can often be found saying to one another, “is there really anyone left to RIF?”
Lancaster, PA & Sussex, NJ
I was a market manager for Clear Channel Communications/iHeartMedia in both Lancaster, Pennsylvania and Sussex County, New Jersey. Reading the trades this past week, I believe that all of the air staff in both of the markets have been eliminated.
It breaks my heart for all the people who were RIF’d out of a career that was their life’s passion.
Efficiency Bubble
The “efficiency bubble” means that efficiency is valued over effectiveness. AI (Artificial Intelligence) is exacerbating this change at lightning speed.
In the UK, Rory Sutherland, Vice Chairman of Ogilvy, shared a personal experience that demonstrated what happens when efficiency bubble is pursued.
“The absurdity of the efficiency bubble was brought home to me in a recent meeting with an online travel company. The conversation repeatedly included the mantra ‘the need to maximize online conversion.’ Everyone nodded along. Clearly, it is much more efficient for people to book travel through the website than over the telephone, since it reduces transaction costs. But then someone – not me, I’m ashamed to say – said something revelatory: ‘Ah, but here’s the thing. Online visitors to the site convert at about 0.3%. People who telephone convert at 33%. Maybe the website should have a phone number on every page.”
“Perhaps the most efficient way to sell travel is not the most effective way to sell travel. What, in short, is the opportunity cost of being efficient?”
“Nobody ever asks this question. Opportunity costs are invisible; short-term savings earn you a bonus. That’s the efficiency bubble at work again.”
According to radio research conducted by Fred Jacobs in his annual Techsurveys, radio personalities are more valued by the radio listener than the music played. But in the current environment, I don’t hear anyone talking about “opportunity costs” being sacrificed with all these RIFs.
Radio companies are all chasing the same efficiency metrics, the result is why all radio stations sound the same and their websites look the same. Consolidators have made this once creative medium a commodity.
Today’s world offers infinite choices when it comes to audio programming, and radio continues to eliminate its competitive advantage; its people.
When Your Iceberg Melts
Back in 2008, many people picked up a copy of Ken Blanchard’s book “Who Moved My Cheese?” I know I did. It’s a great read.
But maybe the book everyone in broadcasting should be reading today is “Our Iceberg Is Melting” by John Kotter. Kotter is an award winning author from the Harvard Business School.
Like Blanchard and Johnson’s Cheese book, Kotter writes a simple fable about doing well in an ever-changing world.
The fable is about penguins in Antarctica that discover a potential devastating problem to their home – an iceberg – it’s melting away.
It’s a story that will resonate with anyone, as AI (Artificial Intelligence) is eliminating the need for people in all professions; not just radio broadcasting.
Kotter’s book walks you through the eight steps needed to produce positive change. You will not only enjoy the read, but will be guided with valuable insights to deal with our 21st Century world that is moving faster and faster every day.
Sadly, all industries today face an urgent need to adapt to AI-driven automation, which is reshaping the global workforce.
Emotions
The radio business was never built on Excel spreadsheets and doing what was most efficient, it was built by creative people who touched others emotionally. Be it station imaging, air personalities, promotions, community events, advertising or marketing; radio always went for people’s hearts. And now those talented people have been shown the door.
Where’s The Outrage?
Striking the emotional chord with the listener is what successful radio stations, podcasts and other audio programs will be focused on. The pursuit of efficiency is a rational answer to an emotional problem.
We make choices in products and services emotionally.
We justify those decisions rationally.
-Roy H. Williams
DickTaylorBlog 
I left radio in the mid 80s, when radio was still a vital resource to local communities. I missed all the effects of the Telecommunications Act of 1996, signed by Bill Clinton. As far as I can tell, Bill Clinton has never owned any radio stations. So his signing may have been partially ignorance. The lack of interest in radio as a whole has been caused primarily by the industry driving itself into the ground. Radio is not relevant to the greater population today and over the air television is next. I saw a Facebook post the other day where a guy said if we lose AM radio, we lose Talk Radio. I thought that is the best reason I can think of to eliminate it. Except for stations that have FM translators most AM stations today are automated junk yards. I have nothing against good talk radio, or even sports/news formats if done well and locally. We just don’t need the same programming on 3 or 4 stations in the same market. It’s just a audio placeholder… Turn in that license and cut down on the interference to other stations!
And don’t get me started on the lack of local news on the radio..
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Say it loud, brother.
-DT
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Of all the criticisms as to why this happened, this is the one the really hits the target. Our society lives this way – trying to make our lives more efficent yet not considering effectiveness. You would know . You’ve been through it!!!
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Thank You, John…for stopping by the blog today and leaving your perspective.
-DT
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I Heart’s scorched earth move is a new low for radio. They claim they care about their local markets, but their actions cancel out their words. The amount of people who had worked 10, 20 and more years at their stations and are now gone is huge. It appears they purposely took out the longest tenured people who also are the highest paid. Experience, loyalty and knowledge don’t matter. What’s next? Scary. I’m often asked if I miss it after spending 50 years in radio. My response: What I miss doesn’t exist anymore.
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Thank You, Mike for sharing your perspective.
-DT
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Back in the days when dinosaurs roamed the earth and I got into radio, one of the first lessons I was taught by a mentor was, “It’s what’s between the records that counts.” Somewhere, we lost that — probably due to the mounds of bad audience research in the 80’s that said only the music counted. We’ve developed a generation of programmers and managers who live by that mantra. Ownership has taken it a step farther by RIFfing most of their on-air personalities. iHeart, I’m told, has until 2030 to come up with $6 billion for the banks. They won’t make that if they keep cutting out the heart of the operations: the on-air people.
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What’s between the records these days, are very long commercial breaks. That’s what I’m hearing when I tune in.
Thanks Thom for stopping by the blog and sharing your thoughts.
-DT
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Thank You for sharing the thoughts JB. I also listened to the podcast by Tyler Woodward you linked to. Yes, we are on the same page, sadly.
The Tyler Woodward Project podcast on this subject.
The conversation delves into the history and impact of iHeartMedia layoffs, the influence of the Telecommunications Act, the role of private equity in the radio industry, the threat of industry consolidation, the shift to podcasting and YouTube, and the decline of live human voices in radio. It emphasizes the importance of the human element in radio and the impact of recent industry changes. https://youtu.be/-cBSTSSxbqE?si=NYI_alUOB8eHvBqv
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I’ve been in and out of radio since 1994. I cut my teech on CBS radio. I’ve followed your blog since it’s start when you were posting on WA ex alumni.
I have also followed the demise of radio since the grand ole days when Rush had 20M in listnership.
Those days are long gone.
I’m back in the radio arena since I was hired by a Spanish speaking group of 7 radio stations to train their sales force. The landscape is quiet bleak. The industry research shows that radio still works but it now needs to be a hybird radio/digital ad buy in tandum.
The ole professional sales people who built careers and lived a middle class lifestyle are gone and I don’t see a clear path to build a solid foundation.
Radio is in freefall where it lands only time will tell.
Best,
Victor
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Victor, you’ve been a loyal reader of this blog and I’m grateful for your sharing the reality of what it is like on the sales front lines today.
Be well, my good friend.
-DT
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Good point Dick on efficiency vs effectiveness.
While I think we can all agree none of us like the impact on the people, and the negative results many of these changes make on to content on many stations – what is the answer?
What is the answer given the real constraints in the market today. By constraints I mean – more competition than ever before, and this is not just on line streaming, podcasts… but more actual over the air radio stations today than in the early 1990’s – the number of licenses stations about doubled since 1990. Also the reduction in advertising revenue that radio station capture, the change in main street businesses vs large companies like Walmart or Amazon. Add in the real pressures of owners with a lot of debt that was taken on when the market was at a different point.
The online pundits – virtually all of them not operators or owners of stations today – seem to look back with trite sayings like live and local, local control, limit the number of stations someone can own. But what I don’t hear is how do you deal with A) the debt that many owners have – and I don’t just mean the major groups -lots of mid and smaller guys who took on debt to buy their stations and still have it. B) the change in consumer behaviors and media usage C) the evolution of the local business market D) the rise is effective alternative advertising solutions. Limiting owners to only a few stations, having all live programing, and many of the other common suggestions I don’t think address any of those issues.
I ask this not to be snarky or a contrarian, but a serious question – do we need half of the number of stations so that the ones left can be healthy? Is there a different model that needs to be deployed?
It is always easy to be an armchair quarterback and suggest what others should do when you don’t have skin in the game, but I think much harder when you are the person with a gun to your head in debt, and a market that is nothing like it was when your business was profiting. Describing the path that got us to this point is only useful if it provides a basis for what we need to do to move forward. Not suggesting I have the answer, but I do think the ultimate solution is some fundamental change, not a reflection on what used to be.
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Hi Rich and thank you for stopping by the blog and sharing your thoughts.
The dilemma radio operators find themselves in today are both self-inflicted, and the increased competition for the ear.
Never did radio operators ask, can the local advertising market support the doubling/tripling the number of radio stations that will operate in a particular location. Docket 80/90, translators, LPFMs, turned the airwaves into a broadcast “garden” that was out-of-control. Signals often compete with each other making both virtually unlistenable.
If you want a bountiful garden, pruning is part of the process. Sadly, the radio industry pushed for more, more, more radio signals and should have instead focused on the audio product they were offering a listener.
Now, with an “infinite dial” of podcasts, streaming and satellite…you can’t go back.
Plus, the current economy is handicapping the small/medium businesses on main street that were the bread & butter of local radio advertising. Inflation continues to grow rapidly and we’re in for a major correction I fear.
When people in power don’t mind the store, everyone pays the bill.
Give your seat-belt a tug, we’re in for turbulence.
-DT
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