There’s an old saying “Nothing lasts forever.” Do you remember flying on TWA or Pam Am? How about shopping at Woolworths? Broadcasters will remember names like Group W Westinghouse Broadcasting, or Taft Broadcasting, or Nationwide, or RKO General that would put the successful Bill Drake Top 40 format (with the non-stop innovations & promotions of 93-KHJ’s Ron Jacobs) in major cities across North America. They’re all now a memory.
In a time of limited radio signals, radio could control its inventory and increase stakeholder ROI by raising rates as it increased the size of its audience. That’s now a memory.
Next came the Local Marketing Agreement (LMA) to soak up all those Docket 80-90 FM signals that were squeezed into the FM band but found themselves economically challenged. More signals meant a new way to make more money. That’s now a memory.
LMAs were “training pants” for the Telcom Act of 1996 that would unleash a consolidation of radio and television ownership like the world had never seen. Companies would rush to acquire as many radio signals as they could as fast as they could. And do what with them? They would figure that out later was the common response. Owning more stations was a way to make more money, until it wasn’t. That’s now a memory.
You might have thought that would have sent a message that there are limits. It didn’t.
Today the game is translators. And the number of radio signals continues to grow, all seeking funding through advertising, just like every other form of media out there today.
So is the ad pie growing? Not according to Adam Levy at Motley Fool who saw advertising drop nearly 4 percent in the second quarter of 2015.
When the advertising pie isn’t getting bigger, two things usually happen: 1) budgets get cut and people lose their jobs and 2) more spots are added to the hour. Unfortunately, all through consolidation and the Great Recession radio companies have been doing both. They are like the Federal Reserve wondering what you do when you already have cut the interest rate to zero to stimulate the economy. Not a fun place to be.
Suggested Solutions
Not to be all doom and gloom on you, I think there are some things that can be done to turn things around. The first thing is to focus on something and own it. Steve Jobs would put it this way “Just get rid of the crappy stuff and focus on the good stuff.” The way Jobs took Apple from near extinction to the world’s most valuable company was by his relentless focus on creating a small number of simple and elegant products.
Seth Godin calls it finding and serving your tribe. Radio needs to give up the quest to be all things to all people and learn to be something some people can’t live without.
Some stations can be the national brand in town, but everyone can’t. Likewise if people can get what you do someplace else, then why do they need you? This is the secret of “less is more.”
Radio stations need to have the agility to make decisions on the front line. Top down management is out, front line management is in. Mary Berner, the new CEO of Cumulus gets it. She has been reported in the trades saying “Cumulus will rely less on top-down management and more on letting managers do the job they were hired for.” She also understands that while IoT (Internet of Things) is the future, it’s not the place Cumulus needs to focus on today. It’s about changing the culture and the way the company operates first. Getting the programming right and improving sales of those radio programs next.
I remember when I starting working for Clear Channel and hired to turn things around in my market, the company had a big push on selling the web and developing that component. I told my sales manager after the conference call ended that was not going to be the case for us. First we needed to get the programming and radio sales on fire and then – and only then – would we begin tackling our web based program. It worked too.
The hardest thing sometimes is not doing things, but figuring out what to stop doing. Jobs was good at this at Apple. You need to invest some serious thought about what you need to stop doing in your radio property. Again, less IS more if done right.
And the last suggestion I have is directed at colleges and universities. We need to be focused on the business model of radio and putting more of a focus on the business side of radio and radio sales. Radio owners and operators I talk with aren’t clamoring for more DJs or news people like they are for more sales people and innovators that will create the next revenue stream for their property.
In the end, your audience size won’t matter if you don’t have a business model to monetize it.
Led for Lunch (an hour of Led Zeppelin music) pre-dates a lot of things, not the least of which is my iPhone. But this radio programming staple along with “Two-fer Tuesdays” and “Million Dollar Weekends” (in a billion dollar world) remain on so many radio stations. It’s like Mr. Peabody’s Way-Back Machine broke down in 1972.
As the clock was approaching midnight and people were anxiously waiting to ring in the New Year, many others were just anxious over the future of their streaming radio stations. Live365 put out a press release titled “Live365, Internet Streaming Leader, Downsizes and Looks to New Options in 2016.”
Hard to believe I started this blog one year ago. It seems like only yesterday. Ironically, it was Sunday, January 3rd – the same date as today’s date.
This was certainly true in the first golden age of radio, that period of time from its birth in 1920 through the mass takeover of television in the 1950s. Once TV came along, radio had to reinvent itself.
I recently wrote an article for Radio World about the impact of colleges that sold their student radio station’s FCC license had on the pedagogical program at those institutions. You can read that article in Radio World 
A couple of weeks ago, I wrote about “
There are times when the stresses that are part of everyday life can occupy a place way beyond their level of importance in the grand scheme of things. Its times like those that you need to take a time-out and remember all the things in your life you have to be grateful about.
We never called them that back in the early days of radio’s reinvention period after the birth of television in the 1950s, but that’s what they were.
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