It seems pressure from Wall Street is making some of the big radio companies think about selling more radio properties. CBS Radio is in the process of selling off its smaller, less essential markets and stands to raise a lot of cash and no doubt please their real bosses -- Wall Street investors.Now analysts are reportedly suggesting to the largest radio company, Clear Channel, that it might want to think about selling off some of its smaller markets. You know, clean up the balance sheet. Mind you, these are the same Wall Street types who helped finance radio consolidation. Once created, many of the resulting companies found that they couldn't run five, six or seven stations in a market. That is, even when they dominated the cities they couldn't live up to the expectations.
Excuses were many. First it was the economy. A declining ad picture. The perception by listeners of too many commercials led Clear Channel to its questionable strategy of cutting commercial loads and making a big deal about it. Cutting commercials -- a good thing. Screaming about "less is more" when no advertiser likes the word less unless its attached to lower rates -- a bad thing.
While all this was going on radio's next generation of listener was getting happily involved with their online lives -- Internet, Napstar, social networks, YouTube. Even Howard Stern bailed out on terrestrial radio for satellite prompting the New York Times to write the latest article about the declining state of radio.
Young listeners are gravitating toward all things interactive. They still listen to radio and it still has some influence on their musical tastes but all music deals seem to be negotiated through a computer, peer-to-peer file sharing, iTunes, mobile devices and word about new music is spread not from djs to listeners anymore but by consumer to consumer through social networks like MySpace and Facebook.
What's ironic is that these mega corporations that have presided over the decline of their business while owning more of it than ever before are about to make another big mistake -- selling off smaller markets. It's the smaller markets that still know that radio is local. Ask a young adult what they want from radio and they go way beyond fewer commercials. The magic of radio is that it used to be local -- and still is in smaller cities. It's no surprise that misdirected advice from Wall Street is leading these conglomerates to conclude that big is better. Chalk up another critical mistake for radio while it waits around for HD technology to save it -- again, another critical mistake in a once proud business that sold its soul to Wall Street. Time to go private.