Radio After Denial

I was impressed to see C.L. King radio analyst Jim Boyle tell it like it is in his latest analysis of revenue projections.

Boyle said July's 6-7% projected drop in revenues will be radio's 15th straight monthly decline.

Boyle laid out radio executives when he asked the question "what are radio leaders doing to change direction". Here's his response:

Not much, it seems to us. The industry’s larger groups do not appear ready to institute revolutionary changes yet in sales, programming, promotion or station clusters. There is a notable sense of denial of how harsh the prospects have been and continue to be for Radio. The classic CEO reply is Radio is not bleeding as badly as Newspapers. We concede there is too little radio ad demand, but there is also too little rate card integrity and too little investment in radio’s product and people for the long-term. It very much looks to us as all rear-guard counter-punching.

Boyle's remarks are right on because radio's monthly declines are not about to turn around any time soon and yet radio CEOs -- the ones I keep skewering right here -- are content to do the same nothing they've been doing.

I should note that smaller markets are outperforming larger radio markets and that's good for them, but the industry together has a problem -- no, scads of problems -- so I want to focus on what I see ahead for radio after denial in honest terms.

Warning: you're entering a "No Diplomacy Zone". I'm pulling no punches.

1. Radio is nowhere near hitting the bottom.

The economy will be awful for the rest of 2008 and while I believe 2009 will get better, I am not sure radio will feel it until 2010. But, it isn't the economy alone that is the problem in spite of what radio's CEOs may say or think. It is radio's inability to remain current with how the audience gets their entertainment -- that would be the Internet and mobile devices. So, rock bottom should occur in 2010 and then it will get worse if radio strategies do not change drastically.

2. Many lost advertisers will not return to radio.

Once they get their businesses on track, former radio advertisers will not likely return to previous levels of financial commitment to radio advertising. One reason is because radio is getting older (in terms of audience) and advertisers are wanting younger (consumers with money to spend on homes, cars, kids, etc). The genius CEO who thinks that when the economy gets better radio will return to its former numbers is smoking something seriously strong.

3. The consequences of ignoring the next generation will kick in.

I've often said the students I taught while on sabbatical from radio are now out there working at good jobs, getting married and I expect to hear soon -- having families. These folks do not like radio. They listen when there is little choice. They prefer their own generation's radio -- the Internet and the more short form content is available for their mobile devices, the more they will listen. Even radio executives admit they blew it when it comes to the next generation. They thought they'd always be there listening to some radio station as has been the past experience. In effect radio twittered away 12 years while their big eyes were set on consolidation. Our mother's were right. Their eyes were bigger than their stomachs. They ate up all the radio stations they could get Wall Street to finance and eventually got sick because the audience shifted to the Internet.

4. Big trouble ahead with WiFi.

If radio CEOs fear satellite radio, they are really going to be scared of WiFi which is coming to a new car near you starting next year. Satellite radio never hurt anyone. WiFi is the killer app. Give the next generation tens of thousands of streams in their cars and see how much less radio listening they will do. Terrestrial radio thinks one way and one way only. We do radio. 24/7 radio. Many of us also package it for the Internet. We regurgitate our morning show on podcasts. Our motto is, "I did it my way". Too bad. If you don't like radio's chances now, see how you like them in two years if you insist of business as usual.

5. Cutbacks will come back to haunt radio.

Radio CEOs are still smitten with Wall Street. They think they are Jack Welsh. Dream on. All these cutbacks that CEOs are making for what they term financial necessity are going to kill them. In fact, it's already happening. Making radio less local does have ramifications -- who needs another faceless (voiceless) national music stream? Taking favorites off the air because they make too much is false economy -- favorites is all radio has that is different from an iPod. Hello? No news. No fun. One program director doing three or more jobs with fewer resources -- sounds like a growth business to me. Not.

6. HD is VD.

The sooner it is wiped out, the healthier the radio business will be. No one in their right mind -- or should I say, with any familiarity of Gen Y -- can really believe that HD sub-channels will save the radio star. Whatever delusion these folks are operating under is laughable. HD isn't going to happen. If I told you I could sell you a $100 horse at Best Buy, would you be interested? Radio -- all radio -- is outdated content and technology as far as the next generation is concerned. Available, older radio listeners will stay with their favorite medium -- in the car -- but don't be surprised of the lure if WiFi doesn't beckon them, too. I think it will.

7. Lack of an Internet plan leaves radio odd one out.

Repeat after me -- what percentage of a radio operator's budget is actually spent on Internet and mobile content? Five percent? You wish. Herein lies the problem. Radio refuses to get into the future. It is married to transmitters and towers. It won't even acknowledge that the Internet is the future for the next generation. While a few group operators would be fast to tell you they have Internet divisions, they are woefully underfunded. If you reap what you sow, look out.

8. The commercial is also the problem.

Radio for years got away with salespeople writing copy (more than you can fit in a 30 or 60, by the way), the part-timer/swing guy or gal voicing the copy with music from one of the production libraries that are sitting around. Emphasis on music under the announcer. Anyone of us who did this for a living knows the dirty little secret -- radio commercials as I have just described don't work for the paying client. (By the way, I feel the same way about Internet ads that call a 2% click-through rate success). Nonetheless, radio can't be a business that provides solutions for businesses when it takes the lazy, cheap and ineffective way out. Radio should guarantee results to advertisers. Then raise rates. Believe me, if a radio station guaranteed results, they wouldn't put the crap on the air they call commercials. Even without the vanishing next generation, radio revenue would have fallen anyway because to put it bluntly -- spot radio as most stations do it doesn't work.

9. 24/7 broadcasting is unnecessary.

Used to be -- when entertainment could not be time delayed and listeners had longer attention spans -- that radio's best option was to broadcast 24 hours a day, seven days a week. We guessed when listeners would be doing certain things -- like driving to work at 7:20 in the morning or washing their cars on the weekend -- and we blasted our good stuff at them. Well, today, radio operators are doing the exact same thing in spite of the fact that sociological changes have become apparent and the stuff these stations are blasting at the audience is not their best stuff. Welcome to time delayed listening. So as harsh as it may seem, there is no reason for a station to broadcast 24/7. None. Even a news station can utilize new technology to get better (and that doesn't mean inviting listeners to "check us out online at It isn't cool to direct young people to the Internet. They know. They're there all the time. You look like a fool. So, the future of broadcasting will have to, by necessity, have a transmitter platform, if you will -- a podcasting platform (separate and apart from broadcasting) and an Internet strategy. Keep doing 24/7 and you'll keep getting bad marks from analysts like Jim Boyle when your revenues continue to decline.

10. The music will kill radio.

You think I'm referring to the needless repetition and lack of variety? That, too. Once the labels get radio to pay something more called a performance royalty then it's all over. Radio people don't get it. They'll go down with the ship to play the same 27 records over and over again. P.S. - there are now more than 27 records you can play. Repetition that worked well for all of us for so long, no longer does. The next generation rejects it. They are different. One way or the other -- ironically, music will be the death of most radio stations.

Now that we're all emerging from denial, some advice -- remember, it's free so it's probably worth exactly what you're paying for it.

1. User-generated content. Repeat. User-generated content. A new, young associate of mine (also a USC grad) and I will be offering platforms for the holy grail of the next generation -- user-generated content. We are not expecting our phone to ring -- from radio executives, that is. Watch. New media will embrace what radio should be doing -- stations built from the ground up on -- you know the routine -- user-generated content.

2. Best way to cut expenses at a radio station (remember, this is free advice!), do fewer good programs. That is, do a few things really well and re-run it almost as if a listener wanted to record it (which they won't). Keep your personalities. Sign them to long-term contracts. Give them the resources. If you can only afford 12 great hours a day, rerun them for the other 12. Great content never gets old. Watered down content (the kind budget cuts are creating) will never attract an audience. Stop firing your talent!

3. Budget no less than 20% of your operating expenses to new media in the year ahead. Don't want to? Scroll up and reread Jim Boyle's analysis. Your next year will be another one just like the other one.

4. Break format. Come on! We haven't come up with a new format (you know, with new formatics, no sweepers, no promos, etc.) in decades. Let's all come up with at least -- one -- before we go to work in another industry. Let's see. Here's an idea: a dj doing his or her own show -- their own music, their own imagery, their own format. I know it is sacrilegious from an ex-Drake format PD to talk like this, but do it. Every generation would like more discovery. Let's all go to therapy together to find out why such smart people can't separate from our inner Cousin Brucie. I believe listeners will really go for this. I know of a few brave managers (proud readers, I might add) who are taking my dare. I don't think you'll be sorry if you do it right.

5. Stop with the spots, already. Less isn't more. None is more. Try a new form of commercial. One that actually provides solutions for your best advertisers. Test the concept. Devote whatever time you need on-air. Make it multi-platform. Guarantee results -- okay, have a drink and stop shaking. I can see some big contracts getting signed when the focus is on the advertiser (large or small) and not the spot vehicle (large or small).

I must stop now.

But this is exactly how I feel -- as the saying goes -- and I'm sticking to it.

I hope I've inspired, angered, or agitated my talented friends in as many ways as possible.

Because it's time to take control and make change a strategy and not just a word.

The Marines may still be looking for a few good men. I'd be happy with one radio CEO with cujones.


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