I recently saw Tom Friedman, The New York Times columnist and bestselling author on Charlie Rose the other night.
Friedman said that we have now entered an era when politicians for the first time in history will be taking things away from their constituents rather than giving something to them.
Friedman’s comments made me think about the radio industry.
For years Clear Channel, the largest radio group, didn’t miss an opportunity to tell the world that less is more. Turned out John Hogan was a man ahead of his time and now Tom Friedman confirms it (wink/wink).
I’ve also been using the end of Citadel bankruptcy to up my meds.
After all, you know what is going to happen.
It may be a new beginning for a flawed management team but the hundreds of employees who were fired are not going to be recalled. Tom Friedman would not be surprised to learn that the radio industry has entered an era where we now take things back from our listeners instead of give them more.
There is no shortage of evidence that most larger radio operators have taken back local radio. Almost every major company uses voice tracking to save on the already low, low cost of live djs.
News has been reduced to virtually nothing -- outsourced by stations to a traffic, news and weather service in exchange for short spots.
Weather emergencies now mean listeners in many meteorological hot spots are now on their own. We’ve gotten conflicting reports about radio’s service to the citizens of Nashville during the recent floods, but last year serious weather events often were left unreported.
Advertisers now get less for more money on radio. Perhaps you saw the recent Inside Radio headline reporting how spot prices across the board have increased. Yet commercials are cranked out, recorded somewhere and jammed into long clusters that for the life of me questions how smart media buyers and advertisers really are. No one is even listening to that poor sucker whose spot is in the middle or at the end.
Now, Citadel is set to emerge from bankruptcy and wait until you see what is in store for the little engine that couldn't now that it got away with stiffing some creditors and wiping out all public shareholders.
The game Citadel, Clear Channel and Cumulus is playing is to take away programming and marketing elements that used to be critical to local radio success where in the past station operators would give listeners and advertisers more to win their loyalty.
This phenomenon is happening because in our modern world there are no consequences.
An oil spill that threatens to ruin the Gulf states and other areas – no problem, no consequences. A few days profit will pay any fines.
Wall Street banking abuses. Don’t worry, no one is looking. The CEOs of offending investment banks are not likely to be punished and business goes on as usual without sufficient oversight.
Greece’s economy threatens to take down Europe and maybe adversely affect the United States. Don’t worry. Be happy.
I mention all of this because those of you who, like me, lament the loss of talented managers, programmers, sales professionals and air personalities are asking how all this could be happening to an industry so rock solid that you’d almost have to set out to wreck it to ruin radio.
Well …
Very soon Citadel will join Regent with a brand new lease on life. But don’t expect these born again bankrupt operators to significantly give listeners and advertisers more.
In fact, what you can expect is -- more of less. And you’ve got my name on this piece so I’m putting it out there.
These newly revived radio companies will run things on the cheap again and will continue to invest pennies on the dollar (if that) to build digital platforms. In other words, with the biggest digital revolution in progress, radio operators will find a way to give their listeners and advertisers less of the digital content they keep demonstrating they want.
But enough of Citadel.
What a great opportunity to let them play Wall Street buyout games while others actually buck the tide.
If you’re competing against, Cumulus, Citadel or Clear Channel, ramp up the local news.
Be live more than 80% of the time.
Retire voice tracking.
Rehire talent, management and sales people.
Put personalities that audiences love back on the air.
Build digital platforms for radio-created content realizing that to do this takes adding a line item to the operating budget.
Promote, market and deliver.
The big joke is that with all the trade accounts of how radio companies are outperforming last year’s numbers, the punch line is last year’s losses were of epic proportion.
Once again, no consequences.
A radio company can report a 4% increase in first quarter revenue and make it sound like a turnaround. Forget that the numbers are compared to horrendous performance a year ago same quarter.
Citadel may look to some like a conquering hero when it soon emerges from bankruptcy, but it represents all that is bad that happened to radio since consolidation.
Weak management.
Over leveraged debt.
Taking away instead of giving more.
Analysts say the radio industry is many years – if ever – from returning to its pre-recession revenue statistics. For an industry that could have been a leader in digital programming, marketing and content by now, it doesn’t bode well.
Radio doesn’t need Citadel to emerge from bankruptcy.
It needs the industry to emerge from operating with no consequences and that is about to change.
Until radio stations start giving listeners and advertisers more of what they have long proven they want and need – to borrow a phrase from Friedman – not only will the world be flat, but so will their future growth.
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