Re: Another View
SirRoxalot said:
I think you missed a major point. The CC's of the world, and the rest of the corporate raiders, looked at "fat & happy" radio serving its audience and reaping a profit. They wanted in so badly that they seriously overpaid for the stations that they purchased in an attempt to establish "clusters" - groups of stations in a market with enough audience to create a defacto monopoly that would allow them to deal with advertisers from a position of extreme strength.
Neither CC nor any of the other large broadcast companies are "raiders." A corporate raider is a person or investment bank that buys up enough stock to put the company in play and force a sale. In consolidation, some companies wanted to sell, given the attractive multiples, and others wanted to buy, based on expectations of improved margins.
They promised shareholders that they could maintain the ratings, increase the rates, and decrease the costs by firing a lot of the people who got the ratings, brought in the money, and made sure that spots got aired in the first place.
No, they promised the shareholders growth in profits and an expectation of appreciation of the investment. How they did it was not the issue.
Experienced sales people were axed or abused until they quit because they "made too much money". They replaced experienced programmers with "Selector Whizzes" who plugged in corporate clocks and music libraries, but had no idea how to handle or develop talent.
I see very little evidence of this. In CC, there are no coroprate clocks or libraries shared by stations. Every one is different, with different rotations, playlists, etc. A quick glance at "same format-different market" in MediaBase proves this beyond doubt.
Experienced jocks were replaced by VT jocks from another station, or syndication from another city. Traffic & production departments were combined, and everyone was asked to do "more with less".
Voice tracking was tried by a number of groups, and found not to be very practical in most cases. There is probably less voice tracking now than at any time since the late 60's.
Their view was short-sighted. Yes, they achieved some economies of scale. What they also achieved was radio monotony, and too many dayparts where the one-to-one relationship between the jock & the listener were lost. They also lost sales people who could put together a campaign based on long-term effectiveness that showed the client results, instead of bombarding clients with endless streams of manipulated "numbers".
In many formats, the listener does not want the intrusions of a jock. Think back to the 70's with Beautiful Music. About a 10 share to a 15 share of every US market wanted a station that played music without annoying jocks. Some want jocks, some do not. We listen to the radio because it satisfies come need, and having jocks is not always part of that process.
Some people "adjusted" to the new "reality" and continued working - usually taking on more and more jobs and responsibilities for the same money because they didn't want to be the next budget casualty. I knew very few "4 and out the door" jocks. I knew a lot of jocks that did their 4-5 hours on the air, put in a 2-3 hours in production, then went out to do station promotions - both paid and unpaid - several times a week. Most of the guys I came up with worked 50 - 60 hour a week. The paid promotions, bar gigs, and personal appearances paid for "luxuries" like owning a home, a late-model car, and the odd kid or two.
That may well be so in some situations. I find that consolidation has also brought some benefits I did not have when I started in radio. Insurance is far more prevalent, and 401-k and other savings plans like ESP are now available. There is often a much better career path, where one does not have to do the U-Haul thing to move up. And at most places I am familiar with, the salaries are better and in many cases adjusted annually with at least a COLA.
In the past, radio survived technological challenges from recording technologies like the LP, 8-track, cassette, and CD. The difference this time is not that iPods and MP3 players offer better technology, it's that programming often doesn't respond to the audience. The next generation of listeners - 12-24 year olds - have been largely abandoned. Today, corporate would rather use a station to shave a couple of shares off of a serious competitor than target an audience that's largely underserved, but represents that next generation of audience that advertisers will want.
Radio does not want the 12-17 audience, so it is off in TSL, but not that music in cume. In fact, one of the main reasons TSL is off is that there are 120 million or so gaming consoles in the US, and you can not listen to radio and game at the same time. Interestingly, radio performs very close to historic levels in cume in 18-54 and is only off slightly in the last 10 years in TSL, with no one item (like the iPod) to blame as much as the overall increase in leisure time options, from HDTV to gaming.
If you look at the audience by age, it "comes" to radio after about age 21, when people have jobs, families and such and do not have as much time for other entertainment. Sure, the TSL will be a bit lower, but reaching 91% of all teens even today is hardly shabby.
Audiences have declined, as have rates and profits.
This is just wrong. There is a minimal decline in cume, and a slight one in TSL in sales demos. Radio revenues, two years ago, for the first time reached 8% of all ad expenditures. Rates have increased at least in proprotion with inflation, and national billings are up every year except 2001 out of the last 10. Profits at every radio company except a couple that are small and have individual market problems (like Radio One in LA) are up, and in many cases setting records... such as Clear Channel.
I personally hope that CC takes a bath on the 448 stations it is divesting because their "system" failed.
What failied is Randy Michaels' idea that regional clusters could be sold in a package. This was a radical idea, and a major risk that only a ocmpany like CCU could take. Were it to have worked, it would have made radio easier to buy by advertisers. It's too bad it did not succeed.
But the stations they are selling are highly desirable by companies with a cheaper business model (more limited insurance and benefits, etc) who are smaller market specialists. I woudl bet that, overall, they get more than they paid... probably much more. There will be an occasional sale for less than purchase, but that will be related to market conditions, not consolidation and not to CCU's operation.
I hope that the people who purchase those stations are smart enough to RECOGNIZE that CC's method FAILED, and that they refuse to pay so much money for stations that they can't possibly deliver quality, local programming to their audience.
They will obviously know that the higher overhead of a large company that is in mostly large markets will have to be controlled, and the operations made more efficient for them to be profitable.
Since most of the stations are highly desirable, there will be more than one bid on most. Whoever pays the most will get them.
With the coming changes in technology that will allow an Internet stream to be delivered wirelessly to a smart phone or audio appliance anywhere in a metropolitan area, the value of that big stick will continue to fall. THAT'S why CC is getting out, and going private to avoid public embarassment on the balance sheet. Live and local CONTENT will be the sellable commodity. Broadcasters who are smart enough to recognize that, and embrace new delivery systems, will survive. Terrestrial repeaters burdened by high costs and heavy commercial loads will not.
Clear is getting out of small markets because they don't fit the business model and because the regional concept did not work. They are keeping the larger markets, where most of the money comes from. Those 450+ stations produced less than 10% of the CCU revenue, and were probably a pain to administer.
As technologies change, radio will add new distribution channels. The ones who will do it first are the ones with big cash flows, like CCU, not some broadcaster in Traverse City or Sebring or Victorville.
Free radio will always have commericals. It is a trade-off.
