Clearly Conflicted

[SirRoxalot]

I know that Clear Channel isn't a player in Buffalo, but it is in Rochester. Moreover, as the biggest player in the industry, it's followed by a lot of copy-cat companies.

Last week brought two interesting tidbits. First, from Tom Taylor:

CFO Tom Casey tells yesterday’s Q1 call that the directive from CEO Bob Pittman is to “find those savings” in the overall business and then re-deploy the cash “to fund the highest-growth” areas – national and digital. Casey tells analysts that for his Q1, “national was up 2%, outpacing local.”

Within days, Radio-Info reports on CC's internal study about radio:

Clear Channel Study Shows Radio’s "Reach and Appeal Remain Strong." Those are the words of Clear Channel CEO Bob Pittman... Pittman says of the study, “This research confirms that radio’s reach and appeal remain strong regardless of the platform, geography, ethnicity, or age group. American listeners – particularly younger generations – feel a strong connection to their favorite on-air radio personalities – which is made stronger by social media – in a way that isn’t replicated by other media.”

There's lots more from the study at http://www.radioinfo.com. A few more salient points:

• 
  92% of all respondents listen to radio at least once a week
  69% agree “streaming services do not replace radio."
  80% say radio is helpful in discovering new artists or songs
  82% say the first thing they do when they get in a car is turn on the radio
  66% agree that their favorite radio stations reflect who they are as a person
  78% agree that radio has the power to make a difference in the community
  72% believe radio is more community-oriented than TV
  85% say radio is more accessible than at any time before
  78 percent say they can access radio anywhere
  Radio advertising is viewed more positively than ads on TV, internet and mobile apps
  72% believe that radio feels more “human” than the internet
  65 percent believe it is more “personal” than TV
  71% say radio is a part of their daily routine

Maybe Clear Channel should read their own study, and rethink where they invest the profits earned by their biggest money-maker.

 

[therealjm12]

Seems like C. C. does everything in reverse according to their in house research. Leastwise in Rochester & Syracuse.

 

[chas108]

SirRox, I sincerely and sadly believe this study amounts to little more than mental masturbation.

This is for CC's AE's to feed their clients, and programming people to enable a false sense of security. Hopefully no one drawing a paycheck from them is fooled.

This company's endgame is iHeartRadio and maintaining some live presence in the larger markets. The smaller markets will be sold off and strongly (ahem!) encouraged to carry Premium Choice Dog Food.

I don't think CC, $20 Billion in debt and counting, can afford to do radio the right way across the board. Not to mention the self-fulfilling prophecy part of the equation - that it's been done on the cheap in so many markets for so long now that it's possible for an entire generation to have grown up in those markets without knowing the emotional connection possible from great radio.

Syracuse is a prime example.

Maybe if the survey were conducted in places like Buffalo where some good radio still exists I could put more stock in it.

 

[TheBigA]

Maybe Clear Channel should read their own study, and rethink where they invest the profits earned by their biggest money-maker.

OTA makes a lot of money, but it's not a growth area. And because advertisers are convinced that OTA is not a growth area, there is less money for staffing. So the company can spend more money in the area that's shrinking, or in the area that's growing.

 

[SirRoxalot]

Look at the numbers OTA is by far the biggest money maker for CC, and suffers because it bears most of the debt load. Radio actually has grown for them although modestly. Outdoor posted a $148-million dollar loss. CC Traffic was a major loser. Has iHeart radio made money yet? They're sure dumping a lot of money into it.

On-line has the most room for growth, but nobody's figured out how to monetize it at the same level that OTA has been monetized. You think there are too many terrestrial radio stations? Multiply that number by millions on-line. Advertisers aren't sure that radio works for them? They'll be less impressed by the on-line results.

CC and a few others are betting that they'll be able to move their audience from towers to the Internet without having to compete with the rest of the on-line offerings. Well, if they have any hope of that working, they need to offer exclusive local content. CC Traffic is a great example of them trying to do that from regional hubs - and it sucks.

Core business. Refocus. Read your own study. Stop the bleeding, reduce debt, and you might survive.

 

[TheBigA]

CC Traffic is a great example of them trying to do that from regional hubs - and it sucks.

Total Traffic is also a great example of why investing in broadcast won't yield results. Total Traffic was losing money BEFORE it went to hubs. In fact, the reason it went to hubs was to stop the bleeding. They also bought Metro Traffic to stop the bleeding. Why? Because the thing that's hurting these kinds of traffic services is they only make money in a one-to-a-market operation when they're a monopoly. The minute they get competition, they lose money. Why? Because the costs keep going up, while the revenues drop. The costs go up because people are expensive. That's really their only cost. Meanwhile, competitors like Cumulus ask why they're paying money or giving invetory to Clear Channel? So they start their own traffic service, and that cuts the audience Clear Channel has to sell to advertisers, which cuts the amount they can charge, which cuts the revenues. And they can't just add more spots to make up the difference. The ONLY option for making Total Traffic profitable is to cut costs. It will not be a growth area, because traffic information is easy to get, anyone can do it, and the public doesn't care where it comes from. Just like radio. There is no such thing as "exclusive local content." If one station can do it, any station can do it. The only way to stop the bleeding is to cut costs. They can't add more inventory. They can't raise the ad rates. They can't really come up with new revenue generators on air, because they're monetizing everything. Heck they're selling naming rights to their studios. They're maxed out.

They're refinancing their debt, restructuring it in various ways, and that helps corporate, but they still have lots of clusters losing money. National ad sales is a growth area, not local. Investing more money in local won't change that. It just adds to the cost. They're losing money with traffic. Investing more money won't change that. It just digs them deeper into the hole. The only hope they have is to reinvent themselves into a technology company like Pandora. Of course even Pandora is losing money. The music industry has seen to it that online radio will never make money. But online changes the perception of the company, adds value, and makes it potentially attractive to a buyer. THAT is the only solution.

 

[Paul_Warren]

...The ONLY option for making Total Traffic profitable is to cut costs. It will not be a growth area, because traffic information is easy to get, anyone can do it, and the public doesn't care where it comes from. Just like radio...

And the reason they don't care is because nobody's doing it well. We have a monster 50 kW news/talk here in Salt Lake, KSL, which does its own traffic, with its own people. But it's as badly done or worse than CC's traffic. People who don't communicate clearly, bury essential details in a sea of babble, or leave out details such as which highway and which side of the city they mean when they say "northbound."

Traffic used to be considered a service element underpinning, not a separate enterprise which had to be profitable on its own. Doing it well made a difference. Sales departments used to ask for helicopters and managers found they could get Coke or a gas station chain to cover the costs with sponsorships. The reporters were off-duty cops or guys like Jack Sharpe.

Today, it's where greenies get their first job in radio for minimum wage. No wonder it all sounds the same, sounds bad, and the information isn't valued.

The costs of getting the data are now next to nothing in any city big enough to have DOT cameras and monitoring centers. Is it such a stretch to think we could get get competent personalities to perform this service? Radio can delivers traffic faster and in a more useful form than any other medium, but nobody's trying to do it well.

If it's losing money, why not just quit doing it and tell people to look at their smartphones? How much worse could it be?

 

[TheBigA]

Is it such a stretch to think we could get get competent personalities to perform this service?

I think it was John Glenn who once said the one thing on his mind as he was shot into space was that the rocket and everything involved was purchased from the lowest bidder in keeping with government policy. Same thing with the people who grow and package the food you eat, or the dental hygenist. Every employer is trying to make a profit, and quality isn't always the #1 priority. The one thing broadcasters have never done is set standards for quality. You'd think that's something a union or professional association would do, but no. It's not a management function. The professionals themselves should create the standards. Other professions, like teachers or lawyers, have come up with forms of certification. The only people in broadcasting who were certified were engineers. Why not everyone else?

 

[Mike Sheridan]

Because on air has turned into a job rather than a career. Also "talent" is subjective.

 

[OldNumber7]

...The ONLY option for making Total Traffic profitable is to cut costs. It will not be a growth area, because traffic information is easy to get, anyone can do it, and the public doesn't care where it comes from. Just like radio...

And the reason they don't care is because nobody's doing it well. We have a monster 50 kW news/talk here in Salt Lake, KSL, which does its own traffic, with its own people. But it's as badly done or worse than CC's traffic. People who don't communicate clearly, bury essential details in a sea of babble, or leave out details such as which highway and which side of the city they mean when they say "northbound."

Traffic used to be considered a service element underpinning, not a separate enterprise which had to be profitable on its own. Doing it well made a difference. Sales departments used to ask for helicopters and managers found they could get Coke or a gas station chain to cover the costs with sponsorships. The reporters were off-duty cops or guys like Jack Sharpe.

Today, it's where greenies get their first job in radio for minimum wage. No wonder it all sounds the same, sounds bad, and the information isn't valued.

The costs of getting the data are now next to nothing in any city big enough to have DOT cameras and monitoring centers. Is it such a stretch to think we could get get competent personalities to perform this service? Radio can delivers traffic faster and in a more useful form than any other medium, but nobody's trying to do it well.

If it's losing money, why not just quit doing it and tell people to look at their smartphones? How much worse could it be?

Amen, Brother. I already have given up on radio traffic reports, even from the major market all news stations where they've been doing traffic since soon after cars were invented. Google Maps presents more information, in an easy to use form, without waiting for the next 2 or 8 on the clock. Modern radio traffic reporting is sizzle without good steak; stations do it because they think they are supposed to -- but they don't do it well. When more listeners figure that out, when dashboard GPS algorithms better use real-time traffic data to tell drivers where to go, then who will need radio reports?

 

[SirRoxalot]

Eventually, Google Maps will be available in cars - but it's not there yet for the majority of people. Google Maps also means that you have to take your eyes off the road to get the info. That's fine if you're already stuck in traffic, but not so good if you want to avoid that traffic jam.

I've worked at stations with Clear Channel traffic. The reason we dropped it was because it sucked. Out-of-towners were unfamiliar with the local vernacular, and because they bounced from market to market, there was no continuity to the rhythm of the traffic patterns. Information was often laughably late. With traffic, you NEED to get WHAT right, even if you don't have the why.

The best local traffic comes from live & local talent who obviously watch the traffic cams, and have the opportunity to give traffic the proper emphasis. If it's an easy day, traffic gets only the programmed sponsored breaks. When it's unusually bad, it gets time between those break - even if it's just a quick mention of the trouble spot. That timeliness is invaluable. Local talent also has only one market to keep an eye on, which affords a continuity to the ebb and flow of traffic.

I hear Toronto traffic reports - which is a much bigger metro with legendary traffic problems - and it's like they're speaking a foreign language if you're not familiar with the city. No 5" screen is going to give me the specific information I need in an area that size - and certainly not if I'm moving. Audio works well.

 

[TheBigA]

For me, I can access the DOT cams from my home computer. I take a quick look in real time before I hop in my car, and I know the best route to take based on what I see on the cams. My tax dollars at work. Conversely, my tax dollars put local radio people OUT of work. But that's how it goes.

 

[SirRoxalot]

Yeah, and nothing changes after you walk out the door. And, "There is no such thing as 'exclusive local content'", or apparently talent in your world.

While we're at it, let's discuss "National ad sales is a growth area, not local. Investing more money in local won't change that. It just adds to the cost." Somewhere around 80% of radio station revenue is from local. You're telling me that there's no way to grow the amount of money radio stations can bring in? That all clients are now being adequately served by sales people, and that there are no new potential clients who simply haven't been approached with a spot package that they can afford? If all that's true, nearly every GM, GSM, and LSM in the business must be wrong. Sales people - particularly sales people who work mostly on commission - cost money? Yikes.

 

[TheBigA]

You're telling me that there's no way to grow the amount of money radio stations can bring in?

You tell me how to do it. Raise rates? No. Increase spot load? No. Add sponsorships and NTR? Already covered.

Sure you can add more commission sales people, and divide their regions more, but in essence you're cutting their commissions by dividing their territory. That's a good way to get sales people to quit.

The great thing about the internet is it's new inventory. It's something you can combine in a package with on air. But in order to make online worth something, you have to invest in it. That's what they're doing. Otherwise, it's just bonus, and no one makes any money.

 

[Element9]

For me, I can access the DOT cams from my home computer. I take a quick look in real time before I hop in my car, and I know the best route to take based on what I see on the cams.

Short drive, eh Lucky?

 

[TheBigA]

For me, I can access the DOT cams from my home computer. I take a quick look in real time before I hop in my car, and I know the best route to take based on what I see on the cams.

Short drive, eh Lucky?

13 miles.

 

[SirRoxalot]

You tell me how to do it. Raise rates? No. Increase spot load? No. Add sponsorships and NTR? Already covered.

Sure you can add more commission sales people, and divide their regions more, but in essence you're cutting their commissions by dividing their territory. That's a good way to get sales people to quit.

The great thing about the internet is it's new inventory. It's something you can combine in a package with on air. But in order to make online worth something, you have to invest in it. That's what they're doing. Otherwise, it's just bonus, and no one makes any money.

You'd better explain this to your corporate masters because this isn't what they're telling the banks, investors, or the guys who draw up the budget. A lot of discussion has gone into this topic locally, and the answer that keeps coming back is to expand the advertising pool instead of trying to get more money from the same advertisers. That requires more sales people to give more attention to new potential clients - along with increased demands from production for spec spots and/or higher production standards.

Unfortunately, production positions are being cut, and copywriters are long gone. Sales people are spending more time filling onerous reporting requirements handed down from corporate, and less time with clients. It appears that corporate management simply doesn't trust local management to oversee the people in the trenches. Producing data is more important than producing results.

 

[average_listener]

Google+ on my smartphone has learned my route to and from work and gives me estimates on travel time. No traffic reporter can do that for me.

 

[TheBigA]

A lot of discussion has gone into this topic locally, and the answer that keeps coming back is to expand the advertising pool instead of trying to get more money from the same advertisers.

Where does that answer "keep coming back" from?" You mean to tell me current sales people aren't interested in seeking new clients?

 

[SirRoxalot]

Sales people have limited time - especially now that several of the larger corporate entities have dramatically increased reporting requirements. Would you spend the majority of your time servicing existing clients who you've already established a relationship with, or pursuing new clients who have money, but need a lot more development time and handholding?

How do you differentiate your potential new client's spots from his competition? Get a special spec spot from creative services and/or production? Good luck with that. Those folks - what few are left - are swimming for their lives trying to keep up with the paying customers. Do you really think that the advertising version of "Mad-libs" that Cumuless promotes is going to do that job?

Either invest your profits in the part of the business that brings the most money through the door, or stop bitching about slow growth. The reason that digital has such "potential" is that it's bringing in next to nothing. If you want new business on that platform, hire sales people to sell it. Send them out to new clients who can't or won't pay for OTA, and hope they get results. If they do, you may convince those who can to eventually give OTA a try. Taking precious time away from your primary sales people to pursue new digital clients is counter-productive.