Cramer: It's Over for Radio Stocks

[KB1OKL]

Cramer: It's Over for Radio Stocks

The radio fundamentals are so poor. The industry is going away, says Jim Cramer.

http://link.brightcove.com/services/link/bcpid1078966384/bclid1137812485/bctid1408041510

If this is true why the waste of money on IBOC?

 

[LinoNYC]

Cramer: It's Over for Radio Stocks

The radio fundamentals are so poor. The industry is going away, says Jim Cramer.

http://link.brightcove.com/services/link/bcpid1078966384/bclid1137812485/bctid1408041510

If this is true why the waste of money on IBOC?

Sure.

A product with an installed base of 600-800 million receivers.

A product that is available free to over 90% of the 300 million people of the United States.

A mainstay for rapid, authoritative information.

The service is free, the devices are cheap and eminately portable.

If Mr Cramer is so unsure of radio's permanence he'd better hurry-up and bank all those checks he gets for his appearances on this obsolete medium.

Honestly, you iboc haters will grasp at anything.

Lino

 

[vsa]

Cramer: It's Over for Radio Stocks

The radio fundamentals are so poor. The industry is going away, says Jim Cramer.

http://link.brightcove.com/services/link/bcpid1078966384/bclid1137812485/bctid1408041510

If this is true why the waste of money on IBOC?

Sure.

A product with an installed base of 600-800 million receivers.

A product that is available free to over 90% of the 300 million people of the United States.

A mainstay for rapid, authoritative information.

The service is free, the devices are cheap and eminately portable.


Lino

Lino,

With that kind of installed base, by your reasoning, AM radio is doing just fine and can't possibly be in any kind of trouble.

 

[LinoNYC]

Cramer: It's Over for Radio Stocks

The radio fundamentals are so poor. The industry is going away, says Jim Cramer.

http://link.brightcove.com/services/link/bcpid1078966384/bclid1137812485/bctid1408041510

If this is true why the waste of money on IBOC?

Sure.

A product with an installed base of 600-800 million receivers.

A product that is available free to over 90% of the 300 million people of the United States.

A mainstay for rapid, authoritative information.

The service is free, the devices are cheap and eminately portable.


Lino

Lino,

With that kind of installed base, by your reasoning, AM radio is doing just fine and can't possibly be in any kind of trouble.

No, the topic was radio in general but by highlighting AM you've made a point in support of iboc, (or any other in-band solution).

Lino

 

[vsa]

Cramer: It's Over for Radio Stocks

The radio fundamentals are so poor. The industry is going away, says Jim Cramer.

http://link.brightcove.com/services/link/bcpid1078966384/bclid1137812485/bctid1408041510

If this is true why the waste of money on IBOC?

Sure.

A product with an installed base of 600-800 million receivers.

A product that is available free to over 90% of the 300 million people of the United States.

A mainstay for rapid, authoritative information.

The service is free, the devices are cheap and eminately portable.


Lino

Lino,

With that kind of installed base, by your reasoning, AM radio is doing just fine and can't possibly be in any kind of trouble.

...highlighting AM you've made a point in support of iboc, (or any other in-band solution).

Lino

You'd be correct IF iboc did not require the purchase of a new radio. Since new hardware is REQUIRED, the solution (iboc or any other) may as well be on another band altogether where it won't interfere with neighboring stations.

Let me add:

"...GCap Media, the UK's biggest commercial radio broadcaster...is to close two digital radio stations...it also plans to sell its stake in Digital One, a national broadcasting platform for digital stations...GCap's chief executive Fru Hazlitt...said GCap sees better prospects in FM and broadband radio..."

http://news.bbc.co.uk/2/hi/business/7238768.stm

 

[R.F. Burns]

And you believe the US is anything like the UK when it comes to broadcasting? The UK is a tiny country compared with the US. Radio in Britain is nothing like radio in the United States. You might as well talk about setting up network distribution in Luxumbourgh. I mean, networks here serve 6 times zones (East coast to Hawaii). The UK or all of Europe, has nothing like that just from a geographic standpoint.

 

[Mike Walker]

Actually AM radio IS doing just fine in lots of instances, including MOST major markets, where sometimes two or three of the top five biling stations are AM!

 

[Play Freebird]

Here's the official statement from GCap. The key phrase: "Focusing on platforms that listeners want"

http://corporate.gcapmedia.com/index.php?id=15&entryId=94

My interpretation:

1) They believe that FM is doing an adequate job of serving most listeners and will remain viable for the foreseeable future.

2) The money they have spent so far on DAB hasn't delivered the results they expected -- but based on recent listener response, broadband appears more promising, so they will continue to stay on that course.

 

[Mike Walker]

And listeners have no freakin' idea "what they want", until the concrete advantages are demonstrated!

Consumers weren't crying out for the personal computer. The vast majority of Americans found them useless in the 80s, and for much of the 90s. Then demonstrable advantages (the world wide web, e-mail, chat, and later broadband services like audio and video) made PCs a "must have" in everyone's home.

Nobody was calling out for the compact disc. In fact, it was a VERY slow-starter the first few years. But consumers were shown the clear benefits of the technology, and decided they needed it. That's true with virtually all technologies that have eventually succeeded (most recently, digital tv). Consumers don't "cry out" for new technology, nor do they have any idea "what they want", because THEY'RE CONSUMERS! They can't envision how some device which doesn't exist yet will impact their lives. That's what inventors are FOR! First comes the idea, THEN comes the product, and only then...once real advantages to a real product exist, does demand enter the picture. And that's always been the case!

People on horseback weren't "crying out" for trains, or (later) automobiles. But once the advantages existed, demand followed.

 

[Play Freebird]

And listeners have no freakin' idea "what they want", until the concrete advantages are demonstrated!

Some would argue that the "advantages" of IBOC are closer to styrofoam than concrete, but in the end it all comes down to a matter of "tipping the balance" in favor of widespread adoption. Do the advantages outweigh the disadvantages (like cost or inconvenience)?

We need to keep this mind when debating the future of any new technology. Remember the all the hype several years ago about the Segway? Its inventor, Dean Kamen, predicted that it would "be to the car what the car was to the horse and buggy" but most people decided to keep using their leg muscles instead. Segway's disappointing sales figures remind me of HD Radio's:

http://en.wikipedia.org/wiki/Segway#Criticism

In the case of AM IBOC, the balance has tipped way over to the negative side. FM IBOC is arguably closer to the middle, but at this stage of the game I don't see a very well-defined advantage. Even the head of RAB thinks we should concentrate on promoting analog FM. (see top story on today's radio-info homepage)

 

[raydofan]

And listeners have no freakin' idea "what they want", until the concrete advantages are demonstrated!

Consumers weren't crying out for the personal computer. The vast majority of Americans found them useless in the 80s, and for much of the 90s. Then demonstrable advantages (the world wide web, e-mail, chat, and later broadband services like audio and video) made PCs a "must have" in everyone's home.

Nobody was calling out for the compact disc. In fact, it was a VERY slow-starter the first few years. But consumers were shown the clear benefits of the technology, and decided they needed it. That's true with virtually all technologies that have eventually succeeded (most recently, digital tv). Consumers don't "cry out" for new technology, nor do they have any idea "what they want", because THEY'RE CONSUMERS! They can't envision how some device which doesn't exist yet will impact their lives. That's what inventors are FOR! First comes the idea, THEN comes the product, and only then...once real advantages to a real product exist, does demand enter the picture. And that's always been the case!

People on horseback weren't "crying out" for trains, or (later) automobiles. But once the advantages existed, demand followed.

Flawed analogies.

Let's take the CD,for instance-the little 'scratchless record':

Could it be used with existing stereo equipment?

I require a player, but it delivers a line-level signal, which is easily accepted into my HiFi setup.

How is the sound?

As good as, or better than my records (we'll leave a more educated argument aside).

Other than the player, any special equipment involved? (")

Not at all.

Now, unless you are on top of the signal in most cases, and/or place an antenna outside or inside, you don't automatically get HD. You have to fight for it. Who-other than a radio geek-is gonna do that?

You have poorly performing radios that do not deliver on a digital promise. And on the AM side, it as the additional benefit of severe interference to existing, working technology.

Usually when an invention has a positive momentum, it sweeps a population. It has to be easy to use, easily adopted, and DISPLAY NO MAJOR FLAWS. HD is not providing-at its worst-a signal, and-at best, anything better than what is on the main signal; other than a simulcast of AM properties. This could be done with an SCA-and actually reach listeners! Use of the FM sidebands is the ONLY way to do Digital Radio without a new band, and not destroying the old.

Actually, the proper analogous to HD is an added feature to an automobile. At the moment, this ain't intermittent wipers. It's a flawed 'redesigned and therefore improved' gas tank. All in the name of maintaining radio real estate. But-uh-oh: the mounts are weak. Ooops!

You say the PC wasn't popular in the 80s. But it was as popular as it needed to be. I'm sure Woz was happy with his sales. At radio shack, they wish this thing was a TRS-80.

 

[skippertthomas]

...The rumors of my death are drastically overestimated....'Analog and Signals To the Ions..RADIO'...

I think in terms of what has happened in recent decades, Cramer is seeing a paradigm shift and comes to the conclusion that radio as he (financial guy) sees it, is dead...

1946, TV came in and radio was pronounced DEAD by 1950.. Along came Storz and Mc Lendon...

2008....The cash cow/real estate attitudes of corporate consolidation and non-radio people calling the shots is busting the backwater on the dam and levy... "The dike is busting".... The positive response to this 'crash' of the 'Titans', is that pricing might become affordable in a window of time for small town and regional small/medium market properties.. I even see it with Salem wanting out of anything below 25 or 30 (market size)... They bail and lose out on pricing, while the overall time they owned those properties, they cashed in many times over the losses they will take in selling below the over priced 'radio real estates' of the last 22 years...

AM is not totally dead.. Only in markets where it is the "Red Headed Stepchild" of a group owner.. When you give middle aged medium and large market jocks, sales folks an opportunity to buy the small discarded Ford Contours that the Cadillac owners and groups don't want, and then 'retro fit them and restore them' then you have what county seats lost over the last two plus decades... Small stations under metro signals, providing local "Mayberry" radio to the mass in that rural or suburban county! You sell a couple of dollars a hollar... You make your own mix of live and automation.. You run: Local News, Sports, Obits, Births, Lost Pets, Community Charity and Events, Local Elections from the Court House, Call the clients and talk with them and the listeners on-the-air, not worry about showing up in the metro or adi book, be concerned of 'traffic' in the retail and the success of being the daily and immediate voice of the small town/county and work with the local print media (as they get the deep details in the weekly paper) and be the VOICE of the common public... If you don't have a chamber, because they merged with the Metro Chamber, then form a community, organization, industry and trade council......El Loco folks! It's just as much fun as being in market #1, making a lot of money with a insecurity about having a job from book to book or day to day... Live a breath it, or DIE (AM or FM)... I can show you the discarded stations that NOW are making in roads in counties of 60, 50, 40 thousand and smaller! Big Boys are crying and trend is over, but the real local radio folks are waiting in the wings with enough cash for smaller commercial and non-com properties! Smiles on our faces and elbow grease to see a revival of LOCAL radio on the air, on the net and over the local cable access channel.... "What's wrong with two to three on the air, three on the streets 'selling' and one hour a day in the production room cutting spots???" After working in top 100 and top 50 markets, it's kind of a turn on, thinking about it, compared to a new gig in Portland with a good salary and doing mornings and ENG for a old group owner I loved working for...

Sounding like Radio's APOSTLE PAUL....

Tesla, Marconi.....Snaroff....Storz....Ol' Man Gordon....Drew....Drake....etc.. I'm ready to take the small flame and with others make a big torch in our niche.... Are you up for it? Will you just sit and cry about the 'good ol' days or why layoffs are gaining ground in the 'biggies'???? Comments on your feelings?? For me, the regional AM's that are being 'basterized' by night IBOC have good reason to yell as loud as they can... If it can be fixed, FINE.. But until that day, give the little guy a break! A Tornado hits a LOCALIZED AREA, not the whole metro...LOCAL RADIO is more concerned that a cluster station with 100kw 30 miles away... I am falling in love with 'abandoned puppies' just waiting for a bath, shot and building wise, a new coax and coat of paint!
Geez?? It's not rocket science! It's common sense RADIO..... Yeah? So you won't make 100 grand a year, but you can get close if you work 10 years at it and live a upper middle class life....

 

[Basnya]

Looking at the title of thread, Cramer may be on to something.

'It's over for radio STOCKS'

As in: You aren't going to make money buying stock in one or more of the station groups.

But you COULD make money owning a station, if it were staffed with competent and experienced radio people who are in tune with the wants and needs of the market and not a bunch of suits who will do anything to protect their own hides.

Radio doesn't belong on the stock exchange. I humbly suggest that it never did.

 

[calstymes]

Mike Walker accurately reported:

Actually AM radio IS doing just fine in lots of instances, including MOST major markets, where sometimes two or three of the top five biling stations are AM!

Yes, but they have to lose the HD IBOC thing. If they keep promising how wonderful it is and "normal" consumers can't decode it, then they're going to stop doing "just fine". Yeah right, it is going to save AM radio. I think everyone will be happier and AM stations will be more successful if and when this horrible and inferior technology goes away.

And Basnya aptly conjectured:

But you COULD make money owning a station, if it were staffed with competent and experienced radio people who are in tune with the wants and needs of the market and not a bunch of suits who will do anything to protect their own hides.

AMEN to that! And I have always said this... for two years now. No amount of IBOC trickery is going to "save" AM radio. Rather, program an AM with competant people and PAY them what they're worth!

 

[congsec51]

Sure. Everyone in America is going to pay $10 a month, $15 a month or whatever they want to charge for satellite radio. Especially with the economy going into the tank.

When Wimax comes along (internet radio in cars) that will put an end to whatever success satellite radio will see.

To satellite, breaking even would be viewed as a big success I guess.

 

[Savage]

AMEN, skippertthomas. So refreshing to see someone who obviously breathes oxygen instead of nitrous, when it comes to HD.

Congsec1, the only model which will ever work for satradio is if they eventually start selling spots, or channel access to terrestrial broadcasters. Broadcasters, want digital distribution? Forget IBOC and use the existing infrastructure with plenty of receivers already in circulation. Meet satradio and internet radio. Think broadcast TV and its alternate distribution pipelines of cable, satellite and the internet. THAT's the digital model. (Oh, radio people, and while you're at it, you might think about actually adding content in on your music channels, so listeners can hear the difference your programming provides vs. XM & Sirius. Lose the "14 in a row" plus angry-voiced liner guy plus a gob of spots paradigm.)

Like it or not, IBOC boosters, that's where it's going. It would be that way even if your pet system worked acceptably. Or was affordable. It doesn't and it ain't.

 

[marshall miles]

Cramer should stick to his TV program....

Radio stocks?

Radio will alway be around. Its free, and sooner or later, every form of entertainment, radio, television will be internet based..with internet radio in cars and trucks, for free, the combination of internet radio and terrestial radio will devour satellite radio.

Uh, why do you think the two are trying to merge....because they can't make it seperatly.

 

[oaktree]

Yes, but they have to lose the HD IBOC thing. If they keep promising how wonderful it is and "normal" consumers can't decode it, then they're going to stop doing "just fine". Yeah right, it is going to save AM radio. I think everyone will be happier and AM stations will be more successful if and when this horrible and inferior technology goes away.

You, apparently, only listen to IBOC stations in major or large medium stations? Small markets haven't fled to IBOC technology at all in most cases ... and in micro-small markets where there are a lot of stations. AM stations won't be more successful just because the "horrible and infererior technology goes away."

For so many thousands of stations, especially AM, IBOC doesn't exist at all ... and probably never will. That means that even fewer listeners in those markets even know of, let alone own, an HD radio.

 

[Savage]

XM + Sirius is a desperation merger. Remember: those who forget history are doomed to repeat it?

Consider the desperation mergers of smaller "independent" car makers in the 1950s: Studebaker with Packard, Kaiser with Willys, Nash with Hudson (the last example the only one that succeeded as "American Motors" and that only worked because Mitt Romney's dad George, later governor of Michigan, detected early that consumers would want small compact cars, so he dumped the senior car lines and produced only the Rambler. It predated the big-three companies' compacts of the early 1960s by three years and saved the company.)

"What do you get when you merge two companies which are losing money? A big company that loses money twice as fast."

 

[Sgeirk]

Basnya has a point. Radio STOCKS are over.

I work for a privately held group of radio stations, we've been private since before Marconi first transmittted a signal.

We're expanding into new markets, signing on new stations and our owners have never been happier.

Radio is as reasonably healthy as it's ever been. Publicly trading radio stocks is/was fundamentally flawed to begin with. Our business models are based on LOCAL conditions. Good riddance to wall street.

Can we get back to serving our local communities NOW...instead of Wall St. ?