How Bad is it Out There ?

[Greybeard]

I heard from a person still in radio sales that billing at her station is less than half what it was prior to October 2008, and this person works at one of the top rated stations in town.
Has the radio business really gotten that bleak or did she just want me to feel sorry for her and pick up the sizeable bar tab we ran up that night ? Thanks in advance for any numbers or comments provided.

 

[Shark]

I'm sure she was telling you the truth. People I know who are still in the trenches (I got out last year after nearly 3 decades) are all telling pretty much the same story. Between the economy and PPM, rates have fallen to the point where nobody even bothered to do a first quarter package because the rates were already at rock bottom.

 

[monkeygirl]

It's that bad.

 

[TVradioguru]

Agency business is probably down 30-50% depending on market. In Los Angeles national down maybe 25%, Chicago 50%, Detroit over 60% mostly due to the loss of automotive.

The good news is local business is picking up and so is automotive from Ford and Toyota. Things are definitely starting to turn around, albeit slowly. With overall radio listening up, I think there will be an opportunity when business scrambles to promote their products and services after a year long draught.

 

[Shoot From Hip]

According to the Radio Advertising Bureau, total Radio spot revenue in 2009 was 20% less than it was in 2008; 2008 revenue was 10% lower than 2007; 2007 was 3% lower than 2006; 2006 was flat with 2005; 2005 was flat with 2004. As an industry, the last year that did better than the one before was 2004, which finished 2% better than 2003.

 

[bossbill]

In the "good times" before the current downturn, major groups did a very effective job of maximizing revenues. The drop in regional/national must have had a huge effect on them.

In our small market, we never got our share of this business to begin with, so the effect on us was not as devastating.

While first quarter is always "soft", we have seen double-digit increases from Jan to Jan and Feb to Feb. March is up as well.

 

[LITTLEBOYBLUE]

I'm optimistic that folks like Bill represent the rebirth of radio. Have felt for years that the biggest traction will be in smaller markets. That is where you still have the relationships with Chamber-of-Commerce type businesses and have the impact on the potential customers enough to make a difference. The content is also still about what matters to the community.

The major markets obsessed with whatever "corporate" is obsessed with, which for years has been balance sheet first aid.

The one hope I see on the horizon for larger markets is what Larry Wilson is doing with "Alpha" in PDX (and, presumably, someday in Seattle when he scores the CBS stations here).

 

[radiogroupie]

In the "good times" before the current downturn, major groups did a very effective job of maximizing revenues. The drop in regional/national must have had a huge effect on them.

In our small market, we never got our share of this business to begin with, so the effect on us was not as devastating.

While first quarter is always "soft", we have seen double-digit increases from Jan to Jan and Feb to Feb. March is up as well.

And instead of saving or investing WISELY greedy egotistical arrogant clueless owners paid 4x, 6x, even 10x over the REAL value of stations. And now they pay the price or I should say WE (jocks) are paying the price in reduced salaries, termination while the fat stupid greedy owners and their VPs keep getting hundreds of thousands to millions in Bonuses.

Thank You: Lowry Mays, The Mays Brothers, Sumner Redstone, The Dickie Bros, and all the rest of the wanna bes dumb asses like First Media, Next Media, Entercom, Entravision, Etc

 

[TVradioguru]

And instead of saving or investing WISELY greedy egotistical arrogant clueless owners paid 4x, 6x, even 10x over the REAL value of stations. And now they pay the price or I should say WE (jocks) are paying the price in reduced salaries, termination while the fat stupid greedy owners and their VPs keep getting hundreds of thousands to millions in Bonuses.

Thank You: Lowry Mays, The Mays Brothers, Sumner Redstone, The Dickie Bros, and all the rest of the wanna bes dumb asses like First Media, Next Media, Entercom, Entravision, Etc

Interesting! So the company that you worked for is somehow evil for falling into the same situation, albeit less, than most corporations in the United States? My point being, had these same evil corporations not taken the risk they had on growing their companies, you my friend could have been working in fast food all along collecting slightly over minimum wage. The sad fact is that there are no permanent jobs anywhere in the world. We are all 'interim' in our positions, no matter what your role or where you're employed.

You think YOU'RE feeling displaced in a small industry like radio? Try being one of the thousands of unemployed workers from one of the big four automakers. This isn't a radio-corporate thing, this is an economy thing.

 

[12 In a Row]

In the "good times" before the current downturn, major groups did a very effective job of maximizing revenues. The drop in regional/national must have had a huge effect on them.

In our small market, we never got our share of this business to begin with, so the effect on us was not as devastating.

While first quarter is always "soft", we have seen double-digit increases from Jan to Jan and Feb to Feb. March is up as well.

And instead of saving or investing WISELY greedy egotistical arrogant clueless owners paid 4x, 6x, even 10x over the REAL value of stations. And now they pay the price or I should say WE (jocks) are paying the price in reduced salaries, termination while the fat stupid greedy owners and their VPs keep getting hundreds of thousands to millions in Bonuses.

Thank You: Lowry Mays, The Mays Brothers, Sumner Redstone, The Dickie Bros, and all the rest of the wanna bes dumb asses like First Media, Next Media, Entercom, Entravision, Etc

First, when you're the owner(s) of any business it's YOUR ass on the line.
Secondly, who owned the bulk of the big stations back in the good ole days?
Insurance, tire & appliance companies.
Good points made on the big picture. Radio is and has been for years, a small industry and not immune to changing times, technology and the ecomony.

 

[12 In a Row]

As for advertising revenue, the 800 pound gorilla-TV.
Internet starting to take a big piece of the pie.
It is what it is.

 

[gr8oldies]

Advertisers are slashing their budgets for all media including traditional internet. Social media is where that money is going. The appliance and insurance companies weren't going to stay in radio ownership.

 

[TexasTom]

Interesting! So the company that you worked for is somehow evil for falling into the same situation, albeit less, than most corporations in the United States? My point being, had these same evil corporations not taken the risk they had on growing their companies, you my friend could have been working in fast food all along collecting slightly over minimum wage.

That doesn't really seem quite accurate.

Launching a new station creates new jobs. But, by and large, much of what has happened since 1996 has been companies getting larger by buying out existing stations at ever higher prices. And those higher prices were supported by cutting jobs, not creating them.

From the outside, I see little evidence that the inflating station valuations after the Telecom Act were anything but bad for those who were working in radio.

 

[TVradioguru]

The facts are that companies like Clear Channel, for whatever you thought of think about them, employed more radio-centric folks than combined of all the independent stations or smaller groups in prior years. Sure they like most groups, utilized automation to take advantage of efficiencies just as most stations today, whether owned by small groups such a Bill's here or large groups. Automation and voice tracking wasn't just a tool used by radios stations owned by the larger corporations. Many other industries also use automation to cut costs while maintaining or increasing quality at a lower cost.

In the end I suppose its true that much of the chaff was cut from groups to save money, but that's business. Stations exist to make money for their owners or shareholders. Get over it.

 

[Wonderfulwino]

With the cutback on production costs, is it my imagination or has commercial jingle beds gone back to the old days? Did I hear the Lone Ranger Theme (William Tell Overture) actually being used for a local spot not long ago..? I thought that one went out back in the 60's? Some of these recent off the shelf packages sound cheap and cheesy....

 

[Andy1970]

The facts are that companies like Clear Channel, for whatever you thought of think about them, employed
In the end I suppose its true that much of the chaff was cut from groups to save money, but that's business. Stations exist to make money for their owners or shareholders. Get over it.

Interesting. Clear Channel = accountants running radio = loss of fun and personality = loss of revenue over time (cos real people really aren't that stupi(real people = listeners))

Local owners = passionate about radio = get enough to make revenue to make payroll = real focused radio.

Sure automation helps, but there are so many stations now voicetracking badly and not using automation intelligently that the public is catching on

Anyways, back on topic: things are looking better out in the field. BUT it's slow, and the market place for ALL advertising mediums will never be the same again. Those of us in radio must think out of the box, embrace new technology and platforms and sell a package, not just spot advertising.

Just a thought.

 

[WKomm]

I have a foot in radio and another in a non-radio gig and I can tell you that for the first time, the non-radio company is putting well over 50% of its budget and marketing on the net. It's a good-sized international firm. Not mega huge but still with a healthy ad and promo budget. So I believe that radio revenue is waaaay down. I can't help but be sad. I really enjoy being on the air, being around listeners - heck, even spot breaks.

 

[bossbill]

The facts are that companies like Clear Channel, for whatever you thought of think about them, employed more radio-centric folks than combined of all the independent stations or smaller groups in prior years. Sure they like most groups, utilized automation to take advantage of efficiencies just as most stations today, whether owned by small groups such a Bill's here or large groups. Automation and voice tracking wasn't just a tool used by radios stations owned by the larger corporations. Many other industries also use automation to cut costs while maintaining or increasing quality at a lower cost.

In the end I suppose its true that much of the chaff was cut from groups to save money, but that's business. Stations exist to make money for their owners or shareholders. Get over it.

I hope you're not suggesting that Clear Channel employed more people in their combined operation than the individual stations did prior to CC ownership. And there is a difference between small rural stations utilizing automation/network in order to stay alive and provide a local service (which they've done for many years already), and larger companies doing it to offset debt service due to inflated purchase prices.

 

[TexasTom]

The facts are that companies like Clear Channel, for whatever you thought of think about them, employed more radio-centric folks than combined of all the independent stations or smaller groups in prior years. Sure they like most groups, utilized automation to take advantage of efficiencies just as most stations today, whether owned by small groups such a Bill's here or large groups. Automation and voice tracking wasn't just a tool used by radios stations owned by the larger corporations. Many other industries also use automation to cut costs while maintaining or increasing quality at a lower cost.

In the end I suppose its true that much of the chaff was cut from groups to save money, but that's business. Stations exist to make money for their owners or shareholders. Get over it.

Sorry, but I'm not buying the nonsense that you're peddling. Consolidation -- in any industry (not just radio) -- results in job losses. After all, the rationale behind any sort of industry consolidation is to increase profits by increasing "operating efficiencies", which is a euphemism for having the same work done by fewer people. Your claim would have a bit more credibility if groups like Clear Channel has expanded the industry by signing on new stations -- but that's not what has happened, as CC and the other big groups have overwhelmingly invested in buying existing stations instead of starting new ones (reasonable, considering that the new stations would be mostly in very small markets).

Regarding automation to maintain or increase on-air quality. Well, in smaller markets, that is certainly true. In large markets, I would argue otherwise. The on-air quality in large markets has most emphatically not been improved by automation. The voice tracked stations in markets like Seattle/Tacoma (where I grew up) and Dallas/Fort Worth (where I now live) are pretty boring and bland compared to what both markets used to get with live personalties. And in that respect, I suspect that both markets are typical of what has happened...