iHeartless

[SirRoxalot]

Buffalo is fortunate that iHeart passed the market by, but Rochester isn't as lucky.

https://www.rochesterfirst.com/top-news/layoffs-at-local-iheart-radio-stations/

The bloodbath is nationwide. Scott Fybush is attempted to track the carnage.

www.fybush.com/nerw-update-20200114/

Of course, they're not being "fired". They're being "dislocated".

It looks like the Bankruptcy court's allowing them to shed over $10-BILLION in debt - or 2/3 of what they owed - wasn't enough for the Tin Man to be able to put any heart aboard his private plane.

I'm sure that Entercom, or at least the former CBS shareholders who now control it, are looking on to see if AI can replace real people and create greater synergies through their "Centers of Excellence" and their "

successful transformation into a 21st century media company" "

improving our services to our consumers and advertising partners; and enhancing the work environment for our employees.”

Does this mean that the employees that are left are getting new computers to help them out?

"Siri, please write me a spot for Boffo Brothers Backyard Emporium. I'll take "folksy" theme for $200, Alexa."
​

​

 

[ckg279]

Not sure if Scott mentioned this, but heading west down the I-90 in Erie it's just as much of a bloodbath at THEIR iHeartMedia stations.

Per YourErie.com(which is the combined site for WJET(Jet 24)and WFXP(Fox 66)), here's their toll...

*WTWF(93.9 the Wolf): Carrie Lee and Sammy Stone
*WXBB(94.7 Bob FM): Bill Page
*WFNN(Fox Sports Radio 1330): Alex Womer, who hosted the lone local talk show
*WRTS(Star 104)PD Chuck Rambaldo

The group also let go longtime Erie radio personality Craig Warvel(who counts WRTS(Star 104)and Bob FM among his stops)some time ago.

(Edit: looks like he DID mention them. My apologies to Scott.)

 

[TheBigA]

It looks like the Bankruptcy court's allowing them to shed over $10-BILLION in debt - or 2/3 of what they owed - wasn't enough for the Tin Man to be able to put any heart aboard his private plane.

The idea that they were allowed to shed $10 billion in debt is a misnomer. There were consequences to that deal. The lenders were given 97% equity in iHeart. They are the majority owners of the company, and the CEO is a contract employee of the lenders. I think he has a 4 year deal. It's already been reported that the lenders are courting an offer from Liberty Media's John Malone. Before he spends his money, he likely wants "economies." So this is part of the process that will get the lenders to cash out, probably by the end of the year. I've seen a similar process play out before at other companies. The old CEO makes the cuts, so the new owners aren't saddled with the baggage.

Here's a link to the terms of the deal:

https://variety.com/2019/music/news/iheartmedia-bankruptcy-plan-approval-1203114664/

 

[SirRoxalot]

No matter how you slice it they have over $10-billion less debt now even if they owe it to themselves. If this is the precursor to control by Liberty Media - which is credible - then prepare for the iHeart stations to sound a lot more like XM. Satellite delivery is simply stupidly expensive. Liberty could turn iHeart stations into the biggest set of ground stations in the nation. At least the audio quality would improve. They'll be pushing the FCC to allow encoded digital subcarriers for those who are willing to pay in order to avoid ads.

Add iHearts "sizeable live concert business" to Liberty's Live Nation Entertainment and they'll be jacking ticket prices even higher if the FTC allows them to become the de facto monopolists in the concert business. They'll also have a stranglehold on artists because they'll control a big chunk of their revenue stream.

Let's hope that the regulators are watching. Liberty could make iHeart look benevolent.

 

[CAVEMANager]

I did the research several years ago and found that Buffalo is the largest market in the nation where iHeart owns no radio stations. This might be something to brag about! iHeart has undoubtedly done more than any other station owner to make American radio dull and lifeless. Amazingly NAB has taken the position that in order for radio to effectively compete with newer digital media more consolidation is needed. I'd offer that public policy should be geared to return stations to local ownership.

 

[CTListener]

No matter how you slice it they have over $10-billion less debt now even if they owe it to themselves. If this is the precursor to control by Liberty Media - which is credible - then prepare for the iHeart stations to sound a lot more like XM. Satellite delivery is simply stupidly expensive. Liberty could turn iHeart stations into the biggest set of ground stations in the nation. At least the audio quality would improve. They'll be pushing the FCC to allow encoded digital subcarriers for those who are willing to pay in order to avoid ads.

How many stations do you think iHeart owns in its markets? Even if it owns, say, a country, a hot AC, a classic rock and a CHR in a given city, that's only four SXM channels for those stations to wind up sounding like. The others are still up there on the satellites.

 

[SirRoxalot]

Heard of HD radio? That'll at least double the number of station streams that they could distribute. Did you also read the part about "pushing the FCC to allow encoded digital subcarriers for those who are willing to pay in order to avoid ads"? That's where they expand the number of channels that can be delivered OTA. They could deliver a LOT of digital channels in the bandwidth of a single FM station with the compression algorithms that they use on the bird. Satellite might not go away, but they could significantly reduce the amount of bandwidth they have to pay for on the bird. That bandwidth ain't cheap.

 

[gr8oldies]

I think it would be more a matter of using the terrestrial signals to push people to paid app subscriptions. 80s on 8 would be on a terrestrial station with the ex-MTV VJs. "Want this commercial free? Subscribe to the iHeart Radio app.

 

[TheBigA]

Satellite delivery is simply stupidly expensive. Liberty could turn iHeart stations into the biggest set of ground stations in the nation. At least the audio quality would improve. They'll be pushing the FCC to allow encoded digital subcarriers for those who are willing to pay in order to avoid ads.

When the satellite companies were started back in the 90s, there was a fear that they'd do that. So the rules that chartered the satellite companies prevented them from doing that. Things became even more strict during the merger of XM & Sirius. The concern about anti-trust is real, and it goes back to the merger.

I think it would be more a matter of using the terrestrial signals to push people to paid app subscriptions. 80s on 8 would be on a terrestrial station with the ex-MTV VJs. "Want this commercial free? Subscribe to the iHeart Radio app

They don't have to own the company to do that. They once bought advertising that said that exact thing. Last year Amazon Music had a huge ad campaign on radio promoting the same thing.

 

[flybynight]

I think it would be more a matter of using the terrestrial signals to push people to paid app subscriptions. 80s on 8 would be on a terrestrial station with the ex-MTV VJs. "Want this commercial free? Subscribe to the iHeart Radio app.

Ironic you picked what I consider THE most frustrating channel on Sirius/XM! I love the 80s stuff, but the chatter of the ex-MTV jocks is painful to listen to. Often way too long and usually boring....particularly awful is Nina Blackwood. Nails on a chalkboard.

 

[TheBigA]

They could deliver a LOT of digital channels in the bandwidth of a single FM station with the compression algorithms that they use on the bird. Satellite might not go away, but they could significantly reduce the amount of bandwidth they have to pay for on the bird. That bandwidth ain't cheap.

I never hear Jim Meyer complain about the cost of satellite distribution. The market cap on Sirius is $31 billion, which is almost twice the revenue of the entire terrestrial radio industry. But every time he speaks to the industry, the topic that always comes up is the cost of digital music royalties that he has to pay and FM does not. He complains all the time about that. I have a feeling that will become a factor if Liberty buys a stake in iHeart.

 

[davideduardo]

...but they could significantly reduce the amount of bandwidth they have to pay for on the bird. That bandwidth ain't cheap.

They do not pay for bandwidth. The Sirius and the XM satellites are the property of Sirius XM, were launched by them and are dedicated to their own use. They own, not rent, the bandwidth.

 

[SirRoxalot]

They also don't last forever, and they cost a LOT of money to replace. Let's face it, the name of the game in the future is bandwidth, and John Malone is aggregating as much of it as he can get his hands on. Liberty Media also owns Pandora. Buying iHeart gives him additional leverage in competing with Spotify. Not to mention the leverage he'll have over artists looking for higher compensation for either recordings or live performances (sold through Live Nation).

 

[davideduardo]

They also don't last forever, and they cost a LOT of money to replace. Let's face it, the name of the game in the future is bandwidth, and John Malone is aggregating as much of it as he can get his hands on. Liberty Media also owns Pandora. Buying iHeart gives him additional leverage in competing with Spotify. Not to mention the leverage he'll have over artists looking for higher compensation for either recordings or live performances (sold through Live Nation).

Yes, the satellites have a high replacement cost. That is why both the individual companies and the merged Sirius / XM funds an account for the replacement of them every year.

Obviously, Sirius / XM knows that eventually car dashboards and 5G will replace the need for satellites, but with the average car on the road in the US being almost 11 years old, the satellite distribution system has to stay around at least another decade or more.

Remember, Pandora is essentially a bunch of custom radio stations... a free model with ads and a paid one without. Spotify is an on-demand service, where every tune is selected by the user, either one-by-one or via a playlist. So Spotify is like a consumer's collection of 45's or their home-made cassette collections.

 

[SirRoxalot]

Spotify will also pick songs for you with their "suggestions". For those who like music exploration and don't want anything but music Spotify will provide it. With voice control you don't need to spend a lot of time making playlists. You can call up an artist on a moment's inspiration, or name a genre and get a list of "suggestions".

Let's look at what just happened to the TV band. How much of that is now headed for 5G? FM radio is in the lower end of that band, but has significant bandwidth available for audio-only content, which is a spit in the ocean compared to video. Video makes up 50% of internet traffic. Controlling as much bandwidth as possible for audio sounds like the kind of goal that John Malone would pursue.

Sirius/XM and Pandora provide curated content with some live input. That seems to be the exact model that iHeart is following. Malone's already made the offer. The people who now own iHeart would love to get their money out so they can invest in growth industries. The only question I see is whether the FTC will let this happen.

 

[TheBigA]

It's interesting when you look at all of the companies that iHeart owns that will affect other radio stations. Most stations I know use RCS Selector to program their music. That's an iHeart company. A lot of radio companies, including Cumulus, use iHeartRadio as their streaming platform. Every major radio station reports music airplay to Mediabase, an iHeart company. How will other companies respond when so much of what they do is affected by iHeart (and in turn Sirius)? The competitive landscape for other companies will change. The other part of that is will the DOJ require them to spin off a lot of these companies?

 

[Buddy Shula]

Spotify will also pick songs for you with their "suggestions". For those who like music exploration and don't want anything but music Spotify will provide it. With voice control you don't need to spend a lot of time making playlists. You can call up an artist on a moment's inspiration, or name a genre and get a list of "suggestions".

Let's look at what just happened to the TV band. How much of that is now headed for 5G? FM radio is in the lower end of that band, but has significant bandwidth available for audio-only content, which is a spit in the ocean compared to video. Video makes up 50% of internet traffic. Controlling as much bandwidth as possible for audio sounds like the kind of goal that John Malone would pursue.

Sirius/XM and Pandora provide curated content with some live input. That seems to be the exact model that iHeart is following. Malone's already made the offer. The people who now own iHeart would love to get their money out so they can invest in growth industries. The only question I see is whether the FTC will let this happen.

What IHeart did is going to be an industry standard with Wall Street companies. The only way to know how to grow the bottom line is to cut, when it should be the other way around. They should find ways to grow revenue. They found digital, but that is still not good enough. That is why local programming and ownership is so important. At WECK, we continue to hire, or replace. It takes a great sales team to do this, and a great programming team to give sales something to sell. I hope in other medium to large markets, more local owners appear. Right now it is hard to buy a full signal station AM or FM in these type markets, but I am lucky enough to have one and it's the best thing I've ever done. I would never go back to corporate. I will be buying them. Buy Local!

 

[TheBigA]

I hope in other medium to large markets, more local owners appear. Right now it is hard to buy a full signal station AM or FM in these type markets,

Maybe. Look at New York City. Imagine if you owned WABC, a 50,000 watt station in the #1 market. It's now locally owned by John Catsimatidis. Look at Los Angeles and what Meruelo has done out there buying KLOS and KXOS. It's happening in major markets. I read so many comments from people saying this is the death of radio, but they don't look at the bigger picture.

 

[Element9]

Worthwhile reading in this thread. Leads to the question, "Where will OTA be in five years?" (Heck, maybe three years.) As of last week, it appears that iHeart is banking on and creating a one-broad-based-size fits all concept for terrestrial that can interface with Pandora and Sirius-XM, which plays into Liberty Media/Malone's vision should he acquire iHeart, which also seems likely. Therefore, can Cumulus, Townsquare and Saga be expected to adopt a similar stance, knowing that critical mass will be on Liberty Media's side?

 

[TheBigA]

Therefore, can Cumulus, Townsquare and Saga be expected to adopt a similar stance, knowing that critical mass will be on Liberty Media's side?

Ultimately it's about the size of the sales platform. That's what this is all about, and ultimately what the DOJ will have to assess. Cumulus walked out of several major markets because they realized they simply couldn't compete from a sales perspective. That becomes an issue for Entercom.