Is (Local) Radio Dead?

[skyrocker]

Lots of great comments from real broadcasters on this LinkedIn thread: <http://linkd.in/yT6Xdw>

 

[recto101]

Yes in some ways when the commercial and non-profit stations in the market does not offer local DJ's or local Talk hosts to air content unique in the area. Or when the stations have to lay off all the local hosts and depend on Voice tracked/ automated hosts to balance their budgets.
In markets like SFO Local radio still is hanging on there. Thats if you listen to KCBS, KNBR, KGO, KQED, KPFA, KALW and KDFC local content is hanging on.

 

[TheBigA]

If it is (and I don't believe it is), it outlived lots of other formerly local endeavors, like locally owned department stores, local newspapers, local record labels, and local dairies. My mom tells me how she used to get milk and bread delivery every few days, and you could go to the dairy and get farm fresh milk. Think of all those records that were made by local record labels. Whatever happened to the local department store? My town had a half dozen of them, all competing on the same street. In addition to the Woolworths, Newberry's, and McCrorys. Those were the chain stores then. A local bakery recently burned down, and I read how it once employed thousands of people. Today a national bakery employs 1/10th of the people, and they turn out more product.

You want to know why local radio is struggling? Lack of local advertisers. Thankfully the FCC loosened up on advertising laws and allows doctors and lawyers to advertise. There was a time when it wasn't allowed. Political advertising is a huge windfall. But the local hardware store has been replaced by Lowes and Home Depot. The local pizza shop has to compete with five national chains. Even hair salons are national today. You take a look at the topics being discussed on talk radio, and even local talk shows deal mostly with national issues. So we live in a national world. Local radio exists in terms of transmitters and towers, but not so much for the listeners. And it sort of brings us full circle to the days of big AM stations in the 30s, where people in Nebraska would listen to entertainment from Chicago.

 

[DavidKaye]

You want to know why local radio is struggling? Lack of local advertisers.

I just received an AT&T Yellow Pages book. It has 875 pages of mostly local advertisers. Before the city imposed a delivery restriction (it can now be delivered only to those who request it), there were 998 pages of mostly local advertisers.

The problem with most radio stations is that they skim cream. They don't develop relations with local businesses, preferring to take the easy way out and using ad rep services to represent themselves to major media buyers.

I have been doing computer technical support for 10 years, during most of which I spent thousands of dollars a year in yellow pages advertising because this advertising worked. Not once -- NOT ONCE -- was I ever approached by any radio or TV station soliciting my advertising. I've been approached by neighborhood newspapers, the local gay yellow pages book, a parenting yellow pages, a couple web search aggregators, someone who puts up advertising in bathrooms of bars and diners, but NEVER by any radio or TV station.

 

[TheBigA]

I just received an AT&T Yellow Pages book. It has 875 pages of mostly local advertisers. Before the city imposed a delivery restriction (it can now be delivered only to those who request it), there were 998 pages of mostly local advertisers.

You're a real optimist. Maybe you should be in sales. Just because someone owns a business doesn't mean they want to advertise.

 

[DavidKaye]

You're a real optimist. Maybe you should be in sales. Just because someone owns a business doesn't mean they want to advertise.

WHAT ON EARTH are you talking about? I just said that the recent AT&T Yellow Pages (one of two yellow pages distributed in SF, the other is the Valley Yellow Pages) has 875 pages of mostly local advertisers.

Obviously local advertisers WANT to advertise to reach their markets, but nobody from radio or TV attempts to reach these advertisers, to they go with the yellow pages instead.

 

[robnokshus06]

Just because someone owns a business doesn't mean they want to advertise.

But you'll never know if they want to advertise or not if you don't ask (which I think is the point that was being made).

 

[Bongwater]

I thought KPOO was also live and local. I was listening a few nights ago online and they were playing some kickass classic R&B from vinyl........

 

[TheBigA]

nobody from radio or TV attempts to reach these advertisers, to they go with the yellow pages instead.

How do you know?

There are lots of types of advertising. Radio is different from yellow pages. If I use yellow pages, I'm looking for a specific service. The only issue there is which service provider do I choose. Radio is accidental. If I'm listening to the radio, there's a 96% chance I'm not looking for someone to cut my lawn at that moment. And of the thousands of lawn cutting services, only a handful can afford the cost of a radio or TV buy.

I run a business and my phone is always ringing with people trying to get me to spend money. And I have never bought an ad in the yellow pages, yet I'm listed there. They got my name and number from the county where I registered my business.

 

[nitnitr]

If it is (and I don't believe it is), it outlived lots of other formerly local endeavors, like locally owned department stores, local newspapers, local record labels, and local dairies. My mom tells me how she used to get milk and bread delivery every few days, and you could go to the dairy and get farm fresh milk. Think of all those records that were made by local record labels. Whatever happened to the local department store? My town had a half dozen of them, all competing on the same street. In addition to the Woolworths, Newberry's, and McCrorys. Those were the chain stores then. A local bakery recently burned down, and I read how it once employed thousands of people. Today a national bakery employs 1/10th of the people, and they turn out more product.

You want to know why local radio is struggling? Lack of local advertisers. Thankfully the FCC loosened up on advertising laws and allows doctors and lawyers to advertise. There was a time when it wasn't allowed. Political advertising is a huge windfall. But the local hardware store has been replaced by Lowes and Home Depot. The local pizza shop has to compete with five national chains. Even hair salons are national today. You take a look at the topics being discussed on talk radio, and even local talk shows deal mostly with national issues. So we live in a national world. Local radio exists in terms of transmitters and towers, but not so much for the listeners. And it sort of brings us full circle to the days of big AM stations in the 30s, where people in Nebraska would listen to entertainment from Chicago.

I love what you have to say.

Local business has been usurped by national chains. Being in retail in a former life as well, it is hard to compete with the Walmarts of the world, thanks to deregulation of laws.

Going past that, my parents used to run a shop that had real dairy (milk in bottles with cream on top), and though didn't deliver the product, it was available in their store. Wish I could find some of that "special milk" locally, but no luck so far.

I don't believe local radio is dead either. There is a need for local radio, but there are a bunch of stations that do VT, and so the local angle does fall off.

I think if radio went back to more of a local presence, radio will benefit in the long run.

 

[DavidKaye]

How do you know?

Because I have friends who run the following kinds of businesses: commercial plumbing, residential plumbing, home remodeling, cabinetry, health spa, restaurants, gourmet coffee, collectors' lamps, hats, vintage clothing -- to my knowledge NONE of them have ever been approached by a radio or TV station to buy time.

The commercial plumber does direct mail (aka junk mail) to businesses. The residential plumber uses yellow pages. The home remodeling and cabinetry people use referrals from contractors. The health spa uses Groupon, Google, and other online advertising. The gourmet coffee has a great location and had business from day one. The lamp maker gets referrals from interior designers. The hat store has walk-in traffic. The vintage clothing store also has walk-in.

But probably most of these businesses could increase their revenue via radio or TV, but nobody approaches them. Why don't they approach the stations? Well, probably because they think it's a big deal to advertise on radio or TV. With web or print they can get layout services for a small price above the ad purchase price, often bundled with their advertising. But they don't know that radio and TV stations work the same way. They think they have to hire a v/o artist or a video production company to make ads for them.

I was actually pleased today to hear Cole Hardware advertising on KKSF NewsTalk 910. Cole Hardware is a longtime user of yellow pages (they've had stickers on the front of the phone book each year for over a decade), but this year dropped all that with the decrease in yp circulation in SF. Cole Hardware has 4 stores and an active promotion campaign. I'll have to ask Rick, the owner, whether KKSF approached him or if he had to bite the bullet and approach them...

 

[DavidKaye]

Local business has been usurped by national chains. Being in retail in a former life as well, it is hard to compete with the Walmarts of the world, thanks to deregulation of laws.

The problem with most retailers is that they have been suckered by what I call the McDonald's syndrome. They think they have to undercut everybody in price in order to run a small business. Actually, the opposite is true. Small retailers need to carry specialized products and CHARGE ENOUGH for them.

I know a bunch of people who produce and/or sell high-end products, and they haven't suffered by either the rise of big box retailers or by the recession.

Take Eileen Hassi at Ritual Coffee Roasters in SF. Her main cup of coffee costs $5. She often has people lined up out the door for her coffee. She was on the KQED Radio Forum program the other day along with her ex business partner, Jeremy Tooker, who now owns Four Barrel Coffee down the street from Ritual. So, not only can high-end coffee exist, but it can flourish. They don't care if McDonald's offers coffee for 99 cents.

Or take Western Dovetail. It's a shop that makes cabinet drawers. You know how the sides of some drawers attach at the ends? Sometimes they're nailed together and sometimes they're wedged together in dovetail fashion. Well, dovetail drawers are sturdier, but they're way more expensive to make than nailed drawers. During the recession the owner introduced a mid-priced dovetail drawer. It didn't sell. But his high-end drawers sell so well that that he has international orders and went in recent years from a staff of 6 to a staff of 20. He doesn't care if Ikea or Home Depot or Lowe's sell cabinets and drawers.

Or take Apple computers. People could pay 75% less and get basically the same hardware in a prettier package, but they don't. Even if the prices on Dells and Toshibas were slashed 80% Apple would STILL sell computers because there's a market segment that wants them.

Or Cole Hardware that I mentioned in another post. They have 4 stores. Two of their stores are a mile from Lowe's. They haven't been hurt by Lowe's because they provide personal attention that Lowe's doesn't.

So, I have little pity for the small entrepreneur who is complaining about the Big Guy eating their lunch. Those little guys just don't focus on the right market.

And radio (and to an even better extent, cable TV) can TARGET the market they need to reach better than, say, yellow pages, which is the last truly mass market ad vehicle.

 

[TheBigA]

But probably most of these businesses could increase their revenue via radio or TV, but nobody approaches them. Why don't they approach the stations? Well, probably because they think it's a big deal to advertise on radio or TV. With web or print they can get layout services for a small price above the ad purchase price, often bundled with their advertising.

All that is correct, and the local radio station is going to expect a flight of dozens of ads for a few thousand dollars to make it worth the time of the commission-driven salesman. And that's quite often why a salesman isn't going to cold call every business in the phone book. Although truthfully, some are doing that now. Probably not in San Francisco. In a major market, you work with agencies, and they bring bigger clients for larger buys. Those are harder to come by since the businesses that can afford thousands in advertising a month are part of a chain. That was the point in my earlier post. So the radio guy spends his time with big ticket stores like appliances and cars. They have the budgets that salesmen can work with.

Contractors and plumbers know that most people don't decide to call them because they hear or see an ad. In my case, I recently hired a contractor, a plumber, and an electrician. In each case the contact was made by me searching for them (often through recommendations), rather than them advertising to me. The problem with direct mail or on-air advertising for services is it doesn't allow comparison shopping.

 

[weav]

Probably in SJ and Livermore, they're doing that. Probably Santa Rosa too. I bet Cole's is just big enough to get an AE's time at CCU.

The new kids at Tumulus might be doing it real soon as well, come to think of it.

 

[LKellerIII]

If it is (and I don't believe it is), it outlived lots of other formerly local endeavors, like locally owned department stores, local newspapers, local record labels, and local dairies. My mom tells me how she used to get milk and bread delivery every few days, and you could go to the dairy and get farm fresh milk. Think of all those records that were made by local record labels. Whatever happened to the local department store? My town had a half dozen of them, all competing on the same street. In addition to the Woolworths, Newberry's, and McCrorys. Those were the chain stores then. A local bakery recently burned down, and I read how it once employed thousands of people. Today a national bakery employs 1/10th of the people, and they turn out more product.

You want to know why local radio is struggling? Lack of local advertisers. Thankfully the FCC loosened up on advertising laws and allows doctors and lawyers to advertise. There was a time when it wasn't allowed. Political advertising is a huge windfall. But the local hardware store has been replaced by Lowes and Home Depot. The local pizza shop has to compete with five national chains. Even hair salons are national today. You take a look at the topics being discussed on talk radio, and even local talk shows deal mostly with national issues. So we live in a national world. Local radio exists in terms of transmitters and towers, but not so much for the listeners. And it sort of brings us full circle to the days of big AM stations in the 30s, where people in Nebraska would listen to entertainment from Chicago.

This may not be a popular opinion, but I think that for some retail businesses, we have to concede that the chains do it better. Why would I give my hardware business to a local mom and pop store when I know I can go into Lowe's or Home Depot, and have a much greater chance of finding what I need in their wide aisles with a huge selection - and pay probably 25% less than at the mom and pop stores?

Restaurants are a little different - locally owned restaurants are thriving in cities like San Francisco. The local pizza shop in my neighborhood has much better pizza than local Pizza Hut...the local burrito places in the Mission have much better food than Taco Bell - and I'm willing to pay more for the superior product...unlike hardware. Toilet parts, nuts, and bolts are pretty much the same wherever you buy them.

Other than produce, which I tend to buy at small local markets in my neighborhood, most of my food is bought at chain stores as well - Costco, Trader Joe's, etc.

BTW - I haven't used the Yellow Pages in about 5 years now. When those big tree-killing pulp-wads are dropped on my doorstep, they go right into the recycle bin. It's faster and easier to find what I'm looking for on the internet.

 

[TheBigA]

Restaurants are a little different - locally owned restaurants are thriving in cities like San Francisco.

I travel a lot on business, and I can tell you that San Francisco is one of the absolute best places for restaurants in this entire country. But there are lots of places in this country where the best restaurant in town is the local Chilis.

 

[LKellerIII]

Restaurants are a little different - locally owned restaurants are thriving in cities like San Francisco.

I travel a lot on business, and I can tell you that San Francisco is one of the absolute best places for restaurants in this entire country. But there are lots of places in this country where the best restaurant in town is the local Chilis.

True - we visit friends near Redding CA a few times a year. I would bet that there are more chain restaurants there (Shasta County population about 190,000) than in all of San Francisco and Oakland combined. They have a few good local restaurants, but they don't look like they're thriving.

 

[weav]

Probably the best restaurant around there is the Black Bear Diner, which is a regional chain....

 

[RadioStarOne]

And the Black Bear Diner chain is going to get a lot larger too. Great Food.