Is Radio the Next Drive-In Theater?

[smedge2006]

Drive-in theaters had their heyday from the late 1940s to the early 1980s. Whole genres of movies, from
50's B-classics to 70's gore-slashers were aimed solely at the "ozoner" audience.

Beginning in the late 1960's, they came under long term attack from several cultural and technological shifts, including daylight saving time, the maturing of the baby boom generation, and smaller cars. The real estate on which they sat became more valuable for other purposes.

Before the great mortality, in the 1970's, one could see signs of impending doom. Many drive-in's still had their 1940's-50's original signs and technology, with the only addition being FM radio to replace the speakers. They looked rundown. Their owners were not investing in the business. In 1980, Sumner Redstone himself proclaimed "drive ins will soon be a part of our nostalgic past." While his prophecy did not exactly come to pass, as we still have a few drive-ins around, in the macro sense he was right.

Drive-ins had their big die-off in the 1980's when the VCR and video stores broke their moat -- a cheap way to see a movie. All the chains closed their theaters, and only a handful of small, family-owned locations kept the phenomena from going extinct entirely. Drive-ins ceased to be a driver of culture, and the movies that were made specifically for that audience shifted to VCR and DVD release. The relative handful of drive-ins that exist today survive on nostalgia value.

Does anyone see analogies here for radio -- first with the lack of investment in the product and threats from new technologies (now), the abandonment of stations by the big chains (soon?), the real estate (bandwidth and in the case of AM towers, physical property) becoming more valuable for other purposes, leading to a final implosion that leaves only a handful of mom-and-pop stations feeding nostalgia for the days of a warm tube-distorted voice coming out of a speaker?

 

[vsa]

Yes, I see analogies applicable to traditional radio. I like to point thoughtful broadcasters to a five-part series of articles written by radio consultant Kurt Hanson in the spring of 2003. The series was called "The Future of Radio." Here's the link to Part 1.

http://www.kurthanson.com/archive/news/033103/index.shtml

Four-and-a-half years later, we have the benefit of some hindsight and can more fully understand now what Kurt was getting at. It would be wise to read through all five parts and become familiar with an author he mentions, Clayton Christensen and his first in a series of business books, "The Innovator's Dilemma."

 

[Tibbs4]

Radio is perceived as uncool and out of touch with the rest of technology by many Americans that are 25 and under.
There is a 5-10 year gap (ages 30-35) that are somewhere in the neutral zone of radio that will close in on radio in the next 5
years toward 'more progressive' media. The last generation of 'radio lovers' (those that grew up with great traditional
radio and have a long term good feeling sentiment) is from 40 and up. The gap between current 35 and 40 year old
is somewhat still in debate, or should I say, flux. It's not as postive toward radio, but not as negative as those 35 and
under. Another good analogy is to look at typewriters vs. keyboards and computers. The worst part...those over 40
are the least likely to believe the status of radio is declining quickly and they are the last group to know radio when
it had heart and soul...and they are being overruled by the new younger generation --- this sentence is specifically
about those IN the radio industry today. Only those in the industry can keep the spirit alive and yet the very systems
in place today are destroying the survival rate: 1.) radio on the cheap, 2.) de-emphasis of personality and names (i.e.
radio personalities are not as well known or have the status of 10-20 years ago) 3.) mainstream, play it safe overused
music is backwards and 4.) 30 and 60 second commercials are outdated. Still, listenership is there, but it's much more passive.
And the very core of the into radio audience (40 and up) are being cast out by ad agencies as wasting advertisers money.
All in all, regardless of the drab reasearch, amazingly younger people WANT to "get" radio ... but radio just doesn't
'get them.' The most difficult part of the picture is where de-reg, consolidation and big corps have already possibly
set their fate in motion by gutting the heart of radio to "save" money and show stockholder's a "good" return. If
they had kept radio's heartbeat stronger, you have to wonder how much more profit and longterm viability the
industry could have had and will have.

 

[SirRoxalot]

Bucket Seats & Smaller Cars

As radio gets less profitable because of over-researched, sterile playlists, de-emphasis of personalities, and lack of relability with younger listeners, corporations will get out. The coming of other listen-anywhere technologies like ubiquitous wi-fi (for both computers and cell phones), along with MP3 players and other portable technologies, will mean that radio isn't the only portable, connected medium.

Does this mean the end of radio? I doubt it. It does mean that radio will have to adapt and redefine itself. What shape that will take depends on what young programmer out there creates a format that captures the attention of young listeners. That format may already exist on some Internet stream somewhere, or it may come as a complete surprise. I believe that it will be live and local, and plugged into the culture. It will require immediacy and compelling content. Today's youth is very into "now", and very willing to express themselves. Those are likely to be key elements of the format.

The drive-in couldn't adapt to bucket seats and smaller cars. Radio can.

 

[Yeziknoradio]

Somewhere in this thread there's also room to mention that the video store may not be the greatest example, as the DVR (or as some call it, the PVR, a personal video recorder) steps in and allows people to watch movies on demand.

As times continue to change, one thing may continue to be the same.
That would indeed have to be the local content of radio.

Any monkey can tune into *anything* internet, but if there's no local interaction, news or information running between tunes or content programming, there is no real need for the traditional AM/FM reciever.

 

[TVJunkie12]

One quick way to finish off the AM band entirely would be to bring back the relic known as the "Fairness Doctrine". Never was a law more mis-named. Should have been called what it was-censorship.

 

[cee]

An interesting analogy and the demise of the drive-in theater should serve as a warning. Actually, look at the demise of AM...once mighty AM Top 40 stations are now shadows of their former selves....probably forever. Will FM meet the same fate?

A couple differences between a drive-in and radio is that radio is free and it comes right into your home, car or wherever you may be - free and totally portable. But unfortunately, radio has evolved into the most generic of mediums. When TV took off back in the early 50s, radio found it's niche with music, air personalities and news/sports. Ipods are a wonder and you can, of course, attach a mini-transmitter and get it to play on a vacant FM frequency in your car or home. But it's still just somebody's music collection....

Obviously, radio should get back to personality and more variety of talented personalities(both on a national and local level). Innovation is what made the golden age of music radio. Innovation will be what it takes to save the industry. Few of us who post on this website have any say in this matter - it's mostly up to the big corporations that own most of the stations.

 

[tothedj]

I often wonder sometimes if there "maybe" a way to save radio as we know it
today?
Not long ago, i thought "HD" radio would be the answer, but because there is
so much technological gadgets today like the IPod, and internet streaming, this
may come into question.
How many stations are turning a profit?, especially in towns with "AM only"
outlets?
I must admit, internet radio would be the way to go, if they can work out
differences regarding feeds for smaller webcasters.
And i understand some automotive companies may be developing a radio
to pick up "internet" stations, but how this would work remains to be seen.
Enjoy over-the-air radio while you can, it may disappear...

 

[dmargalotti]

Drive-ins had their big die-off in the 1980's when the VCR and video stores broke their moat -- a cheap way to see a movie. All the chains closed their theaters, and only a handful of small, family-owned locations kept the phenomena from going extinct entirely.

It's an interesting premise and I understand the point you're trying to make in comparing the demise of the drive-in theater to the future of radio. However, your reasoning for the end of the drive-ins is not completely accurate. Drive-ins have failed because they are not able to compete w/ the mega-plex theaters.

In the 1980's the cost of producing movies began to climb steadily. To recoup that cost, studios passed the cost along to the distributors who then passed the cost along to the movie theater owners. This is from the Warwick Drive In web site (http://webusers.warwick.net/~u1006131/driveinmovie/about.htm)

Back in those days, salesmen would come from the film companies to lease their films to the theater for a $12.50 flat fee for 3 or 4 days at a time. Now, film distributors charge up to 90% of the theater's gross ticket sales and demand 3 to 4 weeks for each film.

So now you've got a huge operational cost increase for the drive in theater owners. And then you have to remember that drive in theaters can only operate at night. So that means just ONE showing of each movie as opposed to the multi-plex theaters which can schedule a movie to run 8 times a day or more. And, drive in theaters in many parts of the country can only operate from late spring to early fall because of the weather. And let's not forget all those rainy nights when people aren't going to go anyway.

The movie industry itself killed the drive in theater...not vcrs, or dvd, or any other technology. So the point here is that radio doesn't need to worry about threats from other technologies...radio's biggest threat is the radio industry itself. Our future is in our own hands. Radio owners and managers need to know this.

And by the way just this past weekend, I took my 3 youngest children to the drive in for the first time...and they thought it was the best thing ever!

 

[doublecashkgb]

The premise is a bit flawed. As another poster pointed out the real blow was the changes in the distribution line, and influx of mega theaters. Moreover the sheer value of the real estate concurrent with the malling and power-centering of America made it too easy for chains and owners to sell the property. In some ways I would add that restraint of trade and anti-trust laws were broken in the process.

Radio was hit with the perfect storm. The Internet was gaining critical mass concurrent with the changes in Communication laws. As new groups sprung up and created clusters, the first round of devaluation of the medium had begun. Chips in the armor of prestigious radio properties began to show up as noveau chains and publicly traded corporations cut the proverbial fat out of their operations. It didn't happen overnight, however as the impact of voice-tacking, less competition, shared resources, and limited budgets added up the perception grew that radio had forever changed. As the cliche goes, "the audience never got the memo".
Ironically I don't agree that AM has the most to lose. First, in Top 10 and major markets many big stick AM Talk-Sports-News stations are out billing their FM music counterparts.

FM music stations are screwed. Wi-Max will be the killer application for a new era of Internet media which will supplant FM in the next five years.

 

[FredRichards]

I think radio has lost it's soul in some ways.

The proof to me is that there are so many people running radio thinking they are doing a great job oblivious to problems.

But I know a lot of listeners, (my kids included), who were pushed away from radio for a variety of reasons, only to find other services like XM and the Internet.

The wakeup call that radio was lacking was when my kid came in while I was streaming some airchecks of stations as I was working in my home office. He wanted to know where he could find the station on his radio. He liked what he heard. The two airchecks were of James K. Davis on CKLW, and the other was of Charlie Van Dyke when he was in Dallas.

In our household we don't listen to any of the local radio stations, except for school closings in the car. News, sports, weather is all from the TV. For music I listen to my home automation system, and my wife got XM in her new car (Channel 5, or 6, and sometimes 7). Sadly, none of the local stations cater to our needs.

Some of the most basic rules of programming, and especially the habits of jocks seem to have been forgotten. I'm not sure if radio people are "comfortable" with what they are doing, or if profits are good enough, or nobody sees a reason to change .... or if they don't care.

But you're right, we could be the next drive in. And I think that if we are obsoleted it will not be because of a new player, it's because we pushed away the very people that were our listeners. The question is, is it too late now?

 

[grantchester]

Radio died when TV came in... but then something new was created by McClendon, Blore, et al... and Radio came roaring back. Then AM died again, as FM took over music programming... then Rush came on and showed that people would tune in if there is a compelling reason to. Now radio is dying again... until someone comes up with something new. I've got a few ideas, but it's a risk to try something without a track record.
It would take some time to cultivate, and the corporations don't have the patience to wait around for something to (maybe) catch on.
But think about the drive-in. The land and location are still there. They're just fulfilling a new purpose. It could be a flea market, it could be a Wal-mart, but SOMETHING is going on with the places.
Likewise the AM band. It's still there, but instead of Top 40, MOR and such, it's ethnic, religious and paid programming. Me, I'd like to bulldoze the Wal-Mart, clear the flea market, and build a new community center, but I'm a couple million short....
g

 

[MickJ]

The movie industry itself killed the drive in theater...not vcrs, or dvd, or any other technology. So the point here is that radio doesn't need to worry about threats from other technologies...radio's biggest threat is the radio industry itself. Our future is in our own hands. Radio owners and managers need to know this.

You made a good case that the movie industry killed the drive-in, but not a good case that radio doesn't need to worry about other technologies. I believe it is indeed technology that is hurting radio revenues and there isn't a lot that can be done about it given that radio is regulated by the FCC.

In the handful of markets where I hear about Miller Kaplan Reports (monthly revenue) they're all down. Again.

 

[jackandcoke]

While it has become extremely fashionable to cry that radio's sky is falling, we may be a few decades too early. The average radio cluster is spinning off 40 percent in operating profit, multiples more than most other industries. Major market clusters do 60 percent... and more.

Yes, the well-run clusters. Not the lousy ones.

Before we all put a torch to our transmitters, could we at least wait until our profits are down to just 35 percent?

Kind of like jumping off the bridge because our chauffeur quit...

 

[ratingsgeek]

While it has become extremely fashionable to cry that radio's sky is falling, we may be a few decades too early. The average radio cluster is spinning off 40 percent in operating profit, multiples more than most other industries. Major market clusters do 60 percent... and more.

Yes, the well-run clusters. Not the lousy ones.

Before we all put a torch to our transmitters, could we at least wait until our profits are down to just 35 percent?

Kind of like jumping off the bridge because our chauffeur quit...

I'll agree that the radio industry is not nearly as endangered as many seem to think. But I won't agree with the assumption that all broadcasters are cushioned by profit margins of 40% and beyond. Maybe the Clear Channels of the world, but not the small-town operator. If small-town radio stations can produce 10% to 15% profit, everyone gets paid and there's money in the bank. But it is not a way to get rich!

 

[vibe]

As a non radio pro (can i post here?) I'd compare radio to baseball (the great American pasttime). Baseball is booming now but there were a LOT of lean years. Radio may be having it's problems but things run in cycles.
I like listening to small town radio when I travel. I can afford satelite but choose not to subscribe.

 

[FredRichards]

As a non radio pro (can i post here?) I'd compare radio to baseball (the great American pasttime). Baseball is booming now but there were a LOT of lean years. Radio may be having it's problems but things run in cycles.
I like listening to small town radio when I travel. I can afford satelite but choose not to subscribe.

And to come in on the shirt tails of this post, radio, like baseball, has good players and not so talented players.

The trick to getting, and keeping an audience is having the guts to know, keep, and direct talent in a positive direction. The best managers in baseball are those that see talent, and then can focus them to the best efforts of the team as a whole.

Being honest with ones self means that if you're not good, it's not everyone else's fault. What it does mean is that the jock has to make that decision to learn the right way to be a good player on the team, or admit that they would be better in some other type of employment.

And from a manager's standpoint, it means that you don't be mean or condescending. You have to have the guts to lead in a positive way, and give direction to those challenged in the game. And if you're not up to the task, either find a middle manager who can, or perhaps go into another business.

And like baseball, when you do loose, it's time to start analyzing where the team's head is at. Most of the time losers (if they can be honest with themselves) discover that the loss is because everyone's ego is pulling themselves in different directions. Having a team mentality can do wonders for focusing on the prize.

 

[MickJ]

While it has become extremely fashionable to cry that radio's sky is falling, we may be a few decades too early. The average radio cluster is spinning off 40 percent in operating profit, multiples more than most other industries. Major market clusters do 60 percent... and more.

Yes, the well-run clusters. Not the lousy ones.

Before we all put a torch to our transmitters, could we at least wait until our profits are down to just 35 percent?

Kind of like jumping off the bridge because our chauffeur quit...

It's certainly not my position that the sky is falling. I'm only pointing out that radio is no longer a fast-growth business. Those high margins, plus an expectation of growth, are built into the prices of radio stations. As those prices come down, and come down they will, I'm a buyer. But buying at current prices on the expectation of fast growth is a losing strategy.

 

[jackandcoke]

While it has become extremely fashionable to cry that radio's sky is falling, we may be a few decades too early. The average radio cluster is spinning off 40 percent in operating profit, multiples more than most other industries. Major market clusters do 60 percent... and more.

Yes, the well-run clusters. Not the lousy ones.

Before we all put a torch to our transmitters, could we at least wait until our profits are down to just 35 percent?

Kind of like jumping off the bridge because our chauffeur quit...

You and I are in agreement. Terrestrial radio is going to be around for a long time--very likely well beyond the lifetime of anyone on this board. So any comparison to drive-in theatres is way off the mark.

On the other hand, a comparison of conventional radio to conventional movie theatres isn't so far fetched. That industry has changed significantly in the past several decades--several times--and, as DVD, OnDemand, and internet video continue to develop, movie theatres will need to continuously adjust, as well.

Radio listening is, indeed, being chipped-away at (sorry if that's not grammatically correct) by numerous parallel audio sources. Arbitron tracks it nationally on the arbitron.com website. Cume rating--the percentage of the population using radio--has dropped over the past decade. And time spent listening (TSL) has also dropped.

But in 8-and-a-half years (Fall 1998 to Spring 2007), overall cume rating has only dropped from 95 percent of the population to 93 percent. And overall TSL has only dropped from 21 hours a week to 19 hours a week.

Check it out for yourself. Go to arbitron.com and look for American Radio Listening Trends (or something like that) and then go to Persons Using Radio.

The death of radio has been greatly exaggerated!

It's certainly not my position that the sky is falling. I'm only pointing out that radio is no longer a fast-growth business. Those high margins, plus an expectation of growth, are built into the prices of radio stations. As those prices come down, and come down they will, I'm a buyer. But buying at current prices on the expectation of fast growth is a losing strategy.

 

[rickityone]

One of the things not mentioned here that killed drive in theaters, especially in larger cities was the cost of the real estate and the ensuing property taxes.

The same holds true of radio stations. Radio station prices became subject to ballooning speculative pricing, therefore eliminating fresh talent and ideas from entering the market place as owner/operators. The cost of the stations is so high no one can afford to make a mistake for fear of losing the farm.

There may come a time when radio properties decline so much in value that new operators can enter the market with new ideas. Then there will be innovation, that coupled with radios advantages, portable, cheap, reliable technology and so on and there might come another day of booming radio audiences.

rickity