More Consolidation is Not the Answer to Poor Business Decisions

[vw86]

My take is that Nielsen isn't set up to really count people listening to radio online. The stations themselves can see actual usage numbers from their ISPs. That's the number SoundExchange uses to charge royalties, not Nielsen. What we're seeing is a big difference between those public numbers and what stations see internally.

Don't forget a *lot* of big market PPM encoded stations are reported with single line reporting. As far as I can tell this includes all iHeart stations. So with the public numbers on those, we have no idea how much share and cume is coming from the stream.

Check for stations that are combined here: Simulcast Total Line Reporting

 

[Mediafrog+]

Looks like the ball is now rolling on more consolidation:

FCC Chairman Carr Launches Massive Deregulation Initiative

Today, FCC Chairman Brendan Carr announced that the agency has launched a massive, new deregulatory initiative. Specifically, the FCC has opened a new docket, titled “In re: Delete, Delete, Delete,” in which the agency seeks comment on every rule, regulation, or guidance document that the FCC...

tvnewscheck.com

 

[TheBigA]

Looks like the ball is now rolling on more consolidation:

It depends. Typically when the FCC asks for comments on this subject, it's mainly from people who want rules to go back to before 1996. You don't get public comment from people wanting fewer rules for radio companies. So the question is how seriously the FCC takes these comments, or if they're just giving people an opportunity to vent before they do whatever they want. In the past, it's been the latter. But we'll see what happens this time. Traditionally democrats want more regulations and republicans want less. Right now it's a 2-2 tie at the FCC.

 

[kevtronics]

Traditionally democrats want more regulations and republicans want less.

Except when it comes to your body and what you do in the bedroom. Then it's reversed.

 

[Mark Roberts]

It depends. Typically when the FCC asks for comments on this subject, it's mainly from people who want rules to go back to before 1996. You don't get public comment from people wanting fewer rules for radio companies. So the question is how seriously the FCC takes these comments, or if they're just giving people an opportunity to vent before they do whatever they want. In the past, it's been the latter. But we'll see what happens this time. Traditionally democrats want more regulations and republicans want less. Right now it's a 2-2 tie at the FCC.

I believe a public comment period is required in any event.

The initiative seems unfocused to me. This could slow it down considerably.

 

[TheBigA]

I believe a public comment period is required in any event.

I think you're right about that.

The initiative seems unfocused to me. This could slow it down considerably.

I don't think it will go further than public comments until they get the third repub confirmed. At that point they may do hearings. But it sounds like Carr wants to get something done.

 

[Mark Roberts]

I don't think it will go further than public comments until they get the third repub confirmed. At that point they may do hearings. But it sounds like Carr wants to get something done.

This current bunch seems to prioritize (the appearance of) action over actually achieving something. Flailing is probably the wrong word at this point, but there’s still a lot of performative (stuff) going on.

(I wanted to use a word other than ‘stuff’)

 

[davideduardo]

Well, one reason might be because I'm not sure if radio needs to just be an old & obsolete distribution system.

It could have been that in the 50s when radio dramas moved to TV. The way radio had been done, with the big networks and syndicated programs, was obsolete.

Not obsolete, just not as good. It took over a decade for the traditional radio model to die.

It moved to TV. The dramas, the variety shows. Instead of shifting the blame over to the new medium, owners innovated and top-40 became a thing.

Top 40 was created well before the TV Freeze was lifted. It was an option for stations that were the also-rans in their market and did not have ABC, NBC, CBS or Mutual affiliations.

I get that digital is a thing. No question about it. But I don't believe broadcast radio is obsolete as a medium. It just needs to innovate. How, I'm not sure. But it's always easier to find fault than find new ways for an old thing to be relevant.

Radio is free and one-to-many. Advertising on radio stations drives away many, who prefer to pay to hear ad-free programming. And radio is curated, meaning someone else picks the content; today's users of audio services want they specific choices at the exact time they need them.

 

[cc333]

today's users of audio services want they specific choices at the exact time they need them.

That takes lots of work, I find.

There are stations out there that consistently play stuff I like, and I listen (they're streams, unfortunately, but "radio" nonetheless since they are "simulcasting" (not sure that's the right word here) an AM or FM station). When a song or two I don't like plays, or a block of ads comes up, I figure it's time for a break, so I go listen to the news on KCBS for a minute or two (maybe the weather report, say), then I come back to the music station when the ads and/or the song(s) I disliked are over with.

c

 

[TheBigA]

Radio owners are challenging FCC ownership limits in court today:

Appeals Court Hears Broadcasters’ Challenge To FCC Media Ownership Limits.

The fate of radio ownership limits is now in the hands of a three-judge panel, who on Wednesday heard a challenge brought by broadcasters to the latest decision-making by the

www.insideradio.com

 

[EricStein]

I agree with you about the commercials. I would also add that what is being sold over the air (and also through online simulcasts) mostly has to do with sex and other bodily functions. I almost never hear McDonald's or Domino's Pizza ads anymore; in fact, out of all of the fast food franchises, the only group I regularly hear ads for now is Wendy's.

Something else is bothering me about the current advertisement market that I think is also reflective of how many new radio stations wish to break into the field. When I listen to old top 40 airchecks on Youtube and other places, I'm strongly reminded about how many small local businesses advertised on the radio. Stations certainly participated in national ad campaigns from big businesses, but there was a very healthy dose of mom-and-pop ads as well from the smallest towns to the biggest cities. Now those mom-and-pop ads (and in some cases businesses) are almost completely gone from the ad buys, and more and more stations are relying either only or primarily on national ad buys.

So now, not only do you have to sit through 7-minute ad sets but they are all for the same body products from the same national advertisers you would hear everywhere else. And I can see nothing in the future that will buck these trends.

I wonder how much of radio's national advertising problem stems from there being one rep company handling 90 percent of the stations in each market? When you have only one true middleman to get to the national advertisers, many stations are being treated like numbers and most likely aren't getting their fair share of ad dollars.

 

[davideduardo]

I wonder how much of radio's national advertising problem stems from there being one rep company handling 90 percent of the stations in each market? When you have only one true middleman to get to the national advertisers, many stations are being treated like numbers and most likely aren't getting their fair share of ad dollars.

That is a good point, but we have to consider the fact that the total amount of funding for radio buys in each market is determined in a higher level at each agency. When a media buyer and planner have the money, they set goals of what to do with each market, and buy as deep and at the "best" reach as they can.

This process is now done at many agencies by computer. No sales calls, no "how many remotes does the client get". Just the station rate vs. the campaign's goals as to what they will buy (measured by "impressions" or "AQH persons" etc.).

 

[Cold Coffee]

Look at the ratings in many markets and the top stations seem to program to middle aged and older persons. The agencies don't want us anymore. Playing Classic Rock today would be like playing Glenn Miller in the year 2000.

 

[lanceventa]

Look at the ratings in many markets and the top stations seem to program to middle aged and older persons. The agencies don't want us anymore. Playing Classic Rock today would be like playing Glenn Miller in the year 2000.

This is nothing new. The sales money has always been in the 25-54 demographics. If you go off the long-established rule that people gravitate to the hits when they were in high school that means that music from 1986 to 2016 is the sweet spot right now.

 

[EricStein]

That is a good point, but we have to consider the fact that the total amount of funding for radio buys in each market is determined in a higher level at each agency. When a media buyer and planner have the money, they set goals of what to do with each market, and buy as deep and at the "best" reach as they can.

This process is now done at many agencies by computer. No sales calls, no "how many remotes does the client get". Just the station rate vs. the campaign's goals as to what they will buy (measured by "impressions" or "AQH persons" etc.).

I understand that the largest station groups have their own national sales operations, but use Katz for programmatic advertising. But, there are some that still use Katz for all their national sales, and that list still seems to be growing 16 years after Interep went broke. If the TV groups can self rep, why can't radio, especially if doesn't benefit the bottom line of iHeartMedia when you're a competitor?

 

[vchimpanzee]

Look at the ratings in many markets and the top stations seem to program to middle aged and older persons. The agencies don't want us anymore. Playing Classic Rock today would be like playing Glenn Miller in the year 2000.

It was done. Westwood One's America's Best Music was still playing him.

I still hear him online on a station that asks for donations.

And last time I checked, he was still on WERT in Van Wert, Ohio, a small station which was streaming but decided to let only local listeners hear the stream. But the station also played "Bette Davis Eyes".

 

[bobdavcav]

Re: 98.7 New York. If they wanted to, I could see two potential buyers for that signal, neither would require changing of the ownership limits. There's Media Co, which bought its current holdings from 98.7's current owner, Emmis. There's no regulatory reason they couldn't make a play for 98.7, and with their recent focus on Hispanic media, the current format would fit nicely with what they're trying to do.
The other possibility is Red Apple. Who knows what they would do with that signal, but they've taken WABC and made it into a successful station again.
As for AM signals in that market, the only one I can comment on is 1190. I have no idea if the Caribbean folks who were buying time on 93.5 before that was sold could afford buying that signal, but that would be interesting to see.
Whether this is true or not I don't know, but it's my understanding that Emmis is asking $50 million for 98.7 and won't come down on that. Based on what EMF has been paying for stations lately, my guess is that 98.7 is worth around $32 million. If I had the money, I'd entertain $50 million for both 1190 and 98.7.

 

[TheBigA]

On Friday a bi-partisan group of 73 members of congress wrote a letter to FCC Chairman Brendan Carr asking him to loosen ownership limits:

https://nab.org/documents/newsRoom/pdfs/032825_Media_Ownership_Letter.pdf

These regulations are a relic of an era when broadcasters were the only electronic media. Today, any one of the largest Big Tech platforms dwarfs the entire broadcast industry – yet they are held to no similar limitations on their reach. This imbalance places broadcasters at a severe disadvantage in competing for advertising dollars and audience engagement.

They say the rules go back to the 1940s and were last updated in the 90s. The commission has asked for comments about which rules should be repealed.

 

[Deus Ex Machiato]

On Friday a bi-partisan group of 73 members of congress wrote a letter to FCC Chairman Brendan Carr asking him to loosen ownership limits:

https://nab.org/documents/newsRoom/pdfs/032825_Media_Ownership_Letter.pdf

They say the rules go back to the 1940s and were last updated in the 90s. The commission has asked for comments about which rules should be repealed.

The counter to that would be something along the lines of "yes, we need to revisit broadcast regulations, but it is high time we also address the fact that the "Big Tech" platforms have little or no limitations."

Loosening radio ownership limits will not make outdated electronic media competitive. It will only allow the remaining players to consolidate and attempt to save what's left of their margins. iHeart, Audacy, etc. will not magically become competitive with Spotify or YouTube if they're allowed to buy up 9 out of 10 stations in Poughkeepsie instead of 8.

How do we address the unfettered dominance of Big Tech when folks like Zuckerberg and Bezos have seats at the big boy table and the owner of "X" is all but co-President? I haven't the foggiest idea...

 

[TheBigA]

iHeart, Audacy, etc. will not magically become competitive with Spotify or YouTube if they're allowed to buy up 9 out of 10 stations in Poughkeepsie instead of 8.

I agree with some of that. I've been to Poughkeepsie, and nothing of consequence ever happens there. But the one thing more consolidation can do is avoid format duplication. So often I see people say "Do we really need 4 sports stations in Phoenix?" The answer is no, but that's not how formats are decided. If the market can support four sports stations or three country stations, that's what happens. But when there are fewer companies owning stations, they're not going to compete with themselves. So you get more format choice. It's the only way some of these more fringe formats have a chance.

The real problem in radio today is that music fans want to control the playlist, and there's no way broadcast radio can do that. So adding another station or two per market might add another revenue stream for a while. But it's a declining stream, and it only buys a few more years before the next round of layoffs.