More Consolidation is Not the Answer to Poor Business Decisions

[Deus Ex Machiato]

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.

Yet while consolidation reduces format duplication, it also reduces competition. One of the things that made radio entertaining back in the "olden days" was two or three stations in a market going after the same audience with a vengeance. Competition was fierce, and that made the stations better. As a listener (which I've been for half a dozen years now) I'd rather have two stations in a particular format battling it out to win my ears for a quarter hour than one bland station that doesn't have to try because they own everything else.

And yes, there's no way that broadcast radio can let the listeners control the playlist, so the thing that might help them compete with Spotify or other streaming services is to provide compelling content when the music isn't playing. I'm reminded of an old PD who used to say "hey, anyone can play a Garth Brooks record...what are you gonna do to keep them when the song's over?"

 

[TheBigA]

Yet while consolidation reduces format duplication, it also reduces competition. One of the things that made radio entertaining back in the "olden days" was two or three stations in a market going after the same audience with a vengeance. Competition was fierce, and that made the stations better.

That was then. What made competition possible was money. Money to hire great people. Money to do great promotions. That money is gone. It's been gone for a while. Radio has lots of competition from other platforms and there's really nothing radio can do that will compete with Spotify. People don't use Spotify because it has great talent. The talent is the music. When one song is over, they go into the next one. Uninterrupted. That's what people want. Holding on to antiquated ownership laws expecting them to recreate the 80s is a waste of time. The 80s aren't coming back.

 

[Deus Ex Machiato]

That was then. What made competition possible was money. Money to hire great people. Money to do great promotions. That money is gone. It's been gone for a while. Radio has lots of competition from other platforms and there's really nothing radio can do that will compete with Spotify. People don't use Spotify because it has great talent. The talent is the music. When one song is over, they go into the next one. Uninterrupted. That's what people want. Holding on to antiquated ownership laws expecting them to recreate the 80s is a waste of time. The 80s aren't coming back.

Hell, the 2010s aren't coming back. And yeah, making radio competitive would cost money, but which of the platforms that radio now can't compete with were profitable from the jump? Can radio (as a whole) compete with the likes of Spotify by reducing the amount of money they spend? Can they cut themselves to profitability? Is the solution relaxing ownership rules to make it possible for one company to own everything in a given market?

It might work for awhile, but - and I've said this before - radio is going the way of the phone book.

 

[TheBigA]

Can radio (as a whole) compete with the likes of Spotify by reducing the amount of money they spend?

Name all the DJs on Spotify. Name all the great hosted shows that people talk about. Describe the localism that happens at Spotify. The only real expense Spotify has is music royalties.

Could broadcast radio become profitable by operating like Spotify? Absolutely. Run it like K-Love. That's the way to profitability.

 

[davideduardo]

. I'm reminded of an old PD who used to say "hey, anyone can play a Garth Brooks record...what are you gonna do to keep them when the song's over?"

Today, what you do after the Garth Brooks song is play another hit. Fewer and fewer listeners in the sales demos ant talk outside, sometimes, in mornings.

 

[Kent]

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."

Another question is “what's stopping radio from doing what the tech platforms are doing?”

Yes, I know some of them are trying, but “we can’t compete with the tech companies when they don’t have to follow rules” doesn’t make me immediately think radio needs looser ownership rules. My first reaction is that the tech companies don’t have enough competition.

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.

I'm not even convinced loosening limits would lead to a big wave of consolidation. The obvious sarcastic retort would, of course, be, “Then why would you care if it happens,” but I just don’t see a big influx of money coming to rescue radio and usher in another round of consolidation. I’m sure there would be some on the margins, but private equity and stock sales financed the first major wave of consolidation, and that money just isn’t there anymore. As The Big A mentioned in another thread, Manoj Bhargava would seem to be less interested in Cumulus lately. So, if a big shotgun marriage between it and Audacy were to happen, most of the money would probably have to come from somebody else.

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...

We have antitrust laws and have broken up too big of companies before. I’m old enough (barely) to remember Standard Oil and Bell Telephone. Of course, the people in power have to be willing to use those laws for them to be effective, and that doesn’t seem to be high on much of anyone's priority list.

 

[TheBigA]

As The Big A mentioned in another thread, Manoj Bhargava would seem to be less interested in Cumulus lately. So, if a big shotgun marriage between it and Audacy were to happen, most of the money would probably have to come from somebody else.

What's more likely, seems to me, is consolidation in television. We'll see what happens with Apollo. They may be waiting for a rule change before announcing a sale. Paramount and Disney might be willing to sell their stations and network to a major station owner.

 

[Theater of My Mind]

Name all the DJs on Spotify. Name all the great hosted shows that people talk about. Describe the localism that happens at Spotify.

Obviously Spotify does none of that because it's not radio. Radio should be leveraging those things because that's what makes it unique, but instead it's running canned formats with voice tracked DJs who have nothing to say.

The only real expense Spotify has is music royalties.

Which is a huge expense that broadcast radio doesn't have.

Could broadcast radio become profitable by operating like Spotify? Absolutely. Run it like K-Love. That's the way to profitability.

Or stop churning out crap no one cares about since Big Radio stripped every ounce of originality, creativity and competitive spirit long ago with its cost cutting, and now we're eyeing satellite feeds and A.I. because that definitely addresses the garbage pit radio has dug itself into.

 

[TheBigA]

Obviously Spotify does none of that because it's not radio.

People use it like radio. So to them, it's radio.

Radio should be leveraging those things because that's what makes it unique, but instead it's running canned formats with voice tracked DJs who have nothing to say.

Unique doesn't always mean it's what people want. There are lots of radio stations that still have live & local staff just like 50 years ago. They aren't always the top rated stations in town. People want uninterrupted music, and they get that from Spotify.

Or stop churning out crap no one cares about since Big Radio stripped every ounce of originality, creativity and competitive spirit long ago with its cost cutting, and now we're eyeing satellite feeds and A.I. because that definitely addresses the garbage pit radio has dug itself into.

Yet in NYC and LA, the most listened to stations are the ones owned by the big companies. They'd own more, but the obsolete laws prevent them. So the only option is to sell to K-Love. There aren't any new owners looking to buy stations anymore. Anybody who might want to do something original or creative wouldn't want to pay all the money or deal with all the regulations when all they have to do is start a podcast or web station.

 

[Theater of My Mind]

People use it like radio. So to them, it's radio.

Source?

I don't know anyone who thinks Spotify is radio. However I know multitudes of people who think "radio sucks," and they proudly use Spotify or Apple Music *instead* of radio, being fully aware of the difference.

 

[AMRadioGuy]

People use it like radio. So to them, it's radio.



Unique doesn't always mean it's what people want. There are lots of radio stations that still have live & local staff just like 50 years ago. They aren't always the top rated stations in town. People want uninterrupted music, and they get that from Spotify.



Yet in NYC and LA, the most listened to stations are the ones owned by the big companies. They'd own more, but the obsolete laws prevent them. So the only option is to sell to K-Love. There aren't any new owners looking to buy stations anymore. Anybody who might want to do something original or creative wouldn't want to pay all the money or deal with all the regulations when all they have to do is start a podcast or web station.

I think there's a bit of nuance to the argument that people want interrupted music. If my choice is a canned satellite DJ with nothing interesting to say or continuous music? I'll take the continuous music all day long.

But if the choice is between an engaging broadcast with a personality or continuous music? I'd take the personality any day.

The other elephant in the room here is that many on this forum say that radio cannot compete in the Spotify reality because people can curate their own playlist there. Fine. I agree. Spotify wins there. So... radio shouldn't try to compete in an arena they can't win in. That's just silly.

Spotify is just one platform. I listen to guys on YouTube (just the audio, like a podcast) because they are entertaining.

Source?

I don't know anyone who thinks Spotify is radio. However I know multitudes of people who think "radio sucks," and they proudly use Spotify or Apple Music *instead* of radio, being fully aware of the difference.

I'm one of those people who think radio isn't in a great place these days. I literally connected a Walkman into my car stereo's aux this morning on the way in to work, which today was filling in for the morning drive slot on a radio station.

I'll put up with a lotta static just to DX a distant station on the AM band with music and personality (Cousin Brucie on WABC on Saturday nights or WSM in Nashville).

What does that tell ya? I don't want continuous music from radio. It can't give me the continuous music I want, because I don't want what it plays. I'll toss on an LP, or pop in a cassette or 8-track, or just go stream Spotify if that's what I want. When I tune in a radio station, I want personality. Just sayin'.

And this isn't old-guy-yells-at-cloud. I'm 23.

 

[TheBigA]

Source?

I don't know anyone who thinks Spotify is radio. However I know multitudes of people who think "radio sucks," and they proudly use Spotify or Apple Music *instead* of radio, being fully aware of the difference.

Spotify itself uses the term "radio:"

Spotify Radio - Spotify

support.spotify.com

 

[TheBigA]

I think there's a bit of nuance to the argument that people want interrupted music.

The argument is that SOME people want uninterrupted music. SOME people don't.

But if the choice is between an engaging broadcast with a personality or continuous music? I'd take the personality any day.

For them, there are THOUSANDS of stations that have personalities. If you can't find one where you live, you can stream them online. They exist. It's total fiction to say that broadcast radio has eliminated all personality and is simply a duplication of Spotify. Millions of people listen to those broadcast stations every day. They may not agree with the choice of every song the station plays, and they may complain about the number of commercials, but the stations exist.

I'm one of those people who think radio isn't in a great place these days.

Radio is not one thing. There are 16,000 stations with lots of different owners, different formats, both commercial and non-commercial. Lots of choices if you just look around. There is no law requiring every radio station to do what you want. "Radio" is in the same place it's been as long as it's been around. The expectations and tastes of people have changed.

 

[Kent]

Obviously Spotify does none of that because it's not radio. Radio should be leveraging those things because that's what makes it unique, but instead it's running canned formats with voice tracked DJs who have nothing to say.

The Big A and David will point out, correctly, that the audience started going to Spotify and Apple Music when live and local radio options were more plentiful than they are today. Having said that, I do mostly agree with you here. I had a similar discussion with the owner of one of the stations where I worked almost 20 years ago. Back then, Spotify and Apple Music didn't exist, and the iPod was really the only place to get all of your favorite music without interruption. He was more concerned with how we were going to compete with Sirius and XM (then separate services) and went from being a big fan of mine to thinking I was awful in a matter of a couple months. One of the big reasons he didn't like my show anymore was because he wanted his stations to sound more like satellite radio. I pointed out that they could offer commercial free music, and we couldn't. We had to be different and offer something they couldn't offer to keep people listening and keep the advertisers happy. I actually won that argument at the time and even got a pay raise out of it, but, when the Great Recession hit, I was one of the first people cut.

I will, however, be the first to admit that I obviously don't know how to apply a good differentiation strategy for radio. If I did, I most certainly wouldn't be posting here. I wouldn't have lost that radio job 16 years ago, and I'd be a consultant selling my successful roadmap to the big group owners. Everyone's trying to figure out the same thing and, at least so far, the results don't seem encouraging. I'm not yet sold on radio being in a death spiral, but I can't imagine it ever being what it once was either. Like you, I don't see how the answer is doing what Spotify and Apple Music do not as well. The only hope in a strategy like that is that the price point on those services will get too high, and people will go back to you because you're free. That looks like a losing bet to me.

Source?

I don't know anyone who thinks Spotify is radio. However I know multitudes of people who think "radio sucks," and they proudly use Spotify or Apple Music *instead* of radio, being fully aware of the difference.

I don't know that there's a smoking gun, but there's a solid circumstantial case that what listeners perceive as radio is evolving. A good example is the results of this survey: Two-Thirds of Americans Have at Least One Radio in Their Home. The actual number of homes with a radio is down from more than 95% fifteen years ago to just 2/3 today. Plus, the average household has half as many operating radios today as it did then. Those people are still consuming music and content, and broadcast TV isn't replacing the radio. That doesn't necessarily mean those people see Spotify and Apple Music as radio, but it would seem to demonstrate that a receiver that picks up a signal from a transmitter isn't the only way radio is defined anymore. Here's some more information on radio use among the population and how people are consuming it (with sources cited): Radio Statistics in 2024 (Listening & Advertising) - Musical Pursuits.

 

[TheBigA]

The Big A and David will point out, correctly, that the audience started going to Spotify and Apple Music when live and local radio options were more plentiful than they are today.

They started going to personal music collections, first on cassette and then CD, in order to avoid songs they didn't like or commercials. That was 40 years ago. Car makers installed cassette, 8-track, and CD players for that reason. It became such a problem that the music industry went to congress to demand a blank tape tax. Radio stations have been using canned formats since the 1960s, first on reel to reel tape, and then by satellite. So none of this is a recent thing. It has nothing to do with ownership rules or big radio companies. It was happening before ownership rules were relaxed in 1996. When options are available, people take them. There is always someone with a new idea to make money.

Meanwhile there are still thousands of locally owned and locally hosted radio stations in all geographic areas and in all formats. Lots of choices for music, both commercially sponsored and commercial free. People want what people want. All the radio companies can do is offer an option. We have no exclusivity on music or formats or presentation. Spotify and Apple Music offer hosted music channels. We also have no exclusivity on the word "radio."

 

[davideduardo]

We have antitrust laws and have broken up too big of companies before. I’m old enough (barely) to remember Standard Oil and Bell Telephone. Of course, the people in power have to be willing to use those laws for them to be effective, and that doesn’t seem to be high on much of anyone's priority list.

A company could own half the stations in the country and still would be small compared to the new media alternatives.

There are two types of media today: audio and video. “Radio” is just a shrinking portion of the audio media category. It competes with all the others.

Radio’s biggest issue is that is hard to buy. There are no “national” stations such as what we see in much of the world. Advertisers find it too complicated and very hard to evaluate.

Radio will continue to get worse until there is massive consolidation.

 

[davideduardo]

Meanwhile there are still thousands of locally owned and locally hosted radio stations in all geographic areas and in all formats. Lots of choices for music, both commercially sponsored and commercial free. People want what people want. All the radio companies can do is offer an option. We have no exclusivity on music or formats or presentation. Spotify and Apple Music offer hosted music channels. We also have no exclusivity on the word "radio."

You are forgetting that radio is hard to buy for most advertisers… except little local small town stations. So advertisers ignore it.

 

[TheBigA]

You are forgetting that radio is hard to buy for most advertisers… except little local small town stations. So advertisers ignore it.

Programmatic

 

[boombox4]

A company could own half the stations in the country and still would be small compared to the new media alternatives.

There are two types of media today: audio and video. “Radio” is just a shrinking portion of the audio media category. It competes with all the others.

Radio’s biggest issue is that is hard to buy. There are no “national” stations such as what we see in much of the world. Advertisers find it too complicated and very hard to evaluate.

Radio will continue to get worse until there is massive consolidation.

OK, we don't have national stations, like BBC's Radio 1 and NRK's P3 -- but we have nationally syndicated shows, like ESPN Radio, Infinity Sports Network, BIN, etc. Are those so hard to sell? After all, they're national, and I would think their demographics aren't that difficult to figure out.

 

[davideduardo]

Meanwhile there are still thousands of locally owned and locally hosted radio stations in all geographic areas and in all formats. Lots of choices for music, both commercially sponsored and commercial free. People want what people want. All the radio companies can do is offer an option. We have no exclusivity on music or formats or presentation. Spotify and Apple Music offer hosted music channels. We also have no exclusivity on the word "radio."

You are forgetting that radio is hard to buy for most advertisers… except little local small town stations. So advertisers ignore it.