Radio is "not a viable business"

[Theater of My Mind]

When she's driving, it's just background noise. She will listen to any station that plays music she recognizes.

This is what so many radio stations have been reduced to, and it's exactly what they want. The predetermined music testing and tiny playlists attract the lowest common denominator of non-critical listener who won't even notice when the ads come on. There has always been a place for that at radio, but now it's to the exclusion of nearly anything else.

I will stream a local station from Wisconsin to hear local play-by-play of my beloved Packers.....I stream a local kilowatt AM in the mornings because they run a call-in "for sale" show called Tradio and I love it.

There's a station like that in my hometown too. It's not a rated market and they're just selling spots to local businesses, not getting agency buys. I'm sure it attracts all the retirees and not much else, but it's weirdly the most interesting catch in a sea of radio sameness around there.

 

[TheBigA]

This is what so many radio stations have been reduced to, and it's exactly what they want. The predetermined music testing and tiny playlists attract the lowest common denominator of non-critical listener who won't even notice when the ads come on.

Everything a commercial station does, from the choice of music to the number of breaks, is all built around the ads, because without them, there is no money. If listeners paid a subscription fee, everything would be different. Then it might be a viable business. But it wouldn't be local, because there aren't enough subscribers in most areas to pay the expenses. That's how EMF works, and why it's a viable business.

 

[TheBigA]

The person or organization that figures out what the "tolerable" length a commercial stop set is should well in the future if they are not loaded down debt.

There is no "tolerable length." Listeners to TuneIn complain that the ads interrupt the stream. Viewers of YouTube use the 'skip ad' feature. The bigger problem is that the spot price is being driven down due to competition. You need a certain number of spots to cover your costs. Every radio station is competing with every other station or service. That's a lot of competition. Nobody can raise their rates. So as costs increase, the choice is between cutting costs or adding more spots. This past year, all of the streamers from Spotify to Pandora have been laying off staff to cut costs. That was before the 15% increase in royalty costs.

 

[boombox4]

My experience has been that the biggest level of distrust of traditional media has been people over 50. The younger generation is simply disinterested. Younger people, in general, have never had reputations for being news junkies.

Maybe that's you're experience, but polling disagrees with your experience. Look it up on Gallup and Pew Research. Young people distrust the media as much, if not more than the older demos.

This Gallup polling article is from 2016. There is a more recent Pew Research article on news in general that came out late last year, that said that less Americans pay attention to news today than they did in 2016, and that lack of attention crosses all demos.

But this Gallup poll goes into detail concerning distrust in the media. You'll notice that the 18-49's had a much lower trust level in the news media than the over 50's. And this was in 2016. I'm sure it's even worse now.

Americans' Trust in Mass Media Sinks to New Low

Americans' trust in the mass media has dropped sharply since last year to its lowest point since 1972. Republicans' lack of faith in the media is chiefly behind this decline.

news.gallup.com

 

[davideduardo]

Paragraph breaks are your friend.

There may be more to it than that, but my eyes glazed over too quickly.

Sometimes I wonder if we, the hall monitors, should insert logical breaks when a post is interesting but to hard to read...

(I really need something else to do.)

 

[davideduardo]

But this Gallup poll goes into detail concerning distrust in the media. You'll notice that the 18-49's had a much lower trust level in the news media than the over 50's. And this was in 2016. I'm sure it's even worse now.

But, for about 80% or better of viable stations, there is no perception of being a "news medium" as they are music and entertainment sources. I don't think Z-100 or KISS-FM fall under the "distrust" banner.

 

[boombox4]

Sad about the 4800 laid off by Bell Media up in Canada. But it's hard for me to believe that radio is not a viable business, when I keep reading here on RD that a lot of radio stations bill in the high numbers. It sounds like it's viable in places, and not so viable in other regions and metros.

And obviously, a lot of stations are on shaky ground. Several in the PNW have gone off the air in the past two years. So obviously it's not a get-rich kind of business, either.

As for the proposed Canadian journalism legislation, if journalism in Canada is in similar straits to journalism in the US, it's turning into a business that's not viable. Thousands of local US newspapers shut down last year, according to NPR and Forbes.

The LA Times -- one of the most important papers in the country -- just laid off a bunch of staff, and it's been losing tens of millions a year since it was bought by a billionaire in 2018. The Washington Post has made some staff redundant. The average time spent perusing an online newspaper, according to Pew, is around a minute and 39 seconds.... Just about enough time to hit the paywall.

And we all know the difficulties in the radio business, as they're extensively covered here on various threads on RD.

I don't see any easy answers.

 

[boombox4]

But, for about 80% or better of viable stations, there is no perception of being a "news medium" as they are music and entertainment sources. I don't think Z-100 or KISS-FM fall under the "distrust" banner.

True, but the comment I was replying to was about the news media, as the Canadian issue partly involves newscasting and journalism. I read similar in a Canadian article on the Bell selloff that was posted on an AM radio FB group earlier this week.

We all know that a lot of radio stations really don't have news, at all. The music stations I listen to don't have news broadcasts. So your point is well taken.

A lot of this obviously centers around advertising, and the advertising industry is feeling the pinch just like radio, TV and other legacy media. If you look at the annual, overall revenues for the entire advertising industry in the US, they're still at 2012 levels, when accounting for inflation.

It seems to be the internet saturation thing that's driving a lot of the problem. So many slots for advertising on the internet, and so many online stores don't really advertise -- they do the equivalent on their own site. No advertising on other media needed.

 

[Theater of My Mind]

Sometimes I wonder if we, the hall monitors, should insert logical breaks when a post is interesting but to hard to read...

Are there really that many of them? This one stands out as a worthy candidate, I say go for it.

 

[TheBigA]

Sad about the 4800 laid off by Bell Media up in Canada. But it's hard for me to believe that radio is not a viable business, when I keep reading here on RD that a lot of radio stations bill in the high numbers. It sounds like it's viable in places, and not so viable in other regions and metros.

If you read the full quote, it says "We will continue to operate the ones that are still viable."

 

[MarkW]

Given the number of heritage radio brands in Canada that Bell Media has ruined due to its boilerplate programming philosophy, I think the fact they are selling nearly half their radio stations is great news. I am hopeful new ownership will be able to improve many of those same stations.

 

[Theater of My Mind]

As for the proposed Canadian journalism legislation, if journalism in Canada is in similar straits to journalism in the US, it's turning into a business that's not viable. Thousands of local US newspapers shut down last year, according to NPR and Forbes.

It's not realistic to say journalism is not viable. Even if the consumption of news has been shifting to new platforms, there is still a voracious appetite for information. That has to come from somewhere, in other words, from journalists. It doesn't just magically appear out of thin air just because it's on the internet.

That said, contempt for their journalists is nothing new at Bell, a company that was already under fire for canning its national news anchor Lisa Laflamme in a way that raised a public outcry about its perceived ageism and sexism. That act of cruelty resonated even beyond Canada's borders, and was covered in such high profile American outlets as the the NY Times, L.A. Times and others.

This is a good read, providing some insight on what Bell is like as a company and an employer:

Lessons from Lisa LaFlamme, echoes from Julie Payette, and the perils of a toxic workplace - Hum Law Firm - Employment Lawyers Toronto

n recent years, we have seen various forms of toxic workplace allegations gain increasing attention as more individuals speak out about their experiences of harassment, discrimination, and abuse in the workplace. Employees also feel more empowered to share their stories publicly in an...

thehumlawfirm.ca

 

[Skivvy9er]

It's not realistic to say journalism is not viable. Even if the consumption of news has been shifting to new platforms, there is still a voracious appetite for information. That has to come from somewhere, in other words, from journalists. It doesn't just magically appear out of thin air just because it's on the internet.

That said, contempt for their journalists is nothing new at Bell, a company that was already under fire for canning its national news anchor Lisa Laflamme in a way that raised cries of ageism and sexism. That act of cruelty even resonated beyond Canada's borders, and was covered in such high profile American outlets as the the NY Times, L.A. Times and others.

This is a good read, providing some insight on what Bell is like as a company and an employer:

Lessons from Lisa LaFlamme, echoes from Julie Payette, and the perils of a toxic workplace - Hum Law Firm - Employment Lawyers Toronto

n recent years, we have seen various forms of toxic workplace allegations gain increasing attention as more individuals speak out about their experiences of harassment, discrimination, and abuse in the workplace. Employees also feel more empowered to share their stories publicly in an...

thehumlawfirm.ca

That was horrible to read. The abusers deserved what they got, if not more.

My background is rather different than most here. Personally, as a commander, leader, and manager found it so much better, so much more productive, and so much less work to treat subordinates right, and look out for them. Was drilled into my second lieutenant head decades ago that if you take care of the people, the people will take care of the mission. Absolutely true.

Another observation - the bosses who treat their people the worst spend the most time at work. They have to work those extra hours to get their own work done due to the time spent mistreating their people. Had a couple of bosses like that in my time. Personally, in a leadership position rarely needed to stay late. Took care of my troops, trusted them. The time I didn't spend messing with anyone allowed me not just to get my own work done but help work some of my boss' stuff.

 

[tall_guy1]

The issue is that each half of the electorate believes that it is the other half that fell into that rabbit hole.

You'd think that this situation would make for newer and more interesting / entertaining radio talk formats. Instead, we have an angry heard of bad Rush imitators who are boring, banal, bland.

One half really has though.

 

[secondchoice]

There is no "tolerable length." Listeners to TuneIn complain that the ads interrupt the stream. Viewers of YouTube use the 'skip ad' feature. The bigger problem is that the spot price is being driven down due to competition. You need a certain number of spots to cover your costs. Every radio station is competing with every other station or service. That's a lot of competition. Nobody can raise their rates. So as costs increase, the choice is between cutting costs or adding more spots. This past year, all of the streamers from Spotify to Pandora have been laying off staff to cut costs. That was before the 15% increase in royalty costs.

On a local level, small non rated markets with little agency business where you are dealing with the owner, if you get results rates are not that big of deal. He (she) just wants a return on his advertising. The downside to this it might take the better part of a year to get enough success stories to make good living.

 

[davideduardo]

On a local level, small non rated markets with little agency business where you are dealing with the owner, if you get results rates are not that big of deal. He (she) just wants a return on his advertising. The downside to this it might take the better part of a year to get enough success stories to make good living.

In those local markets, advertisers find much of their budget goes to web listings and not to radio. Beyond that, there is vastly less local business in those towns ever since Walmart and the big box stores arrived. And to get a selection of merchandise, those people often just use Amazon or another big retailer. So what is left is attorneys and chiropractors and tax preparers.

Yes, it is possible for a local station in a small market to make money, but much less than in the past.

 

[Sammi Brie]

One thing that I think goes unappreciated about Canadian broadcasting is that its big group owners are all also telcos with cable and wireless footprints.

Here, the marriage of telco and media has often not gone so great in the U.S.. Verizon struck out with Oath go90. AT&T struck out with WarnerMedia. Why? They are fundamentally different industries with different kinds of investment needs (AT&T sold WarnerMedia in part because it needed to shovel billions into 5G and fast). But in Canada, the telcos run the media right down to AM radio. Canadian cell phone service is famously among the world's most expensive. The Shaw-Rogers deal has impacts on broadcasting because, well, telcos run Canadian media.

There's also one more thing, and this is particularly the case with TV. US television broadcasters have two huge revenue sources their Canadian counterparts cannot claim: retransmission consent and political advertising.

Retrans consent has become a de facto hidden license fee (of which the networks get a substantial cut) on anyone that has a traditional MVPD. The problem is that fewer people do, and vMVPDs do not yet pay that full freight. The broadcasters want them to. The providers don't want to because it would send their rates soaring, probably $15 to $20 per month just to cover the fees of the major broadcasters. It's the same problem faced by things like a gas tax; a secular decline drains the usage pool from which once drew a mighty fund source.

The other is political advertising. It serves as, essentially, a tax on our divisive, swing-state-concentrated politics that makes hotly contested races highly profitable for broadcasters. The question is how much more campaign funding in 2024 and coming cycles goes into connected television and cheaper social-flavored digital and if it supplants less targeted linear avails. The other point about it is that it benefits broadcasters unevenly by geographic footprint. Gray Television, for example, feasts because it has stations in Las Vegas, Phoenix, and Atlanta—and the other major cities in each of the same states. Seattle is about the size of Phoenix, but it's so safe politically that a station there doesn't have nearly the same political draw.

Newspapers don't have that. Digital sites don't have that and have faced other problems from traffic source changes driven by the social networks, who don't want to handle the live wire known as news. Non-American broadcasters, such as those in Canada or Televisa's regional stations (a bunch of which were axed) or CNN Philippines (now closed) or Channel 4 (250 job cuts), don't have that. What they have is a soft ad market hurt by end-of-ZIRP adjustments.

 

[TheBigA]

Here, the marriage of telco and media has often not gone so great in the U.S.. Verizon struck out with Oath go90. AT&T struck out with WarnerMedia.

The one exception is ComcastNBCUniversal. Comcast is in the wireless phone business. But they sold off their radio operation in 1988.

 

[davideduardo]

One half really has though.

And there you go, telling that half that they are wrong. If you talk to them, as I previously said, they will say that you are wrong. Sorta' like FM antennas: we have vertical and horizontal polarization.

 

[davideduardo]

One thing that I think goes unappreciated about Canadian broadcasting is that its big group owners are all also telcos with cable and wireless footprints.

Here, the marriage of telco and media has often not gone so great in the U.S.. Verizon struck out with Oath go90. AT&T struck out with WarnerMedia. Why? They are fundamentally different industries with different kinds of investment needs (AT&T sold WarnerMedia in part because it needed to shovel billions into 5G and fast). But in Canada, the telcos run the media right down to AM radio. Canadian cell phone service is famously among the world's most expensive. The Shaw-Rogers deal has impacts on broadcasting because, well, telcos run Canadian media.

There's also one more thing, and this is particularly the case with TV. US television broadcasters have two huge revenue sources their Canadian counterparts cannot claim: retransmission consent and political advertising.

Retrans consent has become a de facto hidden license fee (of which the networks get a substantial cut) on anyone that has a traditional MVPD. The problem is that fewer people do, and vMVPDs do not yet pay that full freight. The broadcasters want them to. The providers don't want to because it would send their rates soaring, probably $15 to $20 per month just to cover the fees of the major broadcasters. It's the same problem faced by things like a gas tax; a secular decline drains the usage pool from which once drew a mighty fund source.

The other is political advertising. It serves as, essentially, a tax on our divisive, swing-state-concentrated politics that makes hotly contested races highly profitable for broadcasters. The question is how much more campaign funding in 2024 and coming cycles goes into connected television and cheaper social-flavored digital and if it supplants less targeted linear avails. The other point about it is that it benefits broadcasters unevenly by geographic footprint. Gray Television, for example, feasts because it has stations in Las Vegas, Phoenix, and Atlanta—and the other major cities in each of the same states. Seattle is about the size of Phoenix, but it's so safe politically that a station there doesn't have nearly the same political draw.

Newspapers don't have that. Digital sites don't have that and have faced other problems from traffic source changes driven by the social networks, who don't want to handle the live wire known as news. Non-American broadcasters, such as those in Canada or Televisa's regional stations (a bunch of which were axed) or CNN Philippines (now closed) or Channel 4 (250 job cuts), don't have that. What they have is a soft ad market hurt by end-of-ZIRP adjustments.

Fabulous analysis, and some perspectives I have not seen brought together before to make a point.