Radio stocks

[gr8oldies]

Where to even start.....it's one tho=ing to have an opinion ahnd quite another to be pig-headed. I'm far from a "corporate apologist", but I am a realist.

The crux of Sir Rox's argument seems to be that a live body plopped in a chair in the hometown will beat a syndicated show or personality every time, and nothing could be farther from the truth. You really think some local guy sitting in a chair talking about the inner workings of Dayton politics for three hours would beat Rush hands down? I can't think of anything less interesting than local politics or politicians. We have a station, known as Fly 92-9, which went on the air last year with no DJs and a Jack-type format and no DJs (until recently, and just one) which just beat longtime format leader Mix 107-7, which has jocks. How could that possibly happen? Aren't people supposed to be saying "I'd listen to that Fly if they'd have local DJs." They aren't. Outside of radio people and activists with axes to grind, I don't hear anyone decrying the lack of local DJs, or turning off syndicated programming. I find John Tesh's voicetracks a little dry, but the thought that if you put anyone in a chair in my town and let him talk with no limits, the audience will drop Tesh like a hot potato and go to the local guy in a chair, for the sole reason that he is in a chair in within the city limits of the city I live in. I've heard people with "unlimited talk time"..one of our college stations has two people in a room just talking much of the time and it's really uninteresting.

I grew up listening to CKLW in the late 60s and 70s, and I lived 150 miles from Detroit. In our small town, we didn't go to that big bad city. We didn't follow the Tigers, Pistons, or Lions. The weather forecasts were even wrong for us. Even when we had a local top 40, most of us stayed with the Big 8 (which also beat local top 40s in Toledo and Cleveland as well as smaller cities). I don't know that most people really knew all the DJs names. I remember CKLW being on the loudspeakers at the pool..and no one waiting to go off the diving board til the jock finished talking.

Everything on the radio has to be compelling? What if I want some background music and don't want someone doing comedy bits in between smooth jazz songs (same with the often NUMBER ONE Beautiful Music stations in the 60 and 70s..they sat in a corner, clicked and whirred and were number one). I love personality radio, but not all the time and not just anyone. When I was growing up, none of my friends had a TV in their room, let alone video game systems, internet-connected computers, and all the other distractions. had we had those, we may have spent much less time with radio.

I have friends who like K-Love, one who een contributes and also turns the station off the minute a DJ comes on (and wouldn't leave it on if there was just a local DJ..I've asked her). Other friends LIKE the fact that when they travel they hear the very same K-Love..they aren't saying "when i go to California I want a KLove with different DJs.". It doesn't even enter their mind, any more than wanting "My Name is Earl" with different actors, or a different "Wheel of Fortune" host.
Another friend turns off DJs and says "stop shouting at me"...which is exactly what she says when an obnoxious TV commercial comes on. No one told her in 1988 to stop liking DJs. I worked in an office in 1988 with the radio on, and no one knew who the DJs on the top 40 station even were. You can talk about "compelling", but there is a reason they don't play the TV soaps in the office during the work day.

It's amazing when there are more creative outlets than ever (Internet, YouTube, etc.) that everyone is crying that the big bad radio company needs to put them on the radio and let them talk incessantly, or the government needs to take radio stations away from the big bad radio company and give them to someone who will put them on the radio and let them talk incessantly. You can build a following and even make a decent living with just the right niche website, videos, or even asking a Presidential candidate an unscripted question. THAT's the change that radio needs to think about..becoming a multi-media platform, not "going back to 1974". There are articles on this very website that discuss that, but I suppose the folks that write them are all wrong too.

OK, all the research is wrong, all of our experience with actual listeners is wrong, and the way radio has operated since the beginning was wrong. And only Sir Roxalot is right.

 

[adma]

Re: Distortion?

The listeners, who still SAMPLE radio because they hope for something worth hearing, or because their favorite programming is still there, are growing increasingly dissatisfied. THAT'S why they seek out iPods, CDs, satellite, and Internet radio. Cheap, easily available recorded music has been around since lacquer records. Portability has been around since the cassette tape. It ain't the technology that's attractive. It's the alternative to BLAND PROGRAMMING that virtually every disaffected listener cites as the reason that they "don't listen to radio much anymore".

But maybe there's an accompanying epiphany: that by today's standards, even the programming approach that made radio once seem so great would be "bland", or dubiously not up to snuff. In fact, between your invoking payola quasi-sympathetically as a cornerstone to a programming approach, and David Eduardo labelling the attacks on payola as a "witch hunt", I think there's a huge abyss through which a modern, er, "post-payola" marketplace is passing right through and right by...

 

[SirRoxalot]

Reality

Gentlemen, you talk about specifics, but fail to look at the overall industry.

People listening to the radio - AQH listening, not cume, has been in a steady decline since 1993. The decline has sharpened since 2007, and I doubt that anybody predicts that it will get better when this year's numbers come out. As I stated before, people still sample radio. They just don't stay with it. I contend that it has more to do with insufficient programming than it does with new technologies.

Check out the chart HERE, created from Arbitron data. As you can see, AQH listening peaked in 1983, and stayed relatively steady until 1993.

David, show me a single credible study that says that people are MORE satisfied with radio now than they were 5 years ago, 10 years ago, 15 years agao, or 20 years ago.

Not all stations need to carry active listening formats. Passive listening format, like "beautiful music" of years past morphed into several formats ranging from flavors of AC to smooth jazz (dying if not dead) and others. Many of those stations get good ratings, but the ratings don't necessarily translate into revenue EXCEPT in very large markets where nearly ALL buys are made by agencies, and are based on cost per point. Outside the top 15 markets, and at smaller stations in larger markets, business is done very differently. Formats that promote active listening generally draw more revenue.

Research is as valid as the methodology. A statiscally significant sample can be extracted from a sample of 100 people IF the research isn't skewed to start with. I've seen music tests that yielded flawed results because the methodology was flawed. I've seen research that ignored anyone who wasn't identified as a station's P1 listener, or a P1 listener of the direct competition. Since AQH shares show that 85% of the available audience ISN'T listening to radio at any give time, wouldn't it seem that there might be greater upside to finding out WHY they weren't listening?

You can argue with my observations and opinions. Here are a few things that you can't argue:

1. TSL is down.

2. AQH listening is down.

3. Revenue is down.

4. Salaries for radio have not kept pace with inflation.

5. Stock prices are down drastically.

6. Several major groups are highly leveraged, and in danger of triggering forced refinancing that could put them into bankruptcy.

I continue to believe that cuts in programming are the cause of decreasing listening, and decreasing revenue. Those cuts are coming faster and deeper than ever. If they are a reliable predicter of the future, revenue will decrease faster and deeper than ever.

You may be right. I may be crazy. But every indicator I've seen so far does not bode well for the future of the industry, and most importantly for the future of the people who work in it.

Dispute my view all you want, but I'm not the only one with this opinion. Perhap the Wall Street Journal will carry more weight.

 

[davideduardo]

Re: Reality

People listening to the radio - AQH listening, not cume, has been in a steady decline since 1993. The decline has sharpened since 2007, and I doubt that anybody predicts that it will get better when this year's numbers come out. As I stated before, people still sample radio. They just don't stay with it. I contend that it has more to do with insufficient programming than it does with new technologies.

In truth, TSL began to decile after a peak in 1988. The declines were most notable through the 90's, and have slowed down considerably of late.

Since this year's numbers will have the top 10 markets on PPM, which uses a different system, they will not be comparable. Diary data is available on the basis of the first 3 quarters, and is actually quite stable now in the roughly 20 markets I look at in detail.

Check out the chart HERE, created from Arbitron data. As you can see, AQH listening peaked in 1983, and stayed relatively steady until 1993.

It peaked in 1988, and began a decline afterwards. many believe the 1983 to 1988 growth in TSL (in the early 80's it was close to today's levels) had to do with drastic improvements in Arbitron sampling, including better ethnic samples, DST, HDHAs and HDBAs that were refined and accurate, a new system of telephone follow up, etc.

David, show me a single credible study that says that people are MORE satisfied with radio now than they were 5 years ago, 10 years ago, 15 years agao, or 20 years ago.

I have hundreds of them. They are proprietary, but the listeners sampled over the last 15 years are "just as satisfied as ever" in the majority of cases, with "more satisfied than ever" beating "less satisfied" by as much as 5 to 1.

Believe it or not, but almost all broadcasters in some form or another measure the appeal of not just the songs or talents, but their staitons and radio in general.

Not all stations need to carry active listening formats. Passive listening format, like "beautiful music" of years past morphed into several formats ranging from flavors of AC to smooth jazz (dying if not dead) and others. Many of those stations get good ratings, but the ratings don't necessarily translate into revenue EXCEPT in very large markets where nearly ALL buys are made by agencies, and are based on cost per point. Outside the top 15 markets, and at smaller stations in larger markets, business is done very differently. Formats that promote active listening generally draw more revenue.

I can think of one market that is not even in the top 125 which is a soft AC / EZ hybrid which is #2 in billing in the market, almost entirely based on local direct sales. In many smaller markets the AC station is the billings leader or in the top 2 or 3. Those stations achieve results because clients get perhaps the best reach and frequency of any major format due to the higher TSL.

You obviously don't have access to revenue data, but A/C's, even the softer ones, do extremely well in smaller markets.

Research is as valid as the methodology. A statiscally significant sample can be extracted from a sample of 100 people IF the research isn't skewed to start with. I've seen music tests that yielded flawed results because the methodology was flawed. I've seen research that ignored anyone who wasn't identified as a station's P1 listener, or a P1 listener of the direct competition. Since AQH shares show that 85% of the available audience ISN'T listening to radio at any give time, wouldn't it seem that there might be greater upside to finding out WHY they weren't listening?

Showing how little you understand listner behaviour again? Listeners state the main reason for not listening at particular times is inability... "the kids pick the station in the car" or "I can't listen at work" or "that's when Oprah is on."

In the diary, 6 AM to 7 PM, the average is about 25% of people listening. That's been fairly constant since Arbitron began in 1965.

When a station does a music test, they want to measure the appeal of the songs they play. To do that, the people who come must know the songs, so they must be heavy listeners (not necessarily P1...some P1's listen 3 hours a week) in terms of hours to the station in the study or its overlapping competitors. Otherwise, duh, they will not know the songs and that is why we have tests!

You can argue with my observations and opinions. Here are a few things that you can't argue:

1. TSL is down.

Amazingly little, considering the alternatives available today.

2. AQH listening is down.

AQH is derived from TSL and cume. Ratings measure only thse two things, and get share, rating and AQH persons from TSL and cume.

3. Revenue is down.

Until this year, it was up or flat in this decade. This year we have a recession. Everybody's revenue, including the IRS, is down.

4. Salaries for radio have not kept pace with inflation.

Nor have they in nearly all other fields. We are in a recession.

5. Stock prices are down drastically.

We are in a recession. Many other sectors have been as severely hammered. Some have gone out of existence.

6. Several major groups are highly leveraged, and in danger of triggering forced refinancing that could put them into bankruptcy.

Very few groups are that leveraged. Consolidation was finaced with equity trades and by merger for the most part.

 

[TheBigA]

Re: Reality

Gentlemen, you talk about specifics, but fail to look at the overall industry.

Overall industry? Aren't you the guy who says radio is local? If it is, then why do you keep bringing up national trends that also include AM, which we all know (with the exception of 25 or so huge stations) is deader than dead? The overall industry is giving up on AM, and moving the successful formats to FM. That means about 3000 AM stations with less than 1 shares. That's not going to help the numbers your quoting.

I continue to believe that cuts in programming are the cause of decreasing listening, and decreasing revenue.

That's your theory. So if we are to believe your theory, then your suggestion is to invest billions in on-air programming, hire thousands of people, and create innovative formats and programming ideas, right?

Isn't that what XM and Sirius did for the first half of this decade? They gave Oprah $60 million to work a half hour a week. They hired all kinds of people at huge salaries to do innovative music shows, like Little Steven and Bob Dylan, a 24 hour bluegrass channel, and on and on and on. I have seen no complaints about their programming, but it didn't attract a whole lot of subscriptions. 16 million after 8 years. And after spending billions and billions of dollars, did they not end up in the exact same crapper as everyone else? They were forced to merge because they could not make it as two companies. Now their stock is selling for about the same as Citadel's. AND they owe $2 billion to the banks next year. Talk about being highly leveraged. Explain to me how investing in programming has paid off for XM.

OBVIOUSLY this is not about programming. If it was, XM would be way more successful than all these radio companies, and would not be facing bankrupcy in less than a year.

You may say that people aren't satisfied with radio programming. But there is no single competing service (internet, satellite, cable, even cell phone service) that attracts as many listeners as radio. Sure, radio now shares their listeners with other devices, but not because they offer local DJs or more local information. It simply doesn't happen. The real question is: Do consumers today really want local DJs and local programming? Because if they do, they won't find much of either on other devices.

You may be right. I may be crazy. But every indicator I've seen so far does not bode well for the future of the industry, and most importantly for the future of the people who work in it.

This situation is far more complicated than you will ever understand. I heard Obama today talking as though General Motors could be toast by next June. And you think this is about DJs? Entire cities and state governments may be shutting down soon. You really need to get out and see the world, because it's a whole lot bigger than just radio.

 

[Stewy]

After spending the time to read this thread only two lines from one song comes to mind, "This is the end my friend, my only friend the end." Maybe it's only one line with a pause for some instrumentation but anyway, most of the big (and medium) corps are dead already but can't get past the denial stage and dump now before it gets worse for them.

And to answer a comment made earlier, a couple of DJ's might be able to buy a decent station pretty soon even though DJ's are notorious for being broke. As hard as corp radio is driving themselves into the ground they may start giving entire stations as severance packages to the savviest DJ's with good contracts.

 

[Goat Rodeo Cowboy]

And to answer a comment made earlier, a couple of DJ's might be able to buy a decent station pretty soon even though DJ's are notorious for being broke. As hard as corp radio is driving themselves into the ground they may start giving entire stations as severance packages to the savviest DJ's with good contracts.

Me thinks you are either purposely 'messin with us' or you are engaged in some wishful thinking.

As much as we moan and groan here about what the corporations have done to broadcasting, it's because we disagree with their programming. It's not their business skills we can make an argument against. And if they are a corporation and in so much trouble that they want to wash their hands, walk away, and let someone else 'til the field' for awhile, at that point the stations won't be their's to give away.... The bankruptcy court will be in charge.

I've been through two employers-going-bankrupt (not broadcasting) and I can tell you IT AIN'T PURTY. You will sweat blood in hopes of getting your final paycheck, much less a severance package. If they owe you any expense money you get in line with the power company, the phone company, the office supply place and every one else to see if you get 10-cents on the dollar or maybe 40-cents on the dollar for what is owed to you.

If and when the big corporate broadcast groups get to the "let's auction it off" stage, you are likely to see some of the kind of people who get to have lunch with Warren Buffet step in and stir up some bidding.

If you are a DJ kind of guy and looking for opportunity in a bad, bad market.... keep your eye on the mom and pop stations. Be prepared to sweat over details and issues that have never before crossed your mind.

 

[SirRoxalot]

Denial

Gentlemen, you may continue to remain in denial for as long as you like, but it won't change the facts.

According to Arbitron, radio listening is down. The decline began in the '80s, and has continued unabated since 1989. It has accelerated in the past year.

Companies borrowed a lot of money and overpayed for radio stations in an attempt to create de facto demographic monopolies, which they would use to force rates up. They also promised significant savings from consolidation. What's actually happened is that the cost of borrowing money more than offset any savings from consolidation, and revenue from radio advertising sales not only didn't meet projections, it ultimately declined - despite gains in NTR. Advertising rates have declined, not risen. According to the Wall Street Journal, several of the major players are in danger of triggering refinancing that will either send them to bankruptcy, or further consolidation.

Research that focuses on the dwindling number of listeners reinforces the programming that has caused the number of listeners to decline in the first place. Do you really want to know what (in 2008) 13.2% of the people in the world want to hear, or why the other 86.8% AREN'T listening?

I've never advocated that radio, as an industry, " invest billions in on-air programming, hire thousands of people". It would be nice if they'd stop FIRING talented, creative, successful people who have solid ratings and bring added revenue to the company. THIS IS HAPPENING BY CORPORATE EDICT.

All of this predates the current recession, which has accelerated these practices.

Satellite radio, which is a subscription based service, is different from OTA radio. Most radio listeners are willing to put up with a reasonable number of commercials in order to get radio for free. Most XM/Sirius subscribers pay for content that either isn't, or can't be broadcast on OTA radio. XM and Sirius locked up major personalities with the idea that people WOULD pay for uncensored content, or content (like NASCAR) that was suddenly unavailable on OTA radio. Their model may yet come to fruition, but not at the cost of satellite delivery. They've been positioning themselves to provide most of their content via the Internet for several years now. As wireless Internet becomes more widely available, satellite delivery will fade to those areas that don't have high speed wireless available.

One other recognized effect of programming on both satellite and iPod is that there is a fatigue factor. Many people drift back toward radio listening after 3 to 6 months because both the iPod and satellite don't offer them anything BUT music. There is no "value added", no companionship, no shared experience, no human element. If radio continues to employ more of the same sterile, generic programming, it will not be an alternative to "jukebox" programming. It will just be another source of "jukebox" programming.

Lastly, the attempt by large corporate owners to employ "cookie cutter" methodology in a wide variety of markets, with markets of different sizes in different areas of the country, hasn't led to either savings or improvements in the product. Buying strategies vary by market, by station, and by client. Syndication may work in one market, and fail miserably in another. Some markets, and some clients don't care about anything but cost per point. Some clients, some stations, and some markets look harder at results, and ratings don't always equal results. Those corporations that try to force a standard way of doing business on their stations are leaving money on the table for the competition.

If radio continues with the current course of cutting talent, listening will continue to decline, and revenue will decline along with it. The programming that's replacing the talent that's being cut is producing less revenue. Corporate is even cutting successful sales people at a time when revenue is declining. These practices predate the current recession.

If radio doesn't change its course, other wireless technologies will replace radio as a primary source of entertainment. Some of the talented people - both on air and off - who are being cast aside by radio will end up creating content for competing technologies. Listeners will seek entertainment that offers what radio fails to provide. An industry will continue to decline not because of new technologies, but because of the hubris of a handful of corporate heads who won't suffer for their miscalculation. A lot of others in the industry will suffer in spite of doing their jobs successfully.

The future will bring either further consolidation, or some of those large companies will collapse under their own debt burden. Either way, further cuts are coming, and that doesn't bode well for radio as an industry.

 

[gr8oldies]

Where do you get your figure of 86% no longer listening to radio?

 

[SirRoxalot]

Re: Denial

Where do you get your figure of 86% no longer listening to radio?

Hearing, not sampling. According to Arbitron, AQH rating 12+ Mon-Sun 6AM-Midnight in 2008 is 13.2%. Tune in for 5 minutes during the week and you're part of the 90+% cume. In my book, AQH is a better estimate of actual listening.

 

[TheBigA]

Re: Denial

Research that focuses on the dwindling number of listeners reinforces the programming that has caused the number of listeners to decline in the first place.

Show me research that say the listeners want radio to hire more on air personalities, and play less familiar music.

Follow where the listeners are going. Are the going to devices that offer live & local DJs? Or are the going to jukeboxes that have no DJs whatsoever? You tell me which the people prefer.

What the listeners want is to get rid of all the gatekeepers: Get rid of the DJs, the music directors, and the program directors. Put the listeners in charge. That's what the owners are trying to do. Get rid of the gatekeepers.

It would be nice if they'd stop FIRING talented, creative, successful people who have solid ratings and bring added revenue to the company. THIS IS HAPPENING BY CORPORATE EDICT.

No it's happening by your own facts and figures that you've been posting here for days. You make the best case for them to be fired. During their reign, they caused ratings to fall every year since 1988. Isn't that what YOU said? They weren't talented, creative OR successful if they caused radio listening to fall.

They've been positioning themselves to provide most of their content via the Internet for several years now. As wireless Internet becomes more widely available, satellite delivery will fade to those areas that don't have high speed wireless available.

Mel Karmazin has no interest in providing ANY of his content via the internet. Never has, never will. I don't know where you come up with this stuff. The satellite is his tower. He will not abandon it.

One other recognized effect of programming on both satellite and iPod is that there is a fatigue factor. Many people drift back toward radio listening after 3 to 6 months because both the iPod and satellite don't offer them anything BUT music. There is no "value added", no companionship, no shared experience, no human element.

So now you're saying people "drift back toward radio listening?" I'm really confused now. Is this the 14% or the 86%? When did you get a degree is psychology?

If radio doesn't change its course, other wireless technologies will replace radio as a primary source of entertainment.

Because of the technology or because of the programming? It can't be because of the programming, because you just said the programming in other technologies causes "fatigue." Why would such programming cause those technologies to replace radio? It all makes no sense. And I thought you said a couple days ago that technology has nothing to do with it.

 

[SirRoxalot]

Ask the Guru

Follow where the listeners are going. Are the going to devices that offer live & local DJs? Or are the going to jukeboxes that have no DJs whatsoever? You tell me which the people prefer.

Please advise me of a "device" that offers "live and local DJs" - other than radio.

People are going to devices like iPods and satellite radio that offer a much more diverse array of music than most radio stations. They still go back to radio in the search for information and new music, which they then download and add to their own collections. Radio can't compete with an iPod for diversity, but it certainly can compete with an iPod when it comes to adding value to the music, creating a relationship with the listener, and offering new music that might interest them.

Some of them are going to satellite radio because it offers a much broader array of music, and because it offers entertainment that is unavailable in terrestrial radio.

Sirius XM already offers their products on-line. There are now players that aggregate channels from both services and allow you to easily select them as long as you have a subscription to the service. You can now stream Sirius XM to your iPhone. Wireless Internet will cut their distribution costs, and you'd better believe that Sirius XM is looking to cut costs.

You might want to check in with Lee Abrams, the guy who created the monster that is now corporate radio. To quote Mr. Abrams:

"We always started with emotion, with the passion for the music," Abrams says. "Then we used the research to see if we were full of sh-t. We wrote the playbook, but people didn't evolve it. We got a lot of heat for creating the formula, but we can't take credit for it all falling apart. You can't really blame McDonald's for being popular."

The truth is, Abrams' psychographics got away from him. The advent of airplay-monitoring services like Arbitron and Nielsen/BDS, which use pattern-recognition to track "spins" on hundreds of stations across the country, gave program directors exacting new tools. Gut instincts and audience research became quaint: Now, Abrams says, "if you're a program director, you can't take a pee without doing research on it first."

Read the full article HERE. Or, perhaps this quote from a different article might give a better feel for his view of radio as it currently exists, and the reason he left for satellite:

There was a feeling of sadness and anger at how pathetic the newly consolidated terrestrial radio business had become -- tempered with a feeling of responsibility to do something about it and a sense of "don't screw this up, Lee."

Once again, read the full article HERE.

Abrams has stated that radio has been dumbed down. Most jocks are so restricted in both opportunities to entertain and time allowed to entertain that many of them don't have the opportunity to make much difference. I'm not advocating "yak" radio, but there's a problem when imaging gets more breaks than live talent, and live talent is required to deliver so much imaging and promotional material that there's little room for real creativity. The only daypart where that's untrue is typically mornings - which also happens to be the most highly rated daypart at most stations. There is middle ground between liner cards and endless bits.

Abrams has been thought of by many as the devil who killed radio. He now seems to be interested in reinventing it by bringing by personalities, creativity, and broader music selection in some formats. Perhaps he will lead the revival, because his influence certainly contributed to the decline.

 

[davideduardo]

Re: Denial

Hearing, not sampling. According to Arbitron, AQH rating 12+ Mon-Sun 6AM-Midnight in 2008 is 13.2%. Tune in for 5 minutes during the week and you're part of the 90+% cume. In my book, AQH is a better estimate of actual listening.

A. 2008 is not over. There can be no 2008 figure yet.

B. PUR is the measurment of how many people, as a percentage of the universe, are listening at any given time (Persons Using Radio.

C. The PUR you are looking at is 12+. Radio does not sell nor program to 12+. It pretty much programs to 18-49 or 25-54. 55+ and under 18 are not economically viable so are not programmed to, so the PUR there is lower.

D. If the figure you are using is a PPM figurem then you need to understand that PPM and Diary based metrics can not be compared as there is a methodology difference, a different age range universe, and a variety of other "apples to oranges" impediments to direct comparison.

E. In any case, you don't get the meaning of the term, whatever the ratings system. PUR is an AQH measurement, while use of radio is a cume based measurement. PUR is the average percentage of the universe listening throughout a time period. For example, in the diary the persons using radio in AM drive nationally is around 22%, while the cume of AM drive is around 76%. That means that over three quarters of all persons listen in 6 to 10 AM, but not the whole time period... on average, 22% of the universe are listening at any given time. You are confusing cume, which shows about 93% of all 12+ persons (diary) listen to radio, with the average listenership at any given time, which is much lower.

 

[TheBigA]

Re: Ask the Guru

People are going to devices like iPods and satellite radio that offer a much more diverse array of music than most radio stations.

Nope. They're going to other devices to get THEIR choice of music. Not the choice made by a DJ, MD, or PD. As I said, get rid of the gatekeepers. They're also looking to escape the annoying chatter from the DJs. The actual music most people listen to is exactly what's available from terrestrial radio. We can see exactly what they're listening to by following p2p charts. It's no more diverse than what's on radio. And the most popular internet and satellite channels are those that mimmick terrestrial radio.

Sirius XM already offers their products on-line.

But you must be a subscriber to access it. DOA. Radio that's not worth paying for. So much for investing billions in programming. Today, everyone is a critic, and everyone is a star. They don't need to pay for something they get for free. And they don't need some DJ telling them what's cool. They already know.

All that great programming that's unavailable on terrestrial radio forced Sirius to merge with XM, and the combined company is on the brink of bankruptcy, with a stock price that's no better than anyone else's.

You might want to check in with Lee Abrams

You might want to check who Lee works for now. Hint: Not XM. Everything he said then is now in the dumpster.

 

[davideduardo]

Re: Ask the Guru

You might want to check in with Lee Abrams, the guy who created the monster that is now corporate radio.

Lee Abrams was the PD of WQDR in Raleigh in the early 70's, and he discovered that putting order in the messy (and smoky) world of progressive rock generated huge ratings, and killed the progressive free form stations in the process.

He was no more coroporate than Fred Flintstone. He was a rebel, a counter-establishment character who worked for the consulting firm he and Kent Burkhart operated.

The truth is, Abrams' psychographics got away from him. The advent of airplay-monitoring services like Arbitron and Nielsen/BDS, which use pattern-recognition to track "spins" on hundreds of stations across the country, gave program directors exacting new tools. Gut instincts and audience research became quaint:

Arbitron does not do airplay monitoring. BDS and MediaBase among others do. And they do what the trades, from Gavin to Hamilton to Rudman's FMQB as well as Billboard and then R&R did in the past and even into the present. They just use the web to make the data immediate and accessable, but there is nothing there we did not have in some form back in the 60's or 70's. PDs have always looked at what stations in other markets played, particularly stations the PD admires and finds similar to one's own station and market.

Abrams has been thought of by many as the devil who killed radio. He now seems to be interested in reinventing it by bringing by personalities, creativity, and broader music selection in some formats. Perhaps he will lead the revival, because his influence certainly contributed to the decline.

That's giving Abrams credit for something he did not start. And he pretty much did one format, AOR, where he applied the formatics and mechanics of Top 40 to a broader base of rock. He had personalities, a large playlist and rather creative and inventive promotion and imaging. He did none of what you accuse him of doing.

In any case, Lee has his hands full with the Trib and the LA Times.

 

[SirRoxalot]

Re: Denial

Hearing, not sampling. According to Arbitron, AQH rating 12+ Mon-Sun 6AM-Midnight in 2008 is 13.2%. Tune in for 5 minutes during the week and you're part of the 90+% cume. In my book, AQH is a better estimate of actual listening.

E. In any case, you don't get the meaning of the term, whatever the ratings system. PUR is an AQH measurement, while use of radio is a cume based measurement. PUR is the average percentage of the universe listening throughout a time period. For example, in the diary the persons using radio in AM drive nationally is around 22%, while the cume of AM drive is around 76%. That means that over three quarters of all persons listen in 6 to 10 AM, but not the whole time period... on average, 22% of the universe are listening at any given time. You are confusing cume, which shows about 93% of all 12+ persons (diary) listen to radio, with the average listenership at any given time, which is much lower.

WTF? My statement is that AQH rating - which is what the chart describes - is a better estimate of the actual use of radio as an entertainment device than cume. You are part of the cume if you tune in for 5 minutes during the entire Mon-Sun 6A-12M - and that's the vaunted "93% of people listen to radio".

The AQH share is the number of people listening to radio for 5 minutes at during a given quarter hour - or the persons actually using radio at any given time. Yes, it's variable by daypart, but the average number of people listening for five minutes within a quarter hour period has fallen continually since the late '80s.

I'm not confusing cume with quarter hours. I'm also not buying that the cume number represents actual listening patterns better than quarter hours.

Lee Abrams is now working for Sam Zell, along with Randy Michaels. Sam Zell's budding media empire incorporates newspaper, TV, and radio. Whether he'll expand or contract that empire has yet to be seen, but putting Lee Abrams and Randy Michaels back in the media game might be an indicator.

In any event, Lee Abrams left terrestrial radio because he found it devoid of "personalities, a large playlist and rather creative and inventive promotion and imaging". BTW, I didn't accuse Lee Abrams of anything. I said that he "has been thought of by many as the devil who killed radio". I didn't express an evaluation of that opinion, so please don't make assumptions, and please don't put words in my mouth.

Once again, you attack the messenger, not the message. Perhaps you need to dispute what Lee Abrams says instead of continuing with your ad hominem attacks.

You may now try to use semantics to tell me that I don't understand the difference between cume and AQH ratings, and show that you're "right" when you are clearly incorrect in this case.

 

[TheBigA]

Re: Denial

In any event, Lee Abrams left terrestrial radio because he found it devoid of "personalities, a large playlist and rather creative and inventive promotion and imaging".

Talk about drinking the Kool Aid, you are very naive. I'm sorry to break this to you, but Lee Abrams went to XM for the money, the money, but most of all, the money. His deal with XM made Farid's look like an intern gig. Working for XM gave him access to a corporate jet that he used to fly to far-away baseball games or concerts. Lee was and will always be a consultant. He works for the money. He says what his employers pay him to say. That's how he worked when he was running his own company, and that's how he works now. He has changed his tune from what he said at XM to fit what Sam Zell wants him to say. If you pay him enough money, he'll tell you whatever you want to hear. He is not an unbiased source of information.

 

[davideduardo]

Re: Denial

WTF? My statement is that AQH rating - which is what the chart describes - is a better estimate of the actual use of radio as an entertainment device than cume. You are part of the cume if you tune in for 5 minutes during the entire Mon-Sun 6A-12M - and that's the vaunted "93% of people listen to radio".

Actually, with PPM, it's closer to 96% of people listen to radio. In other words, radio as a medium continues to have enormous reach, and has not been discarded, even by the fickle 12-17 group.

So what if the number of hours a week has declined? The issue is what caused the declines. You think it is rejection of radio, yet all but a tiny residual percentage do use radio (that 4% to 5% residual level was seen in the 60's, too)

I say that it is amazing how resilient radio is. Since the very artificial PUR peak in and around 1988 (caused mostly by methodology enhancements at Arbitron) we have seen, as I listed before, everything from affordable CD portables to iPods, intelligent phones, video game consoles, all kinds of cable and satellite entertainment delivery options including on demand and TiVo, the Web, web streaming, YouTube, etc., etc., etc., which share a person's leisure and entertainment time.

The AQH share is the number of people listening to radio for 5 minutes at during a given quarter hour - or the persons actually using radio at any given time.

Since you are splitting hairs, it's the average number of people listening in a time frame. Even in a single daypart, listening levels by hour, half hour and quarter hour vary considerably... 7 to Midnight's 11 PM hour has about one-fifth of the listening of the first hour in the daypart.

Yes, it's variable by daypart, but the average number of people listening for five minutes within a quarter hour period has fallen continually since the late '80s.

Again... the late 80's benefited from considerable improvements in Arbitron's measurement, and a good part of the increase over the levels of the 80's and 70's was due to that, not any change in real listening. This is just as the PPM removes rounding that we got in the diary, and shows a different reality even when a single market is measured by both systems simultaneously; in this case, radio listening has not fallen... it has just been measured more or less accurately.

Comparing different methodologies... ones that are either drastically changed over time or new ones... does not yield the type of absolute, black and white conclusion you want to make. All I am saying is that there are so many other variables that the real conclusion should be just short of amazement that easy to use, free radio has done so very, very well.

Lee Abrams is now working for Sam Zell, along with Randy Michaels. Sam Zell's budding media empire incorporates newspaper, TV, and radio.

Budding? "Budding" is a term applied to nascent growth situations, which the Trib operation would appear not to be in any shape or form. There have been mostly layoffs and predictions of problems meeting debt service. And they have only one radio station, it appears.

In any event, Lee Abrams left terrestrial radio because he found it devoid of "personalities, a large playlist and rather creative and inventive promotion and imaging".

Uh, he left because he no longer had what I think he would consider satisfactroy employment after the Z rock satellite thing did not achieve the degree of success he had anticipated. He went to XM, and showed considerable vision in exploring niche formats... the ones that Karmazin is now killing in favor of duplicating the more mainstream offerings of free terrestrial radio.

There's no doubt that Abrams is one of the brightest and one of the most "out of the box" radio thinkers. But to even give credit by quoting some moron who blames him for destroying radio is not just exaggeration... it harbours the assumption that radio has been destroyed, which it has not been.

 

[SirRoxalot]

Re: Denial

So what if the number of hours a week has declined? The issue is what caused the declines. You think it is rejection of radio, yet all but a tiny residual percentage do use radio (that 4% to 5% residual level was seen in the 60's, too)

I say that it is amazing how resilient radio is. Since the very artificial PUR peak in and around 1988 (caused mostly by methodology enhancements at Arbitron) we have seen, as I listed before, everything from affordable CD portables to iPods, intelligent phones, video game consoles, all kinds of cable and satellite entertainment delivery options including on demand and TiVo, the Web, web streaming, YouTube, etc., etc., etc., which share a person's leisure and entertainment time.

So what if the number of hours a week has declined? If I'm an advertiser, why would I want to pay more per spot if the number of people likely to hear my spot at any given time has declined. Unless I can afford a LOT of spots, AQH are more important to me the cume.

If the the peak in PUR was "very artificial", then one must assume that more modern ratings methodology from Arbitron more accurately measures actual listening. If that's true, then we can more accurately say that the average number of listeners in any given 5 minute period has declined since the late 1980s. OK, I'll buy that.

You attribute the loss to other entertainment sources. Gee, computers were shiny, new, and relatively cheap by the late '80s. CDs were around. Cassette players - which have about the same quality as the low bit-rate MP3s - were rife. Lots of people used them to record music off automated radio stations so they could create mix tapes, or listen to their own music on demand. Was it as convenient as random-access MP3s? No, but albums and 45s certainly solved the random access part.

Lee Abrams - and a lot of others - think that radio in general was just plain more interesting in the '80s. There was more personality outside of morning drive. Jocks had more "ownership" of their shows. One reason that corporate radio reduced jock input was to avoid having a jock establish a relationship with the audience. That way, corporate could avoid allowing a jock to have leverage when it came time to negotiate for a raise. Why else do you think that non-competes became much more common with the advent of corporate radio?

Now, outside of morning drive, most jocks on music shows have precious little opportunity to entertain. Their breaks are so structured, and so many elements are required in each break that the environment is sterile.

I'm sure that Abrams went to satellite for two reasons. Money was one, and the chance to program a LOT of channels was the other. That doesn't make his assessment of terrestrial radio any less valid. Why did he and Randy Michaels end up working for Sam Zell - the guy who financed Jacor and sold it to Clear Channel? Do you think that they might get back into the radio game when the time is right? I'm guessing that they're hoping for Clear Channel or Citadel or Cumulus or some of the other major players to collapse so they can pick up stations at fire sale prices. Why take on debt now when they can wait for the value of radio stations to decline further?

There's no doubt that Abrams is one of the brightest and one of the most "out of the box" radio thinkers. But to even give credit by quoting some moron who blames him for destroying radio is not just exaggeration... it harbours the assumption that radio has been destroyed, which it has not been.

Thus, we return to the mantra:

CORPORATE IS GOOD. CONSOLIDATION IS GOOD. WE KNOW WHAT'S BEST FOR YOU. (repeat ad nauseum)

 

[davideduardo]

Re: Denial

So what if the number of hours a week has declined? If I'm an advertiser, why would I want to pay more per spot if the number of people likely to hear my spot at any given time has declined. Unless I can afford a LOT of spots, AQH are more important to me the cume.

Although there are other market and competitive forces involved, radio rates are set mostly based on the number of persons exposed to each spot. If radio listening declines, it does not matter as each station sets rates in proportion to who is listening, not who is not listening.

The most widespread metric for buying is the cost per point. The agency sets a CPP goal for the market, based on how many people a point represents, and then buys stations in proportion to their point delivery. Non-listeners have no relevence to the pricing model.

If the the peak in PUR was "very artificial", then one must assume that more modern ratings methodology from Arbitron more accurately measures actual listening. If that's true, then we can more accurately say that the average number of listeners in any given 5 minute period has declined since the late 1980s. OK, I'll buy that.

Arbitron does not measure 5 minute periods, so I can't answer that one.

However, the "peak" in 1988 may have been as artificial as the "rounding" error that is inherent in the diary method. The point is that supply and demand set overall radio rates and delivery sets station rates.

You attribute the loss to other entertainment sources. Gee, computers were shiny, new, and relatively cheap by the late '80s. CDs were around. Cassette players - which have about the same quality as the low bit-rate MP3s - were rife. Lots of people used them to record music off automated radio stations so they could create mix tapes, or listen to their own music on demand. Was it as convenient as random-access MP3s? No, but albums and 45s certainly solved the random access part.

In the late 80's, we had just about found Windows 386 and games were little pac-man icons on a grid. Connectivity was just a step beyond acoustic couplers at 300 baud, with a 1200 bps US Robotics costing around $200. CD portables were way over $100 in 1989. Cable TV was mostly the locals, some superstations and HBO and other pay channels... even things like CNN were still "new."

And I am talking about alternative entertainment options, not just music options. Cassettes are and were klunky, and it took a long time to do tapes because each song had to be dubbed real time. And the quality was vastly lower than 128 kbs MP3s, too.

There was no satellite until about 5 years later. CD readers for computers were expensive and did not record.

Lee Abrams - and a lot of others - think that radio in general was just plain more interesting in the '80s.

And his big successes in the late 80's and 90's were? (_________________________) Fill in blank.

There was more personality outside of morning drive. Jocks had more "ownership" of their shows. One reason that corporate radio reduced jock input was to avoid having a jock establish a relationship with the audience. That way, corporate could avoid allowing a jock to have leverage when it came time to negotiate for a raise. Why else do you think that non-competes became much more common with the advent of corporate radio?

That's crap. There has always been a large supply of jocks, but a short supply of real talent. Putting jocks on or not in mid-days has nothing to do with personality... in fact, there are and have been many top rated formats that are devoid of jocks. Everything is format and demo dependent.

Non-competes have more to do with having spent money promoting and creating equity in a talent than anything else. It's not about crossing the street... it is about using my money spent to build you up just so you could then get a better gig. And such agreements are not enforcable in many big states.

Now, outside of morning drive, most jocks on music shows have precious little opportunity to entertain. Their breaks are so structured, and so many elements are required in each break that the environment is sterile.

"Why can't they shut up and play the music" is the most common comment from listeners about self-styled personalities in other dayparts. Remember, the iPod has created an expectation of music flow among many, so stations have to adjust to the reality from the listener perspective.

Why did he and Randy Michaels end up working for Sam Zell - the guy who financed Jacor and sold it to Clear Channel?

Randy had no job, and Lee likely did not want to stay only to be whacked by Mel.

Do you think that they might get back into the radio game when the time is right? I'm guessing that they're hoping for Clear Channel or Citadel or Cumulus or some of the other major players to collapse so they can pick up stations at fire sale prices. Why take on debt now when they can wait for the value of radio stations to decline further?

I really doubt Chase directors sat around saying, "I hope we have a downturn so we can buy Washington Mutual." And Zell, per both Forbes and Business Week, is going to have to sell, not buy, assets to meet his debt service on what turned out to be a dreadful acquisition... he already sold the best of the newspapers, and that should give you an idea of what to expect unless the economy rebounds in a few months.