The Declining state of radio and your opinion why...

[TheBigA]

When serving money becomes most insanely important, as in a corporation,
those left trying to perform a labor of love are often frustrated as opportunities to do so are systematically defined
as "unprofitable" and not worthy of suporting , or even permitting to be practiced.

There's a lot of misunderstanding about how companies work, because the main people who speak to the media, who do interviews, tend to be CEOs. They also respond to what's asked, and quite often the line of questioning is about money, not content. But I think that will be changing, as you have people like Bob Pittman and Dan Mason, who are programming people, also running their respective companies.

People on the front lines of programming tend to be passionate in what they do. I spend a lot of time speaking with those people, and they don't care about stock pride or debt load.

 

[SirRoxalot]

Obviously, the enterprise has to be financially healthy to survive. The difficulties come when the enterprise turns from long-term profitability to short-term greed. Too many industries these days reward quick cash over long-term investment. That's fine if you're only squatting on a company and looking to clear-cut the financial landscape, but it destroys the long-term value if you don't create ongoing relationships with customers and consumers.

Radio until recently had a tendency to ignore listeners and concentrate on advertisers. The next step was when radio started alienating smaller advertisers in order to service larger advertisers. One big buy - even at greatly reduced rates - was seen as superior to a lot of smaller buys at higher rates simply because the cost of servicing those accounts was greater. We ended up with a lot fewer advertisers spending more dollars overall, but the individual unit rate was static, or dropping. When automotive got a cold, radio got pneumonia because there were no other customers to buy up the avails. The sales people who serviced those accounts were suddenly ejected from their comfy chairs and told to hit the streets cold-calling. Or, they were shown the door, and the sales manager scooped up the accounts, waiting for the sector to come back.

There are a lot of instances of sales and programming talent being sacrificed for short-term gain that hurt long-term revenue. Some of these were forced by poor management decisions on acquisition in an attempt to create de facto monopolies and decrease expenses through synergies. They found out the hard way that synergies were much harder to create when an industry is primarily local in nature, 80% of revenue is local, and HR requirements vary from state to state. The more successful operators have allowed greater local control and hired better manage talent to run local groups. Some groups have tried to centralize operations and develop "one size fits all" systems, and that hasn't delivered the promised rewards.

 

[TheBigA]

those left trying to perform a labor of love are often frustrated as opportunities to do so are systematically defined
as "unprofitable" and not worthy of suporting , or even permitting to be practiced.

Let me add that there's an inherent contradiction between performing a labor of love and providing a service to others. Unless your labor of love is exactly the same as what everyone else likes, your labor of love is mostly self serving. So the needs of the audience are circumvented by the personal love of the guy on the air. What I've found in doing my research is that as much as people criticize radio playlists, they somehow reflect the tastes of the majority of their intended audience. And if that's what serving others means, then it can be frustrating for a DJ who wants to play folk music on a CHR station. There was a story about Jonathan Schwarz, who liked to throw in a Sinatra song when he was a DJ at the NY rock station WNEW. They finally moved him to their co-owned Standards station, where he could play Sinatra all day.

Also, when I go into a barber shop and ask for a haircut, I'm the one who defines how it's done. Not the person doing the cutting. If they make me look like a poodle because that's how they felt that day, I'm going to complain to their supervisor. When you accept money from someone else, they are the ones who get to define the labor.

 

[listener-in]

When you accept money from someone else, they are the ones who get to define the labor.

And there's the rub. The direct "someone else" is the sponsor, not the listener. It used to be that their interests coincided much more than they do now, when corporate owners sell package deals of advertising on multiple stations in a cluster. I'm there's some creative accounting going on, and in the end the advertisers don't know what programming some of their ads are associated with. As a listener I learned this from a sponsor when I complained to him about one of the programs he was unwittingly sponsoring.

 

[jfrancispastirchak]

When serving money becomes most insanely important, as in a corporation,
those left trying to perform a labor of love are often frustrated as opportunities to do so are systematically defined
as "unprofitable" and not worthy of suporting , or even permitting to be practiced.

There's a lot of misunderstanding about how companies work, because the main people who speak to the media, who do interviews, tend to be CEOs. They also respond to what's asked, and quite often the line of questioning is about money, not content. But I think that will be changing, as you have people like Bob Pittman and Dan Mason, who are programming people, also running their respective companies.

Hope you're right.

 

[rdcuffpa1]

I never did say that money would not exist, or that radio should be devoid of money.

And what I meant, in my original use of the "labor of love" term was that, for the founding families, they tended not to be as concerned about short-term returns on assets, in part because the assets themselves were appreciating in value. They didn't have a huge debt service to be paid each month.

Then comes along the twin challenges of a maturing (read: more stagnant) industry and a wave of founding families selling to new corporate owners, many of whom paid for their purchases using money borrowed against the future profits of the stations (read: leveraged buyout).

So these new corporate owners wound up being much more impatient about investments, and -- coupled with the maturity of the medium -- looked for ways to cut costs...much of which enabled by the technologies I mentioned.

Down here in East-Central Pennsylvania, we have WEEU-AM, which I would opine has more of a "full service" AM offering than most of the regional or national cluster owners in markets of its size. WEEU is still owned by the local daily newspaper, the Reading Eagle. Its locally-originated weekday programming airs 6A-12N and 3P-7P. It seems to be a more expensive operation, on a cash-out-the-door basis, than most of its peers. Thankfully, it soldiers on...

Hopefully that explains my rationale a bit...

Richard in Eastern PA (ex-WNY)

 

[TheBigA]

And what I meant, in my original use of the "labor of love" term was that, for the founding families, they tended not to be as concerned about short-term returns on assets, in part because the assets themselves were appreciating in value. They didn't have a huge debt service to be paid each month.

Really? Have you ever read Bill Paley's autobiography? He was in debt for most of the first 20 years of CBS's existence. For me, I started a radio station from scratch, and got a license basically for free, but quickly got into debt because of the building, equipment purchase, tower location, staff, legal bills, and a blown boiler in the middle of a snow storm. It takes money to start a business. Most people don't want to mortgage their own personal property for their business. So they take on debt.

WEEU is still owned by the local daily newspaper, the Reading Eagle.

I’ve said many times that local newspapers are the best potential owners of radio. But the FCC, in its wisdom, made it illegal back in the 70s. I see that the NAB is taking that outdated law to the Supreme Court to try and strike down the newspaper-broadcasting cross-ownership ban.

 

[rdcuffpa1]

Really? Have you ever read Bill Paley's autobiography? He was in debt for most of the first 20 years of CBS's existence. For me, I started a radio station from scratch, and got a license basically for free, but quickly got into debt because of the building, equipment purchase, tower location, staff, legal bills, and a blown boiler in the middle of a snow storm. It takes money to start a business. Most people don't want to mortgage their own personal property for their business. So they take on debt.

My frame of reference is an AM station in Delaware and the changes and pressures they went through from family ownership to corporate ownership. Under family ownership they had a longer-term "lens" they evaluated their business on, vs. an antiseptic notion of corporate asset management.

Perhaps the family did indeed have debt to pay, but -- once they sold the station -- staff were quickly axed, local programming was scaled back, and other functions were "clustered" to bring about efficiencies.

Regardless of their motivations, or their P&L, this loss of local ownership led to the decline in the station's personality and distinctiveness, which meant there were fewer reasons to tune in, which, as the subject line intimates, led to "...the declining state of radio..."

So, perhaps, the focus in my analysis shouldn't be on the quarterly P&L challenges, but the fact that radio stations have lost much of their distinctiveness in sound.

Richard

 

[TheBigA]

So, perhaps, the focus in my analysis shouldn't be on the quarterly P&L challenges, but the fact that radio stations have lost much of their distinctiveness in sound.

And yet in thousands of radio stations, including most of those in Buffalo, you still have lots of local talent, even with corporate ownership and the bankruptcy of two owners. The stations that seem to have the least amount of local flavor are the ones still owned by individual owners. So I don't think the generalization holds true, except in your particular case. And it might have more to do with the changing consumer tastes and the increase in new sources of media and music. There's a whole world of things that can affect consumer habit besides what happens in radio.

 

[Silkie]

The stations that seem to have the least amount of local flavor are the ones still owned by individual owners.

I agree with that to the extent that you refer to local air staff, but no flavor. My maxim is not to give them publicity, but rather find out early on by way of apparent benign warning shots to find out which way they behave when it comes to dealing with personnel engaged in gross misconduct and abuses. That way you have given them no publicity, but have patiently afforded them and their industry every opportunity to deal with the situation they are more than well aware of; AND you have plenty of leg to stand on when you finally decide that you have been more than reasonable, for long enough.

 

[heydaybegone]

Most people don't want to mortgage their own personal property for their business. So they take on debt.

So Big A...no argument here...but definition in order ;D

Isn't this the same thing..in essence? (unless the assumption there is an existing business already)

Personal Guarantees are a bitch when called on ( What do you mean I lose everything? ???)

Just clarifying.

HDBG

 

[Tom Wells]

a blown boiler

Nothing is more fun than a blown boiler in the winter.
Yesterday I discovered my 7 year old cast iron boiler has once again rusted through in another place,
and I had to take the day off to make an emergency patch.

The installers and manufacturer are now claiming the system requires too much feed water to honor the terms of the warranty.
Then why did they install it in such a system where it should have obvious to them that design of the system would
impair the lifespan?

AND then why did they check the box that says "20 year warranty on heat exchanger?


All I can see is 4500 spent on something I expect to be a 20 year investment, to see it begin falling apart after only 6.

Shouldn't I eventually be able to make them stick to the warranty, even if the replacement specifically states that in this type
application, the new boiler is not possible to warranteed?

 

[TheBigA]

Isn't this the same thing..in essence? (unless the assumption there is an existing business already)

Nope...it's not personal debt. It's third party debt. Most lawyers recommend against taking out a business loan as a sole prop. If you're going into debt or taking on employees, incorporate. That way you insulate yourself against personal lawsuit or loss.

 

[Element9]

The stations that seem to have the least amount of local flavor are the ones still owned by individual owners.

And they would be...

 

[heydaybegone]

Nope...it's not personal debt. It's third party debt. Most lawyers recommend against taking out a business loan as a sole prop. If you're going into debt or taking on employees, incorporate. That way you insulate yourself against personal lawsuit or loss.

I concur. I do question the ABILITY to take out a business loan (and incorporation - a major sponge in itself) without collateral or assets (once again putting personal at risk). Meaning...the small guy AIN'T gonna get where he want's to go.

Should we start a new thread?

HDBG

 

[Silkie]

Isn't this the same thing..in essence? (unless the assumption there is an existing business already)

Nope...it's not personal debt. It's third party debt. Most lawyers recommend against taking out a business loan as a sole prop. If you're going into debt or taking on employees, incorporate. That way you insulate yourself against personal lawsuit or loss.

The days of the corporate veil are pretty well over. And as a matter of loans banks are now requiring the names behind the corporate veil, and any loans are also guaranteed personally by the names behind the veil. That is a door that is no longer an option, although when we compile what we have and compare to what was another day and submit everything together, we can use the same door, which means that door is an extremely viable option now. Again, there is no longer a corporate veil to hide behind, most especially if the intent behind the action is not savory.

 

[TheBigA]

I concur. I do question the ABILITY to take out a business loan (and incorporation - a major sponge in itself) without collateral or assets (once again putting personal at risk). Meaning...the small guy AIN'T gonna get where he want's to go.

The station had assets.

 

[heydaybegone]

The days of the corporate veil are pretty well over. And as a matter of loans banks are now requiring the names behind the corporate veil, and any loans are also guaranteed personally by the names behind the veil. That is a door that is no longer an option, although when we compile what we have and compare to what was another day and submit everything together, we can use the same door, which means that door is an extremely viable option now. Again, there is no longer a corporate veil to hide behind, most especially if the intent behind the action is not savory.

Silkie...you should be in Radio... ;D
What did you just say? (I mentioned the personal guarantee in an earlier post)...but the rest seems like double speak to hit the post. Clarify??

HDBG

 

[heydaybegone]

The station had assets.

"A" Are you referring to your personal situation or Paley's?
You lost me on that one. ???

HDBG

 

[TheBigA]

"A" Are you referring to your personal situation or Paley's?
You lost me on that one. ???

The station itself had assets that qualified it for the loan.