Will the front offices of radio stations get the message in time?

[TheBigA]

Radio revenue was dropping at 2 to 3 per cent per year from 2005 onward, long before the economy hit the rocks, because the programming was going downhill and listeners (whose presence or absence drives a commercial station's revenue) were walking away.

That's not what the cause & effect was. Because there was no audience loss at major stations. Radio revenue was dropping because of cheaper advertising alternatives on the internet. Radio spots were seen as overpriced compared to other options.

Look...even in public broadcasting, contributions from listeners have been down during the exact same period. Even while listenership was increasing. It was a major topic of discussion during the Public Radio Conference. Are you telling me the reason was the quality of content?

 

[SirRoxalot]

You're a sharp guy Ace, but you're on thin ice commenting about specifics in the nuanced Buffalo market. Stick to promoting voice-tracking, down-sizing and national syndicated shows, topics on which you seem to be better versed.

I view that comment the same way Ryan Seacrest reacted to "shut up & play the music."

I guess it's pretty obvious why your call yourself "The BIG A". No shortage of ego - or hubris - on your part. Then again, you've never let cold, hard facts get in the way of your opinions.

Either you don't realize that you're in over your head here, or you just don't care. Either way, a lot of people here view your posts with amusement. People in the market know just how valid your "observations" are.

 

[Element9]

Ponderous, effin ponderous...

 

[Bob1370]

That's not what the cause & effect was. Because there was no audience loss at major stations.

And for a long time there was no revenue loss either. Most of the leading stations, who kept up the quality of their offerings (that's why they WERE the leaders) maintained their revenue much better than the business as a whole.


"Radio revenue was dropping because of cheaper advertising alternatives on the internet. Radio spots were seen as overpriced compared to other options."

The revenue losses came from stations, and dayparts, where quality live programming was replaced by canned junk. Market by market, you can look it up.

"Look...even in public broadcasting, contributions from listeners have been down during the exact same period. Even while listenership was increasing. It was a major topic of discussion during the Public Radio Conference. Are you telling me the reason was the quality of content?"

Can't speak to that, because we didn't experience a loss in revenue, and I hope nobody thinks we're losing quality either...

 

[TheBigA]

The revenue losses came from stations, and dayparts, where quality live programming was replaced by canned junk. Market by market, you can look it up.

I looked it up in BIA, and discovered that revenue losses occurred at lots of stations where quality live programming was NOT changed in any way. It's one thing to say canned junk causes revenue losses. But stations that DIDN'T make any changes in programming are ALSO seeing the same level of loss. That's why the industry is in trouble. What worked five years ago is not working now. Even at WCBS-FM, which (as you noted) replaced live oldies with canned Jack, and then went back to live oldies. That station may now be one of the Top 10 stations in New York City, but it's near the bottom in revenues, and has not seen an increase in revenue since replacing Jack with live DJs. That's not good. Unless something changes soon, the station won't be able to sustain its current staffing levels. Meanwhile, KCBS-FM in Los Angeles, currently a Jack station, is one of the top revenue producers in the city. How can that be? Canned junk is supposed to result in revenue losses. But not in Los Angeles.

Certainly newspapers like the New York Times and the Washington Post have not cut their quality. Yet revenues are way down at both papers. Their online services have seen increased revenues, but that increase makes up for only 10% of the newspaper losses. Thus, the Times is forced to sell WQXR to WNYC. Perhaps a non-profit can run a classical radio station better than a commercial institution. Perhaps that's the future of all radio. But the only way that will happen is if public support of radio increases. I read an interesting article about KING-FM in Seattle, which is facing the same problem as WQXR and WCRB Boston. In all three cases, it was not cuts in quality that led to the revenue loss. So thank you, I looked it up, and revenue loss is not always caused by loss of quality programming.

 

[Element9]

The business is in trouble.

Calling it an industry makes it sound like we make camshafts. To the best of my knowledge, we haven't taken up that cause yet.

When the economy coughs, radio, like so many other advertising platforms, catches a cold. The infection is sure to kill some companies while others survive, some barely. Citadel is on life support, Cumulus and a few others are in the ICU.

Digital media is making revenue gains, but from what's been written by experts and those more knowledgeable than I, digital or "new" media is a gamble that's far from having paid dividends. And the advertising and media mavens say it's not "new money" that's being allocated to digital, it's "diverted money" from traditional media. So a zero sum game is in play.

There's no way to qualify the effectiveness of banner ads and pre-rolls. Yes, an agency and advertiser know exactly how many hits or views their ads get, but the effectivenes of those hits and views is difficult to qualify. Just think about the way you use the Internet and your favorite sites.

A New York advertising director was recently quoted in the Wall Street Journal as saying something to the effect of, "We'll try this for a while. (Meaning "new"media.) It could be nothing more than the flavor of the day and the least effective way to promote our clients' products. In the end, we're not walking away from traditional media."

By "traditional media" I suspect he meant TV, Newspaper and Radio, maybe even billboards.

Half of radio's economic woes are the result of the downturn. The other half attributable to the foolishness of the decision makers. Some of the programming decisions made over the years account for that foolishness. The business seems to have plenty of money to pay well-placed shills to ply their craft across many forums defending their decisions.

 

[Bob1370]

The Big A said of WCBS-FM, "it's near the bottom in revenues, and has not seen an increase in revenue since replacing Jack with live DJs. That's not good."

Based on some trade info I've read, that info is outdated. IIRC, it was reported that CBS-FM had gotten back about half of the billing lost when it went to Jack--meaning about a 50% increase from its 2006 bottom. They aren't back all the way yet, but their demos and their AQH and cume are all better than they;ve been in 15 years, and the rest of the revenue is sure to come back. It should also be remembered that they are operating with a smaller payroll than they had in 2004-05, the last year of the original CBS-FM oldies format, so their bottom line is likely to be pretty healthy.

Lesson to take away? You can revive a dying station and bring it back to health with investment in programming.

 

[TheBigA]

Based on some trade info I've read, that info is outdated. IIRC, it was reported that CBS-FM had gotten back about half of the billing lost when it went to Jack--meaning about a 50% increase from its 2006 bottom.

Let's talk specifics. Their peak in 2002 was $32 million. In 2005 (last year as Oldies), they billed $24 million. That's why they made the format change. With Jack, it dropped to $16 million in 2006. Before the flip back to oldies, revenues for Jack increased to $18 million in 2007, and in 2008, they reached $18.5 million. So to say they've made back 50% is incorrect. Their on-air payroll may be lower this time around, but so are their revenues. I doubt their payroll is $6 million less than it was in 2005.

The bigger problem is that the oldies format is in its final years for advertisers. So to say they revived a dying station would be incorrect. They simply delayed the inevitable, in order to suck a couple more years out of a format that is not going to show any future growth.

 

[Bob1370]

Love to hear your source for this...I've heard the billing is back up comfortably over $20 million annually, and CBS is still convinced the station should be doing better than that (with good reason based on the best 12+ and 25-54 numbers they've had in 18 years)--so they shuffled their sales management over thr weekend and installed a new GSM, effective today.

"Their on-air payroll may be lower this time around, but so are their revenues. I doubt their payroll is $6 million less than it was in 2005."

It's probably substantially less, several million less since folks like Harry Harrison, Dan Ingram and Dan Daniel have retired, the overnights are now voicetracked. The profits are likely to be substantial, and higher than they were under Jack. This is a station that SHOULD be one of the top two or three billing stations in the #1 market, and if it isnt, it's a problem of the sales force rather than what's on the air. The numbers are right, the demos are right, they just need sales talent.

 

[TheBigA]

Love to hear your source for this.

BIA Financial Network. They publish revenues from major markets every year.

This is a station that SHOULD be one of the top two or three billing stations in the #1 market, and if it isnt, it's a problem of the sales force rather than what's on the air. The numbers are right, the demos are right, they just need sales talent.

The station ranks at #18, one of the lowest major signals in NYC. They make $18.5 and the #1 station makes $56 million. So there's a huge gap. And #1 is a jukebox station owned by Clear Channel. The problem, as I said, is the demos are terrible. They're aging fast, and not many advertisers are looking for people over 55. Advertisers don't pay for talent, programming, or quality. They pay for numbers, and not just ANY numbers, but the RIGHT numbers. In this market, they can pick and choose. People are quick to blame the sales force, but many of these people are the same people who were selling WCBS in 2003.