WASHINGTON, D.C. — What’s going on in the radio industry? That’s a question addressed to “a highly esteemed panel representing all of the radio food groups” by Jacobs Media Strategies owner Fred Jacobs at a well-attended symposium on the current and future trends of AM and FM hosted by the FCC’s Media Bureau.
In his introductions, Jacobs noted that the session, devoted to exploring the current and future trends in the radio industry, would delve into some of the challenges the technology of today has brought a business first endangered by the onset of TV and, in the 1980s, by MTV.
Compressing what was said at Forecast 2020 in New York on Wednesday was a primary goal of Jacobs, who moderated the Executive Leadership Session at Radio’s Financial Summit featuring Cumulus Media CEO Mary Berner and Entercom President/CEO David Field.
Neither were in attendance at the FCC symposium. That said, “all of the food groups” were present, Jacobs joked.
How does the radio industry compete moving forward?
Taking the question first is Hartley Adkins, President of Integrated Revenue Strategy at iHeartMedia. Perhaps the one “radio company” with the biggest scale, given its iHeartRadio app and podcasting prowess, Adkins said that the AMs and FMs and the content on those properties comes first.
“Everything else that we are doing is built on the back of the radio stations,” he said. “People consume media in different places and in different ways, and there is literally an unlimited amount of content. But, if you have good content and they don’t have access, it doesn’t help.”
Thus, iHeartMedia’s opportunity is to take audio content and deliver it in as many vehicles as possible, lending to radio’s staying power as a community connector — even if social media is the primary way they are linking to the consumer, Adkins said.
For iHeart, the goal is to attract the audience. Then, there is mastering the ability to monetize that audience.
On that topic, Adkins said, “We haven’t done as good as a job with the advertising community. Our job is to close that disparity.”
MANAGING THE DIGITAL INTRUSION
How to manage digital’s magnetization of dollars previously assigned to Radio is a challenge few have been able to master. Adkins admits that digital “made it very easy to quantify” an ad’s ROI. “Radio is a little slower to that reality and now advertisers are a bit more comfortable working with us, because we have something to show.”
Beasley Media Group CEO Caroline Beasley believes radio can compete.
How so? Ms. Beasley explains, “We’re competing on a local level because of our content. We provide an experience, and we are out in our communities.”
Agreeing with a statement Adkins made about being everywhere the listener is, she continued, “That business model is significantly different than an over-the-air model and you’re going to have to make decisions on where to spend your resources. You have to be committed to the local community, and that means there are very challenging decisions that we as owners are making.”
Connoisseur Media CEO Jeff Warshaw lived up to his reputation of being vibrant and slightly brash in his views on media ownership rules and the realities of being an owner of local radio stations in mid-sized markets.
“We can take our content and try to monetize it against myriad competitors, but that doesn’t mean that the business isn’t shrinking,” Warshaw said.
He singled out Adkins for its platform and ability to get scale. But, other fundamental problems persist for radio companies.
“Trying to recruit a radio sales person? Good luck,” Warshaw lamented, noting that younger people are lured by the glamour of digital and streaming companies.
The only way companies like Warshaw have hope? “Scale,” he said, stating that Radio is selling against some digital companies that never have to make any money … and are unregulated.
Warshaw’s solution? Further deregulation for radio operators like him. “We are stuck in regulations that could have never foreseen the things [that have panned out],” he said.
Urban One CEO Alfred Liggins III told the attendees that the radio ownership community is divided over deregulation as proposed by the NAB and championed by FCC Commissioner Mike O’Rielly; none of the Commissioners were present at the symposium.
For Liggins, “Digital is making radio look like a loss leader.” That’s because the core business of Amazon isn’t music, but getting consumers “to buy toilet paper or more devices.”
That’s why he believes scale is necessary “to survive the onslaught of what has happened.”
And, Liggins notes radio has done better than other media– even the Washington Post, now owned by Amazon head Jeff Bezos — in terms of owner stability, he claims.
LOCAL PRODUCT LURE
“Radio is a simple product to deliver,” Urban One’s Liggins said. “There are not many more bells and whistles to go along with it.”
For him, “Local content is what differentiates us.”
With that, how does Stevie Wonder-owned KJLH-FM 102.3 in Los Angeles compete against not just on-air competition but all audio choices?
“I am worried about scale,” said Karen Slade, VP/GM of the stand-alone Urban station. For her and KJLH, it’s simply cost prohibitive. “Every new platform that I add, there is a cost. What is my return? When will I get a return?”
While superserving listeners is a core goal for any digital build-out, there is one overarching mission Slade must consider first and foremost: “Can I make it profitable?”
While scale is an issue and content is a continued lure, what is “radio” for the younger audio consumer?
Streamline Publishing Chairman B. Eric Rhoads admitted that his children, triplets set to enter college in the fall, don’t know what a radio is. Yet, he vividly recalls how people were forced to go to their cars and tune to a radio station in order to get vital information after a hurricane, as this was the only way they could receive valuable post-storm information.
