Saga EVP Steve Goldstein warns radio to embrace change at Arbitron fly-in

Saga EVP and Arbitron Radio Advisory Council member Steve Goldstein discussed how radio needs to jump in with all of these other companies and concerns (agencies and so forth)-accept we need to change and get it done-at Arbitron's annual consultants Fly-In last week:

"My real point was that in the past 10 years that we've had pretty seismic changes in our business, but not just our business-other elements in the media business as well. And I mentioned some of them. For example, the DVD business is now bigger than the movie business. The movie biz is a 9.5 billion business, but DVDs are a 16.3 billion dollar business. Clearly, in the last 10 years a seismic change. And if you recall, the movie companies were frightened to death of video. And now, here it is and it has changed their business.

The music business-obviously seismic changes there. The number one album in 1978 was "Saturday Night Fever." It sold 16 million copies. Last year, the number one album was 50 Cent and it was 6.5 million copies. We know why that is-people are downloading and doing things differently.

In 1965, you could run three :60 TV commercials (that's what they were back then) and reach 80% of the 18-44-year olds. If you want to do that today, it would take you 117 prime time commercials and they'd be :30 seconds. Clearly, that business is different, with DVRs, etc. Ultimately, marketers are looking for new places to put their dollars. Video games are a great example of that. Madden 2004 sold 4 million copies!

Those are just some of the reasons that our TSL is down 14%, and it's even greater among younger demos. We're competing with all this other media and we're also competing with other choices on our own dial-NPR is up 60% in the last five years. They have 22 million listeners [editor's note: Well, what do you expect NPR is heard on two, sometimes three stations in each market these days, gobbling up college radio time clocks like a modern day Pac-Man?!]. And the number one radio show in America is not Howard Stern with 8 million listeners, its Morning Edition on NPR with 13 million.

I talked about satellite radio; I talked about how Europe, which is already digital, it's already RDS. They are way ahead of us technologically. And here we are using this 40 year old diary and advertisers are now in this position where they're really looking for more ROI. Marketing expenditures last year ran about 1 trillion dollars. Consumer promotion is 28% of that. Traded marketing, which would be like end isle slotting is 54% of that. And advertising is 17.5%. And the advertising number used to be 50%. But marketers are looking for more venues and avenues that have ROI. So we need to wake up to that, and we need to get in the synch with that. We need to make changes, and somewhere along the line we need to get into electronic measurement. And whether it's PPM or not, I just know we need to wake up to all of these changes.

Both advertisers and programmers said they need richer data. And I think what really has been going on here is no one has wanted to "change the formula" because it was working pretty well up until a year or two ago. And now I think many managers in our business are asking the question, "How can we grow our business unless we make a change?"