Asked by one analyst whether anything has changed in radio with regards to the glut of inventory in many markets, Cox Radio CEO Bob Neil indicated that nothing has really changed and that, if anything, it has gotten to be even more of a “feeding frenzy” than it was last year. He noted how difficult the ad market is across all media, and then became philosophical. “I say this, and I certainly don’t mean to insult anybody, because most of the time on these calls I end up making somebody mad, but again it’s just my simple mind here, that if, in essence, we can increase revenue 1% with 50% less inventory than, say Clear Channel or CBS, and then outperform them on the revenue side, again, to my simple mind, that just says, geez, you know, if there was more of a rationalization of this inventory, you know, what would happen to rates? Economic law seems to say that if we reduced the supply and the demand stayed stable, then rates would go up. So, maybe I’m over-simplifying here, but historically, in any business, too much capacity leads to lower rates. Again, I hate to over-simplify it, but that’s what I believe,” Neil said.
As you’ve probably guessed, Neil also had some thoughts about Arbitron’s PPM.
Neil has been a long-time critic of the Portable People Meter rollout and had his say on the recent Media Rating Council denial of accreditation of PPM for the Philadelphia and New York markets. Cox has stations in the only accredited PPM market, Houston, which uses a different panel recruitment system than the subsequent markets, and in the Nassau-Suffolk market which is embedded in the New York Metro. “We always thought that getting MRC accreditation before the data rolled out was important to confidence that the science of the ratings was correct. Arbitron did that in Houston under industry pressure. Our position has been that they should do the same in markets beyond Philly. We realize they can’t accredit every single market, but the system that they use beyond Houston is different and that system needs the seal of approval. Arbitron has proven to be pretty lousy at self-policing themselves. If it was up to them, some of the ridiculous sample sizes that they tried to pawn off as just fine, sizes that would not have allowed you to even run reports for advertisers because the sample was so small, would have been the basis now for revenue in the very large and rich New York media market. Until we get that accreditation, there will continue to be questions lingering among advertisers and broadcasters about the service – and that’s not good for radio,” Neil said.
“Some have suggested that for the sake of advertisers, any electronic measurement would be fine. We continue to respectfully disagree with that. We’ll continue to, because we believe that we need reliable audience data,” the Cox Radio CEO told the Wall Street crowd.
RBR/TVBR observation: Somebody recently said something about it being time to “walk the walk.” It seems that Bob Neil has had his walk in line with his talk for as long as we have known him. He and Cox Radio didn’t go along when others were adding inventory, cutting staff and dropping promotion to focus on the bottom line much more than the top line. In fact, Neil complained in his call that others need to get back to spending on advertising in other media to make their radio stations top of mind with local listeners – even though, we would note, that would make them more competitive with Neil’s own stations in Cox markets. If Bob’s “simple mind” produced growth in a year when almost all other publicly traded radio companies reported down revenues, perhaps some of those other companies should look at replacing their CEOs who’ve never sold a spot or run a local station with a simple minded, but experienced, broadcaster.