Does the emperor have any clothes, or were we just looking at one outfit?


In a posting on Radio Business Report on Monday, May 24th, Glenda Shrader Bos and Richard Harker extolled Jeff Smulyan’s speech at our Digital Strategies for Broadcasting Conference as one that “cautioned broadcasters about pursuing technologies that are ‘very cool,’ but not likely to be profitable.” That speech by Jeff and his subsequent question and answer interview with BIA/Kelsey’s CEO, Tom Buono, was candid about the present state of radio and its operators’ best opportunities for competitive defense in the new digital age. Jeff posed and answered the question, “Are digital technologies a hobby or a business?” In today’s world, there better be a business broadcasters are willing to invest in so they grow their market presence and ability to compete better in the future.

Yes, making money on a “very cool” digital application, like streaming radio, is very challenging. Jeff Smulyan cautioned that the cost structure around streaming is very different from broadcasting over-the-air and will require a longer ROI period. However, he noted that his stations are still streaming and not limiting their thinking to current revenues but to tomorrow’s possibilities.

Streaming programming is not all that Emmis Broadcasting and other radio broadcasters must do to make money in this new digital age. At DSB2010, attendees heard story after story about broadcasters, both radio and television, who are extending their brand with digital lines of business. If the authors of the article had been in attendance, they would have heard from Tom Davis of Davis Media who has started an online only daily newspaper ( and is generating 24% of his total revenues in just a few years. Erik Hellum of GapWest also shared how he raised the percentage of his revenues from 2.1% to 8.7% in just two years (and expects that to continue to grow) from initiatives such as rewards programs, automotive and community portals.  Colleen Brown also discussed how Fisher Communications has profitably launched over 120 hyper-local websites that are generating significant revenues.

Many other panelists and attendees have recognized that the growth for radio (and television) broadcasters must include digital elements in order to extend their brand in today’s multiplatform environment. The secret to making these digital efforts work is not to neglect the over-the-air assets, but to utilize those assets – their local band name, local content, local marketing ability, and local sales staffs – to enter into these new areas. As Tom Davis put it in his presentation, “We define successful as increasing market share and revenues by leveraging, not cannibalizing, our primary medium.”

What’s the alternative? What can radio (and television) stations do without moving into these areas? Of course, good operators will see their revenues increase with the recovering economy, but for how long? We have been at too many newspaper conferences where the mantra was that to succeed they just needed to do the print business better. And, look where the newspaper industry is now, and their future is not promising.

Other radio and television operators who see these opportunities will take advantage of their local assets and enter into new areas. Yes, some will fail. But we are beginning to see more broadcasters become very successful with very different approaches. As David Kennedy of Flycast (and a long time radio broadcaster) said at DSB2010, “Enough talking about it. Let’s just start implementing these activities. Let’s start just doing it!”

— Mark Fratrik, VP, BIA/Kelsey

Response to and RBR-TVBR Observation: Jeff Smulyan: Emperor Has No Clothes!