:60s vs. :30s: The pros and cons
of "shortening the standard" - - Part 2

A key element of Clear Channel Radio's "Less is More" initiative is to migrate advertisers to shorter spots. But to implement more :30s and less :60's across the board, there may be a catch. To make listeners happy by reducing clutter and keep stockholders happy by at least keeping revenues stable, something's got to give. And that is to charge more than 50% for the price of a :30 second spot. In fact, CC Radio CEO John Hogan has suggested that the price for a :30 could be as high as 70%-75% of the cost of a :60. We've even heard 80% in some cases. But remember, overall, CC Radio has said it will not need to increase rates dramatically to offset the loss of revenue for the reduced number of commercial units they will now have to sell. Why? There was always some unsold inventory that has been factored into their plan. And also bear in mind, the "Less Is More" initiative is not a mandate that CC will no longer accept :60s. All CC stations will be running a combination of both spot lengths. They are merely looking for some conversion to the shorter length. Clients who feel that need the full :60 will still have it available to them.

Bill Burton, President/Detroit Radio Advertising Group, thinks cutting down inventory loads is an absolute must. "One of the memos I've sent out in the last 30 days is every automotive executive that I've been eyeball to eyeball with typically trades out cars every 90 days or so. And in about all of them they have the satellite radio service. They all think it's fabulous. My approach to them is, 'Yes, satellite is here and it's going to make radio better. And in five years or less every car is going to have it. But radio is still going to be in business. It's live, it's local. We've lived through everything - - cell phones, CDs, cassettes, etc.'"

He adds, "I think Hogan's Less is More is right on target. All the automotive people say 'fabulous.' The buyers say 'fabulous, but I dare you to charge me more.' I think cutting commercials and raising the rates are the right way to go. I also think that we need to take our business back from Wall Street. The radio industry may have to tighten their belt for a period of time, but it's still one of the great cash flow businesses of the world."

This article appears in its entirety in the November issue of RBR Solutions magazine. To subscribe to the all new January debut issue of Radio and Television Business Report - The Real Business Magazine, see below to receive it - - or call April McLynn here to get your free copy: 703-492-8191.