Airport lines were long as broadcasters left Charlotte after enjoying a successful week in a new host city. The biggest concern before the radio industry today has to be the performance tax proposal looming on Capitol Hill. No one can believe that the record industry is so anxious to damage itself, but the threat is real – and universally opposed by broadcasters large and small. Vowing to defeat the proposal to take cash away from broadcasters to line the pockets of international record company executives, NAB President David Rehr noted that the traditional model of "free play for free promotion" has worked well, turning many unknown artists into mega stars. We heard more than one broadcaster vow that if radio stations have to pay a performance tax to be distributed to the record industry, then record companies are going to have to pay up if they want airplay.
Being private is in and being public is out. Those radio companies with public stocks are largely unloved on Wall Street. "The group has been orphaned," said Deutsche Bank investment banker Drew Marcus, noting that yet another big brokerage firm had recently eliminated the position of radio stock analyst. But there is private money chasing deals, even in the current credit crunch. And with Clear Channel, Citadel and Cumulus making divestitures from their portfolios, lots of folks see opportunities to grow their own companies. People are making money on the Internet. Despite concerns about streaming royalty fees, stations are finding new revenue streams online in various ways. And while it is still in the chicken and egg stage – we need more receivers in the marketplace! – there are high hopes that HD Radio is going to pay off in a few years.
RBR observation: We met a lot of happy small market broadcasters in Charlotte. Their business is a far cry from the major market gloom and doom that we see constantly in the reports from Wall Street. Joe Schwartz of Cherry Creek was right in observing that this has become two businesses. Small market radio is alive, lots of fun and kicking butt. But the changing media market is having a big impact on the big markets. PPM may be a long-term plus, but it is going to require a painful adjustment by some stations in the early years of implementation. Internet advertising is growing rapidly and that is making many big national advertisers reassess their spending on "old media." Radio isn’t going away, but it still has some tough days ahead – at least in the big markets. Is the newly announced Radio 2020 initiative a cure-all? No, but it is the right thing to do at the national level to promote and re-brand radio for the modern age. But fixing problems at the local level is just going to take a lot of basic blocking and tackling.