Radio’s string of down months is expected to go to eight when the RAB reports revenue stats for December and CL King analyst Jim Boyle’s latest estimate is that the revenue decline will be 2%, which is right in line with the Wall Street consensus. That’s hardly good news, though. So, what should radio companies be doing to get the business back on track?
Here’s Boyle’s advice: “Can a different revenue stream start and sustain a radio rebound? Yes, by monetizing the P-1 listener. Radio groups fetch about 2%-3% of revenue from internet initiatives, but that hasn’t stopped 2007 from being a down revenue year. So what else is out there? We would strongly recommend that radio look to the second of its two constituencies. Not just its advertisers, its audience! Radio’s most loyal, engaged listeners are dubbed P-1 listeners. We believe radio should sell small local content and branded items to its biggest fans. Consumers have become highly trained by eBay, iTunes, Amazon and others to frequently purchase impulse or planned items via the ease of well-established micro-payments. There will be many failed attempts by Radio to monetize listeners, but potentially some large successes. Most people forget that the cable network that allowed cable to garner non-subscription revenue from the subscriber, Home Shopping Channel, started as a Florida radio show. We also believe radio station personnel and younger employees are more likely to come up with successes than the corporate or top executives. We bet you that no P-1 would ask, what is the cost-per-point of a daily e-mail of the best jokes (on-air and off-air) of the Morning Zoo DJs? Or what is the cost-per-thousand of a station logo baseball cap? Or what is the AQH rating of a mobile flash alert of the latest club event? Radio should establish a second revenue stream or resign itself to being the ‘new Newspapers.’ A second consumer-fee revenue stream would bolster the industry and excite investors and it could even make radio a creative and fun business again, in our opinion.”
Is Boyle on to something, or not? We invite your feedback to [email protected]