RBR analysis: Farewell to Austin


OK, the NAB Radio Show in Austin started off with a real downer. The bankers on the first panel at the Dickstein Shapiro broadcast finance confab were the physical embodiment of gloom and doom gripping Wall Street. Yeah, radio is impacted by that, because the gloomy bankers aren’t lending money for radio deals. But they aren’t lending money for anything else either.

So while radio is going through yet another no-growth year, we didn’t really feel the level of despair that permeated the past couple of Radio Shows. Rather, the people running radio stations have come to grips with the reality that they can’t change the US economy themselves and adopted an attitude of perseverance as far as traditional spot business is concerned. And there is some honest to goodness excitement about new ways that radio is making money in non-spot business and ancillary new media ventures.

The US economy is what it is, so there’s no use worrying about something you can’t change. If there is some good to come out of this downturn, it may be that the sales and programming sides of radio will find themselves working together better to drive business and make the on-air sound better, to their mutual benefit. We enjoyed the story from Border Media Partners VP of Spanish Programming Jose Santos of how he’d found the sales staff at one of the company’s clusters downcast one day because business was slow. So, he went out and bought some candy and went desk to desk in the sales department, passing out the treats and giving each person some encouragement to hang in and keep pitching.

Even with revenue declines forcing budget cuts, virtually everyone we heard from is committed to spending money on such things as better websites, streaming, mobile phone ventures and HD Radio because they see future payoffs from what they do now. Indeed, non-spot revenues are growing double-digits against flat to down spot revenues, so the importance of these new initiatives in indisputable.

The idea that the Internet is going to kill radio is really pretty far-fetched. As RAB President Jeff Haley noted, radio is the only medium that doesn’t have to change in moving to Internet delivery. TV and newspapers have to make major changes to adapt their content to the Web. The Internet stream of a radio station sounds just like the over the air broadcast. “We’re extending the value of our radio brands,” he said. And while Internet usage is growing by leaps and bounds, Haley put up figures showing that radio still reaches 44 million more Americans in a week than the Internet reaches in a month. Why be negative about a medium that remains almost universal? People love free content. Radio has lots of it to deliver however people want to receive it. Radio just needs to redouble efforts to get the facts before the real decision makers at major national advertisers whose agencies are all ga-ga about playing with the new toys.

We saw broadcasters’ eyes light up whenever Emmis CEO Jeff Smulyan talked about talks which he and some other industry leaders are having with the major wireless companies to have a radio receiver chip in every cell phone just a few years from now. That’s not a pipedream. The wireless companies are under heavy pressure from Capitol Hill to come up with an emergency alert system for their cell customers. Piggybacking onto the EAS system already in place for radio stations will be billions of dollars cheaper than creating a completely new one based on cellular texting. Also, the radio portion of the cell phone would still work when cell towers are knocked out by a hurricane or other disaster.

The industry remains split on PPM. But even those who don’t like the methodology or cost – or both – are generally tying to figure out how to deal with it as Arbitron rolls out the new ratings system to more markets. Kudos to Coleman Insights for the “Real PPM Panelists Tell All” study. That type of research will really help broadcasters understand how people on the other side – the listeners – are reacting to PPM.

So, rather than worrying about lenders who don’t have any money, new media competitors, who’s going to be the next FCC Chairman and other issues they can’t control, broadcasters are back to dealing with things they can control. They’re looking for new ways to make local business pay off for them and their advertisers and digging deeper into the pool of local companies that might be able to benefit from a marketing partnership with radio. They’re looking for new ways to monetize the content and knowledge that they already have in-house for radio.

Better days are ahead. There have been downturns before and we can report with confidence that not a single one of them lasted forever. The building you do now will pay off when the broader economy gets back on track.

It was appropriate that the Austin convention wrapped up with Bruce Reese being honored with the NAB National Radio Award. Wouldn’t it be great if radio had a lot more CEOs like the one running Bonneville International? Bruce keeps that ship on course regardless of the storms buffeting radio. He lives and breaths community involvement and knows that it pays off on the bottom line as well. But then, wouldn’t it also be great if we had a lot more radio owners with the balance sheet and long-term view of the Mormon Church?

Photo credit: www.nabradioshow.com