Research Director Downplays Implications Of Radio Disney Station Sale
August 19, 2014 at 12:07 PM (PT)
When RADIO DISNEY announced it was selling off 23 of its 24 O&O stations, making their content would remain available on existing Sirius and online channels because 82% of their current listening is from these two distribution channels, several industry pundits predicted that it could be a harbinger of radio towers going the way of the buggy whip. RESEARCH DIRECTOR, INC. disagrees, calling such predictions a gross oversimplification of the situation, with an incorrect conclusion.
"RADIO DISNEY was a bold experiment. Build it and they will come," they wrote. "Every radio network, which RADIO DISNEY was, needs good coverage on quality sticks" ... but "One must ask if it is fair to compare the reach of two national distribution platforms (SIRIUS and RADIODISNEY.COM) with the potential reach of only 24 radio stations. How many of the potential listeners in this limited number of markets even knew they could listen to DISNEY content on the radio? A lack of marketing alone could have forced potential radio listeners to DISNEY’s online and SIRIUS alternatives.
"So what does this situation truly indicate about the future of radio? While we recognize the importance and growth of digital, we feel that successful radio brands, formats, and stations need to be available on all devices that are used by the potential audience. This certainly includes radios.
"More importantly, radio towers that broadcast desirable content with the best fidelity still succeed. The explosion of FM translators, whose signals are limited, would not be occurring if this was not true. So what prevented RADIO DISNEY from success on real radio?
"Their attempt to play music on AM stations, much of which was already available on the FM dial, certainly limited their available audience. This may be more of a sign of what a broadcaster can do with a weak AM signal, and less about the future of all radio signals. Also, the problem of their audience growing out of the format made for a cume dilemma. While necessary, marketing to build cume may not have been cost-effective for DISNEY.
"We’ve yet to see anyone point out that ABC is not selling its four ESPN O&O stations. Is it possible that ABC sees that sports is a format that can still be successful on real radio, while a format targeted at kids and carried on a limited number of mainly AM signals was not a sustainable business model? So we ask you, is it correct or fair to proclaim radio dead simply because one small niche network is selling 23 of their stations? We think not."