It's Day Two Of The NAB/RAB Radio Show
September 11, 2014 at 12:26 PM (PT)
The NAB and RAB's RADIO SHOW is in its second day at the INDIANAPOLIS CONVENTION CENTER, with sessions all day leading up to the MARCONI AWARDS ceremony in the evening.
YESTERDAY's coverage of day one's events can be found here.
The View From Wall Street
The annual "Leadership Breakfast" opened with WELLS FARGO SECURITIES analyst MARCI RYVICKER returning to offer her rundown of radio's financial performance, opening with the observation that her five- and seven-year old children listen to radio much more than they watch television, but quickly moving into less positive areas, showing how national spot advertising is down for radio and television. She blamed the downturn on the weak economy, the OLYMPICS and WORLD CUP, and dollars shifting to digital, specifically social media and mobile. Radio ad share of the overall pie, she predicted, would decline to 7% by 2022 assuming growth is flat. RYVICKER noted that political advertising seems to be slightly lighter this year and that radio's decline may be the result of dollars being shifted to digital.
On mergers and acquisitions, radio is showing less activity than other media, RYVICKER noted. But she was bullish on NEXTRADIO, saying that investors are "excited" by the app and "just want to see more coming out of radio."
RYVICKER said that her firm's economist GINA MARTIN ADAMS has revised her forecast for the S&P 500 from flat to 5% growth, a positive sign for the economy, but noted that radio stocks are down 21% year to date; she blamed that on a lack of trading rather than anything the sector is doing wrong. Non-traditional media stocks are up 3%, lagging the S&P but outperforming other media.
Her forecast is for 1% growth for radio in 2014 and flat for 2015; she said radio stocks remain inexpensive and don't reflect her personal experience with her children's listening, and advised radio to continue doing what it's doing.
CEOs Chat About Chips
The leadership panel was moderated once again by PILLSBURY WINTHROP SHAW PITTMAN attorney LEW PAPER, with CUMULUS CEO LEW DICKEY quizzed on why his company, in light of radio's traditional reliance on local broadcasting, is moving to national brands; DICKEY said that his company remains locally focused but sees Country as "lifestyle" and "attitudinal" and an opportunity to create a lifestyle brand. DIGITY Pres. DEAN GOODMAN downplayed the threat from car audio systems, which he saw as offering opportunity for broadcasters to deliver programming streams, and online audio, which he likened to the "threat" of satellite radio (which he said hasn't affected broadcast radio). UNIVISION RADIO Pres. JOSÉ VALLE said that he's heard from advertisers taking 2% from radio budgets because they said they "had to have a digital strategy," only to return when the digital ads don't work as well. "It's a lonely experience," he said advertisers are saying, complaining that they don't get the same feedback from their digital campaigns as they do from broadcast radio.
EMMIS CEO JEFF SMULYAN once again touted the FM tuner chip and NEXTRADIO for mobile phones ("if we can find a better idea, let me know"). He said "technology is moving in our favor," adding that he's "never made a penny" from streaming and that people will "fall in love with radio all over again" when they have to pay data costs and note poor battery life from streaming. DICKEY added that if an FM chip was in every cell phone, "it's back to the WALKMAN days" of people listening to radio on portable devices. And GOODMAN said that an FM chip mandate would be the "single best thing" to happen for the industry.
On his company's acquisition of RDIO, DICKEY said that there is a chance now to monetize the traditional way people consumed music by, in the past, buying records and creating their own playlists; he said that it does not cannibalize radio but rather is part of the evolution from music retailing to "e-tailing" to subscription.
On streaming, SMULYAN said, "If streaming in the answer, we're going to be a hobby, not a business ... it's not the same business." He insisted "technology is moving back our way," because of data costs he said would drive people back to broadcasting. He said that "I think we're getting closer" to getting carriers other than SPRINT on board with NEXTRADIO. "We know listeners love it ... I think we're close to a tipping point," SMULYAN added.
VALLE likened radio to MCDONALD'S in explaining why scale across several markets and stations is important, touting consistency in formats as similar to being able to walk into a MCDONALD'S anywhere and getting the same Big Mac.
SMULYAN insisted that the Internet is "horrifically inefficient" as a distribution medium and that if radio and television broadcasting had been invented after the Internet, people would be celebrating their efficiency.
Asked where radio will be in 10 years, DICKEY stressed radio's strength during the daytime, calling radio "the last local medium" and "in the enviable position of being both local and mobile" during the prime daytime business hours. "I believe we're going to be very relevant for a long time to come," he concluded.
Programmer To CEO
CBS RADIO's DAN MASON and CLEAR CHANNEL's BOB PITTMAN gave their impressions of the business from their standpoint of being programmers-turned CEOs at a session with NAB EVP/Radio JOHN DAVID. After describing their radio origin stories, MASON as a self-proclaimed "contest pig" and PITTMAN needing a job to pay for flying lessons and happening into a job at WCHJ-A/BROOKHAVEN, MS, the CEOs addressed topics like how programming skills help them run their companies ("I've always had an instinct about what people will listen to on the radio ... we have to be passionate about the content," PITTMAN said; MASON added, "PAUL DREW said a radio station takes on the personality of the PD, (and) companies take on the personality of the person who runs it"), new media competition (PITTMAN asserted that "when there's new technology, we're not gonna beat it ... we have to figure out how to use it ... we have to embrace new technology as an opportunity, not a threat"), the challenges in finding young talent, and how to grow the business ("we have to think of programmers as our Chief Marketing Officers," PITTMAN said, adding that the industry should be sticking together and pitching the entire category of audio to grow the pie for everyone), and keeping radio relevant (MASON stressing the need for good content and being "integral parts of our communities").
Following that session, a panel on Hybrid Radio and NEXTRADIO explored the technology and its benefits for radio stations, with EMMIS CTO PAUL BRENNER and SPRINT Product Manager ERIC WILLIAMS joined by HUBBARD's GINNY MORRIS and BIG MACHINE's DAVE KELLY. "It's started conversations that weren't there before," BRENNER said about NEXTRADIO's effect on sales. MORRIS, who said her company is "all in" on NEXTRADIO through investment and participation, advised that stations at least put their logos on NEXTRADIO -- "If you're not there already, you need to be" -- because a station without a logo will look bad if the competition does have one posted. KELLY said that the more information stations can put out about music through the app, the better it is for both the station and his label, citing the ability to put a pre-order link for TAYLOR SWIFT's new album on the song within the app, allowing consumers to buy the record through TARGET without leaving the station's stream.
Alan Mulally Talks Turnarounds
Former FORD President and CEO and new GOOGLE board member ALAN MULALLY talked turnarounds and radio's relationship with the radio industry with ABC NEWS' DAN HARRIS in a "Super Session" on THURSDAY afternoon. MULALLY discussed how he refocused his company on quality and got everyone on board with that plan, stressing mutual respect and observation of expected behaviors. MULALLY said that the "love affair" between radio and the auto industry is still strong, citing HD RADIO and localism as examples. "I really think that radio is going to continue to be the center of the dashboard," he said, adding that voice commands will be the future interface with the dashboard.
The MARCONI AWARDS dinner and show are scheduled for 6p (ET) TONIGHT.