The 2011 Radio Show In Chicago, Day Two
September 15, 2011 at 4:49 PM (PT)
Day two of the NAB and RAB RADIO SHOW at the HYATT REGENCY CHICAGO kicked off on a chilly morning TODAY (9/15) with pickets gone and a full day of sessions in store.
CEOs Talk About Economy, Growth, Competition
First up was the annual "Leadership Breakfast" panel of radio CEOs, sponsored by DICKSTEIN SHAPIRO.
ENTERCOM Pres./CEO DAVID FIELD, pinch-hitting for absent RADIO ONE Pres./CEO ALFRED LIGGINS, touted radio's fundamentals, noted that radio listening is up in terms of persons and that TSL is flat, leaving the problem as a "revenue growth issue" in a weak economy. "It's not that we have any fundamental issues" with the product, he said, characterizing the problem as increased competition.
CBS RADIO Pres./CEO DAN MASON contrasted the business today with the conditions of 2008-09, saying "we're far better equipped to move forward" after cost reductions. "The conditions are great ... I think we're in great shape to move forward."
CUMULUS Chairman/CEO LEW DICKEY, whose company has received FCC approval for its takeover of CITADEL, noted that some reductions are possible with scale, like consolidating sales training programs and centralizing some processes. He said that the economy was looking at its glass as half-full last year, but the debt ceiling and European crises led to a loss of confidence. Weathering the storm, he said, depends more on how much debt a company carries and how they're set to operate rather than size of the company.
HUBBARD RADIO Pres./CEO BRUCE REESE drew a distinction between his company's (and his former company BONNEVILLE's) cross-platform operations and cost savings, saying that having TV and radio or newspaper and broadcasting in the same market helps serve the community but does not necessarily save money in operations, a position echoed by MASON, who discusses his own company's synergy between radio and TV.
Moderator LEW PAPER raised the issue of cross-ownership and other ownership limits, asking the panel whether the FCC needs to change the rules to address marketplace realities, and FIELD jumped in to call the rules "hopelessly outdated" in light of the growth of competition. "It is comical that we are limited," FIELD said, offering an incremental solution of eliminating the sub-caps by band (for example, 5 FMs and 3 AMs in a market).
On customizable Internet audio's importance to radio, MASON said that "soon, every operator in this room" will have the ability to offer personalized music streaming; he said that his company's own LAST.FM is just part of CBS' overall strategy. "It's part of a bigger picture," he said, "but it's not the picture." DICKEY followed by noting that Internet audio poses no barriers for entry, which he said would lead to a lot of innovation. "First in doesn't necessarily win," he said of PANDORA. "Look at MYSPACE."
On HD RADIO, DICKEY said that "everything is digital ... it's a great technology." He backed the industry battle to get FM chips in cell phones, saying he was part of meetings with cell phone carriers, whose main concern was battery life. "We have a bit of a marketing issue" with HD RADIO, DICKEY said, adding that "the man on the street" still doesn't know what HD RADIO is despite the money spent on marketing. He also called for the word "terrestrial" to be "expunged" from discussion of radio as part of an overall more positive positioning of the business. MASON said that the technology needs to focus on the car and its ability to provide a visual component; REESE said that "to some extent, HD has been a gimmick" with multi-channels, but he agreed with MASON that providing a better look and feel in the car is critical. "This is us," he said, "this isn't a gimmick anymore."
The panelists agreed that radio stations need to be streaming, with FIELD saying "the world is not going to go backwards" and that offering programming across multiple platforms is a necessity.
On the availability of debt financing, DICKEY joked, "check with me tomorrow morning on that," then reiterated how the loss of confidence in the economy has shut down the market. He said that his own company had some luck in timing its own debt offerings, hitting two brief windows in which the market rebounded; he voiced confidence that the market will come back as people "have to chase yield."
Asked by "Radio's Best Friend" ART VUOLO what will happen to AM as formats migrate to FM, MASON said he is "concerned" about the band's future and offered an option that "we go to a digital platform" with an FCC-mandated sunset on the analog AM dial. "It's going to be an NAB issue," he said, saying that it might be a point of conflict between major and smaller market broadcasters. REESE noted that at BONNEVILLE, his company was a leader in moving AM formats to FM, but "radio is still about product" and "compelling product, wherever it is ... is going to attract an audience." Still, he said, "the band has its inherent physics problems," and a conversion to a new digital platform might be necessary as electrical interference continues to plague AM. FIELD said that losing AM might have a "silver lining" in reducing station inventories and helping FM values; DICKEY touted the performance of his company's Sports KNBR-A/SAN FRANCISCO as an example of how content will draw audience to the band, and offered using FM HD RADIO multicast channels for AM simulcasts as a hedge, although he added that his Sports KTCK-A (THE TICKET)/DALLAS has 20% of its listening online, and that the industry needs to ultimately combine online and broadcast streams for measurement purposes.
FIELD declined to project 2012 revenues, but said that "if you believe in this country," the cyclical nature of the economy augurs a good 2012, later adding that "if you look at fundamentals ... radio is thriving." REESE said that "all four of us are planning to outperform" the economy.
WELLS FARGO SECURITIES Analyst MARCI RYVICKER opened the proceedings by noting that the outlook for radio seems worse this year than last, with optimism and growth replaced by uncertainty and a fear of another recession, with radio stocks underperforming the SP by about 3,600 basis points, as opposed to the Internet, the only medium outperforming the S&P. Her company is forecasting slow growth and high unemployment, and RYVICKER sees radio advertising down 0.7% (local down 1.6%) in 2011 and up 3% in 2012. Auto advertising, non-traditional revenue, political ads, and "a better message to advertisers and investors" are positive possibilities, she said, adding that she expects another major merger/acquisition to be announced but that she isn't sure "adding one slow-growth company to another" will work. "There's a lot of upside" for radio, she said. "We just don't know when you're going to capture that upside."
WHUR/Washington's WHUR World Wins NAB HD Multicast Award
The NAB presented its HD RADIO Multicast Award to HOWARD UNIVERSITY Urban WHUR/WASHINGTON for its WHUR WORLD HD-2 channel. GM JIM WATKINS was on hand to accept the award.
Arbitron, Scarborough, And Edison Offer Study On In-Car Media Use
A presentation on ARBITRON, SCARBOROUGH and EDISON RESEARCH's "The Road Ahead" study of in-car entertainment included highlights from the JULY 2011 study, conducted through SCARBOROUGH with 1,505 telephone interviews and tracked with the ARBITRON/EDISON 2003 national in-car study. ARBITRON SVP Marketing BILL ROSE told the audience that time spent in cars has increased by about an hour a week since 2003, and that in 2003, radio dominated other in car media, reaching 96% of users, followed by CD players (56%) and cell phones (44%); MP3 players and satellite radio were practically new in 2003, In 2011, AM and FM radio remain in the lead at 84% in 2011, with CDs up to 68% and cell phones up to 50%. Significantly, MP3 players are up to 24%, satellite radio reaches 8%, and several new categories under 6% in 2011, like PANDORA, streaming radio, HD RADIO, and ONSTAR or SYNC, either did not exist or did not chart in 2003.
A clip of a respondent who said he does not have a car radio and uses his smartphone to stream PANDORA or other audio said that he now can hear the news on "1010 WINS," but the streaming version. PANDORA, the study showed, is reaching one in five in the 18-24 category in the car.
AM remains the leading medium in usage in 2011, but ROSE noted that the number of choices in 2011 has grown substantially since 2003. In-car listeners still spend nearly twice the time with radio as opposed to all other devices combined, ROSE said. Asked which medium they'd choose if they could only use one device in the car, respondents picked radio over all others combined, although the number dropped from 71% to 51% over the eight-year period.
SCARBOROUGH SVP/Operations MARK MANDERS added more information from the study, including a "love" scale of people saying they "love" using a device, with satellite radio leading that category and AM/FM radio well down on the list, even behind HD RADIO and streaming of AM and FM stations via cell phone. MANDERS noted that sending radio content through new delivery systems like streaming increases people's "love" for the content. Taking the "love" numbers applied to those who use the media, AM/FM radio is the leader in "passionate users" at 23%.
ROSE said that in both 2003 and 2011, few listeners are "button pushers," frequently changing stations; 42% in both surveys said that they generally leave the radio on one station, mostly in older demos.
EDISON RESEARCH Pres. LARRY ROSIN showed figures showing much less cell phone usage in cars than expected. He also showed video from a telematics convention demonstrating new in-car connected technologies and gave information on the interest of respondents in new telematics features, like accident response and LOJACK-type stolen vehicle recovery systems.
Bob Pittman Hearts Radio
CLEAR CHANNEL Chairman, Media and Entertainment Platforms BOB PITTMAN offered his views on the impact of digital technology on radio and rallied the troops in a speech THURSDAY afternoon, rolling out positive statistics to demonstrate the radio medium's strength.
PITTMAN began his talk by advising the audience that radio is undervalued, noting that radio's weekly reach is higher in 2010 than in 1970. "This is not a business in trouble... there is nothing wrong with this business," PITTMAN insisted, adding, "Nearly everyone uses radio, in real time." He said that radio, TV, and the Internet (the latter replacing newspapers) are the mass media, and everything else is "at the fringes," and showed research demonstrating that radio is the highest-ranking out-of-home medium reaching more consumers in more locations. "TV is America's hobby," PITTMAN said, displaying research showing the audience's emotional attachment to radio. "Radio is a companion."
"Digital," PITTMAN said, "is a big opportunity for radio. Digital is not a threat." He offered the opinion that radio has brands that generate loyalty which translates to digital media. He noted that digital listening adds to overall radio listening, rather than splitting the existing listening pie, and offers more choice, in the same manner as cable TV added to viewers' array of choices; he noted that people who want more choice tend to be radio's biggest fans. Likewise, PITTMAN called social media a "big opportunity for radio" as well.
PITTMAN took a moment to differentiate radio from what he called "custom radio, playlists, and music collections" (PANDORA, SPOTIFY, iTUNES,a nd the new customization feature in CLEAR CHANNEL's own iHEARTRADIO) in that radio, he said, is curated, dynamically changes, has the human element, has big brands with strong loyalty, and offers local content, promotions, and events. PANDORA is "not radio at all," PITTMAN said, showing research demonstrating diminishing satisfaction with PANDORA over time and far fewer tune-ins per week by PANDORA users compared to broadcast radio. "It's a playlist creator."
Radio, PITTMAN said, has massive audiences and promotional platforms, and shoukd be tying the two together in ways like CUMULUS' competitor to GROUPON and LIVINGSOCIAL, SWEETJACK, or as CLEAR CHANNEL did with its iHEARTRADIO MUSIC FESTIVAL promotion. He said that radio is now defined as "radio plus Internet" and advertising as "renting our consumer relationship to other markets" and touted radio's "unique position" in the advertising process, noting that radio formerly served as the primary medium for branding while many media offered information and retail handled the actual purchase, while today radio remains the primary medium for branding with the Internet added as a research resource and now primary for the information and purchase segments. And he offered the opinion that radio can be a strong contender for national ad dollars presently earmarked for radio.
As for why radio is not getting what he said should be its fair share of ad revenue, PITTMAN, who noted that he worked in two then-nascent media -- national cable TV networks and Internet -- which had no categories with agencies at the time, said "there is no good reason" radio shouldn't get the money and said "there is no external factor keeping us from getting this money." He said the indusry needs to tell its story to marketers who "don't know," and advised radio to go after revenue still going to "old media" like newspapers, magazines, and Yellow Pages, and to try for some of television's revenue as well. "We have a fantastic business," PITTMAN said, adding that the industry needs to allocate its time to go out and tell its story to get agencies to spend more on it.
During a question-and-answer session, PITTMAN advised radio to "stop running yourself down," adding that he has never encountered another business in which the people in it talk the medium down. "There is nothing wrong with this business," PITTMAN insisted, drawing applause. He also defended CLEAR CHANNEL against a question about national music playlists ("you haven't done your research") and said that higher royalty rates would lead to more talk and less music on the radio dial but that people in the music business "are reasonable people" and that the parties could sit down and work things out. On commercial loads, PITTMAN said that the effect on listening depends on format and location, saying that advertising that's relevant is interesting to the consumer ("I don't see a big problem... nobody likes commercials, but when you ask people to pay for commercial-free... a small fraction pay").
Top Talent Talks About Social Media, Websites, And Community
ALL ACCESS President JOEL DENVER moderated a panel on personalities using digital technology and social media to build their "communities" included TALK RADIO NETWORK and CLEAR CHANNEL Talk KFI-A/LOS ANGELES host PHIL HENDRIE, CBS RADIO Top 40 WBBM-F (B96)/CHICAGO morning hosts J NIICE and JULIAN NIEH, and syndicated and RADIOIO host BUBBA THE LOVE SPONGE.
HENDRIE said that he launched his premium website while he was at PREMIERE and had a subscription site through the syndicator that was second only to ART BELL's site in subscriptions; he continued to offer his "Backstage Pass" after leaving PREMIERE, and said that his site makes more money than his radio show sells in traditional advertising, meaning, in his view, that the industry has a problem not in on-air talent but in "management, sales, promotion, marketing, and general managers." He expressed surprise that people will go to the comments section on his website and rip him, "and they pay me to do it!"
BUBBA credited former bosses RANDY MICHAELS and MARC CHASE for allowing him to "be myself" when he joined the lineup at Top 40 WFLZ (THE POWER PIG)/TAMPA, but added that "we've voicetracked and hub-and-spoked ourself out of business," warning younger talent that "I don't know what you have left to monetize" after their content has been watered down by programmers and management. He described the development of his "BUBBA ARMY" and "BUBBA RAW" websites, but blamed management for failing to back talent and instead using voicetracking, thus preventing talent from developing. He also discussed why his show lost affiliates in some markets, blaming his loss of JACKSONVILLE on financial considerations, noting that his ratings were high when the plug was pulled for "more music in the mornings," leading HENDRIE to note that managers "don't know how to make money," only knowing how to cut expenses.
NIEH and J NIICE spoke about the differences in what they post in social media, with NIEH favoring "life experiences" and J NIICE more into "action." NIEH said the content they post is "all about relatability... that's how we build our community. That's how we get new members" for their audience. J NIICE noted that the station helps by having the talent meet with the web staff weekly to work on their online presence. He said that Facebook traffic and "likes" translate to ratings, so the show posts teases and show content as quickly as possible, sometimes starting the conversation on Facebook and shouting out commenters on the air.
HENDRIE, asking whether any CEOs are in the audience and confirming that there were none, asserted, "It won't make any difference until CEOs are in these meetings instead of shareholder meetings." He said that podcasts will be the future, citing ADAM CAROLLA's success, but BUBBA said that if the podcasts don't make money, they won't succeed.
The evening will conclude with the announcement of this year's MARCONI Awards at a gala dinner.
Attendance Up This Year, Dallas Next Year
NAB and RAB today announced that there were 2,206 registered attendees for the 2011 RADIO SHOW, a 24% increase over the 2010 Radio Show.
Event organizers also announced that the 2012 RADIO SHOW will be held at the HILTON ANATOLE HOTEL in DALLAS, SEPTEMBER 19th-21st. .
MORE ABOUT: pandora | money | hd radio | advertising | clear channel | j niice | debt | technology | scarborough | fund | fcc | consumer | management | marketing | satellite radio | premiere | bonneville | edison research | cumulus | dallas | book | am/fm | sales | cbs radio | groupon | talk radio network | marconi | radioio | spotify | nab hd | lojack | whur world hd | last.fm | country | programs | dickstein shapiro | phil hendrie | myspace | citadel | san francisco | howard university | onstar | hilton anatole hotel | marci ryvicker | wflz | knbr | hyatt regency chicago | wbbm | tsl | kfi | wells fargo securities | ktck | july | entertainment | tampa | today | digital media | bubba the love sponge | sync | wins | art bell | thursday | bubba army | julian nieh | advertisers | employment | randy michaels | arbitron/edison | promotions | affiliates | livingsocial | jim watkins | david field | joel denver | adam carolla | bruce reese | bob pittman | larry rosin | alfred liggins | hubbard radio | marc chase | radio one | sweetjack | lew paper | bill rose | rab radio show | whur/washington | mark manders | entercom | dan mason | september | lew dickey | all access | jacksonville | the power pig | the ticket | heartradio music festival | bubba raw | art vuolo | mp3 | itunes | internet | sports | nfl | insurance | credit | cell phones