January 29, 2013
George Beasley is a true radio "lifer," having gotten into radio ownership over a half-century ago. Slowly, but surely, he has weathered a bevy of economic downturns, programming trends, a consolidation and debt tsunami, and technological sea changes, yet has come out of all that with a stable, mid-sized radio group that is poised to grow even more. Here's his perspective on where Beasley -and radio itself - is headed.
As Beasley enters its 52nd year in radio, how has your perspective of this business changed over the years?
The business has changed very dramatically. When I first entered radio, it was far different than it is now. Many of the radio stations then had nothing except network programming -- NBC, CBS and Mutual Broadcasting. Of course, when the networks began to focus on TV, most of the network programming went away. The FCC granted many more radio licenses and as a result, radio began to redefine itself. With this came the debut of exclusive formats including Top 40, Country, News/Talk and EZ Listening. As radio began offering listeners a diversified range of formats, it allowed broadcasters to reach niche audiences.
Today, we have highly specialized format consultants and we test our music to ensure that what we ultimately choose to air is the best in our specific formats. And radio continues to evolve; we've shifted from all-AM to FM-dominated and now we're in the digital HD era.
Have the keys to success at Beasley changed over the years?
We've become a more professional company. Our goal is to do everything better, be it programming, engineering or business affairs. One thing's for sure, we haven't been afraid of change throughout the organization and we continue to embrace new technology. As a result, today we offer our advertisers more platforms and better options to bring their ad messages to consumers. That's a change for the better and any time we can offer more value to advertisers it's good for radio. At the same time we're endeavoring to leverage our localness to make our stations an important part of our listeners' daily experience with the medium.
What's your view of radio's standing in the current economic situation -- and specifically where do you see Beasley's place in the industry?
As you know, we operate in large and mid-sized markets, and we compete well with the other players in our markets. Over time we've proven to be very consistent operators. This is not the first recession Beasley Broadcast Group has experienced. Granted, the recession of 2008 was very challenging, but having experienced prior recessions we were better prepared for this negative environment. We knew what to do and when to do it, thus we were able to make changes quickly. While some of the changes were difficult; most broadcasters didn't endure the recession unscathed. We came through it by operating more efficiently and our financial results confirm that we made appropriate decisions.
Beasley has stations in PPM markets and diary markets. Do you feel that requires separate programming mindsets? If so, what are they?
We were one of the first companies to adopt PPM because we thought there had to be a better method of audience measurement; one that delivered data more quickly so we could react faster. That's the biggest difference between PPM and diaries. Today the PPM data is such that if programming changes are needed, we don't have to wait three to six months to effect changes. One thing I would like to see, whether it's PPM or the diary, is larger sample sizes as this would increase the accuracy of data we get from the ratings services.
Ideally, would you like to see PPM in all markets?
Yes, if it were economically feasible. I like the idea of up-to-date programming and ratings information as it is a very useful management tool.
With the growth of syndication, voicetracking and streaming, which places stations from around the globe within your listeners' reach, do you feel being "live and local" is still a significant key to Beasley radio's success?
Without a doubt, local is definitely the foundation of our success. We concentrate on being localized as much as any broadcaster in our markets. We're constantly out and about, interacting with our listeners and advertisers. We have strong local programming and on-air personalities in our markets and these attributes continue to be an asset for us.
There is still some debate on the ROI potential of digital. Where do you stand on that? Should Beasley devote more investment to digital platforms?
We were prudent in our investment approach to digital and have been able to realize incremental revenues from this approach. Of course, we'd always like a better return, but through our digital initiatives, we are offering advertisers a wider range of platforms and options for reaching listeners while bringing listeners great content, contests, local information and other programming when and where they want it.
Some radio groups are signing revenue sharing deals with record companies. Is that something you're looking into?
I have mixed feelings. We're open to deals, but we'll evaluate revenue sharing arrangements with record companies based on their economic potential.
Beasley has been aggressively behind HD Radio. Are you satisfied that the industry overall has done a good job of promoting this platform?
The industry has done an excellent job of promoting the HD platform and driving the installed base of receivers in cars and homes, but I honestly believe we could realize more upside in HD if the technology improves ... and I think it will continue to improve. We're not quite where I expected us to be at this point with HD technology. For example, being able receive the HD signal inside buildings is an area for improvement, as is getting HD into handheld receivers.
Are you concerned about the new Congress reviving a performance royalty bill?
It's very difficult to predict what Congress might do, but we will continue to monitor any performance bill that comes before Congress. If this is the case, we will work with the NAB and legislators in the best interest of radio broadcasters.
There has been a slight pickup in station acquisitions in 2012, and more is expected in 2013. Are you interested in adding to Beasley's portfolio of stations?
Over the years we've made acquisitions and we've made divestitures. We're always interested in building value for our shareholders and acquisitions are one way we can do that, but we're not interested in assuming unnecessary risk.
Have the prices for stations dropped to a more reasonable level?
Prices had to adjust after the recession, because revenues fell so dramatically with some companies experiencing revenue drop as much as 20-30%. That has had an impact on the value of those stations and I expect that to continue until such time as revenue levels are restored.
If you had your druthers, would you be more interested in building up your current clusters ... or finding new markets to broadcast?
Ideally, we would prefer to build our current clusters. However, we will also look at new markets depending on the transaction cost, availability of capital and whether the transaction is in the best interest of our shareholders. The bottom line is although we want to continue the growth of Beasley Broadcast Group, our intention is to maintain or reduce our leverage.
Are you bullish for Beasley in 2013 ... and of radio in general?
Of course I am. We have solid clusters and ratings in our markets. We have streamlined our operating costs and structures; our leverage has come down significantly and our debt is declining. We've been very successful in implementing strategies that are benefiting the Company now and are expected to continue to do so in the future.
What are the radio's biggest challenges and opportunities for growth in 2013?
We'll face many of the same challenges this year that we faced in 2012, most notably the economic uncertainty. Aside from the economy, radio also faces a very competitive market with radio's share of the advertising pie relatively consistent at somewhere around 7-8%. We have to be smart operators who offer better programming and content and better salespeople. We have a great opportunity to leverage the value of radio's enormous audiences and in doing so, we'll serve advertisers even better. With all the challenges facing us, we have to continue to support the NAB and ensure our voices are heard in Washington, D.C.
Finally, do you find radio, as a business and a profession, as enjoyable or satisfying as it was when you started? What keeps you going today?
I'm as passionate about radio today as I was when I started in 1961. I've been working in this business for so long ... I enjoy it so much that I'd be miserable if I were not working in radio every day. It is indeed a passion with me and I think about radio constantly. I would only hope that young people entering any type of business today would enjoy their profession as much I continue to enjoy radio.