October 22, 2013
All Access last interviewed Greater Media Chairman/CEO Peter Smyth close to four years ago - and considering what has happened in radio since then, that seems like a lifetime. In 2009, radio was still dealing with a devastating recession. Since then, radio companies initiated revenue sharing deals with the labels and have made a concerted push to get FM chips inserted in smartphones. Through it all, Greater Media has continued to make its presence known in a still-difficult economic climate, yet Smyth remains as bullish about radio's future as ever. Here he explains why.
It's been almost four years since we last interviewed you for Power Player. How has things changed for Greater Media and radio, economically, since then?
On the overall economy, this thing in Washington, D.C. has been disgraceful. There's no other way to put it. If you were a CEO of an organization that was this dysfunctional, everyone would get fired. The federal government should not be an impediment to growth of the economy.
Radio, today, has made a lot of strides. Even as bad as our representatives in D.C. have been performing, the auto industry nonetheless has been doing very well, selling 15.5 million units this year. Health care will be a major sector of growth for radio, and our digital growth has been exponential.
Greater Media has been in the media business for over 50 years and you look at the strength of our platforms -- over the air, online, on site and on demand -- combined with live and local personalities ... all of that is paramount to grow our share of the business.
When you look at our industry moving forward, we just went through one hell of a tailspin. People were saying terrible things about all media; and it was hard to get a handle of the recessions. But now, our industry is looking at a growth of audience thanks to our growth on mobile devices. We're now getting into cellphones. Jeff Smulyan has put in a great effort on that with NextRadio. We've don't have a lot of good stuff on it right now, but we've only been there a few months.
Today, when I look ahead, I see a bullish future. I'm encouraged by the men and women who are now coming into our industry. We're starting to recruit people again, who are savvier and more digitally inclined. We have to educate these people on this medium; they have to be students of economics who understand where new business is coming from - and it's not just to radio. We have to compete in the advertising business marketplace. In some big cities, hundreds of million dollars are spent to market to advertisers. We have to participate in that and not look at ourselves as an industry of silos, where advertisers spend only on TV here and cable there. We have to come to advertisers as solution providers.
I feel encouraged by what I see in housing starts, which is turning around. Housing brought us into this mess and it's going to get us out of it. That rebound will bring us into the furniture sector, which represents a whole different group of businesses. Housing creates a multiplier effect on the economy, which is very important. I see health advertising and marketing as being very strong.
But we have to break down silos. People who talk about Miller Kaplan have a very limited view. We have to take look at all the money in the marketplace to see what share we currently get and where we can grow it. We expect to do better in medical, financial and wholesale. We're also going hard for the auto aftermarket. These are the areas we think about. We're not going out there offering sales of $2 a point, which drives pricing down. The days where you can succeed with that business model are over.
Greater Media announced a revenue sharing deal with Big Machine, much like the ones Clear Channel have done with a number of parties. Do you believe such deals will become commonplace?
I wouldn't see it as a one-time-only deal. We're honored to be in partnership with Scott Borchetta, who is a good friend, a visionary and an excellent human being. There's another dimension to Scott; he's a big giver back to the community and the city he loves - Nashville.
We look at deals like this as a way to get into the digital space and be able to grow our content. To do that, we have to make sure the partnership works for both sides. The Big Machine deal ensures that Scott continues to grow his brand and artists -- and at the same time, we continue to grow our stations and promote their artists on the digital platform. Any deal has to be equally advantageous to both sides; if it's not a partnership, we're not interested.
But is radio revenue's pie big enough to accommodate revenue sharing deals with all the major labels and artists who would want them?
You certainly want to do smart deals. I don't know about the Clear Channel deals and they're none of my business. But I certainly respect Bob Pittman; he's a smart guy who knows what he's doing.
I think our industry is big enough if you look at it in terms of potential for revenue. You must have a very shortsighted view of the medium to think we couldn't do it when we're reaching this high a percentage of the population many times in a week. I absolutely think there's great growth here - as long as the deals are partnerships, and not a good deal for only one party, which walks away from the table making more than the other. There's good reason we should be able to grow digital platforms in an affordable manner.
Judging by what you mentioned previously, you seem to be strong proponent of the FM chip.
Absolutely. NextRadio provides a fabulous platform and I hope all the stations get on it. Users really get the artist experience; they turn it on and immediately see the album artwork, and they have the opportunity buy the song on iTunes.
I give Jeff Smulyan a lot of credit for his hard work that got the Sprint deal done. We all owe him a great deal. We're very excited about it; from the early data, the usage rates are very high. It's coming on very strong. We're very happy to get into a better, more accessible place on that platform.
NextRadio also helps move our connection with listeners to other places. They can time-shift one of our local podcasts and listen to our content at a place and time of their choosing. When you move into a new technology, you have to be adaptive and have an open mind for what the listeners want. By doing so, you learn about a lot of new things that can help reinvent your business.
Radio has to be a part of that menu of choice for smartphone users. If we're not there, we risk losing audience. Once we're there, again, it's the content that's going to dictate our success. You need great content to win, plus you need to be topical. If there's a national emergency in a city, you can't live on just 90 characters.
When we went through Hurricane Sandy, radio played a critical role in news, information and public safety. Our Rock station in New Jersey won News Station of the Year for its coverage of the hurricane -- a Rock station that was live and local, where the men and women stayed at the studio, just five to six blocks from the water, during the entire storm. That was local radio playing a critical role in helping people find shelter, food, water and gas. It's easy to take radio's strengths for granted - until something like this happens. It reminds me of a great John Lennon quote, which goes something like: "You don't know what you got until you lose it."
Enhancing our connection to the listeners through an FM chip on a cellphone is a great thing. You have to be ubiquitous to connect to today's audience, and as long as they're spending more time using their phones, it's more important that we be there as well.
Being easily accessible to the consumer is a given nowadays. But is radio doing enough to create enough great content to attract their attention?
Even before NextRadio came around, I have been a firm believer that the best way for a radio station to create quality content is to have local personalities creating it. You look across Greater Media's stations and their air staffs, and you'll see some of the top local on-air talent in the country -- WMMR's Preston & Steve, WMGK's John DeBella, WRIF's Dave and Chuck, WMGC's Drew Lane and WLNK's Bob and Sheri. That's an outstanding stable of local talent; we have to make sure we keep investing in local talent because that's the best endorsement service in your local market. It helps retailers bring more traffic to their stores - and at the same time, grounds you into the community. It makes you different and much better than some stream coming in from parts unknown or some soul-less audio.
That can breathe more life into a city. When cities such as Detroit and Boston are on the cusp of the World Series, that's an exciting time for those local markets. Local stations with local personalities can best celebrate things like that because they reflect their listeners. That's why when we put on a new station in Boston several months ago, one of the first things we did was bring in Pebbles and Baltazar, both of whom have a strong local presence. That tells people there that this is a Boston station for the people of Boston.
But where do you find the next generation of star-quality on-air talent?
Historically, they were found in smaller markets, but because of the way our business has evolved, we have to look in other places. YouTube has a lot of interesting people; we've also found some callers who were fascinating, and we turned them into DJs or talk hosts. There are still a lot of people who are growing up on radio, and our idea is that they grow up with great local talent - even in smaller markets. It's incumbent upon us to encourage people to get into our industry - and to do that, we've got to put great stations on the air
It goes back to the adage that we want people on the radio to sound like us. We don't need people on-air to merely recite different slug lines, such as "the greatest hits from the '50 to the '90s." We don't talk like that.
There's been a public debate about whether it would be worth investing time and energy in rebuilding AM radio. Where do you stand on that?
I think AM will always play a critical role in our society. You look at the trends of all-News stations ... we have our own in WBT/Charlotte, which is a fabulous, legendary station. Everyone who grew up in New York seemed to listen to WOR; I even worked there as a GSM. People have also grown up with WINS in New York. You look at the big Sports operators that are still carrying unique content on the AM band. A lot of people still listen to AM. People in the media tend to dwell on its demise as happening sooner rather than later. I realize there are challenges for AM, but I believe that wherever there are challenges, there are opportunities.
What Dan Mason has done with an AM station on HD is terrific; we have to keep doing those things. We have to build our HD stations and deliver quality signals that have to be better. We need to figure out how to push the evolution of AM and its spectrum, which is finite. They're not going to make any more spectrum. If we put compelling content on AM, people will come to it. There has to be a call to action to harness their attention.
Judging by the national string of Jingle Ball concerts, concert promotion is becoming a bigger part of radio's picture. Do you see Greater Media doing something like that, too?
Not on that scale. The other night, we did a thing with Sheryl Crow for one of our Country stations. It was set in an intimate studio where the artist got to relate to the listeners. We prefer to do one-on-one shows; all of our studios are set up for live performances. We feel it's important for artists to come in and be able to select how they'd like to do a live on-air performance, because if it's not done right, it's not going get sales moving.
It's important to have a closer relationship with the right kinds of artists. If you go to a concert of a band that's not playing the hits broken on radio, you'll see people in the audience looking at their smartphones in the middle of the show. Even today, you talk to most record people and they'll say that radio still sells a lot of records
We don't see ourselves in the concert promotion business, per se, but we do a lot of concert support with local promoters such as Don Law and his group. I'd rather invest our money in great content and technology, grow our digital platform and invest in talent - the men and women who work here - to make sure our business has a great rate of return.
Recently, it seems that station transactions are on the rise. Do you see Greater Media growing its business through station acquisition?
Absolutely. If the right opportunity presented itself, I'd do it tomorrow. I'm always looking at things, but it's got to be right. Everything gets reset when you come out of a recession. As we move forward over the next 18-24 months, we believe we'll find a great opportunity that may not be on the table today. We're approached constantly because our company is in strong financial shape with a good debt situation.
When it comes to the size of the company, the key is that we want to have quality, not just quantity. We don't want to get bigger if we can't adequately care for our stations. We make sure the stations we operate can dominate their markets and super-serve their communities. It's not the number of stations you own; it's how you run them.
We are not in a business of scale. We operate in the top-10 markets and we're very fortunate to be one of the last private companies out there. It's very important that whatever we do with Greater Media, we never break the culture we created - as an entrepreneurial company built on a family environment.
We're financially strong because our most important strength is our people - the men and women who work here. They're outstanding, and it's my greatest satisfaction that they come to work here every day because they want to. We don't have non-competes or any of that. We believe that creating an environment where people can win is the most important thing. The product has to be here and if we continue to do the right things, the rest will take care of itself.