August 19, 2014
Hubbard Broadcasting fits somewhere between "The Big 3" in radio groups and the companies that own stations in medium and small markets. Despite having a little more than two dozen stations in large and major markets, Hubbard has remained true to its roots as a family-run, local market-centric company. Pres./COO Drew Horowitz, who came from a similarly run radio group, Bonneville, offers his perspective on how Hubbard can prosper in a tough economy with increased media competition.
You've been in broadcasting for going on 40 years. Did you believe that you'd enjoy such a career when you started in the business?
No ... not even a "maybe" on that one. It has been a pretty amazing run; I feel very blessed to be where I am today. I am fortunate to feel great and would like to continue to be an active participant in the industry. .
Do you remember the time when you first truly felt comfortable about having a successful radio career?
It probably was my third year in the business. I was achieving all my budget goals and my boss -- who is still a friend today -- came to talk about me becoming Local Sales Manager. It was the first time I felt I must pretty good at this." I got that job and always appreciated being given the opportunity.
What have been the biggest changes in radio sales and management over the years?
On the sales side, the core tenets of being successful are still the core tenets. They haven't changed much; focus, discipline, execution and urgency must be practiced every day. The big change is the technology aspects of the process and the evolution of technological platforms. The competitive environment was fairly limited over the last 25 years; you had "The Big 3" of newspaper, TV and radio. Now you've added digital platforms that are competing with us us, as well as all the music streaming competitors that now exist. It's gotten to the point where regular salespeople are almost required to be digital experts, since it's part of the delivery systems of all radio stations. It's a much more sophisticated sales process today.
Is there more risk in terms of spreading your resources too thin to handle both terrestrial and digital competition?
I don't know if it's riskier, but it is more challenging because more companies are competing for the advertiser dollar. At the end of day, we really have to make sure our people have all the tools and the technological training to enhance the sales process.
What's more, there's a whole new generation of sellers coming up who, unlike the old schoolers, have to be given lots of latitude and space to do their jobs. They perform better working in a more relaxed environment because that's how they've grown up. We have to make sure to create an environment they can thrive in while keeping the competitive edge and utilizing their technological awareness that is part of their DNA.
Going back a bit, you went from being a part-owner and COO of Lakeshore Communications to work at Bonneville's WTMX/Chicago as a GSM. Why did you take that job at The Mix?
That was a big change. The ownership years at Lakeshore were a great learning environment; I enjoyed the time I spent there. We were living in New Jersey and my family wanted to move back to Chicago, the Mix gave me that opportunity. I often reflect on where would I be had I not taken that step back becoming the GSM at the MIX.
When Bonneville sold many of its stations to Hubbard, you stayed through the transition. How did you handle the change of corporate culture?
It was an interesting moment in time. After 22 years at Bonneville, there probably wasn't a more perfect fit for us. One of things that made Hubbard's acquisition of Bonneville such an excellent choice was that there was a lot of compatibility between the two cultures. Both were steeped in a long broadcast history. There were numerous other similarities; both were early adaptors who had a passion for broadcasting. I felt it was a really good fit to segue to the Hubbard culture. Of course, certain adjustments did have to take place over first two to three years, but it has all been good. The Bonneville and Hubbard values are all about the employees. Great people make great stations and create great products. We are fortunate to be a part of the best company in radio; I don't think it can be any better.
Can you see Hubbard buying even more stations?
That's the furthest thing from my mind, but to be honest, Ginny Morris would be the best person to answer that question. I'm sure we will continue to be opportunistic buyers.
What are the biggest challenges facing radio?
The big challenges are making sure we understand that we have to deliver compelling entertainment while building our brands and ensuring that we are serving our customers. . The other challenge is in integrating the legacy business with the digital business - while staying relevant and competitive. In every platform that we deliver our product, we have to ensure it meets our listeners' expectations. They should also be able to listen to our radio stations in any way on any platform they choose. The ultimate goal is melding legacy and digital.
There are still those in the industry who don't see an adequate ROI in digital. Have you discovered otherwise?
It is a work in progress; delivering a respectable ROI in digital is the Holy Grail that we are all chasing.
Do you feel your legacy and digital teams are totally integrated, or is there more work need to be done to best complement each other?
No, there is work to be done.
With your priorities being your listeners and advertisers, how concerned are you over the ongoing debate on a performance royalty for radio?
Yes, I'm concerned, but the industry is having an ongoing dialog with the other parties, and I believe a lot of smart people will inevitably come up with a solution that makes sense for everyone involved, because either we all win, or we all lose. I do know that everyone I've talked to about this is motivated to find a solution. We'll see if that can happen.
Has Hubbard considered or consummated a digital revenue sharing deal with any of the labels ... and do you think revenue sharing could be the answer to the performance royalty issue?
No we have not. It's too early to make a determination; it's still a work in progress. A lot of smart people have created these deals and they're sold on them. Again, they have to work for all parties and until they figure that out, they're going to keep plugging away at them. It has got to make good business sense for everyone. It can't be one-sided for broadcasters or for the content providers. This issue has been hanging out there for a long time; the one good thing is that I think we're closer to a solution than we were a few years ago.
What's your take on the FM chip and NextRadio?
We think that will be good for the industry. If we can give people another delivery option so they can hear us not just in the car on their way to work, but through their phone as part of their day-to-day life, that makes sense to me. It offers a logical advantage to consumers that would also benefit us.
The beauty of radio has always been its portability and mobility. I remember growing up at a time when everyone had a portable radio. That's how most of us listened to radio back in the day. With an earphone, we could listen to ballgames under the covers in bed. A $9.99 radio that ran on a 9-volt battery was a key part of our lives. Hopefully, the FM chip will offer consumer that same mobile option.
There's been a lot of discussion on how syndication and voicetracking have put a serious dent in developing future on-air stars. Do you agree and if so, what is Hubbard Radio doing about it?
Yes, it is more challenging today because voicetracking and syndication certainly create an environment that inhibits talent development. But there are still enough broadcasters committed to developing talent. We understand the importance of quality local personalities, and we're continuing to identify and develop talent on our stations. That's an important ingredient to make sure we keep new talent in this company; and we're fully committed to it. Right now, we have wonderful personalities on our stations and by finding, developing and investing in new talent, we will continue that legacy.
Overall, can radio be successful as a mature industry with modest growth, or must it reinvent itself to generate optimal growth?
Radio still reaches a huge proportion of the population of America, something along the lines of 93%. Radio may be a mature business, but it's still a mass medium that delivers significant free cash flow numbers. Traditional radio still reaches large segments of population and we have the metrics that appeal to advertisers. There's now a digital aspect to advertising, and we have to continue to develop new platforms to deliver more audiences to advertisers. Radio has to create opportunities and more platforms to reach our audience, by integrating digital into legacy. We have to keep innovating. If we sit back and say, "We're just doing legacy radio. It's a mature business and we're okay with growing 2-3%," that's not necessarily a bad thing. But to stay relevant, we think radio is in a great position to deliver our content to audience in multiple ways.
So you're bullish on the future for Hubbard and radio in general...
Hubbard is well positioned to be successful. We do invest in our product, invest in people and invest in research because we get better by doing that. If you look at the history of media, every time a new technological platform came out, people said it would put traditional radio out of business. First it was TV ... then it was the iPod ... and satellite radio ...now it's the Internet ... yet radio is still around. But for us to succeed, we can't rest on our laurels. At Hubbard Radio we are committed to innovation and ideation by empowering our people to lead the charge. Being private and being owned by a family fully committed to the broadcast industry, I like our chances.