The Business Of Radio
December 3, 2013
It's worth protecting.
So, what is the business of Radio?
Some might say we exist to maximize profit for owners, including shareholders.
In fact, the largest consolidated radio companies say they're forced to operate under this mandate. Unable to produce enough revenue to impress Wall Street,and/or meet their huge debt obligations, they must cut expense -- and they see most employees as an expense, not an asset.
I think the real business of Radio is still attracting and engaging listeners.
Attract and engage enough listeners and your station becomes an efficient and effective way for advertisers to spread their messages. Simple enough.
Except for that "engagement" part, which is in conflict with the differing ways consolidated radio and I see employees.
We're all in agreement that listener engagement is a good thing; it's one of the reasons personal endorsement spots work, and stations sell more of them now than ever before, at least in morning shows.
Yet, the relentless cutting of local staff in favor of voicetracking, and our defensive reaction to PPM are leading to ever less engagement.
Look, the more Muzak-like we become, the more we're just a music service, like Pandora (but with a lot more commercials and clutter), the more likely we are to push listeners away, not engage them. It just seems so obvious.
And that brings us to the topic no one wants to address, the words that cannot be spoken aloud inside any radio station: spot loads.
Radio is going to have to find a way to increase revenue while playing fewer spots.
We can either choose to or have the choice forced upon us. And if we wait much longer, we risk our very survival. Our long-term viability is being sacrificed to short term greed.
The best way I know of to increase the value of your station is to increase listener engagement.
Part of that is undoubtedly music, if yours is a music station. The problem is, very few music stations have found a way to be truly unique, to be necessary to listeners.
Again, Radio treats music mostly defensively rather than as an offensive opportunity. Listeners don't notice what they don't hear, right? We've all been taught that, so most music stations use research to screen out songs that listeners might not like or know, rather than to find songs listeners might love.
And, justifiably so, most radio stations aren't eager to turn over control of their playlists to every listener, the way Pandora can.
So, the part of your station that cannot be duplicated by your local competition or by satellite, internet and/or Pandora is talent.
Great talent in every daypart.
Great production and writing talent for each station in your cluster, so your local spots are part of the excellence of your product rather than an automatic button punch.
Great Program Directors, who know their market and have the time to make their station sparkle in every daypart, every day. That time is hard to find when you also do a four-hour air shift.
There is every reason to believe listeners still prefer their local stations.
So, if we're in the business of aggregating listeners and engaging with them, let's look a bit further out than this month or this quarter.
Let's play to our strengths, rather than accentuating our weaknesses, because the bottom line is, this is a business worth nurturing and protecting.