Playing Fantasy Radio Business League, or Dividing To Conquer
September 19, 2014
Get over it.
Really, you should get over it now. By "you," I mean you, and by "it," I mean radio, not the industry or the medium but the word. This comes to mind because of the reaction to Clear Channel changing its name to iHeartMedia and iHeartCommunications and iHeartInvestors and whatever other divisions they created. I mean, sure, I joked along with everyone else when I heard it, tweeted out that the new name was "iHeartMedia" because "iHeartWe'reJustLikePandoraPleaseBelieveUsWe'reDigitalNoReally" was too unwieldy, but I didn't think people would take it so... seriously, like it was an affront to the industry or something. I even heard someone complain that radio was "losing its radioness." That was not meant as a joke.
Look, we've had this discussion before. The world's changing. Radio's turning into something different. It HAS to, because consumer tastes and lifestyles are changing, technology's changing, and the competition is changing. This is not a bad or good thing, it just is.
We know that, right? So why is the term "radio" such a hangup for some people? Why do people get all bent out of shape when Pandora calls itself radio -- why, they don't have towers and antennas and jocks reading liner cards! They CAN'T be radio! They're just radio (this is where you curl your lip into a big, dark, dismissive sneer)... wannabes! And Clear Channel is (shake your head sadly for this) turning its back on radio and the people who (patriotic music swells in background) built this industry to the greatness for which it stands today! Not called radio? UNACCEPTABLE.
Except... first, let's be honest, Clear Channel dropped radio from its name before this. They've been "Clear Channel Media + Entertainment" for a while now. Second, whatever the motivation -- and I do believe that it's to shed the Wall-Street-unfriendly "old media" image and, maybe, lull some investors into thinking it's more a Pandora alternative than AM/FM -- you would do it, too, if you were Bob Pittman and Rich Bressler. It IS their job to get investors to back them, and to refinance that massive debt so they get more time to, um, refinance again, because that's how it's playing out.
But maybe this presages a different way to do business for radio companies. And here's where I play amateur CEO, because nobody will ever let me be a REAL CEO. I'm going to engage in some fantasy business league stuff here -- this is not by any means what iHeart or anyone else is actually doing, but something I think is a way of doing business that might once and for all move "radio" into the next phase, whatever it's called. For my model, I'll raise something that I have been observing with interest in media corporate ownership that is just now reaching radio, and I'll suggest that a) it's inevitable and b) it might not be a bad thing.
Look at Tribune. After it emerged from bankruptcy, what did it do? It created two Tribunes. One Tribune is taking all the newspapers and the debt, and the other Tribune is taking all the broadcast stations and production operations. This is like a yacht towing a garbage scow out to sea, then cutting the tow line and sending the scow off to drift in the ocean while the yacht heads to the Mediterranean. (Not to suggest that newspapers are garbage, just that the lack of growth and continued industry woes make it desirable to cut loose.) Another example? Journal and Scripps: the newspapers get lumped into one company, TV and radio into another. See what's happening here? Perceiving that the broadcast operations (mostly TV in both cases) are still capable of growth while the newspapers aren't, they're separating the growth and non-growth operations as if immunizing the former from the latter's cooties. If the newspapers sink further and can't be sold, they won't take the broadcast operations with them.
Still with me? Okay, you own a big broadcast company. You have a ton of radio stations, and revenue growth has slowed to a relative trickle. You have digital properties that both stream the stations and carry original programming, and there's tremendous growth in that (although it's still relatively small, revenue-wise, compared to the broadcast side, but you assume that will change in the next decade or less). Investors are way more interested in digital. What do you do?
Here's an idea: Lump the broadcast station licenses and hard assets into one company, and put the digital assets AND the creative assets -- the programming -- into the other. Low growth in one, high growth in the other. Have the latter company -- don't call it a "radio" company, because it isn't anymore -- produce the content that airs on the former under contract. If broadcasting continues to be low growth, that protects the digital and content divisions. And the content can also be sold to other companies' stations, to podcast networks, to other media needing audio content. That's how TV's worked forever -- the Big 4 networks' related production companies sell shows to rival networks all the time ("Modern Family," for example, is a Fox production airing on ABC) -- and how radio syndication works.
And it's not unprecedented within radio -- I've noted some small market deals lately that have involved related but separate corporate entities buying the licenses and the intellectual property of stations separately. Besides, the license companies can then start exploring alternate uses for their assets, like data transmission using HD subchannels (hey, they're worth something!), to increase their value and provide an alternate revenue stream. Ultimately, that would mean that those of you who create content -- hosts, producers, programmers -- wouldn't be working for radio stations anymore. That might work out better than the way things are now.
What does this all mean? Simple: "Radio" isn't even radio anymore, and that's okay. The market for audio content has expanded. It's now encompassing podcasting, streaming, audio for websites, and broadcast. The word "radio" is restrictive; it's linear, in-pattern broadcasting in a world that increasingly wants its audio on demand, or not limited by signal or geography, or limited to only the formats and schedules the locally-available broadcast signals provide. So, of COURSE a company that wants to project the image of filling the needs and desires of THIS world rather than the world of 1986 would want a name that doesn't connote "old media." Yes, "Clear Channel" meant 50,000-watt AM stations that covered a big chunk of America back in the day. That day was over a while ago. And if the trend of separating content from stations and licenses continues, it could signal MORE, not less, commitment to content moving forward.
If you're among those who think that broadcasters dropping the word "radio" is a danger sign of radio "losing its radioness," well, maybe radio NEEDS to lose its "radioness." Or its "radiosity." The new world offers a lot more opportunity if you stop worrying about defining "radio" and stop allowing that term to define what you're creating.
Whomever you end up working for (for whomever you end up working? Grammar Is We), your best source for ideas for topics is All Access News-Talk-Sports' Talk Topics, where you'll find hundreds of items and ideas for segments on your shows plus kicker stories you won't see anywhere else. Click here for that. And the Talk Topics Twitter feed at @talktopics has every story individually linked to the appropriate item.
Full Disclosure: I also serve as Director of Programming for Nerdist Industries (a division of Legendary Pictures, and, no, I've never met Godzilla or Batman), which includes the Nerdist Podcast Network, one of your major podcast entities.
No, not sure if all of that made sense, but it's been a long and mostly excruciatingly hot week here and it's all I have. Maybe I'll totally disagree with my own analysis next week. Be here next Friday and see....