Place Your Bets
June 5, 2015
How confident are you in radio? I mean, broadcast radio. Do you think it's nothing better content will fix? Do you think AM can be revitalized? Is there opportunity in things like HD Radio?
Okay, then. Would you buy a station right now? With your own money? I'm not talking about winning-insane-amounts-in-the-lottery money. I mean reasonable financing. A basic investment. Would you buy a station right now, in 2015, with your own money?
That came to mind when I was slogging through the FCC database looking at station sale documents. One AM station went for a hundred bucks, in a small but not impossibly small market. And before you go there, yes, I know, the purchase price doesn't reflect the real cost -- there's equipment to buy or upgrade, leases to sign, staff to hire, many expenses. But, still, if the license cost isn't huge, some of you COULD afford to put together financing or an investment group and buy, say, a medium market AM station.
But would you? That's sort of an acid test for exactly how enthusiastic you are about the broadcast radio industry. Would you put your money in it now, or would you rather put your cash into new media? Or something else?
I would never have imagined this would be a question when I got into the business. In fact, that was the goal: I wanted to own stations. By the time I could reach that goal, however, prices had skyrocketed to the I'll-Never-In-A-Million-Years-Get-Financing level. Some of the companies that drove those prices skyward are now the ones holding on for dear life, looking for a sucker -- er, prudent investment group -- to bail them out under the impression that they're buying "digital" assets. I wonder if there are any kids left out there with the same goal I had decades ago, to buy and run and grow radio stations. They might find some bargains.
And, in truth, there are opportunities; they're just not the kind we used to see. Small market stations that own their local audiences and don't have significant digital competition, for example. And it's true that as operating businesses, apart from the debt burden weighing on their owners, many radio stations are still profitable.
But so are many newspapers. They're just not growing, or growing at negligible rates. The growth is in digital. Yet THAT growth is, while rapid, also still relative pennies. (Do I have to say Digital Dimes? I'm so tired of that cliché.) And the low -- nonexistent, really -- barrier to entry means that whatever you do is very vulnerable to competition, too.
So, what media investment makes sense? This is where your definition of the media business has to be very specific and very different from the past. And it's the argument about whether radio is defined as AM and FM or includes streaming and podcasting as well. Forget that argument. It's about content, period. If you own the right intellectual property, whether you're a podcaster creating a great show or a multinational corporation holding the rights to a huge movie franchise, you own something that has growth potential. The platforms are secondary, and have to be, because you have no idea what the future will bring in that regard. It's not even just about whether broadcast media will survive. It wasn't long ago that nobody -- nobody -- would have guessed that Netflix would go from renting DVDs in the mail to the way a huge number of people get their TV shows. Nobody saw the Great Cable Monolith being threatened by cord-cutting. How radio -- audio entertainment -- and television -- video entertainment -- are delivered, how they look and sound, a decade from now is still undetermined. A lot can happen in a short time, in case you haven't noticed. Whatever happens, though, there will be a pipeline to fill with great content.
And great content is what many of you do. There's a future in that, and in many ways, it's more exciting than ever to be in that business. If that means my old dream of owning a bunch of radio stations and programming them the way I want is forever dashed, that's okay. This new dream is pretty cool, too, and a lot more attainable.
Whatever content you create, you need ideas for stuff to talk about, and for that, check out All Access News-Talk-Sports' Talk Topics, with hundreds of items and ideas and bad jokes, available now by clicking here. And there's the Talk Topics Twitter feed at @talktopics with every story individually linked to the appropriate item. Plus, this week, it's a return visit for Salem Radio Network host Michael Medved at "10 Questions With...," talking about his welcome return from cancer treatment -- whew! -- and politics and faith. Michael's always a thoughtful and interesting subject, and he does not disappoint this time around.
You can follow my personal Twitter account at @pmsimon, and my Instagram account (same handle, @pmsimon) as well? And you can find me on Facebook at www.facebook.com/pmsimon, and there's pmsimon.com, back in intermittent action.
And as for Full Disclosure: I also serve as Director of Programming for Nerdist Industries, which includes the Nerdist Podcast Network, one of your major podcast entities. Hey, we had John Cusack, Mike Judge, and Allison Janney on this week - all quite good.
If you read this early enough on Friday, June 5th, I'm still at Hivio here in L.A. Next week at this time, I'll be in New York at Talkers. If you're at either place... um, I don't know, don't hit me. That's a reasonable request, right?