Mike Agovino

Mike Agovino is one of the few people in the radio industry who can say they were at the forefront of radio consolidation and on the cutting edge of the current movement towards optimizing digital revenue streams. Around 10 years ago, he was handed the reins to Jacor, AM/FM and Clear Channel's stations so he could revamp the Rep business for Katz. Fast forward to today: Agovino is COO of Triton Media Group, which has grown to become the leading provider of digital applications, service and content to the radio industry. Here's his inside look at the continuing evolution of radio's revenue streams.

How did your experience at Katz and Clear Channel help you make the segue to the digital world at Triton?

My experience at Katz was wonderful. The Rep business is like a 50-yard-line seat on the radio industry; you get to know all the markets, the groups, the players, the top shows and you build a lot of great relationships that last your entire career. I miss many aspects of those days as they were unbelievably fun. But things evolve and Katz sort of became the "player to be named later" in the Clear Channel/AMFM deal and that presented an opportunity for me and many others to re-invent ourselves.

After Jacor, AM/FM and Clear Channel were merged, the decision was made to put all those stations together into one sales organization. Stu Olds asked me to launch that group in 2000. That was the start of my three-year stint at Clear Channel. I loved my experience there. I came into a brand new situation and the company basically said, "Here are 1,200 radio stations, 750,000 outdoor faces and this cool live entertainment company ... go figure out how we can monetize the synergy".

To me and other leaders on our team this was both an inspiring and liberating experience. Most of my time in the rep business had been spent soliciting new stations and trying to protect the stations I already represented. In this new world of Clear Channel, my job description got turned on its head; I could focus singularly on value creation for Clear Channel. This singularity of mission allowed me and my team to focus on the opportunities that truly mattered.

We started thinking much more like marketers. I got a group of people together across all our platforms -- Network Radio, Station Group, Outdoor and Live Entertainment -- and we'd meet regularly to discuss targets for our asset presentations. We had a good little run and generated some decent new revenue. It was a really exhilarating time for me that changed my career perspective. The knowledge I gained selling cross-platform convinced me that the ultimate synergy and integration opportunity would be with digital assets.

Exactly when did you get the Net bug?

Prior to Clear Channel acquiring Katz, I launched a streaming rep unit inside of the company with partners in the building - that was as early as 1998 and '99. We were trying to put together a streaming network and we aggregated many of the early movers in the space, but we were a bit ahead of our time. The Internet didn't work so well back then when it came to streaming live audio or video, but we gave it a shot, learned a lot ... and I knew that at some point these technologies would transform the music and radio industries.

I left Clear Channel at a crazy time, but it all worked out in the end. In retrospect, I probably should have stayed where I was, but a complicated mixture of events led me to become Co-COO of Interep. I didn't stay long there. However, it was during that point in time where I became convinced there would be an opportunity for a company like Triton.

Triton CEO Neal Schore and I had known each other as friendly competitors and casual friends. Neal asked me to lunch one day and what started out as a lunch turned into an all-day affair, where we built a business plan on napkins. Neal is a brilliant guy and he has a great understanding and vision when it comes to doing deals, as well as connectivity to the right kinds of people to get things done. The more we talked, the more convinced we became that there was a large opportunity for a company to become a provider of best-in-class digital services to the radio industry.

Neal took that plan we built and began meeting with potential financial sponsors and not too long into the process, Oaktree Capital surfaced as the right team to partner with and that's when we co-founded Triton.

When did you realize the potential of the Internet as a legitimate revenue source?

We've believed from the very beginning that a transformation would happen with media distribution of all kinds. Radio or audio would be no different. What we saw happening at the time with the explosion of digital music was just the tip. Our initial investments were in companies that we believed could play a meaningful role in shaping that transformation. Those have proven to be wise investments.

How did Triton's growth come together?

Off of our initial success we started to look more holistically at terrestrial radio. We started thinking about its strengths and its weaknesses; we started assessing and obsessing over what we would do or what we would need if we owned a station group. So our mission evolved a bit as we then sought to find or build digital products that could offer a meaningful value proposition back to radio. We began to see our company playing a key role in paving the way forward for the industry. This obsession compelled us to make a series of key acquisitions over the last 24 months.

Are you concerned that, at some point in time, corporate radio will generate more money and invest more into their digital efforts in-house - and become competitive against you?

Radio desperately needs to invest more on digital. However, regardless of the radio group's size, there are things that are entirely inefficient to build, service and support in-house. The investment from the radio side needs to be more in true original content that can both attract an audience as well as go find the audience where they live. Software development is not the business that radio is in. Radio is in the entertainment business -- and content creation is where the investment should go.

Triton is a technology company. We're also a very unique technology company in that baked into the DNA of every product we build is a long history, knowledge and love of the radio industry.

One sentiment emanating from past Power Player interviews with certain radio group heads has been that while Net revenue is beneficial, it's not proving to be a "cash cow." It has been argued that the non-exclusive nature of the Net limits the amount of revenue one can generate. Agree?

I know some very sharp people are running these radio companies. They know where this is going. I was just on the phone with one of our clients last night. This is the Group head of a 100-plus station group. He told me that his digital revenue had grown by 400% in 2009 and that for the year digital would end up being 6.8% of his total business. His company is using the power of its local presence to build separate digital businesses that they promote through the radio stations; this man's company has more than 10% of their on-air cume actively participating in their various database-driven engagement opportunities. His company has dramatically out-paced the industry and he credits his digital strategy and his people with this accomplishment.

Where will Net radio stations fit in the overall radio world? Will they become a major player with the terrestrial giants and compete with them on a level playing field?

In some ways, they already are players. If you look at Ando's latest webcast metrics ranker, Pandora performs pretty well against the terrestrial companies. Moving forward, we're all in the same business. There will be a host of other players competing for audience around the world -- but that audience pie is growing, too. More people are listening to various forms of audio-centric content than ever before. When you combine online, satellite and terrestrial listening together, what is now "radio" has never been more popular.

Do you foresee digital revenue equaling - or surpassing -- traditional spot sales?

As we move forward and more people are drawn into the space, the ability to provide a rich data set for targeting purposes will propel revenue growth exponentially. However, it's very early in the game and we're a long way from such a goal. Currently digital is 2 or 3% of most stations business. I think 10% is an attainable goal for 2010...In fact, I think "Let's Get To 10 In '10" should be an industry battle cry.

Does the advertising community appreciate the true potential of the digital media business?

Everyone is still figuring this out. Traditional advertising brings critical mass and builds brands. I'm not convinced that most forms of digital advertising do a very good job of branding. With way too much inventory on the average page and virtually nobody clicking, it's hard to appreciate. What the marketer craves is the accountability and the sense of "I got exactly what I paid for," but there are many, many complexities with attribution and not all products lend themselves to the Google model.

Radio and TV have offered fabulous environments for advertisers for more than half a century. The power of audio and video advertising delivered inside the environment of trust provided by your favorite talk host or sitcom remains a powerful model today. What we are seeing is that model transferred and transformed through technology so that it can combine the best of what it has been with all the benefits of accountable new media. This is something the ad community will certainly appreciate and it's why we're so bullish at Triton.

What's your view of the concerns about a lack of localism and radio?

I was on the national side of this business for nearly 20 years. I know that just about every time I looked at an Arbitron ranker back then -- and every time I do so today -- I see lot of national content sitting on top of the rankings. I guess I don't really buy into the notion that taking national content is a bad thing. What's funny when you think about it is that national content only gets to be national content because it was so successful as local content. In the overwhelming majority of cases, people are deciding to affiliate with national pieces of content because they believe it delivers better ratings than their other options. I also believe that while your market knows Ryan Seacrest isn't physically there, you can do a great number of things, many with digital tools, to localize and provide unique experiences around that content.

When it comes to digital radio being local, there is a huge opportunity that online radio is really well positioned to take advantage of, but just being well positioned doesn't guarantee you anything. Up until now, radio stations have been pretty challenged in terms of driving engagement through their digital assets. Radio has predominantly been streaming, loyalty clubs, photo galleries and the like. Unless the engagement is broadened, which requires investment and promotion, station online performance won't compare very well when stacked up against other local media entities in their markets.

As someone who was on the inside during the deregulation boom, in your view, besides not accumulating huge debt loads during consolidation, was there anything radio could've done to prevent their current economic situation?

As someone who was there as Clear Channel was consolidating 1,200 stations, I can tell you it was and still is a tremendous opportunity for marketers ... and it inspired a lot of creativity and innovation. Defenders of the status quo will always outnumber the pioneers. I've gotten to the point where I just don't read a lot of that crap anymore. It's easy to look back and blame consolidation for our woes but I think it's much more productive to look forward and see the possibilities ahead. If one radio group can grow digital revenues 400%, every radio group can. Nobody could have predicted the kind of economic challenges we've lived through. The industry can wake up today, see some positive results from November and December and think, "We've weathered a pretty tough storm and we got lot of good things going on." There are reasons to be optimistic again!