Radio: December 1, 2017
I
promise that I was going to let go of the CBS Radio-Entercom merger, in
spite of my concern of what the merger may mean to the radio industry.
But then I read something on Don Barrett’s LARadio.Com that I couldn’t let go without comment:
“We
are done apologizing about radio,” said David Field, CEO of the new
Entercom. “(It’s) America’s #1 reach medium, which is massively
undervalued.”
This
one quote says volumes about Field and what is wrong with radio.
Frankly, if I owned stock in Entercom, I would be very concerned. But it
does explain a lot. To wit:
•
One of radio’s greatest problems is revenue. Ad sales dropped in 2008
and have not rebounded. A major reason? Radio under the current
corporate model has changed radio itself -- with rare exceptions -- from
being a foreground activity with listeners actively engaged and is now a
background service with listeners changing stations as soon as the
advertising begins.
•
To attempt to make up for lost revenue, stations added more commercials
each hour, making the stop-sets even less tolerable to listeners. Add
to that the sponsorships for everything “traffic is brought to you by
...” and the issue is compounded. No advertiser in his right mind would
pay a premium to advertise on a station run this way ... which includes
Entercom stations as well as iHeart and Cumulus. This explains why
revenue among major corporate stations is flat in spite of ad minute
increases.
•
In order to supposedly move the merger ahead, Field sold the one
station in Los Angeles -- The Sound (100.3 FM) -- that bucked the trend
and had a fiercely loyal audience that did listen actively. This could
have been exploited by the CBS sales department, but he looked at the
spreadsheet instead of the audience. That he didn’t realize what he had
or didn’t care is very telling ... it would appear that Field just
doesn’t get it, and that may be the saddest part of this merger. He
really should know better.
In
conclusion, David, you are right: you don’t have to make apologies. But
you’re in for a rude awakening if you think things are OK. Listeners
still have ever increasing choices, and your programming and management
decisions can either reverse ... or instead hasten, the trend away from
radio.
Dumping
The Sound instead of, say, Jack (93.1 FM) shows your reliance on
spreadsheets over understanding the art form and the true potential of
well-programmed radio. There is still time to change, and I hope you do
as you have the potential to do great things; in the meantime don’t
apologize ... just keep your resume current.
Cumulus Update
Cumulus
Media stock was officially delisted from the NASDAQ stock exchange, and
is now traded “over the counter” due to the company not maintaining a
stock price over $1 as required by NASDAQ. As I write this, Cumulus is
trading at 16 cents per share, with a total market cap value of less
than $5 million dollars. Just last year, Cumulus -- which owns KLOS
(95.5 FM) and KABC (790 AM) locally -- did a reverse split to try to
maintain the price but it was ultimately not successful.
What
does this mean for Cumulus? Operationally, nothing. A company’s stock
price doesn’t necessarily mean anything directly. The problem is with
debt of more than $2 billion on which the company is apparently unable
or unwilling to make payments. This will be a story to watch.
Where’s Olney?
A
reader who wanted their name kept secret asked, “Could you please let
the readers know what happened to Warren Olney on KCRW 89.9 FM?”
Olney gave up his daily syndicated show heard locally on KCRW, and is now doing a podcast. Find it via Olney’s Facebook page at facebook.com/KCRWToThePoint/
Extended Holiday
Go
Country (105.1 FM) began playing holiday music last week as they did
last year. It’s a good alternative to KOST (103.5 FM); I actually like
it a little better. But I miss the country tunes.
No comments:
Post a Comment