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[Swprograms] Columbus Dispatch article on radio's economic challenges
Link courtesy of George Zeller.
Richard
http://www.dispatch.com/live/content/business/stories/2009/08/03/RADIO_IN_A_DAZE.ART_ART_08-03-09_A6_4OEL2HP.html?sid=101
or http://snipurl.com/oleq2
(long version may break over two lines in your e-mail).
The statistics on radio listening look like they were provided by the
industry (i.e. Clear Channel) and not by independent
researchers...most stats I've seen aren't as favorable towards radio.
---------- Forwarded message ----------
From: George Zeller <georgez@xxxxxxxx>
Date: Mon, Aug 3, 2009 at 6:35 AM
Subject: [roburgdx] Radio News in Columbus Dispatch Monday
To: Robergdx <roburgdx@xxxxxxxxxxxxxxx>
http://www.dispatch.com/live/content/business/stories/2009/08/03/RADIO_IN_A_DAZE.ART_ART_08-03-09_A6_4OEL2HP.html?sid=101
Struggling to stay on the dial
Radio industry -- with revenues faltering and staffs cut to the bone
-- plots survival strategy
Monday, August 3, 2009 2:59 AM
By Tim Feran
THE COLUMBUS DISPATCH
TOM DODGE | Dispatch
In the studio at WCKX (107.5 FM): from left, the Power Morning Crew of
Konata, Misty Jordan and Paul Strong, and general manager Jeff Wilson.
Jeff Wilson doesn't work in the radio business anymore.
He is general manager of WCKX (107.5 FM), WXMG (98.9 FM) and WJYD
(106.3 FM), but the word radio "is nowhere in our local creed," he
said recently.
Better to call it "brand management," he said.
It's a new way of looking at the radio business, and it may be a key
to the industry's future, which, like that of other
advertising-dependent media, is looking pretty grim.
Revenue in the Columbus radio market, the nation's 36th largest, fell
by 21.2 percent to $34.1 million for the first six months of 2009,
down from $43.4 million for the same period last year.
The drop isn't just from the absence of political ads, which crested
as last year's presidential election neared, managers say, or because
fewer people are buying ads. The problem is that people are paying
less per ad.
"A large part is not a consequence of fewer ads but a consequence of
rates," said Alan Goodman, general manager of Saga Communications'
stations in Columbus, which include WSNY (94.7 FM) and WJZA (103.5
FM). "There are roughly the same number of accounts utilizing radio.
It's the rate structure that has somewhat imploded."
The ripple effect of that dearth of revenue is becoming evident. The
debt rating of Clear Channel -- which operates six stations in
Columbus, including market leaders WNCI (97.9 FM), WCOL (92.3 FM) and
WTVN (610 AM) -- recently was lowered two notches into junk status by
Standard & Poor's, reflecting concern that the company might default.
Financial pressures have led Clear Channel to lay off more than 2,400
employees this year, more than 10 percent of its work force.
Radio One, which operates three stations in Columbus, reported a loss
of $59.4 million for the first quarter of 2009, compared with a loss
of $18.9 million a year earlier. Things are not likely to improve in
the second quarter, Alfred C. Liggins III, Radio One's president and
CEO, said in a statement.
It's a similar story at Saga Communications, which operates four
stations in Columbus. It reported a loss of $362 million for the first
quarter of 2009, compared with a profit of $910 million a year
earlier.
Radio stations have been cutting back but, given wholesale changes
enabled by a decade-old law, little fat is left.
The Telecommunications Act of 1996 permitted a single company to own
multiple stations in a single market, allowing them to share or cut
the staff and use money-saving technologies and syndicated features.
Further reduction of staffing could threaten stations' personality and
ability to act quickly in the event of a breaking story or weather
alert. In the long run, such a strategy could prove self-defeating,
several broadcasters said.
"It's critically important to have live disc jockeys around all the
time," said Saga Communications' Goodman. "When Michael Jackson died,
none of the Clear Channel stations had it until the following morning,
nor did WLVQ. Radio One, us and CD101 were the only stations that had
people -- real people -- on the air taking comments, going live."
Even so, radio would seem to be better-positioned than other older
media to ride out the recession by integrating itself into the world
of the Internet, iPhone and iPod.
"The partnership between radio and the Internet, the potential for it,
is humongous," Goodman said. "We can reach everybody now at the
office, through iPhones, cell phones. So we're available to multiple
users. The only thing that changes is the delivery systems."
For now, online potential is still more promise than fact. In
Columbus, digital ad sales have risen 36.6 percent for the first six
months of 2009, to $1.2 million, from $896,000 for the same period in
2008. But online ads represent only 3.5 percent of total revenue.
Still, not all the news is bad. Audience levels for radio haven't
changed much during the past decade.
Nationally, radio reaches 92 percent of people age 12 or older each
week, despite the popularity of MP3 players and the growth of
Internet-only stations, Arbitron, a media and marketing research firm,
reported last month. Even 89 percent of the young radio audience,
youths ages 12 to 17, continue to tune in each week.
And though some stations have cut their staff significantly,
opportunity is on the horizon, programmers say.
WBNS (97.1 FM) dropped 16 people in programming, sales and promotions
in January when it dumped its music format and began simulcasting the
all-sports format on its AM sibling, WBNS (1460 AM).
The move, while painful, was made with an eye toward the future, said
Dave Van Stone, who oversees both stations as president and general
manager of RadiOhio, a sister company of The Dispatch Printing
Company, which also owns The Dispatch.
"I'm really, really optimistic about the future," he said. "This year
has stunk for everyone, of course. But, for us, sports is a huge
opportunity and the listeners have supported our move to FM. We've
gotten great response from advertisers, too, so I think it will play
out as we hoped."
Can radio survive?
"I still believe in the future of radio," Goodman said. "It will be
redefined by the medium of its delivery. That will be different. But
hopefully we can continue to contribute the same things to the
community that we've always done. It's not only about the profits."
Information from the Philadelphia Inquirer via the Associated Press
was included in this story.
tferan@xxxxxxxxxxxx
Revenue in the Columbus radio market, the nation's 36th largest, fell
by 21.2 percent in the first half of 2009.
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International broadcasting / shortwave blog:
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