Does Radio Have A Future?
February 09, 2009
I love radio. It is where I got my start in advertising and marketing. But, radio is failing our society in the same way Wall Street has...we're talkin' greed and it pains me to write this.
Here in the "hometown" of our advertising agency there are roughly 19 radio signals. Less than four are locally owned. And, these tend to be marginally commercial. That leaves the bulk of Des Moines radio being owned by three outside radio groups with headquarters and management "out there". And the programming proves it.
Back in the day, radio (and all of broadcast media) was required to "serve the public interest in their city of license". The spirit of that regulation has largely been gutted and so we have "news stations" that offers opinion in the guise of "news" (with zero local news) and "public interest" activities take on a "pay to play" role. Every moment is monetized. Local "stars" are replaced on a whim with "voice tracks".
How can this be? Maybe because the owner is not involved...
A bean counter in an office in a city where it's warm in February looks at revenues and makes decisions that effect thousands of local folks. Why is it this way?
There is no way a signal in Des Moines, Iowa that captures 15,000 listeners a week can sell for $15 million dollars. It does not cash flow. Period. But if you look around you realize signals have been selling on the "multiples" for years. The scam works like this: The outside corporation buys a signal many times it's billing, holds it for a few years and then sells it again "on the multiple" to another corporation that will then try it to sell it to somebody else. There are stations in this market that have been through this four or five times in fifteen years. That's how a radio station that bills a million dollars (not many) a year can sell for 15 million. It is a "house of cards" and it is that culture of corporate greed that is bringing broadcasting to it's collective knees.
Meanwhile advertisers are asked to pony up more advertising dollars...for less. "Local stations" find themselves serving their "master corporation" rather than the "public interest".
Will it change? Perhaps new technology will force the issue, perhaps advertisers will become more savvy buyers, perhaps the public will demand some attention. In the meantime...
Michael P. Libbie - Insight Advertising, Marketing & Communications - Where we still buy radio for our clients...but carefully.