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Wednesday, June 10, 2009

The State of Radio--A Media Realism Interview

I have known Roddy Freeman for nearly 32 years. In that time, I have never met anyone who loved radio more or followed it more thoroughly or objectively. Today, he has graciously consented to a brief interview on the state of the medium. Roddy has been a media strategist for a very long time (translation--longer than I!) He had stints at Doner, Ted Bates, Cunningham & Walsh, Ayer (where I started) and McCann. In recent years, he has run his own media consultancy based in Atlanta. I had the pleasure of working with him on two tours of agency duty. Plus, he maintains his own blog on local radio entitled "Atlanta Airwaves Action". You might really enjoy it even if you are not Atlanta based.

So, here is Roddy's perspective:

Media Realism: Young people tell me that they often hear about new music from social media. Someone will post on their My Space page, for example, that they just heard Ms.X and love her music. That goes out to a few hundred people who in turn send it to thousands of others. How do you think that this is effecting the role of radio in young people's loves?

Roddy Freeman: Radio is definitely having a problem attracting young people. According to Arbitron, the average percentage of persons using radio at any given time has decreased 24% among teens and 22% among 18-24 from 1998 to 2007. Radio in these people’s lives has of course been replaced by music on iPods, computers and other devices. And, the frenzied growth of Facebook, My Space et al has greatly accelerated the viral spread of news about new music downloads.

MR: Arbitron's PPM (Portable People Meter) is turning rankings upside down. Most of us would agree that it is a big improvement over the diary measurement technique. Will this change formats in many markets?

RF: Yes. PPM already has been prompting format changes. The Smooth Jazz format has been virtually wiped out. Hot Talk (for a relatively young male audience) is becoming a thing of the past in PPM markets. On the other hand, PPM has been very kind to high-cuming formats, such as CHR (Top 40). A huge cume can disguise very short time spent listening by helping a station toward good quarter-hour numbers. As a result, new CHR stations have popped up in New York and L.A., and this trend will continue as PPM enters more markets in the months ahead.

MR--In smaller and mid-size markets, there is little local on air talent as syndicated shows cover many hours a day. Any chance that this can change?

RF--I would like to think this will change, especially if the big corporate station owners are forced to shed stations in medium markets. But technology might prevent this from changing. It’s become easy for small and medium market owners to acquire satellite formats and shows that sound better than what they could afford to do on their own. Given the technology available, it’s easy to “fool” a local audience by inserting the call letters (with the national host’s voice) after each song and going to a meteorological service for the local weather including the current temperature. And it’s also better for the bottom line. So we might see some localism come back but probably not a lot.

MR--When AM radio was on the ropes some years back, talk radio saved it. Anything on the horizon for FM that could breathe life into it?

RF--Talk actually is becoming big on FM. A number of large AM’s have recently started simulcasting on an FM or moving a successful AM News/Talk station to FM. Some market examples are Salt Lake City, Indianapolis and Pittsburgh. Otherwise, I don’t see any new format coming down the pike for FM. The reason is that as much as people complain about lack of music variety, ratings have always proven that listeners in general want very familiar music. A deep playlist or a format of unfamiliar songs is not commercially viable.

I don’t think radio has done a good job of incorporating digital into their marketing plans. Their streaming simply duplicates their on-air product except for the commercials. I think they’re missing an opportunity to put forth something different online, lure young people from an audio stream such as Slacker or Pandora, and turn it into a profit center.

MR--What do you think of the prospects for satellite radio? Has much of their problem been the decline of the US auto market and rotten economy? Or, was it just not that great a product to begin with?

RF--I don’t see the incentive for large numbers of people to purchase Satellite Radio in its present form. The music stations sound voicetracked (i.e. have disc jockeys who record their limited talk using software ahead of time) and have little personality; they are mainly music machines. Satellite Radio does offer virtually every conceivable genre of music, but most appeal to a small, very narrow audience that will have little impact on Satellite’s revenue. While listeners complain about advertising on FM, spots do not appear to have a noticeable effect on listening levels. Moreover, Talk shows on Satellite are simulcasts of what’s available on commercial radio and cable TV.

Satellite does fill a role of having a continuous radio companion on a distant car trip. The decline of the auto market is certainly having an effect on Satellite Radio; for the first time, Satellite subscriptions declined over the past several months. The jury is still out; now that Liberty Media owns a large share of Sirius XM and might own more in the near future, watching what the company might do to improve things will be interesting.

MR--If a giant such as Clear Channel goes bust, will local ownership come back in many markets?

RF--I’m hoping some local ownership will come back. What would be even better is smaller broadcasting companies owning fewer stations per market than are now owned by the Clear Channels of the world. The smaller groups would have more business and programming expertise plus greater financial resources than local owners.

Something has to give and maybe will happen before the year is over. One problem is the banks probably don’t want stations back because they couldn’t get what is owed to them from new owners in the current marketplace; values have plummeted too much. But companies such as Citadel, Clear Channel and Cumulus Media Partners are in so much trouble that they probably will run out of refinancing options and be forced to unload stations.

MR--The agency model is broken and many shops are on the edge. Is their a future for radio as we now know it? How might it evolve?

RF--One thing that doomsayers forget is that radio has the best delivery system of any audio medium. Radio is accessible to virtually everyone, unlike an iPod, Blackberry or any other device. There’s no buffering and no downloading. Radio’s problem is its content. When it’s forced to, and radio is still a very viable medium, radio will correct its content problem. Doing so now might be difficult given all the financial problems. But eventually radio will straighten itself out. In terms of delivery system, radio has no problem at all.

MR--I have never thought that agencies have given radio a fair shake in putting media plans together. How can radio stations sell themselves better?

RF--Radio has always played second fiddle at ad agencies. Some of that has to do of course with glamour and making money. Some of it is legitimate; TV does offer a superior creative product as well as high reach and probably greater attentiveness. I’ve always felt the RAB sold radio incorrectly by saying it’s a reach medium and pointing out that almost everyone hears radio over a week. That would be a valid point if media buyers used every station. The truth is, because most people listen to just several stations, radio buys typically have low reach compared to TV. Yet radio does have some excellent attributes, and I think the RAB would better serve itself by promoting the medium’s actual strengths.

MR--Music theft is really rampant. I was surprised on my college tour (see May 14th post) by the stuff going on all over. Also, some young people tell me that some artists make so much on their concert tours they are willing to almost give away their music for free. The kids out there tell me that the "Wild West" mentality provides a greater variety of music and gives smaller artists a chance. I have gone to folk concerts recently where the artists hawked CD's during intermission and after the show. The only way to buy the music was in person or on the Web. What is the future of Warner Music et al?

RF--The record labels are having the same problems as radio, and I don’t see that going away. That’s why the record lobby is trying to push legislation through Congress that would charge radio stations royalties, and why music-only retailers have almost disappeared. I don’t know whether technology and legislation will ultimately converge to end illegal downloads.

Thanks, Roddy. That was terrific. And, please readers, do not forget to check out Atlanta Airwaves Action (atlairwaves.blogspot.com).

If you would like to reach Don Cole directly, you may contact him at doncolemedia@gmail.com

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