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Monday, December 17, 2012
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Radio Industry Year Ends - What's Ahead?


Each year around this time there are multiple articles on the radio industry which wrap up the current year, or speak about what to expect in the coming year.

You can't "create" what's past - facts are facts - you only interpret them. You do "create" what's coming, though, with precognition or guessing. It's the latter which helps form my words.

"For all but a few big players, there is not enough money to be made selling advertising alone, anymore." I've been writing about how the internet affects the radio industry since January 1997, often showing impatience with radio executives who have dismantled a once respected industry in the name of higher profit margins. There are times when paths chosen by these leaders are questionable, even to an industry neophyte.

In 2002 I wrote: "Those of us who watched radio stations being bought like trading cards over the past five years have repeatedly asked 'How are they going to pay for this?'" I ended those comments ten years ago with "Today Wall Street is not looking favorably on radio as an investment, which means talk about more consolidation may turn into a scramble to deconstruct heavy debt (and interest payments)." It may be presumptuous, but I believe this is the reason why, as we exit 2012, stations have skeleton crews producing commercials and programming of a lesser quality.

Anyone who's created programming or commercials knows that to do it well you need focus, time, and resources. Everyone in the radio industry today knows these commodities are in short supply.

It's been coming for a long time, so we may as well say it outright: For all but a few big players, there is not enough money to be made selling advertising alone, anymore; or said another way, there are so many places to buy impression-based advertising today that the value of an impression has been greatly diminished.

Radio's product to advertisers is time, and radio sells it as an impression. As has been the case for over a half-century, radio advertising rates are based on two variables - how many are reached and for how long. Unless this changes we'll see a continuing drop in revenue.

The radio industry now has multiple competitors. Many more options compete for a person's time than just 10 years ago, when I asked "How are they going to pay for this?"

"To compete today, the radio industry needs to change" are words you've read many times at Audio Graphics. Last year, around now, you read this: "We're looking for change, yet a recent radio get-together was comprised of older white males, with an exception of a very few females in the crowd." I was referencing a 2011 radio industry being controlled by a group that does not understand how society has changed (or fights it), and how a major change for radio was needed at the top. Curious how at this same conference in 2012, nothing has changed. Check the pictures.

The radio industry is still being controlled by old white men; integrating youth and ethnic diversity into leadership is still missing. This is the main "change" needed. If you disagree, please comment below.

I'm taking a break through January 7.

Over the course of the next three weeks you'll see articles which have appeared at Audio Graphics starting in the year 2000. See if you can spot movement on the topics discussed. Match how things were "guessed" to what's occurred. I think you'll be surprised. Start with these words:
Quotes from Ken: 12/15/2011
...there's nothing being discussed that indicates we'll see major movement in better
using the internet for connecting to clients and audience.
Here's another item to keep tabs on in 2012. Besides iHeartRadio (Clear Channel)
and LastFM (CBS), what groups are challenging audio newcomers in mobile?
[BTW: Last.FM made a wise move in recently restricting the countries it serves.]
What radio group is forging inroads into email marketing?
How about advertiser education?
Social media will continue to be a major focus, without regard to whether
it provides a positive ROI.


Have a safe and merry holiday.

Ken Dardis















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