A Man on the Street’s View of Radio

Broadcasters, at Least the Ones I Meet, Are Very Much Invested in the Future
By RadioWorld ,

As far back as I can remember in my 32 years of attending NAB shows, someone inevitably stops me in the hall or at the booth and asks me my opinion on the state of radio. I was always fairly certain how I’d answer, until this year.

I have to admit that faced with that same old question at this spring’s show, I had one of those “man on the street” moments you see on TV, where passersby are asked a ridiculously simple question but can’t seem to come up with the answer.

How can anyone possibly sum up recent market conditions? I surely can’t. I am not a radio economist and Broadcast Electronics is certainly not an authority on the business of operating a radio station. We make transmitters and studio gear. What do we know about ratings and advertising? I am far more comfortable speaking about modulation and bandwidth issues.

Yet, nothing could be more important to me, and BE, than the state of radio. We do not have a division or department or cubicle at BE that doesn’t relate to radio somehow. Which makes us the proverbial man on the street, I suppose. Radio is all we do, so we tend to be hyper-aware of what is going on with our customers. And, for what it’s worth, I can tell you that not all of it is bad news.

Small-market lessons

For example, for all the talk of doom in the news recently, I found it interesting that at this spring’s convention, people seemed genuinely interested in buying stations. One broadcaster confided that he was at the show checking out equipment because he’s thinking about buying a couple of stations now that the market is priced right.

I also noticed that engineers arrived with the usual list of radio projects, both studio- and RF-related. Of course, budgets aren’t grandiose these days, but then, they’ve seldom been grandiose.

It’s also true that HD Radio, other than the power level issue, wasn’t the center of attention as it had been at previous shows, but that’s nothing new. A lot of HD Radio build-outs have already taken place in the larger U.S. markets, and it’s no surprise that the remaining stations are making the transition at a slower pace.

I talked to quite a few small- and mid-market station owners whose stations are adopting HD Radio one unit at a time. In fact, I noticed that this year’s convention was dominated by small- and mid-market broadcasters more so than any other in recent history, in large part because some of the major U.S. groups stayed home this year.

That’s probably why much of what we heard mirrored the discussion at a BE webinar earlier in the year for mid-and small-market operators — I guess you could call it BE’s version of the man on the street interview for station owners in the heartland.

Many radio operators said local advertising was holding its own. Two said ad sales were up 7 percent in 2008 compared to 2007. Actually, one made a point of saying that his sales were up only 7-1/2 percent in 2008, his lowest increase in 11 years. There had been some downward ticks in revenue during the first several months of 2009, of course, but in good years, his stations saw an average 10 percent increase in ad sales.

General Motors should be so lucky!

Unconventional thinking

Several radio operators told of picking up ad dollars from merchants who once advertised in the local paper but are now making buys on radio because they perceive the value to be better.

With more and more newspapers folding, that trend could very well continue, leaving merchants in the lurch and millions of ad dollars on the table for opportunistic broadcasters.

We know of at least one station that is not only filling the newspaper void with traditional spots, but also e-mailing merchant offers to loyal listeners for a surcharge and even creating portals for merchants that will be able to do transactions for them.

Another operator, whose station is an hour outside of Detroit, is targeting unconventional clients in order to replace some of the shrinking ad dollars as a result of the auto industry slowdown. He mentioned doctors and lawyers, and a precious metal advertiser who is doing brisk business by taking in people’s jewelry.

Another money-maker: event marketing. He recently sponsored one outdoor event for hunters and fishers that attracted 600 people and 35 exhibitors, a precipitous rise in attendance and exhibitor revenue from the year before.

These are the sort of stories we hear over and over again in our daily conversations with broadcasters.

It’s evident to us that the radio industry is taking stock of the situation and making ends meet in very tough economic times. Some stations are even making inch-by-inch progress in nontraditional areas.

One owner told me he specifically came to the NAB Show to find out about streaming program content to mobile phones; and I lost count of the number of people who were interested in text applications. These are no longer pipe dream applications; they’re for real.

Emmis Radio, for example, tells us that they are seeing per ad buy interest when adding RDS text messages while audio commercials run or during morning shows and music sets. And, just recently, I heard about a station that began running live Webcams of the morning talent on the station Web site, and listeners loved it so much, they’re taking it to YouTube.

Broadcasters, at least the ones I speak to, are very much invested in the future — that goes for those abroad, too. I experienced this first-hand a few weeks prior to the show during a trip to India, where commercial radio is relatively new and is run almost exclusively by people aged 30 and younger.

I suspect that many of these young broadcasters haven’t seen a board in two years, let alone know how to operate one. Yet, they, like so many others that I have met and reconnected with recently, are totally invested in the future of radio, which in itself says a lot about current market conditions.

I certainly do not have all the answers. But, if I had to pick one takeaway from my conversations with broadcasters recently, it’s that they are doing what they always do: radio.

Broadcast Electronics recently celebrated its 50th anniversary. Tim Bealor has almost 35 years’ experience and leadership as a senior BE executive. Contact him attbealor@bdcast.com. Comment on this or any article toradioworld@nbmedia.com.

The author is vice president of sales for Broadcast Electronics.