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Finally, Radio Invests in Itself

Clear Channel's commitment to an aggressive rollout of HD Radio is a huge boost to radio's hopes of retaining its listeners and relevancy.

Clear Channel’s commitment to an aggressive rollout of HD Radio is a huge boost to radio’s hopes of retaining its listeners and relevancy. (Some would say “and attracting new listeners,” but let’s start by keeping the ones we’ve got.)

Radio’s biggest group owner already was an investor in the technology through Ibiquity; but the supersized radio company had been holding back on taking the big IBOC step. Two years ago this month, Bill Suffa, Clear Channel’s top capital investment guy, told our News Editor/Washington Bureau Chief Leslie Stimson on the front page of this newspaper that “the whole IBOC thing is one of economics … from a financial basis, it’s very difficult to justify going to IBOC at this time … We’re talking about return on investment.”

Things have changed; and when the company in late July issued its announcement of an “advanced technology initiative” and a commitment to install HD Radio in 95 percent of its top 100 markets within three years, Stimson stuck her head into my office and said, “I guess they found their ROI.”

Market forces

Indeed, return on investment is what this is all about. And it’s good news – great news – that the big pooch in radio’s dog pound is thinking about how to make radio better.

I don’t want to make too much out of one corporate decision. However, I do like what I’m seeing and hearing on several fronts from Clear Channel lately. And don’t think for a minute that other companies aren’t paying close attention.

For too long, radio has been content to milk its lucrative market position without investing in improving itself. While new media have sprung up around us, many leaders in radio felt secure believing that nothing could threaten our supremacy with listeners trapped in the car or the workplace.

As a result, ad clutter proliferated. Programming innovation plummeted. Groups looked for every way to squeeze out the “inefficiencies” in the marketplace – inefficiencies that, some people feel, gave radio its market-by-market identity.

Meanwhile, many rosy-outlook types parroted the old line that “radio will survive, it always has,” as though our medium is invincible thanks to some sort of magic invincibility cloak.

My friends at NAB and some other broadcasters will argue with me about this; they’ve said that radio has never been more diverse and listener-oriented than it is today. But they are ignoring the elephant in the room on this issue.

“Localism” has come to be viewed by cynics as a naïve concept. Stations sound the same, market to market to market. Even the most ardent radio fans have felt (and I have written) that market forces were at work to make homogenization of our product inevitable.

But guess what? Market forces are now working to make radio better. That smugness has been replaced by concern that radio’s place in the American media pantheon is not inviolable. Along came Internet radio, MP3s and iPods, cellphones, Wi-Fi – and satellite radio, the 2-by-4 upside the head that really got the donkey’s attention. Satellite is a competing medium that reached right into the center of our home turf and showed us that listeners not only want interesting programming with fewer commercials, they’ll pay for it.

Thanks, XM. You did what many of us in radio could not.

More than toothpaste

Meanwhile, the past year has seen several welcome initiatives at Clear Channel. Someone – and I suspect it’s John Hogan – has succeeded in getting the company to tone down its “we’re just toothpaste salesmen” rhetoric.

The company’s localism initiatives, efforts to curb indecency and apparent renewed appreciation for its image in the communities in which it operates are, of course, driven by business concerns, not altruism; but I welcome them, because I equate good radio practices with good business.

Clear Channel has been a more responsible corporate citizen of late, responding to critics who felt it was paying little heed to the quality of its programming. (Compare this to Infinity’s pugilistic attitude toward regulation and content.)

And few announcements, even this IBOC news, could be as welcome to me as Clear Channel’s stated commitment to fixing the problem of ad clutter.

I am proud that Radio World has been one of the most vocal industry voices on this topic over the years, including a pointed editorial in our Feb. 11 issue, in which we wrote, “Ad buyers must sense that if their commercial is deeper than the second or third ad played in a stop set, a huge chunk of the audience has tune out mentally or switched channels … yet the paradigm persists. … Radio needs to reinvent the way commercials are presented.”

I am encouraged to find that a big industry can in fact do better when it puts its mind to a problem.

Digital radio’s audio quality is a plus; and some major news coverage of the Clear Channel announcement focused on that aspect. But my gut tells me Clear Channel ultimately made the decision it did because it believes that the data and multicasting possibilities represent a major potential increase in the value of the spectrum it occupies. A company like Clear Channel does not spend $100 million over 10 years unless it does indeed see the ROI.

Radio has a real chance here to win back listeners and make the radio experience exciting again. Improvements to radio’s fundamental services are in our enlightened self-interest. I’m glad Clear Channel took this step.