Hard economic times mean tough choices for radio owners and general managers.
How do they generate more money when ad sales are down while convincing top sales and management talent not to jump ship? How can the public’s passion for iPhones build radio’s audience, rather than erode it? Could government bureaucrats and money-seeking rights-holders hamstring the industry or rob it blind?
These topics will be up for discussion during the NAB Show Broadcast Management Conference. Here is a sampling of sessions of interest for radio managers.
Finding other revenues
“The New Radio Model: Tool Kit and Case Studies” — For decades, commercial radio has lived and died on advertising revenues. In fact, “the old radio model was reliant on spot sales for over 95 percent of its revenue,” says Mike Henry, CEO of Paragon Media Strategies and moderator of this Monday morning session.
Thanks to this addiction to ad dollars, he said, “The old radio model is now seriously underwater from the perfect storm of advertising declines and new competition.”
Mike Henry. ‘The old radio model is now seriously underwater from the perfect storm of advertising declines and new competition.’ In contrast, he says, the new radio model, while drawing on spot sales, increases the amount of live event and digital revenue in the overall mix.
In particular, “the new radio model combines hyper-local content and community-building with multi-platform distribution and revenue streams. ‘Multi-platform’ means all platforms, including events and on-site non-traditional revenue.” By hyper-local, Henry refers to the kind of local news, sports, events and community interaction at which radio can excel.
“Copyright Licensing” — Meanwhile, the cost of content remains a major concern for radio broadcasters, particularly with cash-strapped record companies pressing their case for performance royalties from radio every time one of their songs is played on air. Royalties historically have been paid to songwriters and composers but not to record labels and artists.
“The record industry’s business model is failing, and they are trying to shore it up by taking hundreds of millions, even billions, of dollars from the radio industry,” says NAB Executive Vice President of Media Relations Dennis Wharton.
“If this becomes law, many stations will have to switch to all-talk to survive, or just go dark. Fortunately, there is strong bipartisan resistance to performance royalties, but this battle is far from over.”
Performance royalties will be on the table during the session on Monday morning, as will fee determinations for BMI and ASCAP that are the subject of rate court litigation by the Radio Music License Committee; the status of SESAC licensing; streaming licensing; and the implications of content consumed via podcasts, downloads and mobile devices.
Retaining top employees
Patricia Kincaid, Media Staffing Network “Recruiting & Retaining Sales and Management Superstars” — Work harder, make less money: It hardly sounds like the best way to keep top salespeople and managers on staff. Yet this is precisely what radio owners must do to weather the challenging financial times.
How do you persuade profit-minded staff to stick around? Start by reminding them how hard they’ve worked to date, replies Patty Kincaid. She is director of new business development at Media Staffing Network and moderator of a Monday afternoon session.
“Many salespeople and managers who have worked for a company for a number of years have a vested interest in seeing it through,” Kincaid said.
“In today’s world, most are happy to have a job and know that while their income may have been affected by the business climate the past several years, their value has not waned.”
Meanwhile, money isn’t the only reason people stay with employers. Job satisfaction and how they are treated are factors. To keep top performers, build a relationship with them, she advises.
“Get them involved in top-level projects, let them take the lead, partner them up with junior employees which not only provides training for your new hires, but gives the senior employee some assistance with their workload. Focus on one-on-one time with employees; make sure you listen to them and recognize their achievements.”
Rules and ad rates
“Regulation: You Want Me to Do What?” — Once a year, the FCC bureaucracy, which may seem monolithic at other times, becomes human when top FCC execs and commission staff fly into Vegas to come face-to-face with NAB delegates.
According to Wharton, this is the time to catch the commission’s attention and get your questions answered.
“The FCC has been almost totally preoccupied with tackling broadband regulation,” he said. “But for broadcasters interested in discussing radio regulation with top policymakers, the NAB Show offers a prime opportunity.” For example, attendees can hear from, and talk to, FCC General Counsel Austin Schlick and Media Bureau Chief William Lake at this Monday afternoon session; they are among the panelists.
Separately, Chairman Julius Genachowski will speak in a high-profile keynote Tuesday afternoon, and three FCC commissioners will be part of the Tuesday session “Washington Face-off.”
Mark Levy. ‘Stations that pay close attention to rates as an integral part of their daily business have seen less rate erosion in “bad times” and substantial rate growth as things get better.’ “Raising Radio Rates” — The last few years have been tough for most U.S. commercial radio businesses. Many stations have lowered ad rates in an effort to offset dropping demand and more inventory. Unfortunately, without an increase in spot load, the result of rate cutting is less revenue, even if a station sells the same amount of airtime as before.
“It is part of the reason that many stations have had such a difficult time achieving budget,” says Mark D. Levy, vice president and general sales manager of educational services with the Radio Advertising Bureau. RAB has developed a strategy for resisting rate reductions, Levy says.
“It is based on knowing what a station has to sell, building a belief among the sales team that pricing is an integral part of their daily routine and then instituting a series of weekly checkpoints to make sure things are on track,” he said.
“Historically, stations that pay close attention to rates as an integral part of their daily business have seen less rate erosion in ‘bad’ times and substantial rate growth as things get better. Rate growth that outstrips the market is common.”
Levy will moderate a session on this topic Tuesday morning at the NAB Show.
Capturing Generation iPhone
“Mobile: The Seventh Medium” — In the old days, “mobile entertainment” referred to transistor radios. Today, mobile means iPhones and similar wireless devices — and it’s a space some observers think radio must conquer if it’s to remain viable.
“As the Walkman was replaced by the iPod, radio’s portability has been severely challenged,” said Fred Jacobs, president of Jacobs Media/jacAPPS.
“But mobile devices that allow consumers to download applications open up an entire new platform for radio. And apps do more than stream. They are mini-marketing machines that carry podcasts, advertising, games, connectivity to social media, and anything a station wants to present.”
‘Apps do more than stream,’ says Fred Jacobs. ‘They are mini-marketing machines.’ He will moderate a session about radio and the mobile revolution. Radio is a natural fit with mobile, providing access to new audiences for enhancing existing sales packages and generate added revenue.
“For example, our apps provide stations with control over their artwork remotely, so they can change ad panels at the station level,” says Jacobs. “There are five panels that rotate, creating more avails for sales reps. They can be used for sales, for promotions of events and remotes, for on-air giveaways, and for mobile couponing.
“This puts a client’s message right into the hands of consumers as they are on the go, shopping, eating, and spending.” Radio stations that do this in mobile make more money as a result.
“Mobile: The Seventh Medium” will be presented on Tuesday morning. Speakers from NPR Digital Media and Entercom are on the panel. (For the record, the other six media are print, recordings, cinema, radio, TV and the Internet.)