01 marzo 2008

Business Week: la radio si è rotta


Per una volta, lo spunto per l'ennesimo ritratto a fosche tinte delle pessime prospettive per la radio commerciale americana, su cui pesa una costante erosione delle revenues, non è il confronto con l'iPod, ma con la stampa locale. Nel suo requiem per la vecchia radio, Jon Fine su Business Week fa un interessante paragone tra stazioni e giornali locali. Questi ultimi riescono molto spesso a conquistare un posto di primaria importanza tra le realtà online su scala locale, producendo un sacco di notizie. Le radio, non solo non hanno abbastanza soldi, ma non sono attrezzate per questo. Molte non fanno altro che ripetere musica (posseduta da altri) e show radiofonici in syndication. Come che sia, la radio viene definita "un modello che non funziona più" e inadatta alla transizione verso il Web.

Media Centric February 28, 2008

Requiem for Old-Time Radio

Hit hard by the music world's fragmentation, it's handicapped in making a Web transition

by Jon Fine

I remember what we now call "terrestrial radio" with ridiculous fondness. I recall huddling with it long past bedtime, the volume set low, hoping to hear something I loved. Thus the truism of how radio is the most intimate medium: You're in bed with the lights out, the music and the DJ's voice going straight into your brain, the images created are yours alone.
I remember, with terrible pangs of longing, my first days as a college radio DJ. Doing a 3 a.m. to 6 a.m. slot in a small town in Ohio, even if, during those still and wintry nights, I could have been the last living person on earth for all the people who were actually listening.
All of which testifies to how old I am. Realities of the music world—the explosion in both expression and availability, first on independent labels and now everywhere, thanks to the Internet—began overtaking commercial radio stations well over 20 years ago. (I feel profoundly sorry for anyone whose musical universe is limited to the shrunken playlists of commercial radio, given the bounty available elsewhere.) There was a complicated blood bond that budding music geeks of the 1970s and '80s formed with radio, which today seems quaint. You loved radio for first opening up a world; you hated it for falling behind what was actually going on.
That's the emotional aspect of this medium, which almost certainly has more songs written about it than any other. Or at least it's me acknowledging my complicated feelings about it. The market is less sentimental. Rush Limbaugh may still mint millions, but a private equity firm that ran stock analyses of key publicly traded media companies in the past five years found that the worst-performing sector was radio, which managed the neat feat of underperforming newspaper companies. (This helps explain why radio giants Clear Channel (CCU) and Cumulus (CMLS) are in the process of going private.)

"THE MODEL IS BROKEN"

Flat industry ad revenues began a steady slide into negative territory beginning in May of last year, and January's decline was 6%. But monthly falloffs in local advertising, which accounts for around two-thirds of radio revenue, began surfacing regularly in '06. (These figures come from trade group Radio Advertising Bureau, which tracks the top 150 U.S. markets.) So much for thinking radio's losses might have been early indicators of recession. "It used to be a leading indicator," says Marci Ryvicker, a Wachovia Securities (WB) analyst who covers radio. "The model is broken. The negatives you saw in 2006 had nothing to do with the economy." She's expecting radio revenues to fall at least 1% in '08, and don't forget that this is despite sky's-the-limit campaign spending we're seeing this election year.
"The biggest failure of many broadcasters is understanding how much the environment has changed," says Clear Channel Radio CEO John Hogan. Clear Channel, long a flash point for listener anger over homogenized and overformatted airwaves, has beaten the industry's revenue performance in the past two years. For 2007, though, Hogan concedes that this meant his company's revenues dropped only slightly.
As with newspapers, small-market radio stations have been insulated from their bigger brethren's woes. And radio still boasts the odd trump card, formats that make up in uniqueness what it has lost in monopolized distribution: morning zoo DJs, rush-hour drive time, the Limbaughs of the world, and local talk. But of all major consumer media, radio is the least suited to an online transition.
Industry executives fiercely deny this point, but consider the landscape. Newspapers' ills are well-documented, and I've had much sport with them in this space. But the local paper's Web site is almost always the dominant local online entity. Newspapers churn out tons of original content daily. Radio is built to a large degree on music it doesn't own and syndicated talk shows. Both are available in countless venues online, which means radio Web sites have less unique stuff to attract audiences. And stations aren't structured like newspapers. While their profit margins are much higher—try 40% and up—they also have much smaller news organizations and fewer bodies to create new content that can be slapped up online. Ryvicker says radio companies that are doing well in the Web are getting 1% to 2% of revenues from it. Hogan says Clear Channel Radio will get 5% of revenues from its 1,005 Web sites "very soon" but isn't there yet. (Radio executives also extol the revenue potential of radio stars turning up on cable, à la Imus, or on local TV, but few can make that leap.)
By comparison, the big newspaper companies get about 8% of total revenues online, according to public companies' comments and an analyst tracking the industry. It says something about radio that a commonly cited star example of its online efforts is the not-for-profit npr.org, which has Web traffic growth most companies would envy. (HD radio, a newish technology that opens up spectrum on the dial for more niched music offerings, requires consumers to buy equipment and is considered a revenue nonstarter even by some industry executives.)
And another thing: I haven't even mentioned iPods or satellite radio.

For Jon Fine's blog on media and advertising, go to: www.businessweek.com/innovate/FineOnMedia

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