Radio & Satellite

Top 10 Reasons Radio Stations Are Bleeding Money

Another great guest post from our resident music industry philosopher Kyle Bylin. The title speaks for itself.Radio_tower

In The Social Music Evolution I wrote about the commercialization of radio due to Clear Channel’s growth from owning forty five stations in 1995 to a staggering fifteen hundred by 2003.  Noting this as a contributing factor that has increased the complexity of the music industry.   The idea of commercialization was great at the time, because after all, what’s better than owning five stations locally?  Of course, owning hundreds nationally.

Commercialized radio may not die out entirely, but it will bleed money in the meantime.  The local radio stations stand a better chance because they have the advantage connecting with their audience and being more able to adapt to the needs of their market. Here are the top 10 reasons why radio stations are bleeding money:

1. Loss of community – They’re not losing their listeners, they’re losing their communities.  Remember when you got on the air and talked with the host?  Then, later that night, your friends called you because they heard you on air.  Dying.  You retell the stories from the morning show with your coworkers later that day.  Dying.  We’ve all lost our sense of community and are finding somewhere else to belong everyday.

2. Generalization to specialization – We’ve developed very diverse and complex listening habits.  The problem is that radio plays music based on genre and the different the eras of its success.  If I’m listening to current alternative and want to hear some classic rock, they lose every time.  Switching back and forth between stations isn’t good for driving, but for those who are still listening, they’re doing it more and more.

3. Localization to nationalization – Loud and local was the mantra of the station…

I used to listen to.  Broadcasting from some place I’ve never heard of just doesn’t work.  Big name radio, takes the passionate guy out of the booth that injected life into the airwaves.  Listening to something local meant being a part of something, if your somewhere else or too big to talk to your audience, then it isn’t clear what I belong to.

4.  Satellite radio and the road – Drivers bored in their cars are a big part of your audience, but its hard to prevent those who travel nationally from switching to satellite radio because retuning stations just doesn’t work.

5. Promoting not playing – The good stations used to play music, but now most of them make more money by promoting music.  Who would’ve thought that if you promoted the same music all the time and replayed some songs every hour that listeners would turn away?

6. Programed to personal – If someone buys an iPod, you lose.  Instead of you delivering your listeners play lists, they make their own.  They put new songs into rotation all the time and no commercials.  They can also teach Pandora how to help  them discover new music, but they can’t teach you.

7. Advertising based on budget significance not audience relevance – Its obvious that people flip through stations anyways, but if most of your adverting has no relevance to your demographic, then you lose.  You used broadcast to be for the masses, but now that you have a pretty idea who your targeting, why not make the messages relevant to them?

8. Issues to no issues – As Bruce wrote, “(People want) broadcasting that is not afraid to express a point of view and talk about issues facing listeners.”  Where can  your listeners  find the cheapest gas and what’s the latest news on the economy?  Better yet, do you know of someone who’s hiring? 550,000 people are searching. 

9. Morning show to morning show gimmicks –
Recycling noise and shock humor can only go so far.  Your local morning show has a feel to it that a syndicated show lacks.  If you make noise you’ll raise your ratings for bit, but if you make meaning they’ll stay longer.   

10. Instead of beating out, they bought out – If Clear Channel couldn’t beat out programing that was better then theirs, instead of making something worth talking about, they started making bids on the station and (usually) wrecked what was worth talking about in the fist place.

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  1. It’ true, i remember i called my local radio station back in the day and asked them why they were playing more commercial music and leaving their quality music roots. They said “We are in the market for making money off advertising and not in the interest of music. So whatever music will push higher advertising profits will prevail”
    I know its basic principles for any business, but the fact they would blatantly use this business model with zero interest in the music is beyond me..

  2. Let me first say that I understand the sentiment being presented. I agree that relevant content, not specifically music services, is the future of radio, and that iPods fill that role much better.
    However, this is a very poorly researched, and poorly written, article.
    What exactly is a ‘non-local’ station? Last I checked, there was a transmitter in every local market, and the FCC required a staffed studio location for every licensed transmitter. Each of these stations is still dependent to a great degree on local advertising dollars, and so airs advertising for, and provides a service to, local businesses. Thus, it would seem that every station at least has some locality to it.
    I think if you’d actually spent some time researching some of these small-market stations, you’d find that there are many mini-ClearChannels in these markets that own a great many of the stations, some even owning half the available stations and then running even more in the same market through FCC-allowed management agreements. I think you’d also find that these types of operators are just as likely to use syndicated programming to fill out their programming day than the operators you cite by name.
    I also submit that the level of talent on the air in most small markets is such that a nationally-syndicated show IS likely to be better in many instances. Not sure if you’ve actually listened to a small-market local morning show lately, but they’re pretty much all likely doing the same recycled “Hollywood Dirt.” Not very ‘different’ than the very shows you seem to decry for not being ‘local’.
    Equally interesting is that SiriusXM was just announced today to be the company second-most likely to declare bankruptcy this year. Doesn’t seem like an improvement to the business model.
    Can you cite sources for point #10? I’d like specific examples of a station that a conglomerate has backed out of buying that subsequently hemorrhaged ratings and revenue.
    Good luck.

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