Radio Ink's publisher Eric Rhoads just wrote a thought-provoking commentary, titled "Disney's Devastating Signal About Radio." Here's part of what he said:
"Yesterday, Disney, one of the world's most respected media companies, sent a signal to the media and advertising world that could be devastating for radio. Essentially, they said they are selling off their AM and FM signals because they no longer need them, since only 18 percent of listening is coming through AM and FM. The rest is coming from digital or satellite. Let me restate that.... One of the world's giant media companies is saying we no longer need AM and FM stations because our listeners are digital. Ouch."
My first question is: "Eric, where have you been?" Disney first sent this message in 2006 when it sold its entire radio division to Citadel. It retained Radio Disney and ESPN Radio because of the copyrights. But the company had already decided that radio ownership was not part of its mission then. Back in 1988, NBC made a similar decision following its purchase by General Electric. Both companies, integral in the development of radio in the 1920s, left radio over 25 years ago. Lots of other major media companies, like Fox and Time Warner, are not in radio. So what's the big deal?
The fact is that since the 90s, radio ownership has been dominated by radio-only companies like Clear Channel, Cumulus, and others. Companies whose sole source of income is radio. That pivotal change in radio ownership began in the 80s. It's only now becoming most painfully apparent. Especially when the world's most successful companies, Apple and Google, are creating radio stations without owning transmitters or towers. Fifty years ago, those companies would be buyers. Not now.
The devastating signal was sent over 25 years ago, and we haven't been willing to recognize it. And we're not alone. We're merely licensees. The FCC hasn't done a single thing to encourage more experimentation or investment in radio. No technological developments. No federal initiatives. Commissioner Ajit Pai is all by himself, talking about an AM Revitalization Program that would simply give AM owners FM translators, as though that addresses the problem. It doesn't. It creates a bigger problem, by giving AM owners a reason to devote less attention to their AM properties. Then again, this is the same FCC that wrings its hands about minority ownership, and doesn't realize the problem isn't the ethnicity of the owners, but the lack of investment capital available for radio.
Eric Rhoads' solution to this devastating signal? "Radio needs a giant PR and ad budget now."
Great. Maybe hire the same company that handles iBiquity's PR. See how that's going? You don't solve a problem like this with PR. You solve it by doing something. Make radio exciting and sexy again. When was the last time anyone was excited to buy a radio? For me, it was when I bought a Walkman. When was that? Thirty years ago? The only real solution the radio industry has doesn't have to do with traditional OTA radios. It has to do with putting radio on cell phones or better online platforms. These are devices that don't need towers and transmitters. So the problem isn't content. The people love our content. They don't like our devices. But we're not in the device business, and the Consumer Electronics Industry absolutely hates radio. That's a problem that could use a little help, if the owners of transmitters and towers want to do something. Same with the FCC. Maybe it's time for a mandate or two. Throw a little weight around. Then again, I worked in Washington, and I know how impossible that is.
Yes Eric, it's a devastating signal. One that has been building for a long time. Of course Disney sees the value in placing its content on radio. That's why it's taking control of ABC News Radio. But it doesn't see the value in owning towers and transmitters. Radio is bigger than that. Big media companies are content providers. Not landlords. One by one they're getting out of the ownership business and into the content business. Let other people build the platforms or own the distribution. That's the situation the record labels are in right now. They own copyrights. They're building their companies on those copyrights. Maybe radio should look around at similar industries, and see what it can learn.
"Yesterday, Disney, one of the world's most respected media companies, sent a signal to the media and advertising world that could be devastating for radio. Essentially, they said they are selling off their AM and FM signals because they no longer need them, since only 18 percent of listening is coming through AM and FM. The rest is coming from digital or satellite. Let me restate that.... One of the world's giant media companies is saying we no longer need AM and FM stations because our listeners are digital. Ouch."
My first question is: "Eric, where have you been?" Disney first sent this message in 2006 when it sold its entire radio division to Citadel. It retained Radio Disney and ESPN Radio because of the copyrights. But the company had already decided that radio ownership was not part of its mission then. Back in 1988, NBC made a similar decision following its purchase by General Electric. Both companies, integral in the development of radio in the 1920s, left radio over 25 years ago. Lots of other major media companies, like Fox and Time Warner, are not in radio. So what's the big deal?
The fact is that since the 90s, radio ownership has been dominated by radio-only companies like Clear Channel, Cumulus, and others. Companies whose sole source of income is radio. That pivotal change in radio ownership began in the 80s. It's only now becoming most painfully apparent. Especially when the world's most successful companies, Apple and Google, are creating radio stations without owning transmitters or towers. Fifty years ago, those companies would be buyers. Not now.
The devastating signal was sent over 25 years ago, and we haven't been willing to recognize it. And we're not alone. We're merely licensees. The FCC hasn't done a single thing to encourage more experimentation or investment in radio. No technological developments. No federal initiatives. Commissioner Ajit Pai is all by himself, talking about an AM Revitalization Program that would simply give AM owners FM translators, as though that addresses the problem. It doesn't. It creates a bigger problem, by giving AM owners a reason to devote less attention to their AM properties. Then again, this is the same FCC that wrings its hands about minority ownership, and doesn't realize the problem isn't the ethnicity of the owners, but the lack of investment capital available for radio.
Eric Rhoads' solution to this devastating signal? "Radio needs a giant PR and ad budget now."
Great. Maybe hire the same company that handles iBiquity's PR. See how that's going? You don't solve a problem like this with PR. You solve it by doing something. Make radio exciting and sexy again. When was the last time anyone was excited to buy a radio? For me, it was when I bought a Walkman. When was that? Thirty years ago? The only real solution the radio industry has doesn't have to do with traditional OTA radios. It has to do with putting radio on cell phones or better online platforms. These are devices that don't need towers and transmitters. So the problem isn't content. The people love our content. They don't like our devices. But we're not in the device business, and the Consumer Electronics Industry absolutely hates radio. That's a problem that could use a little help, if the owners of transmitters and towers want to do something. Same with the FCC. Maybe it's time for a mandate or two. Throw a little weight around. Then again, I worked in Washington, and I know how impossible that is.
Yes Eric, it's a devastating signal. One that has been building for a long time. Of course Disney sees the value in placing its content on radio. That's why it's taking control of ABC News Radio. But it doesn't see the value in owning towers and transmitters. Radio is bigger than that. Big media companies are content providers. Not landlords. One by one they're getting out of the ownership business and into the content business. Let other people build the platforms or own the distribution. That's the situation the record labels are in right now. They own copyrights. They're building their companies on those copyrights. Maybe radio should look around at similar industries, and see what it can learn.
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