This does not appear to be an operational and integration success of broadcast and digital but shuffling of assets. Gannett bought Cars.com from McClatchy in 2014. A year later, Gannett spun out TV and digital including Cars.com creating Tegna. Now Tegna is spinning off Cars.com and is thinking of selling Careerbuilder too. The article says TEGNA share are down 30% since the split last year.
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Radio Leaves Money On the Table
- Thread starter TheBigA
- Start date
OK, then consider Townsquare. They own a bunch of medium market radio stations plus 8 major music news sites plus several major music festivals. They're all integrated, and are all hugely profitable.
The point being; a media organization being able to diversify their business portfolio using digital, other than a bunch of traditional station-focused websites with banner ads.
I won't argue that. I don't know enough about them to say. I get the impression over a period of time that Townsquare is one of the better operators so good for them if they're doing it right.
Best advice I ever got was from a retired station owner that told me to own as much media as you can in the community you serve. He suggested audio on cable TV, website/online, print (a daily newsgram or weekly shopper) and radio. As he put it, our world has changed and the competing media is going after your dollars with a well reasoned argument to win those dollars and the more options you can offer the harder it becomes for them to win those dollars you currently are getting from the business. If you can't say "I offer that too and can coordinate everything to work in unison for better results", then you'll lose every time. I though that was advice worth paying for but luckily he offered it for free.
That's interesting and probably correct. I worked for Clear Channel after they bought AM/FM and I couldn't figure out their strategy. As it turned out, there wasn't any. Randy Michaels used to get on GM conference calls and say "We're still trying to figure it out." I understood intuitively that concentrating a bunch of radio stations in a market offered advantages. I didn't see how it was an advantage to own a bunch of radio stations all over the U.S. It makes sense to me that if you can concentrate multi-media ownership in a single market, that offers advantages too.
What was happening at that time was major retail was changing from local to national, and they realized that having a national platform made you attractive to national advertisers. Except the size of the platform, being radio-only, became too small. National advertisers wanted more than just national radio. That's where digital and other platforms came into the picture.
You may be right. The other thing I thought was odd was that we kept hearing "we're trying to figure it out" and I was thinking that I would have thought they had a strategy in mind when they bought all those stations. But it seemed like a gold rush at the time. Big companies but up a bunch of stations because deregulation permitted it and because there was plenty of money available to do it. The hangover continues.
Do you think Columbus knew what he would find when he sailed across the ocean? Do you think Tim Westergren knew that by creating a music-friendly site like Pandora he'd make something that was immensely popular, but at the same time unable to turn a profit? He was just trying to figure it out. That's part of the risk of being a pioneer. Marconi himself had no idea what he was inventing, or how it would become practical. He just wanted to do it without wires. Funny how we're back to the exact same spot we were 125 years ago.
That's an interesting take. Perhaps Jeff Bezos has no idea what to do with Whole Foods now that he's made an offer. My guess is that he does have a pretty good idea. Maybe he's wrong but I doubt he made an offer so that he could "figure it out" later.
It would be one thing if Randy Michaels knew what to do with a national radio company and was wrong like Columbus, and Westergren, I just took him at his word when he said he didn't know.
He has an idea what HE wants to do, but we'll see how his idea fits with the reality. This is the same guy who wants to deliver packages with drones. I order things from Amazon all the time and have yet to have a package delivered by a drone. So that may have been one of his ideas that fell by the wayside. There are many things he doesn't know or understand about the grocery business. Fortunately this is a smaller grocery company, so if he's wrong, or discovers he's in over his head, he won't drown completely.
Westergren's qualifications are as a musician. He wanted a music delivery system that was good for musicians. His problem is that he's working for the wrong company. He couldn't find a way to be generous with musicians and make a profit for his investors. He should be working for SoundExchange. Perhaps that's where we'll see him next.
I was completely wrong about Pandora myself. Way before all those competitors came on the scene, I thought Westergren was building up a huge barrier to entry with the Music Genome Project® run by human musicologists. It didn't work out that way did it.
I've read through the thread a couple times, and get the jist of what applies to online streaming and radio... what about the HD?
Nearly every car has it, and a lot of interesting stuff is on there, but is it really being marketed or utilized as much as it could? Some HD broadcasts here in Seattle aren't even mentioned online, even on the station's website, or included on its drop down menus. It's nice they have their HD channels going, but do they even market the broadcasts?
In order to sell radio to advertisers, you need documentation. That means ratings. So far, HD Radio mainly shows up when it's connected to an FM translator. I'm not sure what percentage of cars have it, but it's a lot less than "every car." Mine, for one, doesn't. I'm sure someone can google us a number. Is it being marketed? Depends on the station or company. Certainly NPR stations have been pretty active with it. Some stations have streaming links on their websites. Some don't.
In any case, HD radio isn't considered digital media, compared to podcasts, streaming, or web sites. Why? Because it still uses over the air frequencies.
Nearly every car does not have it. Only this year has HD approached the figure of half of all installs. And new car sales are off about 8% this year.
Since about 5% of all cars are replaced each year, and the average car age is nearing 11 years. So we can assume that maybe 10% to 12% of all cars have HD capability, and home and workplace radios and smartphones have 0% capability. That is a very small universe.
That would presently be around 25 million cars in the US with HD Radios, spread out over the main metros (and other areas as well), so I can see your point.
So, does HD have a future at all? Or is it something that will die out like AM Stereo did? In my metro there are at least three HD broadcasts with ethnic programming.
I just got a used HD Radio. I can see the appeal of the extra channels, especially in a 'full' FM band, in a country where the population is definitely NOT shrinking. It just looks like there is this potential resource for revenues that is sort of being put on the shelf.
Or is online streaming going to kill everything.
I'm reserving judgment until the patent runs out. I think it has a chance. Connecting HD stations to FM translators has brought new life to HD.
If that question had an answer, Pandora would not be loosing more and more money with every new user.
Pandora's apparent solution is to add more commercial minutes. It then sounds more like terrestrial radio, which does have a profitable business model.
At this year's Texas Association of Broadcaster's Convention there was an interesting session about "AM Radio Revitalization. One suggestion was to go all digital. I think that is a bit premature, but if you have good coverage from FM translator(s), it might be something to eventually consider.
A HD Radio representative was there, who said the licensing cost for radio stations had recently been reduced to $7000. If you have a digital ready transmitter, the Importer and Exporter were now around $15,000 for the pair. Of course, those prices don't mention whatever modifications or improvements you'd need to do to the transmitter and antenna system. While I commend them for recognizing that cost is a major factor in getting stations to convert. I think it still too expensive, especially for non-major market stations. I suggested that if they want this thing to fly, they need to subsidize its adoption for broadcasters. It's hard to sell radios if there is nothing to listen to. I suspect that suggestion fell on deaf ears.
A HD Radio representative was there, who said the licensing cost for radio stations had recently been reduced to $7000. If you have a digital ready transmitter, the Importer and Exporter were now around $15,000 for the pair. Of course, those prices don't mention whatever modifications or improvements you'd need to do to the transmitter and antenna system. While I commend them for recognizing that cost is a major factor in getting stations to convert. I think it still too expensive, especially for non-major market stations. I suggested that if they want this thing to fly, they need to subsidize its adoption for broadcasters. It's hard to sell radios if there is nothing to listen to. I suspect that suggestion fell on deaf ears.
That idea has come up from time to time, and while the expense is minimal for broadcasters, it requires consumers to buy new radios. That's the same issue for HD. We can see how well it's worked for HD. The general view is people don't buy single-use radio devices any more. Combine a radio with something else (like a car or a phone) and you'll sell a few. That's also the case for satellite and internet radios. Radio-only devices are non-starters, and the electronics industry has no motivation to sell them any more.
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