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Thread: RADIO (as we know it) is DEAD!!!

  1. #21
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    Re: Rebirth

    Quote Originally Posted by SirRoxalot
    In case you hadn't noticed, Clear Channel has taken stations dark, and has sold stations at a loss. They're cutting their losses in some markets in order to stop bleeding dollars. They probably won't be the only ones.
    The stations they took dark, two of them, are certified dogs. There have been posts elsewhere that the stations never were able to do well. How CCU got them is probably answered by having to take them with a bunch of better stations. Why they did not spin them is probably answered by recognizing the inability to sell dog AMs.

    I hope more of this happens.

    . Wall Street realizes that the days of double-digit growth in revenue and ever-increasing radio station values are over. That's why stock prices are down.
    I looked at the RAB figures, and we have not had double digit growth for decades. The idiocy of Cramer's analysis is in his statements like "in the car is where it happens." or words to the effect. In truth, about a third of listening is in car, less in many markets... bad data creates bad conclusions.

    I think the real problem is that investors thought consolidation would create great growth in profits, and it did not. I owned a large cluster (9 stations in a market) in the late 60's, and we did not save money. We just were enabled to do second tier formats once we covered the main ones well.

    Radio has been in a recession for years because owners overextended themselves in a buying frenzy. Like homeowners who bought more house than they could pay for with the idea that they'd be making more money in the future, they're nearing default. The rising cost of interest on the money that they borrowed speeded up the process.
    While true in a couple of cases, this is pretty much urban legend. Most expansion was financed by equity, not debt, or by merger. At least one top 10 owner did it with no debt at all!

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  2. #22
    War Of Attrition
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    Re: Rebirth

    Quote Originally Posted by DavidEduardo
    While true in a couple of cases, this is pretty much urban legend. Most expansion was financed by equity, not debt, or by merger. At least one top 10 owner did it with no debt at all!
    Which one was that? Susquehanna? Greater?

  3. #23

    Monkey Business

    Quote Originally Posted by DavidEduardo
    I looked at the RAB figures, and we have not had double digit growth for decades.
    Investors were certainly promised double-digit growth, and those promises were incorporated in budget projections for stations and clusters.

    Quote Originally Posted by DavidEduardo
    The idiocy of Cramer's analysis is in his statements like "in the car is where it happens." or words to the effect. In truth, about a third of listening is in car, less in many markets... bad data creates bad conclusions.
    I agree that Cramer is an idiot when it comes to radio. My point was that Cramer reflects Wall Street's attitude, which has soured on radio since they've finally figured out that they've been hoodwinked by the whole "cash flow" sales pitch.

    Quote Originally Posted by DavidEduardo
    Radio has been in a recession for years because owners overextended themselves in a buying frenzy. Like homeowners who bought more house than they could pay for with the idea that they'd be making more money in the future, they're nearing default. The rising cost of interest on the money that they borrowed speeded up the process.
    While true in a couple of cases, this is pretty much urban legend. Most expansion was financed by equity, not debt, or by merger. At least one top 10 owner did it with no debt at all!
    The expansion was financed by the perceived equity of radio stations. That equity was based on values that had been pumped up by consolidators overpaying for radio stations based on the "cash flow" myth that Cramer and others have soured on. Stations selling for 15x cash flow made - and makes - as much sense as the dot-com flame-out of the late '90s. You might as well call Clear Channel "Radio Enron".

    The stations that Clear Channel took dark may be dogs, or maybe they were just overpriced and trying to serve markets that they didn't cover well.

    Give the licenses to local community groups who won't have a financial monkey on their backs and who can operate them successfully and serve the public interest, convenience, and necessity with whatever niche format works in their coverage area.
    Did I forget that <<sarcasm>> tag again?

  4. #24

    Re: RADIO (as we know it) is DEAD!!!

    It's all about the money!

    If you are expecting someone to give you a radio station, I wish you the best of luck.
    Now that you have it, what are you going to do with it?

    Where is the money to operate the business while you get on your feet? Those monthly bills pile up fast.
    Studio/office lease, telephone system, computers, traffic software, supplies, electric, heat, air, BMI,ASCAP, payroll, health insurance,
    just to name a few.

    Are you prepared to take your savings, cash in your 401K to keep it going until it catches on? Sure is an expensive hobby.

    Advertising revenue is down and the local businesses are just barely hanging on.

    Years ago banks fell out of favor with radio. Now, Wall St. has been burned and is moving on. Where do you get the money? Loan sharks?
    Even the venture capitol people want out.

    You are correct, radio has not seen double digit growth for decades, long before CC came along. Can't blame them for everything wrong with the business. Radio has not kept up with technology.

    Yes, there are plenty of radios on in the office, it's simply background/passive listening.
    Lots of businesses pipe in satellite radio.

    I have a 22 daughter and a 14 year old son. They rarely if ever listen to the radio. Like the rest of their friends, they get their entertainment and information from their I-Pods, internet, TV, games and cell phones.

    They don't even need radio to listen for the no school announcements. It's now automated, where they call your home and cell phone to inform you of a delay or closing.

    The next generation and Wall St. looks at radio as old fashioned technology.

    I'm not so sure "local" is the magic bullet that will make radio cool again.

    What will people be talking about today?

    American Idol?
    Obama winning big over Clinton?
    Roger Clemens?
    Last nights City Council meeting?

    We all have great passion for the business and some stations continue prosper.
    There are simply too many stations and not enough revenue to go around.

  5. #25
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    Re: Rebirth

    Quote Originally Posted by War Of Attrition
    Quote Originally Posted by DavidEduardo
    While true in a couple of cases, this is pretty much urban legend. Most expansion was financed by equity, not debt, or by merger. At least one top 10 owner did it with no debt at all!
    Which one was that? Susquehanna? Greater?
    HBC. But your two are also close.
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  6. #26

    But It's Not Dead Yet

    Quote Originally Posted by 12 In a Row
    I'm not so sure "local" is the magic bullet that will make radio cool again.

    What will people be talking about today?

    American Idol?
    Obama winning big over Clinton?
    Roger Clemens?
    Last nights City Council meeting?

    We all have great passion for the business and some stations continue prosper.
    There are simply too many stations and not enough revenue to go around.
    What will people be talking about on a radio station that's live, local, and well-programmed? In my market, they'll likely talk about American Idol, Obama winning big over Clinton, Roger Clemens, weather & traffic, the Buffalo Sabres, the continued recovery of Richard Zednick, a local woman who was jailed for killing her teen-aged daughter is now out of jail and won't be retried because it's been determined that her daughter died of a cocaine overdose, 1500 local workers who'll be affected by GM's buyout offers, the local Water Authority director who's retiring with a platinum parachute at the expense of rate payers - and about 20 other topics that a syndicated or voice-tracked host wouldn't even know about.

    Radio has always been about the relationship between the broadcaster and the listener. There's enough revenue to go around if the overhead isn't exorbitant, and the biggest cost of overhead is debt service for many stations. Reduce the debt service, and radio can prosper. Why else do you think that all of those other technologies are scrambling for bandwidth so that they can offer content similar to what radio can offer?
    Did I forget that <<sarcasm>> tag again?

  7. #27
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    Re: But It's Not Dead Yet

    Quote Originally Posted by SirRoxalot
    What will people be talking about on a radio station that's live, local, and well-programmed? In my market, they'll likely talk about American Idol, Obama winning big over Clinton, Roger Clemens, weather & traffic, the Buffalo Sabres, the continued recovery of Richard Zednick, a local woman who was jailed for killing her teen-aged daughter is now out of jail and won't be retried because it's been determined that her daughter died of a cocaine overdose, 1500 local workers who'll be affected by GM's buyout offers, the local Water Authority director who's retiring with a platinum parachute at the expense of rate payers - and about 20 other topics that a syndicated or voice-tracked host wouldn't even know about.
    Nice point. And no iPod playlist can duplicate the powerful combination of some good music and good content that relates.
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  8. #28

    Re: RADIO (as we know it) is DEAD!!!

    Sounds like most excellent morning drive News stations.

    What are your plans for the rest of the day?
    Are you planning for the future? 5 years? 10 years?

    Technology? TV planned ahead...this time next year, digital replaces analog.
    High Def, Blue Ray, and what will the advertising landscape look like in 5 or 10 years?

    How are you going to attract a demo that hasn't grown up with radio?

    What group of investors are going to give you their business? Or will it be the FCC that will throw you the keys and say, have fun!

    I live in a town where 10 years ago a few overnight convenience stores were open 24 hours and all did well.
    5 years later, 3 times as many stores opened. They all choked...too many and not enough customers.

    As of today, half of them went out of business and only 2 remain open 24 hours.
    Again, thin the herd or we all die.

  9. #29

    Re: RADIO (as we know it) is DEAD!!!

    This about says it ...

    http://seekingalpha.com/article/6421...-little-profit

    I, for one, agree. Apply for a limited time STA for six months. Sell the station within that time, with verification of one year's worth of financing available with no income (rather than three months,) and if the deal's not done ... turn in the license, the party's over.

    Free the allocation list to eliminate interference. Happens in market after market. Don't want to see that station lost in a community? Then stop putting so many, including move-ins, there, and adding to the "clutter" that radio has become. Do we really need 500 channels on every radio? I think not.

    While some "community group" radio is good ... so much of it isn't. And if it keeps up, we'll see all brokered radio everywhere. What good is that in "serving the local need and interest" of a local market ... especially a small one?
    &quot;Naked Hobos -- only come here for the promise of FREE Chicken! CBS Cares.&quot; Craig Ferguson - &quot;The Late Late Show&quot; - CBS

  10. #30
    tsjclkt362
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    Re: RADIO (as we know it) is DEAD!!!

    No it isnt dumb McDonalds - I HATE McDonalds BTW - food stinks! Radio is dying becuz these DJs dont play song requests!

    Quote Originally Posted by oaktree
    Revoking licenses of failed operators does.

    And I still contend, that to make the properties retain any value, there are way too many ... and more on the way. Failed operators should be like other businesses gone bad ... fold them up and go home in many instances.

    A station that can only get a fire-sale price in a small town and causes the band to be further subject to noise, co-channel interference and other problems need only look at the cutbacks and hatchet jobs that are going on in supposedly pre-dominant stations and facilities on a regional or major market basis.

    I'd much rather listen to a station that I can get further than 20 minutes from where I live, before the frequency is taken over by someone else on that frequency or nearby interference because there is no signal from the little tea pot station that is failing miserably.

    Further, we've been saying for years that a great deal of AM's problems have directly been related to overcrowding of the band.

    As for "public need and necessity," that does not mean "new radio stations doing new things." Failing stations do not serve anyone's need or necessity. Nor does the regionalization of radio stations-turned-repeaters as is happening now in markets like LA.

    If you have less of something, you create more demand. Less "bad" might make better radio, in my opinion.

    And as one who grew up and worked in the "Drake Era" (which I deeply miss,) the price of stations going through the roof came about because then-owners could do it and others like the consolidators had the wide-open checkbooks to meet that "need."

    The problem is, after scraping the cream off the top, they found they had debt-service problems just as homeowners of below-prime rate mortgages have today.

    It's very seductive to have a plan before buying "too much" ... but it's a killer when it all catches up with you as that plan unravels. The good days are great ... but when the tide turns, look out. Ask Clear Channel, Citadel and CBS Radio. They know how it feels...buying too much too frequently...and losing.

    A lot of those rimshots and second tier stations in smaller conglomerates would be better off off the air. After all, they don't even serve their city of license most times ... they compete to call the "bigger market" their sales target.

    It's an abuse that the corporates needed to do to get the primary stations they really wanted. The rest of the stations were trashed ... as they were when the previous owners begged Clear Channel and others to buy them ... at way inflated prices.

    And they did.

    Thin the herd. There's way too much to go around now as it is. Radio isn't McDonalds.

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