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Thread: "Disney's Devastating Signal"

  1. #1

    "Disney's Devastating Signal"

    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.
    Last edited by TheBigA; 08-14-2014 at 05:35 PM.

  2. #2
    Thank you, TheBigA, for saying what I had thought after I read Eric Rhodes' asinine article. He should have the courage to publish your post as a rebuttal. I hope you send him a copy.

  3. #3
    I think the bigger issue that Rhoads is only halfway missing here is that AM radio is dead. Dead, dead, dead, dead, dead. It's last great revitalization was Radio Disney in the late '90s and early '00s, but once that audience went digital as the technology shifted in that direction, there was nothing keeping them on AM, especially since that very digital technology made the band entirely unlistenable. Anyone who's still putting stock in AM radio is looking backward, not forward.
    Last edited by JoshTheRadioDude; 08-14-2014 at 07:14 PM.

  4. #4
    I disagree, Josh The Radio Dude --

    AM radio is NOT "dead, dead, dead, dead, dead" -- where I live in Texas for example, there are a number of them doing quite well -- KLBJ-AM in Austin takes in several million dollars a year in ad revenue. KRLD Dallas, WOAI San Antonio, KTRH in Houston, KLVI in Beaumont all make money. And I'm sure there are more. Even in a small Texas market, KULP in El Campo, Texas (population 12,000) for example, is making a tidy profit for its owners (I have first hand knowledge of this.)

    Sure, you can say that many of the other 250 AM's in Texas may be losing money, but SOMEBODY is making money with AM radio.

    And it bet it's the same for many of the community-oriented AM's across our great country.

    I don't think any of them would consider their AM stations "dead".

    I'd take the profits they generate any day.

  5. #5
    And where does that money come from when the generations that still listen to AM die out? Because it's sure not going to come from the kids. It's not even coming from my generation. Between the technological impossibility of AM radio to overcome the ever-increasing amount of electronic noise and the generational divide between those who listen today and those who don't even know AM radio exists, those profits won't be there much beyond the next decade, tops. If you're relying on AM for your income today, you're toast tomorrow. That's just a fact of the technological and listener landscape. This sale of all but one Radio Disney stations proves it.

  6. #6
    Quote Originally Posted by dualux View Post
    I disagree, Josh The Radio Dude --

    AM radio is NOT "dead, dead, dead, dead, dead" -- where I live in Texas for example, there are a number of them doing quite well --
    Whenever I read that "radio is dead" or "AM is dead" or even "newspapers are dead", I think: Define dead. There are thousands still in existence, some still profitable. No "dead" is not a good word to apply to industries in decline.

    No, AM isn't dead, but the trend is inexorably downward. The only thing I don't know is the rate of decline.

  7. #7
    I remember thinking it was odd that Disney would keep its fleet of peashooter Radio Disney AMs when the Citadel deal went down. But back then, the wisdom was that the Radio Disney outlets added to Disney's bottom line.

    Radio Disney still adds to Disney's bottom line, but now its Sirius and AT&T who bring home the content and not 1160 AM.

    The question is not whether Disney reducing its radio ownership (again) is bad for the industry, it is whether consumers will decide to get their content elsewhere in large numbers. It happened a while ago for fans of other niche music genres such as Smooth Jazz.
    "Its music what makes a radio station, and at Live FM, we play the last music around."
    After receiving that copy, I quit the VO industry.

  8. #8
    FredLeonard
    Guest
    Dead used to be when the heart stopped. Now they can keep the heart going, so dead is when brain activity stops. Still some parts of the body are still alive (and can be harvested for transplant). No complex organism dies all at once (unless physically destroyed). Same with AM radio. Somewhere the fingernails are still growing. But unless somebody comes up with a way to revive AM radio - which no one has, not for lack of trying - AM is as good as dead. People fantasize about what they'd do with their own radio station but nobody in their right mind would sink real money into an AM radio station.

  9. #9
    Quote Originally Posted by TheBigA View Post
    Apple and Google, are creating radio stations without owning transmitters or towers.
    I consider these "music services" not radio. If it doesn't have RF it ain't radio.

  10. #10
    Quote Originally Posted by landtuna View Post

    I consider these "music services" not radio. If it doesn't have RF it ain't radio.
    You can call it whatever you want. They're calling it radio, and so are their customers.

    You can listen to podcasts on devices other than iPods. That doesn't change that they're still podcasts.

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