Bill Figenshu
There are very few radio execs in the business today
who have the profound depth of experience that Bill Figenshu has. A 34-year veteran of the broadcast industry, “Fig” has occupied numerous high level posts including President/Viacom Radio, SVP/ Chancellor Media, SVP/CBS-Infinity Broadcasting and Regional President/ Citadel. Now it’s all about FigMedia1 where the outspoken Fig has been running his own show since July 2005.
You have been decisively outspoken in your assessment of the state of radio today. What are the top issues radio must address to insure a healthy future?
Vision, leadership, execution and focus, because right now there is a very singular agenda which is financial. The problem is this business was never built on just the financial model alone. Given the history of radio (going back to 7 AM’s and 7 FM’s) the FCC wouldn’t let you get big enough to the extent that you would become this mammoth company. But right now, we’re trying to drive a car in a race that’s low on fuel with bald tires and we’re letting our pit crew go. For radio CEO’s and the guys in charge, it has to be very disconcerting. They’re watching their stock deteriorate, TSL decrease and the rise of new technology. It’s the perfect storm.
Consolidation of the past decade has led to a pervasive top-down management approach to operating stations. What are the inherent flaws with this approach?
You can’t have 80% of your revenues be local and 80% of the decisions be national. It just doesn’t work. Some oversight is fine, but it got to be too much about five years ago when national management began administrating everything to local stations and everything had to be approved by corporate. Local management simply became executors of whatever the corporate agenda was. I’ve always rejected the Wallmart approach to running radio. Radio has always been a local medium. When it’s not yours to run you lose the pride of ownership and start caring less about the product. It turns into: just give me the numbers, tell me what to do and I’ll just do it. If you push back, you’re not a team player.
I speak with managers every day from many of the public companies and they’ve stopped telling the truth about local market conditions and listening trends because corporate simply didn’t want to hear it. Even recently, I was talking to a manger in a Top 5 market from a major company who said he wasn’t allowed to submit a budget for next year that doesn’t show an increase of 10%. That’s insane! They give them what they want in fear of their jobs.
Why did it get this way?
First of all there’s a lack of trust. Somewhere along the line someone got the idea that the concept of running 200+ stations was to keep everyone in line. Perhaps it came from the Wall Street approach. How are you going to manage all of these stations? We’re in charge, our names are on the door; we have to do it ourselves. As a result it just kind of eroded over the past few years and now it’s all about financial. If I hire somebody that’s not all that expensive but can do what I say, then I can get cheaper talent to run the stations. I’m not suggesting that’s the case with all of them. But you can clearly see there’s been an erosion of experience and high-priced talent that has left the industry never to return. Part of it is ego…’I’m the boss. I’m running the company!’
I laugh because I’ve spent my whole career on the product side of the business and it humors me when I see people really feel like they know what is right for the American public. Most of my career I would collect all the research and marketing knowledge I could. We’ve somewhat eliminated these things. We’ve cut ourselves off from listener input and local management input. We’re making a lot of decisions on a lot of stations based on very little information, at a time when we’ve had this convergence of new technology and a recession.
Is it time for radio in general to take a more national approach to local radio as with many talk formats? Could deploying marquis talent like Ryan Seacrest and Elvis Duran be a positive step for the product going forward?
I say do everything in moderation. One can look at the Seacrest show, which has cleared over 300 stations in the past year, as a solid winning show. Should every station have all syndication, all the time? Of course not. And by the way, local radio does not necessarily mean good radio. Just because you have a local show doesn’t mean you win. It has to be good and local as well as good and national. Bad of either won’t work. Smart companies will strike a balance between high profile well paid local talent and marquis national shows. Advertisers appreciate the profile of national talent along with the advantages of local talent that understands the local scene and nuances of a city. That’s what makes great radio.
When assessing the financial shape of the industry today, are traditional budgetary expectations still taking precedent too often over the investment of the product and human resources channeled into the product?
When an industry declines, regardless of the industry, budget cuts are necessary. We’re clearly in a recession so you can’t have declining revenues without having expense adjustments. I believe it’s going to continue until the industry bottoms out, whether it’s Q4 of 2009 or 2010 and beyond. Until we start seeing month to month improvement, you’re going to see adjustments in expenses. I believe that 10-15% of the people of this industry have been cut so far, and I would suggest that another 15-20% is still to come.
Given the recession, is it fair to say that forecasting (the time and demands) of budgets should be recalibrated with realistic financial goals matched to product goals more feasibly?
They are as we speak. I know the budget cycles of a lot of companies so if you started the budget process in July/August, you’ve already made four-five adjustments. And based on what you see every day, there are more adjustments to come because retailers, advertisers and consumers are not spending money right now. They’re scared. Until we see some resolution of the auto industry or some mortgage stability, we’re going to see that fear is driving the market. When you have fear, nobody spends anything and when nobody spends anything you have declining revenues. That said, radio should not stop investing in its future at the expense of such budgets.
If you were a radio Group Head of a medium to large broadcast company today, what would be your three essential objectives over the next 12-15 months?
I’ve thought about this very question a lot over the past six months. First of all I would establish a realistic, credible budget by making the local management team accountable. You can’t do top-down numbers. If you trust the local management team and compensate them accordingly, you should have a realistic expectation of results and hold them responsible. I haven’t met too many smart managers that don’t say, ‘here’s my budget, give me what I need and let me do my job…and if I don’t, throw me out the door.’
Secondly, I would create a new revenue model that addresses the strong brand that radio has and integrate new tech platforms into the function of the brand. That is essential. And anyone who thinks they’re addressing new media by putting up a Web site with a few jock pictures and a few links is wrong. As a radio brand stations need to be where the people are: on-line, on-air, mobile, no matter where it is. When addressing new budgets I would invest money in all of these platforms.
Finally, I would put the emphasis back on creative people development, specifically young people in management, marketing and programming. You have to employ the most innovative, versatile, competitive, smart people you can find. If you try to get by paying them cheap, you’ll get what you pay for. If they’re that good they should be properly compensated. My guess is that innovation going to come from the next generation who doesn’t sit around and say, ‘you know when I was at W-blah-blah-blah, we did it that way and it was great times.’ You can’t go back there.
An outside perspective of a business one has vast knowledge of often offers clarity that cannot be seen by inside executives too close to the situation. From your outside/in vantage point, what advice do you have for the current Group Heads that they may be missing?
We’re a very provincial business to begin with. Everybody knows everybody. There are only a hundred people in the business and sometimes the business gets too scripted and too predictable. We’re not going back to the model of 8-10 years ago. It’s not going to be there. It’s going to be different. Today’s radio leaders are spending too much time upstairs and if you want to find out where the war is go down to the front. Assuming you’re hiring the right people, I believe in local station managers. If you believe in the people working in your stations, hundreds if not thousands of miles away, then go spend time with local staffers and local advertisers. Get out in the communities and I believe you’ll get a better perspective of radio today.
How do you answer the notion that radio today has a perception problem?
When you go into a Best Buy store and ask to see an HD radio and the sales clerk takes you over to the Siruis satellite display, that’s not a good thing. Perception aside, we have a reality problem that starts with finding out what the reality is. If you can’t trust local management to hire and empower people they can trust and make them accountable; if you can’t hire a chief creative officer in corporate and make him or her accountable, then we are going to have insurmountable problems that won’t go away. I don’t think there’s enough creativity at the top to change any perception issue that may be out there. I don’t think there’s a leader at the top that really sets the creative tone for the company, and that has to happen. The stations are more than willing to launch into a creative place. That’s the place where leadership is as important as the financial side. We need more creative people that can guide this business. We’re not going back to the radio model of 2000. Accept that the business is never coming back the way it was. Put the company on a course for a new reality and lead to it.
Clear Channel and CBS Radio are both in divestiture mode (economy permitting). Do you think these large owners have realized that a smaller model (strategically) is more attractive going forward, or is it purely the overall diminishing returns that have prevailed this decade?
I don’t necessarily think that smaller is better. Smaller is better only if your management team is incapable of a larger portfolio of stations. Do I think it’s unrealistic that a public company that has three to four hundred stations has only one person in corporate that’s the tech/Internet dude? Yes! It strikes me that thirty people need to be there to handle a company that size. We can’t get by with small amounts of people doing the same things we’ve been doing for the last twenty years. You can be bigger, but you have to act bigger. If you’re going to be smaller you still have to act bigger, because the competition is a lot more complex today. Make no mistake, people buy and sell stations for one reason, it’s always about the money. Companies make investments, they answer to stockholders and investors who like any of us demand a return on their investment. They really don’t care how you get that return.
How can radio best bridge the gap that exists with the younger/future listener base of the medium that exists today?
We should be where the people are and that’s basically from the time their ears start working until they stop working. I reject the traditional perception of radio as either AM or FM stations. Radio today is audio delivery on several platforms. I’ll take it one step further and suggest that stations like KIIS-FM deliver a lifestyle, and that lifestyle has to be more than just on a frequency. It has to be on-line, through podcasts, it has to be cellular. We have stations with very strong local brands like Z100 (who does a great job of this) that address young people on multiple levels. However, you can discard the notion that if we don’t address the younger demo’s we’re going to lose them. That ship has already sailed. But it is critical that we address them. For every Z100 in the world there are hundreds of stations that don’t. There are stations that target young people who don’t even have a Web site. Of course it requires investment and a way of thinking, but it also requires a passion and we all have to get there sooner than later. You talk about bridging the gap between future listeners. Well first we have to start with investing in bridges. We have to start recognizing that young people, whether as employees or listeners, have to find this medium viable, credible and attractive again. If we don’t we’ll lose them exclusively to the FaceBook’s and MySpace’s of the world where they are anyway.
The Internet is an unprecedented way to increase your brand value. Here’s where the opportunities are. Of all the technology that’s available, the Internet can get your station out to the masses better than anything else. There are 250 million computers in this country with the ability to pick up your station in full quality digital stereo. It’s the best coverage map you’re ever going to see.
*** QB Content by Fred Deane ***
