Year-End AT ISSUE: Radio’s Future Path For 2019 And Beyond

By Fred Deane

In this Year-End feature our panelists address the suggested areas as outlined below, while also expressing their thoughts in general about these topical issues in their own terms.

• What are the biggest challenges radio will confront in 2019, and which areas will these challenges predominantly come from?
• Is radio’s product good enough (content and delivery) to successfully compete in the vast digital multimedia arena, and what advancements need to be addressed to insure growth and product optimization?
• What pitfalls must radio avoid to remain competitively astute and at the top of its game?
• What are your bold predictions for each of the radio and music industries for the forthcoming year?

 

Pat Paxton, President of Programming, Entercom

The only way outside “disruptors” can affect us is if we let them. I just ignore the noise, and advise others to do the same. We know how relevant we are. We know how big we are. There’s a reason big money is coming back to radio, because top level marketers are figuring out what we’ve known all along.

In a word, radio’s product is “mostly” good enough. I hear a lot of great content out there. However, I also hear a lot of average content as well. We’ll continue to win and dominate if we continue to put our resources toward creating the best, most enticing content available on any platform. I think there are many, many radio brands, in all companies, that do that every day. That’s why that in spite of the multi-level attacks from pure plays, satellite, etc., we’ve managed to grow and become the #1 reach medium in the country. That in itself is very telling. Add what we’re doing with Radio.com, and what iH is doing with their platform, and you can see that our industry has a very exciting future.

The pitfalls we need to avoid are the same as any business, company or person has to avoid when they’re winning. Avoid becoming complacent. Challenge yourselves and your people to be better every day. Ask yourself at the end of every day what you did to make a difference that day. Demonstrate positivity, focus, energy, and pride to set the right tone in your buildings, and most importantly, get out there and do anything that you ask others to do. Lead by example.

Going forward, on the radio side, I expect to see some level of deregulation regarding ownership rules, which I think will help everyone. I expect to see radio programmers envision themselves more as content creators and brand managers. I expect the best talent to continue to rise through the ranks, whether it’s on-air or behind the scenes. But most of all, I expect our industry to continue to grow, no matter what challenges get thrown at us. Why? Because it’s what we always do.

 

Sam Milkman, EVP/Senior Consultant, Coleman Insights

As an industry, we have to assume digital audio platforms will get better at creating and more easily delivering concepts consumers want (or don’t even know they want yet.) Personalization, customization, skipping, playlists, targeted discovery, continuity across platforms, voice commands, this is only the beginning. We can be a part of all that new reality, but we need to think outside the four walls of the radio station to do it.

Must all of this disrupt radio? Only if we forget the basic premise of why people want radio in their lives. Radio’s magic is generated by live personalities that know what’s going on, have opinions and evoke emotions. I want to know why the George Washington Bridge is closed and I can’t get home. I’m interested in hearing how this incredible new Greatest Showman album came together. If radio loses its curiosity about what fascinates the audience and the ability to tell stories, it will certainly lose the audience. A base music or talk position has never been enough, and that’s true now more than ever. Radio must have deep layered images to create meaningful listener experiences.

Radio is not the black and white motion picture industry staring at the advent of Technicolor. Radio has all of the talent, creativity, ingenuity and resources to produce the most competitive audio entertainment in the world. The studio is waiting right down the hall for the right group of creatives to walk in and make magic. Radio has the brands that mean something to the audience right now. By continuing to build those brands, and refining them by constantly deepening our understanding of what the audience wants and expects of them, radio will continue to prosper.

In order to ensure its competitive position, radio must never stop asking the audience questions. Spend time focusing on the long-game. Not just how you’re going to get through this week or month, but what impact are you having on the long-term health of this station, this brand. It’s called second-order thinking, and we believe radio would be well-served to utilize the practice.

Looking ahead, radio will form more partnerships with streamers, leveraging each other’s distribution channel’s unique audience to build the other. On the music side, an artist, or maybe even an entirely new style of music, is going to come along that moves us, touches our hearts, or so infuriates us that we have to listen. At least I hope so.

 

Rick Cummings, President of Radio Programming, Emmis Communications

Our biggest challenge is remaining relevant in an on-demand world. It will require innovation and a lower spot load. We have known this for ten years, but it will be challenging to do in this economic environment.

We’ve ‘lost a step’ with expense management that has led to lots of voice-tracking, even in very big markets, but we’re still pretty good at content creation. I continue to believe commercial load will be of greater and greater importance to the growing percentage of people who have other choices that are “good enough” and don’t come with 12 minutes of commercials every hour.

Thinking like a distributor is increasingly a dead end. We need to be platform agnostic and recognize that the consumer will decide, not us, how she wants to consume us.

I’m not entirely sure it’s next year, but I am encouraged by the growing volume of voices who say traditional media (radio, TV, print) are necessary for branding and that digital “ain’t all that” when it comes to branding and certainly when it comes to data attribution. Fraud is rampant and real. As more consider the need to brand build or grow brand, I’m hopeful that there is a ‘natural correction’ ahead that is beneficial to traditional outlets. The pendulum always swings too far toward the new thing. It will swing back. Whether that’s next year or in three to five years, I couldn’t say.

 

Dom Theodore, CEO, RadioAnimal Media Strategies

In 2019, radio will continue to face many of the same challenges we’ve been experiencing over the past few years, at least in part because we have failed to admit the mistakes of the past few years and therefore haven’t learned the lessons from them. We are already seeing early signs of an economic slowdown, and are clearly overdue for a recession. With radio revenue already challenged, any economic slowdown will have an amplified impact on our industry. Digital will continue to negatively impact traditional advertising dollars; however digital will also represent even more opportunity for radio in 2019, including more mass exposure of smart speakers and the connected car.

On the programming side, you will continue to see Gold formats outperform current formats, as we continue to weather the storm of a weak CHR Pop cycle and lackluster Country cycle. On the other hand, the edgier Rhythmic CHR format will continue to outperform where it is being embraced. The good news is we will likely see the start of a CHR rebirth in 2019, and we are already seeing early signs of a Country rebound. In spite of the number of new Alternative launches, the current product still isn’t there to drive any big success in this format yet. Perhaps with more outlets, labels will invest in more product in this area.

Radio’s biggest product issue is lack of experimentation. With so many delivery systems available today for audio entertainment, we need to challenge the traditional radio programming model at every turn, and disrupt ourselves instead of continuing to allow outside forces to remake us. But to do this, we need to overcome our adversity to risk. Let’s be honest, the 1996 model of cutting expenses to bolster short term cash-flow hasn’t served us very well. Cutting the training grounds so the talent pool is so thin that you struggle to find even mediocre talent when you have an opening hasn’t served us well. Over-programming stations to the point where they are completely predictable and boring hasn’t served us well. Taking away basic tools like music research and marketing hasn’t served us well. Eight-minute stop-sets haven’t served us well.

Part of this is due to the fact that everybody is looking at what the “other guy” is doing, and we’ve become an echo-chamber replicating each other’s mistakes. The real winners in 2019 and beyond will be those who look at what is NOT being done, and take a chance on something new. We need to empower innovators to innovate. We need to unleash talent and let them entertain rather than simply executing a rote format. At a time when the rest of the world is more interactive than ever before, many radio stations are just empty rooms with computers segueing from one element to the next. No audience interaction. The listener has no reasonable expectation that they can communicate with the radio station on any platform and actually interact with a human being. How can radio possibly meet the basic expectation of “companionship” with this approach?

Too much debt, short-term thinking, lack of innovation, and too much adversity to risk, are four of the top pitfalls radio needs to avoid. If we focus on building brands and talent that listeners are truly passionate about, we will not only survive, but thrive! But to do this, we need to break out of the standard radio playbook and hire innovative creative types that will challenge traditional thought. Empower those people to take chances. This is where innovation will come from.

Looking ahead, Gold-based formats will continue to outperform this year, while CHR will continue to struggle, although we will see some early signs of a CHR rebirth later into the year (possibly with a crop of Dance/up-tempo Pop on the horizon). We will likely see a mini-recession in 2019, although nothing like the deep recession of 2008-09. But you may see more radio bankruptcies as the economy slows down, including at least one of the larger companies returning to bankruptcy court. The recent ALT and Hot AC format launches will be challenging as the soft AC stations demos will be too old and difficult to monetize, and the Alternative formats will continue to struggle with lack of great current product to drive ratings. Country will see some improvement from 2018 as the product cycle improves. Urban and Hip-Hop will continue to thrive, although the robust mass-appeal Rhythmic cycle will start to fade as the product becomes even more edgy in 2019.

 

Mike McVay, EVP of Content & Programming, Cumulus Media

Radio continues to be the most listened to entertainment and marketing vehicle in North America. We are seeing 3% erosion, on average, monthly when compared to year-over-year ratings in PPM markets. I believe that some of that is the inability of the rating service to accurately capture listening, but some of it is definitely the improved competition that we face today.

We have to take all competitors seriously. We have to fight to remain on the center stack of the entertainment systems in vehicles. We need to improve the listening experience. We have too many interruptions. We play too many commercials. We have eliminated copy writers in many situations and that leads to inferior production. We aren’t spending enough money on research to satisfy the audience by giving them what they want. These curative steps are all within our ability to improve the listening experience.

Don’t accept that we’re in an eroding business and it is going to erode regardless. The best products win. There are dominant brands in many markets and they’re in that position because they’re presenting stellar products.

The music industry and the radio industry need to find a middle ground that enables the artists to perform more concerts supported by radio, and the music industry needs to view radio as its best and biggest marketing partner. We can, and do, sell music, concert tickets, merchandise and assist in creating bigger-than-life-brands for artists and their music.

 

Buzz Knight, EVP of Strategy & Innovation, Beasley Media Group

Radio’s biggest challenge for 2019 is the need to not only stay on our existing core strategic plans but to not be afraid to take on disruptive challenges and turn them into opportunities. As our CEO Caroline Beasley puts it, “How can we figure out how to disrupt the disruptors?”

As the year ends, it’s amazing to note that the business of audio has never been this robust with so much opportunity in the coming year. Even though many things are changing rapidly the one constant that remains is the priority of nurturing and developing great content with great talent. In a world of multiple choices, we can’t turn our backs on the fact that our audience expects great content from our brands. They crave it and reward us if we keep it as our priority to great engagement.

In 2019 we need to all take a vow that we will strive to improve our listeners user experience when they consume our brands on multi-platforms. Gone are the days that we can get away with a bad UX (User Experience) because another traditional or non- traditional competitor is waiting in the wings to swoop in and grab our audience.

As the world is consumed by the future of Big Data, we need to consider how to reduce the big data to small bite size pieces, so we understand the methods and implications to better serve our audience.

We have a great opportunity to serve our clients and audience in a better way and be a greater force in 2019. Let’s go get it!

 

Jon Zellner, EVP/Programming Operations, iHeartMedia

Radio brands are at a critical moment in time and in 2019, we have an opportunity to redefine our path to success and relevance for years to come. But making this happen will require everyone in our business to look at their roles a little differently. Can programmers look holistically at their skillset, recognize their strengths and weaknesses and understand what might be causing their brand to fall short? If a programmer is skilled at the “art,” are they willing to work on the “science” piece or find someone to help them? If they’ve mastered the “science,” where can they go for creative ideas? Are programmers spending enough time truly listening to their brands like listeners do? Is what’s coming out of the speakers constantly hyper-focused on a very specific target listener?

Talent needs to grow their brand way beyond the cume of the radio station. What are they doing in the world of digital, social and podcasting that showcases radio’s true point of differentiation – companionship? How are they prepping for their shift? Are they really looking at every break as potentially the only break a listener hears all week or are they just going through the motions and reading live liners?

Are our sellers just selling :30s and :60s or are they challenging their clients to look at our medium differently and using all aspects of listener engagement to solidify us as “partners” instead of “vendors.” Can they truly compete against a digital or social pitch from a start-up? Are they fans of the brands they’re selling and do they have the courage to (hate to even suggest it) pass on business that won’t get the results the client is looking for? Radio will never increase its revenue share unless we look beyond competing with other radio stations for business.

As for radio and the music business, we always work best when we recognize that we need each other to succeed. Programmers need to be accessible to the labels, give songs time to develop (sometimes after they lose their bullet unfortunately) and not move songs up in rotation pre-maturely. Label reps have an even harder job, finding a way to provide data to programmers they can’t pull on their own and recognizing that the chart game doesn’t equate to sales. Definite challenges for both sides, but at the end of the day, honesty and good business tactics are always the right path.

The good news is that our business is full of opportunities for young people, more so than in the past ten years. These are the people that really know how to market to millennials digitally and socially, who understand how our brands are being used by young people (and why they may not use them) and can speak intelligently to prospective clients about how to interact with our brands without the use of an actual terrestrial radio. We just have to be willing to teach them what we know but, more importantly, listen to their ideas.