Is Radio Dead?

The answer is no.

When I began in this business as a teenager, we had turntables in the studio. We were live 24 hours a day. Commercials were on "carts" and there was a limit of one AM, one FM and one TV station per owner per market.

I'm back in my home town and as of today, all the major radio stations in town are still privately owned. We had 6, now 4, there is another company that has 5 local stations, one that has 3, another that has 2. And the number of local radio stations has remained steady between 20 and 25 for the last several years.

Are we effected by the economy? Yes. Is it a dire situation? No. We have had many national clients or clients that are handled by advertising agencies make some cut backs, but it is the local business owners that we get to work with directly that have been our life blood over the years and it is the strength of local radio.

Radio done right is easy. Listenership continues to grow despite the competing technology advances. Radio is free, portable and in every automobile on the road today.

What about the internet? Smart radio operators, stream their broadcast signal on line via their websites. We do. Not all Fort Wayne stations do.

Most of the bad news in the following article has to due with publicly traded radio station groups. Us local folks just need to work harder at create winning ideas to help our local businesses. And we are.

Your comments are always welcome.

Here's what the New York Times has to say:

Radio’s Revenue Falls Even as Audience Grows

By STEPHANIE CLIFFORD

CAN radio save itself?

Listeners are diverted by iPods and Internet and satellite radio. Companies are loaded with debt. Advertisers are heading to television or the Web — and the advertisers that have continued to advertise on radio, like auto dealers and retailers, are being hit by the economic crisis and pulling back.

And even though the audience for broadcast radio is actually growing, stations cannot seem to increase their revenue.

Radio advertising was down 10 percent last month from October 2007, according to the Radio Advertising Bureau, the 18th consecutive month of declines.

And the third-quarter numbers are dismal. CBS Radio reported a revenue drop of 12 percent. Citadel Broadcasting’s revenue dropped by 10.9 percent. CC Media Holdings, which owns Clear Channel Communications, said radio revenue was down 7 percent. Cox Radio revenue fell 6.2 percent; Emmis Communications’ radio revenue decreased 1.5 percent; and Radio One revenue was down 2 percent.

Problems in the radio industry have been piling up for years, said Marci L. Ryvicker, an analyst at Wachovia Capital Markets. In the 1990s, radio companies consolidated, then began increasing the ad time available. “They started to fight for share, instead of being proactive and thinking of new ways to generate revenue,” Ms. Ryvicker said.

Then, when advertisers decreased their spending around 2001, radio stations were stuck with too much time and too few advertisers. “There was too much inventory out there, and rates kept going down, down, down,” Ms. Ryvicker said.

Recent years have not changed the fortunes of radio. Many companies borrowed money to buy back their stock, leaving them saddled with debt.

And the industries that supported radio advertising — finance, retail and autos — have all been particularly hard-hit by the current economy. Radio advertising declined 8 percent in the second quarter of this year from a year earlier, according to TNS Media Intelligence. That was worse than any other category except newspapers.

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From an advertiser’s perspective, the consolidation of radio companies has resulted in sound-alike stations, said Jim Poh, vice president and a director of analytics and media planning at Crispin Porter & Bogusky, which handles radio ads for clients like Burger King and Domino’s.

“The group ownerships in various markets tended to blunt the edges of the formats, so that each of the stations could play across more demographic groups, and that way could share more of the revenue from various advertisers,” Mr. Poh said. “The downfall of that is the medium isn’t as relevant, the stations aren’t as relevant to people as they were.”

There are some signs of hope, though. The radio audience is increasing: radio now reaches more than 235 million listeners in a week, versus 232 million last year, according to a study by Arbitron. But those people are listening to the radio less: fewer than 19 hours a week, versus about 20.4 in 2005.

Stations in small markets are doing relatively well. Stations in the 10 biggest markets had revenue drop about 12 to 15 percent this year. Stations in the smallest markets, though, have been about flat, Leland Westerfield, an analyst with BMO Capital Markets, said. “The ad agency-placed business that predominates in larger cities has been subject to a greater level of pricing pressure,” Mr. Westerfield said.

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Radio executives are hoping that HD Radio will catch on with consumers.

“We’re beginning to see revenue-generation opportunities for radio broadcasters” on HD stations, said Robert J. Struble, the chief executive of iBiquity Digital, which develops and licenses the technology.

HD Radio lets stations transmit on digital signals, which allow each FM station to broadcast on two to eight channels, theoretically making the medium competitive with satellite radio.

But consumers have to buy a special radio to hear the digital stations, and only about 500,000 units were sold through September, iBiquity said. The radios have been available since 2004.

Consumers listen to the radio most frequently in the car and in the office, and so far, have little reason to pay for an upgraded radio in those places.

And automakers, which have other problems, are not embracing the technology; so far, only Volvo is offering HD Radio as a standard feature in its new cars (it is standard in all but one of its 2009 models).

“HD radio is pretty much going to be nonexistent, because they can’t figure out how to get the auto guys to include that as an option, and the auto guys that do include HD don’t let the consumers know about it,” Ms. Ryvicker of Wachovia Capital Markets said. “It’s been a horribly marketed product that’s not going to save the radio industry.”

Mr. Struble objected to that characterization. “For a number of years, we were very focused on getting stations to convert,” he said, adding that about 1,900 stations now broadcast on a digital signal. “The attention has now turned to the consumer side.”

He said there was “a lot of momentum” with the auto industry.

Still, with only 500,000 radios in use, a lot of the technologies available for HD Radio, like one that allows listeners to “tag” a song and buy it later from iTunes, are going unused.

Radio companies are taking other small steps into the future — several have created free iPhone applications, for example, which are popular. Still, it’s a scramble, analysts said.

“I think things will get better if the economy recovers,” Ms. Ryvicker said, “but I can’t imagine this sector going from negative double-digits in Q4 to positive anytime soon.”

Photo credit goes to my brother-in-law, Tim Luncsford, owner of Advanced Graphic Imaging. He submitted this creation and won a local radio contest for the public radio outlet in Indianapolis a couple years ago. Click here to see the full extent of his companies work.

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