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Has Wall Street Sucked The Life Out Of Radio?

Has Sucked The Life Out Of ?

GUEST EDITORIAL: A Message About Solutions
from ’s Eric Rhoads

Last night I was reading some past editorials I’ve written for Radio Ink. On July 18, 2005, my editorial titled Should Radio Walk Away From Wall Street? said, “Wall Street has become unforgiving and unwilling to allow companies the necessary time needed for growth, reinvention, and cyclical adjustments. Meanwhile, regulations such as Sarbanes-Oxley create a wall of paperwork that turns aggressive entrepreneurial businesses into restricted paperwork bureaucracies. General managers, sales managers, salespeople, even program directors in publicly owned radio companies say that a significant portion of their time is consumed by meaningless paperwork. What have we become?”

It went on, “There is a season to be public, but I have a hard time finding any value in being a public company in this season of radio. Perhaps it’s naive to think that we don’t need Wall Street anymore, or that the debt can be paid without public money, but radio would change for the better if we could shed the Street and its need for quarterly performance. That freedom would let us focus on doing what’s right for the long-term growth of our business, rather than only what looks good this quarter. Fortunes can be made in radio by paying attention to the important growth strategies of our industry and leaving the business of theatrics, acting out foolish scenes to make Wall Street gush. It’s not working, and some scenes are embarrassing and humiliating. Radio needs to get back to the business of radio. Wall Street is a fair-weather friend whose value to us as an industry may have passed. “

A New Era For Radio
Radio today is no better off for hanging in there with Wall Street. The only good news is that iHeartmedia (formerly Clear Channel) is no longer traded on Wall Street, and because of its leadership (by the weight of its holdings alone), there is hope that radio might return to its core strengths. This assumes that radio will not continue to cut its way to success, which is unlikely. Like it or not, radio is leaving the Wall Street era (thankfully) and entering what I call the Hand s-On Era.

With every disaster comes reinvention. This American economic disaster, combined with radio’s seven-year streak of bad luck (who broke a mirror?), makes it clear that whatever radio broadcasters have been doing is not working. After beating their heads against the wall, some are finally seeing the need for creative solutions. There is no wakeup call like a severe drop in revenues. Any smart CEO will look to what is working and what is not. If we’re lucky, they will put their pride aside and realize that small, local, independent radio stations have it figured out. Those small groups are not crying the blues, are not seeing the declines, and are not being severely wounded by the economy.

When I write my missives about the woes radio is facing, I hear from dozens of radio operators asking me what world I’m living in, because life in their world is just fine. So what is the difference between them and the Wall Street operators? They are hand s-on radio companies with high levels of contact with local-direct advertisers and local audiences. They invest in on-air and sales talent. They do not just pay lip service to localism with liner cards mentioning local communities. They invest in localism, promotion, and entertainment.

What Are The Independent Companies Doing Differently?
What works on can work on Wall Street, but it will require a complete shift in thinking and an entirely different strategy. Radio board rooms need to echo the strategies where radio is successful, and shed their tired and worn tactics of cut to profit.

The New Heroes Of Radio
Today I asked Radio Ink General Manager Deborah Parenti to add a session to our Forecast conference focused on what the independent operators are doing right and how those techniques can be applied to all radio. This is a dramatic change for Forecast, which has mostly had a Wall Street focus. Though we will continue our practice of forecasting spending and advertising trends, this December we will also address what IS working, and how we can replicate this success. We have a powerful session planned, and I think people will be clinging to the panelists’ words like never before, because these are the heroes in radio. They are successful, they are pacing equal to or ahead of last year, and they have strong opinions about what other companies are doing wrong.

Every Radio Station Owner And Investor Should Be Present
If you own, invest in, or fund a radio station or group, you need to be present in New York on December 2. If you sit on the board of a radio group, you need to be present. This is the most important conference we have held in the history of Forecast, because it will not only focus on economic strategies, it will focus on making radio more hand s on. Knowledge is power, and this knowledge can change the outcome of radio nationwide.

Oddly Enough, We’re Pacing Ahead
Frankly, I was a little nervous about attendance this year, but so far we’re pacing ahead of registrations from last year. I suspect it’s because people need fresh ideas and answers. You have my word that we’re focused on your needs, and we offer a 100 percent satisfaction guarantee. The Harvard Club limits us to 200 seats, and we max out on attendance every year. To reserve your seat, call 561-655-8778, or go to www.radioink.com/forecast to register.

Eric Rhoads