Programmers Without Borders

The Promise & The Reality

If you took all the borders and restrictions away from Urban programmers today, there is no doubt that in many cases you would have a better product ... one that served its community the way broadcasters promised to do when the got their licenses. But would doing this increase the station's bottom line? In today's economy, that is a question all companies have to ask. Even if they understand and support the notion of the station truly serving its community and programmers having creative freedom, they still have to ask, "But would the station make money?"

When the question, "Does really serving the community translate into better ratings?" is raised, then the follow-up question is, "How long before you see results from the extra community effort?"

Nearly everyone agrees the answer to the question, "Does spending time understanding the social fabric of a market really pay ratings dividends?" is yes. Programmers are increasingly aware that the ratings health of their stations are inextricably connected to the health of the communities where they operate. As members of that community we often find ourselves drawn in to help solve local problems.

In a perfect world we would be encouraged by our management to do this. But even where management agrees that there is a need for this type of effort, we are often forced by economic reality to re-direct our efforts inside the radio station. Why? Because of time constraints coupled with the fact that when a station sets out to address complex problems such as economic stagnation, sprawl and failing schools, the effort usually ends up going nowhere. Competing agendas surface, members delegate responsibilities to staff, difficult decisions get postponed, hopes fade and interest flags as hidden challenges and underlying conflicts become apparent.

The fact is that while there is a growing need for Urban stations' involvement, if it gets in the way of the day-to-day tasks that an often overworked programmer has on his plate, they have to make the ugly choice to pass and try to serve the community in other ways.

As we prepare to enter into a new ratings phase with the upcoming Arbitron sweeps, I thought we'd take another look at the state of our industry in 2009. This is a pivotal year in building the future of "terrestrial local radio" as we know it. There are new challenges we can expect to face in the weeks and months ahead.

Satellite, Internet & HD Radio

Before we completely walk away from localization and community service, let's not forget about formats and services that can't and don't serve their communities the way local stations can. Two such services are satellite radio and Internet radio.

There is an ongoing debate regarding the future of not only satellite radio, but also Internet radio, podcasting and HD radio -- and their impact on local earthbound frequencies. Let's first look at satellite radio. Some don't see this as a threat, while others clearly do. It is no coincidence that one of the leading investors in XM Radio was Clear Channel. They clearly saw the potential of this new medium to impact the way listeners use radio.

There are some listeners (with no affiliation with the radio business) who have purchased a satellite radio and have no intention of returning to traditional radio any time soon. The jury is still out on whether that number is really growing. On one hand, the number is increasing, but on the other, there are many satellite radio listeners who, when their free ride from the dealer where they bought their new car is up, so is the service. They're simply not going to re-sign.

Satellite radio as a competitor is like facing a multi-station cluster. They can put formats up that specialize in unique and small niches that we can't possibly do as narrowly as they do. After all, they have options for almost every type of listener somewhere on their service. With all due respect to those who downplay the impact of satellite radio, this is clearly a threat that may only loom larger in the future.

Now let's take a quick look at Internet radio. Something that you may find interesting is the fact that, strictly from a performance perspective, Internet radio is a lower quality product than broadcast radio. Specifically, most Internet stations stream at a bit rate that offers poorer sound quality than FM radio. Internet is not completely portable yet, but it has made definite inroads and improvements. You can now listen to it in the bathroom, in your car, or on a Walkman. While it's true that bit rates are not what they should/could be, as the price of bandwidth continues to drop, there will continue to be dramatic improvements in the bit rates and quality of Internet streaming.

Many Internet stations have dead air between tunes. But, while Internet radio is not yet fully portable everywhere, it should be noted that Verizon and many others have developed a coast-to-coast wireless broadband. Now there are portable HD radios that are designed to be IP-tunable to bookmark a user's favorite streams and to receive these broadcasts and pipe them through a car or home system. If you have a laptop with wireless capabilities, then in a sense, it already is wireless provided you are near a "hotspot" or Verizon or other ISP that has a wireless network in proximity to your machine.

And then there's HD radio. There's no doubt that, under ideal conditions, HD quality far exceeds the best FM radio. But this requires spending extra money to get an HD radio --and then if you really want to hear it at its finest, a better antenna system than the one that usually comes with the unit. Broadcasters have to spend thousands of dollars to upgrade their equipment. Listeners too, will have to make an investment in new HD receivers and antennas.

What it all comes down to is whether digital HD radio represents another example of adding performance characteristics that are beyond what consumers are going to be willing to pay for.

What Happens When Commercials Come On?

Heavy commercial loads have become a severe problem. And it's not just the number of commercials stations are forced to air, but the type of commercials. Commercials, like records, have burn-out, too. Pitch commercials with an 800 number tend to burn out very quickly.

I've had the opportunity to sit in on various focus groups and perceptual studies around the country, and the number, type and length of commercial sets is definitely one of the leading causes of tune out to radio today. Somewhere along the road, it became okay to follow the "leader" and add units because the competitor was doing the same. At the same time, we were going to one and two breaks an hour, which meant unit stacking to a ridiculous level.

My prediction then and now is that with PPM, more companies may look at expanding the number of breaks per hour, while shortening the length of those breaks. Some companies like Clear Channel, CBS and Cox have resisted the temptation to add units. This has generally paid off for them with higher ratings.

In 2009, it is important to really examine the risks of raising the average spot rate and increasing radio's share of overall advertising above the traditional 8% it has held for several consecutive years now. To continue to ignore the problem could lead to irreparable damage in the near term.

The Aging Challenge

Radio is becoming an aging medium. With the agency focus over the last two decades being towards the 25-49 year old listeners, there has been a concurrent decline in younger age tuning. This has led to a change in how radio is perceived by younger listeners. In the upcoming Winter rating sweeps we should remember the rule: 80% of your station's listening still comes from 20% of the audience. The problem is that 20% is shrinking, particularly among young listeners.

No longer is radio the top source for new music choice. With the explosion of mp3s and the availability of the iPod for both Mac and PC users, it has become relatively easy for consumers to build their own radio stations on their personal listening devices. This fundamental change in technology will continue to take its toll on terrestrial radio's natural ability to build cume by luring new listeners.

There is some hope, however, that agencies are beginning to see the need to expand and diversify their reach of advertising into younger demos. This has already led some radio clusters to consider a younger, Latin-leaning option among their choices of music radio offerings. These younger Latin-leaning music-based formats will have to be less rigid and more adventurous to be successful, as today's young people have so many choices with which to spend their entertainment time. In short, youth-based radio will have to change to become really compelling again. This leads me to another format observation.

Real Content And Creativity

We thought the day of "10 in a row" jukebox radio was finally coming to an end. Our research told us that listeners were hip to the fact that the price they pay for 10 in a row often seemed like 15 in a row (as in 15 commercials in a row). Now while it wasn't true, that was the perception. The audience is simply are not going to tolerate that any more. This is especially true for those "music freaks" listening in their cars, where it's a quick, one-button motion (sometimes right on the steering wheel) to find a new frequency, or to flip on their iPods.

We shouldn't be surprised, as every situation hits critical mass sooner or later. That moment has now become sooner rather than later. Those small percentage declines in TSL over the last decade are going to increase until an effective remedy is put in place. It is time for Urban stations to become more adventurous and to put the emphasis back on personality and creativity. It is time to stop talking about all the things we shouldn't do and to begin focusing on things that we can do or that we should at least try.

The policy of restricting those few live, local air personalities left to just back-sells and liners has led to a less than compelling overall product. Add to that problem voicetracking and syndication and we risk continuing to lose our place as a primary medium unless we put something compelling and local back in to the presentation.

In the future, those stations that invest in and cultivate personality and creativity could become big winners. They will also be the stations that are then able to attract and keep the most creative people in the business. This is the time to ask ourselves an important question: Are we content with where we're at now, or are we prepared to make the changes necessary to convert occasional listeners into loyal listeners? Are we willing to invest in programmers without borders?

Word.