A Meditation on COVID, Radio, and Podcasting
Ten years ago I was invited to a kind of “renaissance weekend” with a dozen or so radio executives in Hilton Head, NC. I was flown down to give a talk on what I thought the future of radio would be so that these forward-thinking, independent broadcasters could get a jump on it. Also, golf. Well, golf for them, anyway. My opinion of golf is that it’s a very long walk punctuated by moments of abject failure that you actually have to pay for. Related: I suck at golf.
I went back and had a look at that talk. I think it still holds up, but I was a little early. I’d post it here, but 2010 Tom apparently had lower graphics standards than 2020 Tom and I can’t bear to release this hodgepodge of pixelated slides, stolen photos, and drawings from my “yes, and” period. I’ll just sum up the main points here, because I think it rings truer than ever, and now is the time for broadcasters AND podcasters to think about this very near future.
I called this talk “Tower Defense,” which is both a style of game and a nod to the fact that broadcasters then and now are clinging to what was their competitive advantage but is now the albatross around their necks: the broadcast tower, and the physical infrastructure terrestrial radio requires. I trotted out the well-worn story of the explorer Hernán Cortés arriving in what would become Mexico and ordering his men to burn the boats so that they would have to make a go of it in The New World. What if, I posited, you burned your towers? What would you have to do? What could you do?
What was true then is true now: the overwhelming majority of radio stations are middlemen, which is gender-biased language but a pejorative term so I’m going to leave it as-is. The Internet has not been kind to middlemen. Ask anyone who was a travel agent or a stockbroker in the 80’s. About 95% of commercial radio stations in America fall into one of two categories: music stations, and syndicated talk stations. In both cases, the local radio station is essentially a Coke machine, and they don’t own the Coke.
At one time, “free music that you like” was an economically scarce good, and radio (AM, then FM) controlled it. It had enormous value, and radio parleyed that value into billions of dollars in annual revenue. Today, however, “free music that you like” is a commodity. Wheat, essentially. Every local radio station that makes its payroll by playing music is trucking wheat, and the only way to profit from selling a commodity is scale. Even in 2010, when I gave this talk, it was clear that Pandora was going to have this kind of scale, and we weren’t even talking about Spotify yet. Today, both companies have enormous scale, and if Liberty Media does indeed acquire a controlling interest in iHeartRadio, the combined portfolio of IHeart’s radio stations and app, Pandora, SiriusXM, and Soundcloud (not to mention their formidable podcasting assets, led by Stitcher/Midroll) will be the biggest trucker of wheat in America. (Also, and I was today years old when I learned this, Liberty Media owns Formula One Racing.)
That leaves talk radio, and the vast majority of commercial and non-commercial radio stations in this country are rebroadcasting someone else’s content. The upside: Dave Ramsey is better than anyone most radio markets could hire locally, and Marketplace can do things that no local radio station could dream of pulling off. The downside is that the local radio station does not have the relationship—the personality, or content producer, has that relationship. It doesn’t matter where I get Coast to Coast AM, and I can certainly just get it from the source. As long as I can get my fill of alien abduction stories.
That leaves locally-originated talk and what we used to call “Full-Service” stations. I worked for a radio station exactly once in my life—I was on the air for WQDY, Calais Maine, as a high school student. WQDY (“The Voice of the Valley”) was a true full-service station: classic rock and pop during the day, Red Sox games and local high school basketball at night, and a morning show called “Open Line,” where people from my little nook of Downeast Maine and New Brunswick would call in and advertise things like “Blank Cassette Tape for sale—looking for two dollars,” and “I’ve got an engine block for a 350 Chevy motor, it’s yours if you can haul it away.” WQDY was, at one point, owned by Buffalo Bob Smith, of Howdy Doody fame. I met him once when I was doing a remote broadcast on Main Street in Calais at an outdoor festival. Unfortunately, I was introduced to Mr. Smith just seconds after I had inhaled all the helium out of one of our balloons. To this day I am scarred because I tarnished the entire Doody legacy with my actions.
I’m going to come back to the idea of full-service stations in a minute. One of the points I made that weekend in Hilton Head is still true today: we have a lot of radio stations, and nothing says we need them all. As an example, not far from Hilton Head, is the market of Savannah, Georgia. Savannah has one local newspaper, the Savannah Morning News, and five local TV stations. Guess how many radio stations it has?
The answer is 52 (it was 49 when I gave this talk in 2010.)
Why do they have 52 radio stations?
This is a very good question.
There are 52 radio stations because the market can support 52 radio stations, give or take, but that is surely changing, and with COVID-19 canceling our commutes and all of that in-car listening, it’s an open secret that radio has plummeted over the last quarter. For the past six years, in the Share of Ear® research my company Edison Research puts out every quarter, we have tracked the gradual diminishment of radio’s place in our audio diet, and while it is still the plurality of our listening and a significant media channel, radio has been steadily encroached upon, year after year, by pure-play streaming companies, podcasts, and even YouTube.
All of which begs the question: is radio dying?
My answer, you might be surprised to hear, is of course not. “Dying” implies that it is going to die. I don’t think it is going to die. It is going to be different. Savannah, Georgia may not need 52 radio stations, but the correct answer isn’t “zero,” either. We are still reading newspapers, we are still watching network TV, we are still reading paper books, and I’m still buying vinyl records like a fool.
With COVID quarantine taking away concerts, events, and indeed, other places in general, we have all gotten very good at efficiently finding exactly what we choose to read, watch, and listen to, either from the largest players at scale (Netflix, Pandora, Spotify, Hulu, etc.) or directly from the source/producer of that content. There is no law that states Savannah has to have, or gets to have, 52 radio stations (or ANY AM stations) and for those that are trucking wheat or relaying content off a satellite, this is an existential discussion.
Radio’s strength has always been that it is live, and local—yet so very little of it is! Some music stations may have a live and local morning show, and the occasional local personality can sneak onto a talk or sports station that is otherwise populated by syndicated shows, but you can listen to many stations for hours at a time and the only local content will be a few of the ads. People in the industry know this to be true. But the costs associated with a full-time live and local radio station just don’t work in the current environment.
But the current environment is changing. COVID is changing it for us. What if there weren’t 52 stations in Savannah, but six? Or three?
What would that station sound like?
It just might be a pretty kick-ass station. It would do all of the things we want radio to do. Live personalities all day. It would keep us company. It would hold our town council accountable. It would give us a place to sell our washer/dryer, or complain about construction. It would call local school sports games. It would celebrate the successes of our children.
It would sing the song of a city.
This station could not support itself today because it costs a lot to make that kind of radio, and if you are charging the same for spots as your 51 competitors, and they are playing music or Sean Hannity all day, that’s a losing game. But what if you’d didn’t have 51 competitors?
This is what you would do. And you would do great. And radio would be smaller, yes—and different. But most certainly not dead.
Here in Boston, where I live, we listen every single day to our very local station (as in two blocks away), WERS, which is a listener-supported music station broadcasting from Emerson College. They are live and local all day, play great music, and do all kinds of things to show love to members and listeners alike. And they do some creative things to make money. Currently, they have partnered with a local coffee roaster and they are selling a batch of coffee that was donated. They’ve done similar things with a local chocolatier and other local businesses. I like those businesses. So, a little more “commercial” than your local NPR affiliate, perhaps, but it all works just fine to my ears. Ad-supported is a fine model, too, but having an element of listener support means that your listener and your customers are the same thing, which means something, I think.
When I said this ten years ago in Hilton Head, I was too early. Maybe I am now, too. We will find out. But If I had a radio station, I would think about burning the boats. The safest way to do that while you are still playing the Greatest Hits Of The 70’s, 80’s, And Today?
Podcasting. I’ll let you fill in the blanks from there. But I think the vision I’ve set forth here will happen. If you believe me, then you can already see what that radio station of the (potentially near) future will and must look like. I’d get a head start if I were you. Local podcasters are that head start.
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The above is adapted with permission from Tom Webster’s newsletter, I Hear Things. Subscribe here, and get the whole thing, free, every week.
|Tom Webster is Senior Vice President at Edison Research, and is co-author of a number of widely cited studies including The Infinite Dial, The Podcast Consumer and The Podcast Consumer Tracker. He lives in Boston MA, USA.|