Radio: In search of truth serum

Do you often wonder what alternate universe the radio industry exists in these days?

Let me introduce you to Scott Sperling, the co-president of Thomas H. Lee, one of the two equity firms (Bain Capital being the other one), that ponied up $17.9 billion to take Clear Channel private just moments before radio stocks fell into the incinerator.

Last Wednesday, he told Reuters that Clear Channel and another Thomas H. Lee media investment, the Hispanic network Univision (a $12.3 billion deal in 2006) are "inherently great businesses" and that the recession in the ad market would reverse.

Now let’s visit with BAI Financial Network VP Mark Fratrik, who researches broadcasting and related communications industries.  Last week, he revised his original radio revenue forecast he issued last December.  Based on his most recent studies, he now foresees 2009 radio revenue to be worse than he initially projected with no improvement in 2010.

So whom do we believe?

The BAI study is little more in-line with the latest study from Pulse Research, which in a study prepared for the Cable & Telecommunications Association for Marketing (CTAM), shows that over seven out of ten or 71 percent of US households believe that the economy is heading toward a depression. 53 percent of US households are doing less shopping, 52 percent are eating out less, 51 percent are taking fewer vacations, and 50 percent are attending fewer concerts and theatre performances.  The study also showed that most are not willing to give up broadband and cable TV.

(I’ll buy the broadband part – but not cable.  Just this past week, three people – unsolicited – told me they were downscaling their cable channels – and one intended to drop cable service entirely due to increased use of Hulu and other TV on-line, on-demand services.) 

We're also hearing that in the future rounds of Clear Channel cuts even some of their hard-core, brown-nosing bum-kissers will be getting the axe.    It’s not just the billing and traffic departments that are living on borrowed time. Hell hath no fury than a woman scorned or a loyal-to-a-fault Clear Channel manager being told that the elevators are at the end of the hall.

That’s like calling sewage perfume.  You can actually call it anything you like but you can’t prevent its stink.

 The more I hear and read comments like “we have to contract before we can expand” from Clear Channel execs and their private equity suckers, the more I’m convinced that the last batch of Kool-Aid they make will be for themselves.

Lyin’ Diane Warren at the HD Digital Radio Alliance churned out still another press release, this one announcing a “major milestone.”  According to the Alliance statistics (yes, a flag was just thrown on the field) there are now “1,000 multicast stations” broadcasting and 100 various                      HD Radio models “now available at retail.”  The Alliance also announced still another new ad campaign (yes, another flag on the field), which will be carried at no cost “on over 700 stations in the top 100 media markets.” They called it “extending the broadcasters' commitment to promoting the technology to 42 months.”

Allow me to translate Lyin’ Diane-speak into truth: To be precise, that's 1,000 HD stations that few will ever hear and 100 receivers on warehouse shelves gathering dust. 

The new campaign “will combat the mistaken perception by many consumers that they already own an HD Radio.”  No, I couldn’t make this up if I tried.  An unidentified spokesperson for the Alliance adds that the new flight “will continue educating consumers that they need a new receiver to enjoy the HD experience,” and will word-up their slogan, which will go from “It’s time to upgrade” to “If you don’t have an HD, you’re not hearing HD.”

True genius.

Let’s, of course, not confuse iBiquity and the HD Digital Radio Alliance will the facts.

Sure, iBiquity’s failed miserably in new product development resources and expertise. They followed that with a series of flawed marketing research, sales, distribution, advertising, and promotional resources and skills. 

Have you seen any HD Radio marketing assessments other than Alliance’s own?  Did you see even one independent, impartial market evaluation since the deficient product was introduced?   But I digress. 

How about radio still hawking those Internet radio ratings, which claim CBS Radio and Clear Channel to own the lion’s share of on-air listening?   

The only one buying that hype is the radio industry.   No one that counts in new media believes that misleading hype.  Read Ken Dardis’ current Audio Graphics for specifics.

As long as hypocrisy is in the forefront of radio pitches, the medium will continue to loose ground.

We live in a transparent world.  You can’t avoid it.  The consumer is in control.  Facing up to the reality will be your first step forward.  Deal with it.