Open Letter to Radio: coronavirus edition

March 24, 2020

March 24, 2020

An Open Letter to Radio (coronavirus edition),

The coronavirus has already achieved what an invading army would never have dreamed possible – overrunning America and bringing our economy to its knees in a matter of days.

When it comes to AM/FM radio, the coronavirus is set to accomplish what satellite and streaming platforms have attempted, but failed to do for more than a decade – erode the ratings of music stations overnight.

After all, being the 800-pound gorilla of audio with the most profitable and resilient business model along with the largest total reach of any media platform, we have much to lose.

The situation is further compounded because unlike television, our heaviest users get up and go to work every day, which for the moment, is no longer happening.

Conventional wisdom also reminds us not much listening occurs at home on the couch.

Even with the growth of smart speakers and mobile apps, these devices won’t be able to offset the loss of overall listening. This is especially true during drive time as commutes switch from driving across town to walking down the hall.

What’s radio to do?

Let’s get out in front and lean into what’s going on.

Does anybody think less of the aviation industry or their favorite airline because commercial travel has come to a halt?

Even the most casual observer knows that when business travel dries up overnight, airlines are in for severe turbulence.

Like the airlines, it’s taking a global crisis on the scale of a modern world war to significantly impact radio listening.

Reason being: The backbone of radio listening and the backbone of our economy are one in the same – the American worker.

If there’s any doubt that our core audience is upwardly mobile with a paycheck that provides disposable income, this global disaster is going to prove it.

Radio must own our story with confidence and conviction.

National TV news airs every morning and evening. In this constantly changing environment, that’s not frequent enough.

Meanwhile, cable news is a never-ending stream of alerts and loud opinions that only the most avid news junky can consume.

Not to be outdone, social media updates your news feed by the second and is full of unverified information and conspiracy theories.

None of these scenarios serve “the public interest, convenience and necessity.”

Radio is trustworthy and local – two essential attributes in this public health crisis.

Our ability to provide reliable updates every quarter-hour is an essential part of our story.

Trusted voices on the radio – they are companions.

This is going to become even more important as people settle into a work from home routine. A video chat with your best friend at work is nice, but the companionship radio provides will be increasingly essential.

Speaking of video conferencing, despite many of these companies growing their stock price in the midst of a historic market downturn, the business model these platforms operate on is not well suited to make money during a temporary surge.

They have to scale up additional network resources and many of the new customers are not generating revenue due to the freemium model. As soon as bars and restaurants reopen, virtual happy hours will be kicked to the curb.

Further, many of their existing paying customers are encountering technical issues as a result of this surge in usage, which has sparked concerns about the long-term impact on their brand reputation.

For radio’s part, we can have the entire city tune in without any incremental increase in the cost of doing business.

News/Talk is predictably experiencing that surge right now.

We have an amazing over-the-air business model that we often take for granted in this digital age.

We’re able to serve our communities and each additional listener doesn’t increase our costs. It’s another angle of our amazing story as the internet pipes are set to burst.

Radio has always done some of its very best work when responding to a disaster and this coronavirus is no different.

As we navigate this global crisis, we’re going to generate even stronger insights into why our employed audience is so valuable.

Even before we roll up our sleeves and win listening back, radio will have an opportunity to make the case to both new and existing clients that on-air messaging must be an advertiser’s first dollar spent during the recovery; allowing them to reach the people with paychecks and money to spend, rather than the people still sitting on the couch.

Radio’s 100th anniversary will be unlike any other.

Together we will continue to drive radio forward.

On behalf of Catherine Jung, Tony Bannon, Jen Clayborn, and everyone at DMR/Interactive, this is the latest installment of an annual Open Letter to Radio series that began in 2016.

It was initially written to coincide with Labor Day, radio’s unofficial holiday, a claim made possible by the dominant percentage of listening that’s delivered by employed persons across markets and formats.

Earlier editions of the letter are available here: 2016, 2017, 2018 and 2019.

Onward,

Andrew Curran
President and COO
DMR/Interactive


As the NFL Turns 100: Radio is Now on the Clock

October 1, 2019


Heading towards their 100th season, the NFL faced massive headwinds: concussions and brain injuries, half empty stadiums, kneeling for the National Anthem, and steadily declining ratings.

In fact, “Super Bowl ratings and viewership have now declined in four straight years, the longest streak of declines in Super Bowl history.”

Despite this combination of existential risks, the NFL remains a money making machine with revenue expected to grow from $15 billion currently to $25 billion in 2027.

Meanwhile, national brands like Lowe’s are not just walking towards the NFL, they are running to be associated with the shield.

“Let’s face it: The NFL is dominant,” Lowe’s Chief Marketing Officer Jocelyn Wong said. Lowe’s came to the NFL after ending a 17 year relationship with NASCAR.

Similarly, when Papa John’s cut ties with the NFL, blaming the player boycott for slumping sales, the league had a more valuable agreement with Pizza Hut finalized in 24 hours.

The NFL is 100 years old and facing smaller numbers of teenagers playing the sport as well as increased competition for their target audience’s time and attention.

100 years old, $15 billion in annual revenue, concern over the next generation and increasing audience fragmentation. All of these elements could be used to describe radio.

So what’s the difference?

“We have obsessed a lot over the last three or four years on game presentation, which I think matters,” said Barry Rolapp, the NFL’s chief media and business officer. He continued, “We always pay attention to them (the ratings), but it’s not as much week-to-week or year-to-year. It’s about how is it trending generally.”

This unrelenting focus on the user experience has resulted in reduced TV breaks. In addition, the NFL is riding the wave of two massive macro level forces: the popularity of fantasy football and the legalization of sports gambling.

Both factors give diehard fans reasons to watch more football, thereby driving occasions and time spent.

Radio: First in Audio

The original commercial broadcast on KDKA in Pittsburgh in November of 1920 provided election results. A century later, our democracy in action will once again be the biggest story of 2020.

According to Pew Research more Americans get their news from radio than printed newspapers or social media. Among those who get their news from social media, “57% say they expect the news they see on these platforms to be largely inaccurate.”

In addition, it’s increasingly difficult to figure out “real news” from manufactured/fake outrage. A reliable source of news and context is essential, especially for our employed listeners who are too busy to sift through all the daily drama.

Politicians governing and conducting diplomacy via Twitter is not going to end with the Trump Administration. It might be bad for world affairs and our republic, but it’s great for driving ongoing tune-ins.

In addition, the ability for music stations to serve as an oasis and provide an escape from the political craziness is an enormous macro level force that will continue to generate listening.

Also, just like in the NFL where Father Time remains undefeated, musicians won’t live forever. With so many icons in their 70’s, their passing will provide ongoing opportunities for radio to connect and engage with the audience.

Whether it’s Dolly Parton, Mick Jagger or Paul McCartney, even the Boss turned 70 last week, time doesn’t stand still. Factor in all those artists who will pass far too early and our employed A25-54 core audience will be looking to radio to celebrate these legendary lives.

Radio’s first 100 years have been filled with ongoing innovations in the face of new technologies and changing business conditions.

The reach of radio and the ability of stations to connect with the employed listeners who have money to spend with advertisers is a tremendous competitive advantage.

Not all listeners are created equal. By continuing to recruit and engage the heavy listeners who matter most to your ratings and revenue, radio is investing in a high margin business model, while using our strong local AM/FM brands to simultaneously grow incremental digital, podcast and event revenue.

Here’s to the next 100 years!

On behalf of Catherine Jung, Doug Smith, Jen Clayborn, and everyone at DMR/Interactive, thank you for reading and working to drive radio forward.

Andrew Curran, President and COO


Open Letter to Radio: Focus on Your “Bread and Butter” and “Get Better”

August 29, 2019

Labor Day 2019

An Open Letter to Radio:

The last time the Radio Show came to Texas (Austin 2017), advertising giant P&G took the stage and encouraged radio to focus on your “bread and butter,” namely broadcast radio. “It’s a gimme. You’re selling water in the desert, you have what I want. How can you fail at selling me what I want?”

The reason this advice was necessary? John Fix from P&G recounted hour-long meetings with radio companies where for 50 minutes, “I will hear about everything you’ve never done but want to. I hear about podcasts you’ve never broadcast. I hear about targeting, and what I really want to talk about is how you can touch 93% of the United States.”

Radio is a daily companion for employed consumers, who advertisers need to reach. Meanwhile, people who are out of the workforce don’t listen to a lot of radio. They also don‘t have much disposable income to spend with advertisers.

As Procter & Gamble has ramped up its investment in radio, its stock price has followed suit and is trading at an all-time high. Not a bad testimonial for radio, especially for buyers and advertisers skeptical of radio’s enduring strength and dominance in a digital world.

As the saying goes, it’s harder to stay on top than it is to get there in the first place.

For radio to continue to grow and deliver strong ROI to advertisers, those of us working in the industry need to keep getting better.

In that regard, insights into athletic performance and what separates champions from the rest of the field are both interesting and informative.

Researchers have found that champions consistently have a unique reaction to challenges. They view obstacles in a positive light – as opportunities to grow – and overcome them thanks to a “never satisfied” attitude.

This runs in contrast to almost champions, who blame setbacks on external causes, become negative, and lose motivation.

Most notably, researchers have discovered that the best goal is also the simplest: Get better. 

Champions are driven from within. Their primary concern is self-improvement. They hold themselves to high standards, but judge themselves against prior versions of themselves, not against others.

Almost champions on the other hand, focus on external benchmarks, like national rankings or how they compare to rivals.

The research also found that champions seek empowering, lasting mentors. Coaches that empower their athletes and take a longer-term perspective. This differs from the experience of almost champions, who recall their coaches as being focused on immediate results, “often seeming to drive the bus more than the performer.” Not surprisingly, almost champions change coaches frequently whereas champions maintain long-term relationships.

These insights on what separates champions from others applies across radio: programming, sales, promotions, on-air, imaging, management, research, consultants, marketers, software providers, and on down the line.

Advertisers need people across radio to keep getting better and to continue delivering what they can’t get on any other platform – maximum reach to an employed audience with money to spend.

2019 has proven to be an important year for radio and 2020 should be a bumper crop that sets the tone for a new decade as we focus on growing industry revenue to $20 billion by 2022 (#20×22).

We are grateful to work with talented and dedicated professionals across markets and formats as we together enhance radio’s highly profitable business model and ensure an ongoing commitment to operating in the “public interest, convenience and necessity.”

This letter is the latest installment in an annual series that started in 2016, written to coincide with Labor Day, radio’s unofficial holiday, a claim made possible by the dominant percentage of listening that’s delivered by employed persons across markets and formats. Earlier editions of the letter are available here: 2016, 2017, 2018.

On behalf of Catherine Jung, Jen Clayborn and everyone at DMR/Interactive, thank you for working to drive radio forward.

Happy Labor Day!

Andrew Curran
President and COO
DMR/Interactive