By Walter Sabo
Consultant, Sabo Media Implementers
A.K.A. Walter Sterling
Radio Host, “Sterling On Sunday”
Talk Media Network
1. Financial solvency laws. Consolidation is not the problem; it actually saved the radio industry. The problem is the 1986 rule change that dropped financial solvency requirements for station ownership. Prior to 1986, stations could not be purchased with debt. A potential owner had to prove that they could meet the expenses of a station through the duration of its license. Once the financial efficacy rule was dropped and stations could be purchased with debt, the industry was financially decimated. Prediction: Financial solvency laws will be re-instated.
2. Ratings change. Ratings giant Nielsen will change its system of measurement of audio. The PPM was created over 20 years ago by a company that no longer exists. For a station to earn proper audience levels, Nielsen must measure all audio distribution platforms including radio sets, in car, cell phone streaming, computer streaming, satellite, public address systems and ear pods and whatever comes next. Now you choose one – over the air or the stream. This will change or more companies will follow the recent lead of Good Karma Brands radio which just cancelled Nielsen.
3. New leadership. Who’s in charge? Most radio companies are run by very sharp and very senior CEOs and Boards. The Boca effect — I don’t want trouble, just get me to my retirement and condo on Boca. The primary reason FM grew from 10% household usage in 1968 to 60% in 1981 was the “kids” were put in charge – and caused “trouble.” Allen Shaw at ABC FM, Walter Sabo at NBC FM (forgive me), Jerry Lyman at RKO FM and the sons and daughters of the owners of thriving AMs paired with orphaned FMs (think Beau Woods at WEBN, Cincinnati and Bart McClendon in Dallas) were given free range to create and implement brand new formats. While the AM management played golf, those 20-somethings aired daring, new, shocking, amazing radio that drew listeners to FM. No, not stereo or low commercials, it was the FM package of subversiveness. For radio to level up and serve the joy of an audience born with iPhones in their cribs, it will be led by today’s 20-somethings without suffering interference by bosses sharing really interesting stories about their time at CBGBs. The essential leadership will come from younger programmers and executives who have only known a world with online video stars, a thousand cable channels, and on-demand video and audio entertainment.
4. New sales paradigm. Digital entertainment companies – audio and video – are fueled by stupid money. Venture capitalists launch new businesses with the goal of claiming a stake and then selling the business for their ROI. VCs have no interest in operating profit. Really. That means start-up media companies pay much more for sales executives than radio companies. Start-ups are shinier goals than radio stations to a media advertising seller. There will be a revolution in the way salespeople are identified, recruited, managed, and paid or the decline in radio revenue will accelerate.
5. Renovated voice tracking. Voice tracking is not horrible, it’s an opportunity that has not been realized. Today voice tracking is a poor imitation of being live – without benefits. No time, temp, urgent news. Here’s the miss: Every station has a stunning, amazing production library. Don’t have one? Swipe from YouTube. Rather than pretending to be live, admit to being recorded. Use that production freedom to produce. Tap the production library to create a running drama, comedy, mood, listening environment. Make the show between the songs to be as compelling as Taylor Swift. That’s the future of music radio.
Walter Sabo has been a C Suite action partner for companies such as SiriusXM, Hearst, Press Broadcasting, Gannett, RKO General and many other leading media outlets. His company HITVIEWS, in 2007, was the first to identify and monetize video influencers. HITVIEWS clients included Pepsi, FOX TV, Timberland, Microsoft, and CBS Television. He can be reached at walter@sabomedia.com www.waltersterlingshow.com
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