Media and Advertising: Dialing up local radio's future, finding static

There were only 15 stations listed in the Birmingham Arbitron Radio Market Report. Today there are 26 stations listed in Arbitron’s Radio Market Report including six additional FM stations. The first significant "move-in" occurred in 1993 when Tuscaloosa’s WZBQ-FM 102.5 was purchased and transformed to a Birmingham station.

Today three companies own most of Birmingham’s stations, a result of the Telecommunications Act of 1996 which relaxed station ownership rules. One company can now own up to seven stations in Birmingham. Currently Cox owns seven, Citadel owns five and Clear Channel has five. This "consolidation" trend (fewer broadcasters owning multiple stations) has led to multi-station facilities called "clusters."

Cox has two clusters, but all Citadel and Clear Channel stations operate under one roof. Today, the "big three" Birmingham companies garner more than 70 percent of total radio listening.

Ten years ago in the summer 1991 Arbitron survey, the top 10 stations (total listeners age 12 and older, total week) accounted for 76.6 percent of the listening. In the summer 2001 survey, the top 10 stations claim only 58.1 percent. The market is much more fragmented with 26 stations instead of 15.

Has consolidation been a good thing or a bad thing? Well, it all depends on whom you ask. Radio stations serve three sets of customers employees, advertisers and listeners. What do these customers think about today’s new radio world order?

Consolidation of jobs

Because of pressure from stockholders, most publicly traded radio companies are prodding stations to increase revenue and cut costs regardless of local market conditions. Eric Rhoads, publisher of Radio Ink (a radio industry publication), commented in the Aug. 27 issue: "The true state of radio is that its fuel tank is at an all-time low. … Radio problems stem from the fact that many of its captains are caught in a blood lust of cost-slashing. Impressed with the short-term financial results, they fail to see the long-term damage they are causing." The impact of what Rhoads is referring to can be felt by employees. Most working in today’s radio industry would tell you that quality of life is lacking on the job and turnover is at an all-time high. With several radio studios under one roof, many on-air jobs are being eliminated due to syndicated programming or voice-tracking. In the past, only radio DJs and other on-air talent were asked to sign "non-compete" clauses. But today many companies require even salespeople to sign draconian non-compete agreements. It’s ironic that non-compete clauses were designed to reduce turnover; however, they have exacerbated it. Key point: There is a strong correlation between employee satisfaction and customer satisfaction.

Are radio stations better or worse to do business with today compared to a few years ago? That’s the question I asked Birmingham advertisers in two informal focus groups in March 2001. Although opinions varied on some issues, the overwhelming number of participants felt that doing business with radio stations is much more difficult today than in the past. Criticisms included a decline in sales professionalism, increased turnover and ineffectual promotions. Worse, management was viewed as apathetic and virtually anonymous. Broadcasters trying to force advertising on all stations (in their cluster) was a tactic that advertisers did not appreciate, leaving the impression that the needs of the radio company had taken priority over the advertiser’s needs.

The total number of weekly radio listeners in Birmingham has been stable over the past 10 years. However, the time spent listening to radio has decreased somewhat. Erosion of listening (both locally and nationally) can be attributed to several factors, but the main culprit is too many commercials airing today. The old radio saying "God gave us 60 minutes in an hour and the program director took away 50 of them" (meaning a 10-minute commercial limit per hour) no longer applies. Regardless, the listener is clearly winning with more choices today than ever.

Despite its challenges, radio’s strength of reaching consumers in their homes, cars and at work remains a hallmark of the medium that most other media can’t match. One other thing hasn’t changed either: A cast of talented and motivated employees who have a common mission to serve both advertisers and listeners is the foundation for a successful radio station. That was true 10 years ago, and it’s still true today.

Ben McWhorter is manager of sales and marketing at 101.1 The Spot WRRS-FM in Birmingham and a veteran radio sales executive.

Follow up Commentary: Of course this is the edited version— my first submission to the BBJ was much longer.