The definition of insanity is doing the same thing over and over again and expecting a different result. Well, I must be insane because I keep waiting for radio executives to speak positively about the radio business. Time after time, many distance themselves from their identities, hoping the ad industry will see them differently. The belief is that by being seen as ‘radio’, they’re considered outdated whereas ‘digital’ or anything else makes them sound shiny and new.
The latest example came last week. Inside Radio published an excellent story on Townsquare Media’s latest results. Townsquare has earned a lot of praise in recent years for their digital focus, and according to CEO Bill Wilson, the company is doing well. That’s great news. We need more groups producing positive results.
But something Wilson said in the second paragraph didn’t sit right. Wilson expressed frustration with Townsquare’s stock performance not matching the company’s transformation. He said, “We believe we’re being penalized by being looked at and lumped into a group of companies that we don’t belong in. The bigger issue is being classified in a neighborhood that we don’t believe we live in anymore, which is the radio industry”.
I had to read those quotes twice to make sure I processed it correctly. One of radio’s top CEO’s, which owns 342 radio stations doesn’t believe he should be lumped in with other radio companies. Yet if you visit the company’s website, listed up top in large blue text is the line “3rd Largest Owner of Radio Stations in the US.”
When I read Bill’s comments, I instantly thought of Vince McMahon trying to convince the business world that the WWE wasn’t a wrestling company. Vince wanted people to see the WWE as an entertainment company. In theory, that might’ve been true since all sports are technically entertainment, but when you consider that WWE’s main area of entertainment revolved around wrestling matches, it was clear, they were a wrestling company first. McMahon tried modifying the identity of his business because the advertising industry saw wrestling as less desirable.
Bill isn’t the first executive to speak this way. Other execs have previously suggested that being identified as a radio company is bad for business. As a result, they try to change their identity to be seen as something modern to gain greater support from advertisers and shareholders. The problem is that most radio companies have digital tools but they’re still radio dominant. The advertising industry knows this. So do listeners, stockholders and employees.
One of my favorite business movies is ‘The Founder’ starring Michael Keaton. In the film, Keaton meets a gentleman named Harry Sonneborn. He invites him to his office to review his books to figure out why he’s not turning a profit for McDonalds. Sonneborn looks over the financials, confirms how the business operates, and tells Keaton “There’s a big problem. You don’t seem to realize what business you’re in. You’re not in the burger business, you’re in the real estate business.”
Whether Bill and other radio executives like it or not, they’re perceived as radio companies first. Do you know why? Because they own and operate hundreds of radio stations. To suggest that they are not a radio company is disingenuous.
There are extensions of that business of course. In Townsquare’s case, they’ve done an excellent job growing their digital business. Those extensions though are supported by 300+ radio stations. Without those stations, how would those digital products perform? I think it’s fair to say, radio plays a key role in driving that success.
This is a positive for radio companies, not a negative. Many industries would kill to have the megaphones and local audience connections that radio companies have. If the airwaves disappeared today, and radio had to rely on podcasts, websites, social channels, events, and digital marketing services, do you think we’d be better tomorrow than we were yesterday? How would that effect the amount of advertising revenue coming into our industry?
In that same Inside Radio article Wilson discussed Townsquare’s radio performance. He said, “We are treating them (our radio properties) as a traditional cash cow. Just through our AM/FM signal, we’re reaching half the adult population, which means we’re also reaching business owners as well.”
If the company’s radio stations are reaching half the adult population in their local markets, why seek separation from your radio identity? That’s a heck of a story. Isn’t it better to be known for being the best in your markets at something than just one of many in a crowded field? Billions of dollars still get spent on radio especially with groups who deliver results. With that type of impact, how can advertisers afford not to be doing business with them in their respective cities?
What exactly makes Townsquare or any other radio company a ‘digital’ business rather than a radio business? Is ESPN not a digital business even though many think first of the company for television? What about the NY Times and Amazon? Are Spotify, Apple, SiriusXM, Katz Media, Facebook and X not also digital companies?
There are tons of examples of businesses in other industries who have websites, social channels, apps, content, and digital marketing services. Most of them don’t own radio stations though where the airwaves can be used to boost digital performance. That’s a big advantage for radio. It’s one that makes companies in our industry unique.
Townsquare does a great job with their stations, websites, and talent. Talent are required to host shows and create digital content. The company’s websites are clean, well designed, and often marketed using Facebook and other social platforms. They also rank well for popular keywords, topics, and highly searched terms in addition to serving as a local ad buyer for local businesses. In the markets where they operate, they often do quite well.
But although they do some things better than other radio groups digitally, they don’t win every category. For instance, is Townsquare stronger at podcasting than iHeart? The last time I checked, podcasting is ‘digital’. Do Townsquare’s brands generate more video subscribers, views and watch time on YouTube and Twitch than Audacy brands? Video is also ‘digital’. How does the company compare when its social media followings and engagements are listed next to industry competitors who broadcast in higher populated cities? Social media is also ‘digital’.
Website traffic is another part of digital. Townsquare and other radio groups have local strategies that work today, but Search is being disrupted rapidly. By next year, AI will dominate how people gather information, and most of it won’t come from the promotion of links. Are radio station websites producing unique, original content that’s built to thrive in an AI search world? What happens to those websites when the content can be duplicated by AI in 10 seconds, and clicks and programmatic ad dollars shrink?
I live in a market where Townsquare operates local radio stations. They run them well. I listen to two of their brands if I’m out in the car, and I see their articles appear often on Facebook, showing a consistent strategy to market their content. I appreciate what Bill Wilson, Erik Hellum and their local markets are doing, and want to see them continue having success.
Where I disagree is on the distancing from the identify of the core business – radio. Townsquare may offer more than just radio stations. Between podcasts, social media channels, digital marketing services, building websites for businesses, and operating their own, they have a lot of digital tools that they use to drive business. But those digital services gain a lot of traction in local markets because of the success of their local radio stations. iHeart, Audacy, Bonneville, Hubbard, Cumulus and other radio groups do the same.
For that reason, Townsquare Media is identified as a radio company and should be. The only question I have, why is that a bad thing?
Barrett Media produces daily content on the music, news, and sports media industries. To stay updated, sign up for our newsletters and get the latest information delivered straight to your inbox.
Jason Barrett is the Founder and CEO of Barrett Media. The company launched in September 2015 and has provided consulting services to America’s top audio and video brands, while simultaneously covering the media industry at BarrettMedia.com, becoming a daily destination for media professionals. Prior to Barrett Media, Jason built and programmed 95.7 The Game in San Francisco, and 101 ESPN in St. Louis. He was also the first sports programmer for SportsTalk 950 in Philadelphia, which later became 97.5 The Fanatic. Barrett also led 590 The Fan KFNS in St. Louis, and ESPN 1340/1390 in Poughkeepsie, NY, and worked on-air and behind the scenes at 101.5 WPDH, WTBQ 1110AM, and WPYX 106.5. He also spent two years at ESPN Radio in Bristol, CT producing ‘The Dan Patrick Show’ and ‘GameNight’. JB can be reached on Twitter @SportsRadioPD or by email at Jason@BarrettMedia.com.
I agree with virtually 100% of your comments. Radio, as an industry, continues to be it’s own worst enemy. We no longer brag about the dominant audience share. We seem to have the need to apologize for being radio. The business continues to detach itself from the people who are responsible for creativity, excitement and listenership. While digital initiatives and AI are an important part of the landscape, the very things which built radio over the years such as promotion, talent and audience interaction has decreased at an alarming rate. Radio has given up on being competitive because of the cost. There is no magic pill. Getting rid of the very things that continue to make us viable and running away from our identity continue to make our industry less and less of a player in the minds of both the listeners and advertisers. It’s simply a self-fulfilling prophecy.
Thanks, Ken. I agree, there is no magic pill, and I’m certainly not dismissing the importance of digital just as I won’t ignore how AI is going to massively disrupt the industry in the near future. Every company has to be nimble and smart enough to move into these spaces and make them a key focus of their business. But that in my opinion doesn’t change the core identity of what that business is. Owning radio stations is supposed to be an advantage. It’s what gives many companies the local edge against many other digital options. I’m a fan of how Townsquare operates their markets but there’s no reason to be ashamed of the ‘R’ word. It can be a great positive for them and many other owners.
I think the key is who he was addressing. As you pointed out, “Wilson expressed frustration with Townsquare’s stock performance not matching the company’s transformation.” Radio faces an uphill battle on Wall Street, where growth and the revenue/expense ratios play a major role in stock performance. From a business perspective, radio excels at generating cash not those metrics. Radio is a mature industry, so its growth has to come from its digital assets, and quality radio demands higher expenses, even if it generates generous revenue. Wilson is hoping that his company isn’t considered a radio companies by Wall Street so that its stock performance isn’t limited by those metrics.
That’s a fair point. However, those remarks are not isolated to a stockholders call. They travel to employees working at more than 300 radio stations and to the entire advertising industry. Additionally, yes digital should absolutely be a large focus for driving revenue just as AI will be in the near future. But that doesn’t change their core identity, it just becomes a part of their sales strategy to maximize profitability.
Great read, Jason. Everything you’ve said here is spot on.
Appreciate you reading the column, Kyle. Hope things are great at WFNZ.
It’s hard to put into words how spot on this article is. For a major radio company(s) most can’t wait to not talk about the industry. Well written.
Appreciate the kind words, Dave. Thanks for reading.
I often get the sense that some people in radio are embarrassed by it. Which I don’t understand.
Great write-up, Jason!
Appreciate it, Pete.
It would be nice if radio companies were in the radio business. But, as we know all too well, most big radio companies are primarily in the debt service business.
The debt situation is a challenge for many for sure, but that’s a separate issue in my opinion from a company’s identity. It’s more than OK to be a radio company with unmatched digital tools for local advertisers.