Problems that occur in business aren’t overnight fixes. It takes time, planning and investment to address an issue and correct it. But sometimes problems can linger, and the messaging surrounding them can become repetitive and lose its impact. Earlier this week, iHeartMedia released its second-quarter results. The message remains: digital up, broadcast radio down. It’s a common theme for the company over the past several years.
Another commonality on the call was company CEO Bob Pittman stating the obvious. ‘iHeartMedia doesn’t have a radio audience challenge; it has a radio monetization challenge.’ He’s not wrong, and you could point out all sorts of reasons why. However, the message from Pittman isn’t new. In fact, it’s become far too repetitive and has completely lost its impact. So, why hasn’t Pittman been held accountable for it as Chairman and CEO?
I come from a sports background. Your head coach or manager is your team’s CEO. They are hired to a position of power to achieve the goals set by the organization.
iHeartMedia is an organization whose core business is built on broadcast radio. With more than 860 owned radio stations in 160 markets around the country, you can’t escape the company’s footprint in the medium. With that many outlets comes more opportunity, but also heightened responsibility.
Rinse, Wash, Repeat
Every market is different, and the opportunities are bountiful. Station by station. Market by market. iHeartMedia has scale unlike its direct broadcast radio competitors. The responsibility comes in ensuring you’re monetizing those opportunities to the highest degree possible in each individual market.
According to Pittman’s own words this week, that isn’t happening.
“Unlike other traditional media, we have more users of broadcast radio today than we did twenty years ago. Indeed, our broadcast radio now has two times the audience of the largest TV network and four times the audience reach of the largest digital-only ad-supported audio service. As I’ve said before, we don’t have a broadcast radio audience challenge. We have a broadcast radio monetization challenge, which seems counterintuitive given radio’s strength with the consumer.”
To me, this sounded oddly familiar. After some digging around, I found that my instincts were right.
In 2014, Pittman was fresh off his first year as chairman and CEO and stated something similar.
“I came out of retirement to lead this company because I think this company and this industry under monetizes what it has,” said Pittman in 2014 with Bloomberg. “Almost every business over monetizes what it has. That’s sort of the secret of new media and new businesses. You get this surge and this rush toward the shiny new thing. Then you have to rush to catch up… We’ve got the opposite problem. It’s all about let’s improve the monetization.”
Just a year later, in 2015, Pittman talked with CNBC and said something similar.
“The good news about our business is that we don’t need a new product to generate more revenue. We just need to monetize better what we have,” said Pittman.
In 2019, Pittman said that iHeartMedia under-monetizes radio based on the reach, engagement and time spent listening it owns. He said the company could do a lot more to address this and even went as far as to say it was “100%” their focus.
Are we seeing a pattern here?
Just last year, Pittman once again championed his own company’s campaign to address this issue.
“We’ve got more listeners than we did 10 years ago. The audience side of broadcast radio just fine,” Pittman said. “This is a monetization issue that broadcast radio is facing.”
Earlier this week, the same messaging came from the top of the country’s largest broadcaster.
“As I’ve said before, we don’t have a broadcast radio audience challenge. We have a broadcast radio monetization challenge,” said Pittman.
Is Anyone Listening?
Make no mistake about it, Pittman deserves credit for what he has accomplished at iHeartMedia. His upcoming place in the Radio Hall of Fame should reflect those accomplishments. But a resume filled with achievements does not provide immunity from accountability.
For more than a decade, Pittman has repeatedly identified the same problem: iHeartMedia has a massive broadcast radio audience but has failed to monetize it to its full potential. In 2014, it was an issue that requires fixing. In 2015, the company supposedly didn’t need a new product, just better monetization. Even in 2019, it was “100%” the focus. Last year, it was still a monetization issue. This year, the message hasn’t changed.
At some point, recognizing a problem is no longer enough. If the CEO of the country’s largest radio broadcaster has spent more than a decade telling investors that the company knows exactly what is wrong, then the natural question becomes: What has been done to actually fix it?
Pittman’s message has officially rung hollow. You cannot continue identifying the same fundamental problem year after year while asking shareholders, employees and the industry to believe that progress is being made. Eventually, the explanation becomes an excuse.
After 12 years of hearing the same diagnosis, the local employees of iHeartMedia deserve more than another acknowledgment of the problem. They deserve results. And if the problem has been recognized for this long without being resolved, perhaps the person who keeps recognizing it should finally be held accountable for why it hasn’t been fixed.
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