Disney’s Devastating Signal About Radio

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EricRhoads

By Eric Rhoads
Radio Ink Publisher

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August 14th, 2014

Way way back, I think it was about 1998, I made a prediction in Radio Ink that talked about how one day all of radio would be digital and online and one day we would see a time when AM and FM stations were no longer the primary means of distributing our programming. I went so far as to say that some would sell off their properties because they were no longer needed. I got lots of hate mail on that one.

Yesterday Disney, one of the worlds most respected media companies sent a signal to the media and advertising world, which could be devastating to radio. Essentially they said they are selling off their AM and FM signals because they no longer need them because only 18% of listening is coming through AM and FM. The rest is coming from digital or satellite.

Let me restate that…. One of the worlds giant media companies is saying we no longer need AM and FM stations because our listeners are digital.

Ouch.

This is the first time in history where there is actual action from a radio broadcasting company to remove AM and FM from their distribution. Its the first sell off of AM FM properties because their listeners are digital.

If you think this is some tiny story that doesn’t matter because no one really considered Radio Disney a major play in radio, think again. This isn’t about Radio Disney, really, its about a GIANT media company who owned radio stations sending a signal to the world that radio is no longer important to listeners.

Yeah, but….

We can find lots of “yeah but” statements to tell why this really isn’t a big deal, but those will fly under the radar. Media will ignore that Radio Disney was not a giant part of the radio landscape, they will ignore that Disney has so many other distribution channels like their TV networks to drive digital listening, they will ignore that theirs is just one research study, or that there is other research, which indicates that digital is not impacting radio listening that much yet.

What they will pick up is that Disney research only indicated that 18% of listening was coming from AM and FM and since most was on AM they may send a signal that AM is even less valuable. That can’t help, especially in light of BMWs recent announcement that AM is being removed from their new electric car.

I’m already getting the calls from the analysts, board members, advertisers and investors….
Is this the beginning of the end of radio?
Should we sell off our stations while we can?
This just proves that digital is crushing radio.

Something seemingly so small as Radio Disney is sure bringing a lot of attention to the concept that young listeners are not using AM and FM radio.

If this were some small company that no one ever heard of this would fly under the radar, but since its a respected media company who has decided to shed radio as its distribution channel, it sends a giant signal about how they feel about radio.

Radio, of course will state its case about its continued strength, its growth, its relationship with listeners, its domination of the car, and all the other expected arguments, and as always it will appear defensive, even though there is truth and fact to support much of the argument. The fact that its radio people saying it is a lot less powerful than Bob Iger saying, Disney is selling radio stations because our listeners are listening online. (Note, there has been no statement from Bob Iger that I’m aware of, but when Disney makes a major move like that, he would have to bless it.)

This event is just another continuing part of radio’s ongoing PR problem. Yet nothing, it seems, is being done. No giant PR firm is making radio appear hip and relevant in this digital era, no campaigns are reinforcing radio’s story. Instead advertisers and business owners are assuming that radio is dying. Just yesterday the head of one of the worlds largest advertising agencies told me that “Pandora is doing a better job getting face to face with the advertisers and telling their story than the entire radio industry. Whether any of it is true or not, they are presenting data radio does not have, showing exact listening times radio does not have, and able to identify exact listeners in exact zip codes and deliver custom ads to those listeners, plus have they have a huge team in front of the customers and are making huge progress.”

Radio needs a giant PR and ad budget now. It needs to be handled by a major NY advertising conglomerate and it cannot be about using radio to promote radio. It needs to hail radios relevance and find powerful stories that are believable and third party research not related to any radio company or radio research company that builds credibility for its case. And it needs a team who is out meeting and promoting radio in a relevant fashion. Rather than trimming the RAB budget the industry needs to increase it. Radio has a very capable leader in Erica Farber who needs to be empowered to take on this PR nightmare with the worlds leading professionals. I once heard that Pandora was spending $18 million on PR and yet the entire RAB operating budget of RAB is a fraction of this.

Am I over reacting to the Radio Disney announcement? I hope so. I see it as a major PR nightmare for radio and a reminder that there will be more things in the future supporting the digital world which reinforce radios declining distribution, where true or not. Remember it’s perceptions that people believe, not reality.

Eric

[email protected]

www.RadioInk.com 

6 COMMENTS

  1. So, it’s goodbye Radio Disney then? Oh well… (shrugs)

    Somehow, I don’t see the rest of radio being affected. The freqs that get dropped by Disney will just be picked up by other broadcasters anyway.

  2. Hey Eric,

    Radio, YellowPages, Newspapers – dead men walking. Those bleating out that you Eric are over reacting, well there are many fossilized 30yr dinosaurs currently hanging on to their velvet retirement packages and never wanting to look forward. That other broadcasters are going to grab the spectrum? Seemingly, there is an amazing amount of dumb money in broadcasting.

    Like 8tracks, Cassettes and CD’s… radio will be a “Remember when we used’ta” rocking chair story in a relatively short time.

    You started strong doing the upside the head smack of reality this business needs, but then I think you wimped out with a prescription for rearranging the deck chairs.

    Run folks. They’s life in the carcass but it ain’t gonna do much but crawl around a bit before it crawls in the grave for the death rattle. Look around – has your cluster had a steady diet of cut, cut, cut? Hint – They all have.

    Surely that sign should give you pause.

  3. It’s a PR problem. Having been in the tech business for over 30 years though I have been amazed at how long “old” technologies hold on — they find a niche. Heck. we still get a paper newspaper even though most of our news is “consumed” via computer, TV, and tablet. I even turn on an FM radio when shaving. But I do notice that my twenty something kids don’t own radios. That’s the issue, just like they don’t have cable TV or landline phones.

  4. Assets like buildings, airplanes and company stocks get re-capitalized all the time so that they earn an economic rate of return. Radio will, too. It’s not rare and not the death of radio. If we find other better uses, it will go back up in value. Declaring radio “dead” is like declaring real estate “dead”….it’ll be around and doing something. It’s how we roll here in capitalist USA.

  5. Okay, alarmist Eric Rhoads, are you not the same Eric Rhoads that once also said that no radio installed in new cars also meant the “death” of radio…

    Seriously, not surprised about Radio Disney folding their tent….

    Disney’s main schtick is television…has been and always will be….

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