Posted on 06/20/2004 6:52:15 PM PDT by Diddle E. Squat
The strategy of stuffing commercial radio full of ads has backfired, as a handful of investment banks predicted slower growth, downgrading six key radio stocks -- Clear Channel, Emmis, Cox Radio, Entercom, Citadel and Westwood One -- and the sector as a whole.
Wall Street's piling on the industry comes two weeks after the sector's most outspoken advocate, Mel Karmazin, exited Viacom. The media conglom subsequently hinted that it may consider selling its giant Infinity radio division.
Karmazin built Infinity and repeatedly predicted over the years that consolidation meant radio would be able to snatch an ever bigger piece of the overall ad pie. The results have been mixed.
As radio companies merged, the number of spots has surged to a high of 25 minutes per hour in some cases, said Goldman Sachs analyst Richard Rosenstein.
He and others said the ad inundation -- which consumers have bemoaned for years -- has eroded the value of the spots. Advertisers have started to worry that their message is being diluted by the sheer number of blurbs.
Radio stocks will be stuck, said Banc of America analyst Jonathan Jacoby, until the industry faces up to challenges.
Rosenstein said radio companies can either lower their prices or reduce the number of spots. But "it is difficult to believe that such a structural improvement in pricing/inventory can happen overnight, and could take as many as two quarters or longer to accomplish once undertaken," he added.
JPMorgan Chase, Wachovia Securities and A.G. Edwards also lowered their investment recommendations on the sector after a report Wednesday cited weak ad data for the group in July.
Ad prices are expected to dip 4% in July from the year before. August is tracking flat against the same month last year.
National sales are down 7% in June and are seen dropping 13% next month, Jacoby said.
Overall, the radio sector has been the slowest in the media to recover from an ad downturn and the start of the Iraq (news - web sites) war last year. Generally, TV and newspapers have had a nice boost since then.
As a result, radio stocks are down nearly 20% since April, with many trading at or near their 52-week lows.
If there's a bright spot, A.G. Edwards thinks the stocks could be just about at bottom -- meaning there's no place to go but up. And Wachovia sees a possible rebound in September as a wave of political advertising on TV drives ad spending on secondary media like radio.
As the glum forecasts flew, investors pummeled most radio stocks Thursday. Emmis fell 6.10% to close at $20.02. Entercom dipped 2.32% to $36.70. Westwood One was down 1.08% to $23.89. Cox eased 0.35% to $17.20. Citadel slipped 0.14% to $14.49.
Clear Channel, the biggest of the bunch, bucked the downtrend, rising 2.43% to $36.71.
The analysts didn't downgrade Viacom, since the company's exposure to other businesses buffers it from a slowdown in radio. Still, Viacom shares were off 0.75% to $37.21.
And there does appear to be an increase in the number of stations that are squeezing in an unbelievable number of commercials in their breaks, using that technology that compresses out the pauses in speech to shorten the content time(one wonders if they use this to reduce Glenn Beck's show to 10 minutes per hour!)
And how about those stations that spend more time on their own promo's than actual news and weather? WOAI in San Antonio and KTRH in Houston are especially bad, spending more time telling us how great and often their weather is than discussing the actual weather, which 9 times out of 10 just a canned general forecast from the Weather Channel. Really, how hard is it for the newsreader to sometime during the hour glance at the TV or internet radar and tell us WHERE a storm is near and WHERE it is moving? "A 40 percent chance of rain" doesn't do jack squat for me when I'm out driving, telling me where the rain is far more useful. Is a cable TV or internet hookup really going to bankrupt these stations? I realize that some promo's are needed to establish brand identity, but they truly think that we are morons, tossing out there call letters multiple times a minute. Ya know, "Your exclusive KRAP traffic and KRAP weather together, heard only on KRAP on the KRAP 50,000 watt KRAP blowtorch. Live, late breaking, local, KRAP is your news source for exclusive KRAP news monster. When news breaks, KRAP is there. Now the KRAP update, with KRAP news specialist..." Followed by a 15-second news story, then a similar promo, then commercials, then a similar KRAP exclusive KRAP Weather Channel meteorologist...", 15-second canned forecast, another promo, and closing with the inane, "Remember the time you spent listening to KRAP's Blowhard and Blotto, only on KRAP."
How does the Bozo who came up with this tripe keep his job?
For the words of the profits
Are written on the studio wall,
Concert hall ---
Echoes with the sounds...
Of salesmen.
I'm seriously thinking about XM. What does it go for--about $10/month? There are times (more often than not) during my work commute that I get nothing but commercials--on all stations.
Then, of course, the miracle of the market happened and two other alternative stations joined the fray. After about two or three months where these alternative stations were the only ones worth listening to, suddenly XRT is XRT again. It's a beautiful thing to have the old XRT back. I'm sure they were getting their clocks cleaned by the alternative stations that even the old guys like me were tuning in to. That's what happens when you let the marketing guys rule the roost, IMHO.
Do you actually have XM radio? I do. The top of each hour is loaded with crap. Not just commercials, but useless homegrown "tips" on topics less interesting than watching grass grow. I bought the XM rig to catch Drudge, Savage and CoastToCoast when I'm out of coverage. The internet streams of Drudge are equal or better. Savage is moving further left. CoastToCoast is fine on my local AM dial. I'm not sure I'll pay for another quarter of XM service. It just isn't what I had hoped it would be from a content point of voice.
XM won't give you local news/weather unless you are in a major city
That sounds about right. Almost thirty minutes per hour of grating ads for restaraunts and car dealerships.
And, as you noted, KRAP's laughable self promotion.
Infinity and Clear Channel are so worthless it's hard to believe they can stay in business.
Gawd how I miss the old KZEW.
" topics less interesting than watching grass grow"
why you are knocking other people's hobbies? :-)
And you know, it wouldn't be so bad if radio ads weren't so incredibly annoying. There are ads that have made me swear to never buy their product just to spite them for their horrible ad.
I understand your thinking about XM voice. I wouldn't buy it for the voice.
I've had it a month now and it's about the music, never even had a voice station on, in fact I locked those out. It's on 24/7 on the home stereo since we don't drive much. Jazz, classical, classic rock, disco heh, R&B, country, Sinatra, soul, Cinemagic, they had an old Miles Davis concert on last week and sometime in July they are doing a massive hit countdown across the 40's, 50's, 60's, 70's, 80's and 90's stations that will take more than a week. We haven't had the TV on except for news and weather since we got it. Best 10 bucks a month I've spent for entertainment.
http://www.xmradio.com/programming/full_channel_listing.jsp?sort=number
There is a pretty good music station I would listen to if they did not give the call letters and assorted yap between each and every song. Just play the bloody music!
Sorry, Kirby and John and Rusty and Rush and Michael and Michael and Michael (you know who you are)...
And about WBAP. Every time there is a decent challenge to Mark Retch, I mean Davis, WBAP grabs them and shuffles them away, never to be heard again in this market.
I switched to XM and hardly ever listen to commercial radio except for Rush and baseball games. Hopefully, Rush and sports will eventually end up on XM, and then I can trash Am and FM completely. All they are are one commercial after another!
To my ears, it sounds like they are aimed at enlarging the under-100 IQ set.
And the FM transmitting to a radio.
so turn to the weather channel
I went to XM originally for the jazz and classical because even though I can get 3 PBS and Temple Jazz (WRTI, it's a real good jazz/classical public station from Temple U. in Philly) I got tired of the liberal NPR news bias and EVEN some of the jazz DJ's late at night piled on Bush. I don't need that crap especially when they want my coin to survive. Anyway the concerts, XM just did Bonnaroo and Telluride and some of the other stations like Frank's Place and On the Rocks just cinched it.
I'm a bit of an audiophile within my budget and even though XM sound isn't quite CD quality but maybe equal to good FM I actually find myself listening to the music again rather than worrying if the system sounds right and what tweaks I can apply when playing expensive SACD's and DVD-A's.
I find the Drudge stream from WABC on Sunday night to have superior quality to the national broadcast over XM that starts at 10 PM ET on the "America Right" channel. The XM feed sounds "mushy".
If any of you enjoy classical music and can't stomach the idea of listening to a NPR station, go this this ad-free classical station in Raleigh NC:
http://www.wcpe.org
24 hours of Classical Music...7 days a week...365 days a year.
And the best part? No snobbery or NPR pretensions.
Think they'll cut down on the ads? LOL, right!
Hey, if that liberal radio show (what is it called, Airhead America) can make it without commercials, why should the rest of the radio stations be any different.
I was just out there for an hour doing it myself. Nice easy chair at the edge of the garage so I can stay in the shade while watching. Quite interesting, really.
Read the comments ping
I listen to WFAN radio late at night -- it's the big sports radio show here. It's astonishing how many ads they run, and how long the breaks are. The worst is the commerical where the guy says, "I'm a dope, I'm a clumsy, stupid ignoramus" -- I can't change the station fast enough when that ad comes on.
It's getting to be the same on the Internet.As long as these A,H's have ears and eyes they will spam you.Do'nt buy the product they advertize instead of bitching about it.
Ads-wise perhaps, but their musical selection is still much tamer than in their heyday.
Kerry's getting plenty of free press on Howard Stern every day. Apparently Howard isn't happy with more restrictive FCC regulations and his ClearChannel handlers. I guess they're hampering his ability to stage tickling contests or throw pastries at fat womens' asses.
Houston time compresses Rush's program. I used to be able to tune into Beaumont to hear the broadcast in realtime but I think that they've also gone to doing this. The lag time is noticeable.
Dear Buck: How much to install and pay per month for XM? Have you benn satisfied with it? If you don't want to give a testimonial you can reply privately. Is it transferable from vehicle to vehicle?
I like KLove radio.....listener-supported, so no ads.
But, it is Christian.
If you want to go the cheap route to play your own music on a car without a CD player, you can always get a little 40 buck Fm transmitter (which are a lot stronger and transmit a lot further than the pre-made CD to car radio transmitters) and use it to transmit CD audio to the car radio, or any radio for that matter. The good thing about an FM transmitter is that you can stick any audio at all on your radio instead of only putting on only CD's that transmit for less distance if you buy a portable Cd player adapter. You could use these to transmit mp3's to your stereo system as well; a lot cheaper than buying a device that will only transmit one thing. Plus, it is kind of cool having your own little radio station effectively.
Is that the station that sponsored the Disco Demolition thing at Comiskey Park back in '79?
No, that was WLUP, with Steve Dahl and Garry Meier (and the sexy Lorrelei).
Pardon me bub, but as I am in RADIO SALES, I would prefer that someone NOT go that direction. My station plays 15 minutes of music, and 5 minutes of commercials, in that order, at a time. Very reasonable, and still FREE!
It's part of getting older I think. I used to wonder why my folks just listened to the radio, when I was so much more into the sound, and albums and cd's, etc. Then when I hit forty I realized I didn't give a flip about all that crap either.
I listen to KTRH. I know exactly when the programs are going to come on after the top of the hour. When they go to commercial, I have a sense of when they will be back much like the way I can sense when a red light is about to turn green. Glenn Beck is the worst because at 25 after the hour I've counted over 20 commercials in a row, including many repeats. Will an advertiser really pay to have their ad played twice during the same break?
Anyway, KTRH now has competition in the mornings (700). I find Laura Ingraham funnier and edgier than Glenn much of the time especially when Glenn is acting womanish, or is giving his Motivational Guru rant. OTOH, 700 has almost as many commercials and they run O'Reilly and (gag) Alan Colmes at night, so I have Hannity on one channel and Colmes on the other. I won't listen to Colmes. He sucks, though I must say he has a face made for radio.
The one that gets me is where the guy comes on and brays: "Hi, I'm so-and-so, the creative mind behind Queer Eye for the Straight Guy". That causes a channel changing reaction, I can't stand it. That and the Planned Parenthood and Reproductive Rights PSA/commercials they play during Hannity. Think he knows about that?
I hear that one on sports radio a lot. Who do they think their audience is? I doubt any sports fans are going to be impressed by the creative mind behind Queer Eye for the Straight Guy!
That and the Planned Parenthood and Reproductive Rights PSA/commercials they play during Hannity. Think he knows about that?
Good question. Maybe he has no control over those PSAs. I also notice how jarring the liberal bias is on ABC Radio News, especially after listening to Rush or Hannity.
Sunday morning I was watching with my nephews and nieces a fun show about pets on one of those animal channels when a commercial for some pet product came on(Hartz?), spoofing the Queer Eye show(or maybe the actual guys for all I know), complete with a hamster/gerbil reference at the end. Might have been funny in the right timeslot, but was totally inappropriate for a Sunday morning kids show.
That seems to happen a lot(putting an insanely liberal PSA in the commercial break for conservative shows like Rush.) IIRC, the PSA rotation is usually automated, so it is often just a random juxtaposition.
DITTO! DITTO!!
In fact... every time I hear that insipid "Carol From Lifequotes", I find myself spontaneously envisioning my hands closing around her throat - not to mention the two smarmy yuppies from Centerpoint Mortgage. What I have in mind for those two, would make an al-Zarquawi envious of my savagery.
I don't watch TV at all, and the only radio I listen to is Right Wing Extremist Hate Radio (Praying someone from DU is reading this and soiling their drawers, right now). I've got a stopwatch next to the radio and I've doped out the format for Rush's show so that I can turn off the radio precisely as necessary to eliminate all the commercial breaks during his show. (And even with all that, I still want to brutally murder the announcer on the local station who *insists* on talking over Rush's intro music... If I wanted to hear from a toilet, I'd FLUSH one, you jerk!) If I'm not mistaken, I think even Rush sacrificed another minute at the beginning of the hour to commercial yammering, sometime in the past few months.
Additionally - any of you snake-oil salesthings out there (and in particular, the phony "Doctor Doctors" advertising hair goo and fat pills) (and it's not lost on me that Rush dragged that insufferable phony Phil Hendry in to do the "Corti-Slim" commercials; there are still some things to which some people will not stoop): Pay close attention to the next sentence, because I have a heads up for you:::
When you get to Hell, I will be waiting there for you. Your punishment, for eternity, will be to eat bottle after bottle of whatever it is that you're advertising - and I'll be there with a lighted blowtorch, and if you don't keep swallowing, you'll get the blowtorch. (Yes, that includes YOU, Doctor Doctor Doctor Greg Sinemoan and Doctor Doctor Doctor Talbott and Doctor Doctor Doctor Etc... You WILL have to drink the hair goop. Bottle after bottle of it.)
Furthermoreover... my febrile imagination runs toward designing an electronic device which *at least* turns off the radio via remote control in 1 minute increments, programmably. Actually, I think something like that already exists, but there are other items (such as laser and GPS jamming) that are higher up on my list of priorities for electronic countermeasure expenditures right now...
I think Rush used to be on shortwave - and with no commercials; you just got the EIB filler during the time for local commercials (which would be just fine with me, Rush's commercials - with the exception of the fat-pill one done by that rodent Hendry - are at least tolerable). But I haven't been able to find it recently - is it still on?
Thats an incredible amount of money wasted on ads no one is listening to.
Thanks, Buck.
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