Opinion: The Business of Radio

From Doug Erickson, Blog at Erickson Media

So, what is the business of Radio?

Some might say we exist to maximize profit for owners, including share holders.

In fact, the largest consolidated radio companies say they're forced to operate under this mandate. Unable to produce enough revenue to impress Wall Street, and/or meet their huge debt obligations, they must cut expense -- and they see most employees as an expense, not an asset.

I think the real business of Radio is still attracting and engaging listeners.

Attract and engage enough listeners and your station becomes an efficient and effective way for advertisers to spread their messages. Simple enough.

Except for that "engagement" part, which is in conflict with the differing ways consolidated radio and I see employees.

I think we're all in agreement that listener engagement is a good thing; it's one of the reasons personal endorsement spots work, and stations sell more of them now than ever before, at least in morning shows.

Yet, the relentless cutting of local staffs in favor of voice-tracking, and our defensive reaction to PPM are leading to ever less engagement.

Look, the more Muzak-like we become, the more we're just a music service, like Pandora, but with a lot more commercials and clutter, the more likely we are to push listeners away, not engage them. It just seems so obvious.

And that brings us to the topic no one wants to address, the words that cannot be spoken aloud inside any radio station: spot loads.

Radio is going to have to find a way to increase revenue while playing fewer spots.

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Doug Erickson  is an award winning programmer with over 30 years experience creating great content across all formats, media, and national boundaries. He is an internationally recognized strategist and branding expert who works with the largest media companies in the world. Doug@EricksonMedia.com