Opinion
Yesterday, Clear Channel Radio – which owns close to 1200 radio stations - accepted an offer to take the company private while promising to sell off 448 of its properties in smaller markets.
Not long ago, CBS Radio announced it was selling off 35 of its stations in smaller markets - partially a result of declining revenues brought on by Howard Stern's departure to Satellite Radio.
These are “trim the fat” times in Radio as companies strive to reduce costs and concentrate on operations that can make the most profit.
The Big Reality Check
But, this is no cyclical round of behavior. What's going on here is a major shift in how AM and FM will compete in the future. Like our Armed Forces, the traditional Radio industry is becoming a leaner, fighting machine.
Radio companies are circling the wagons to protect their most important assets because New Media has finally cast a shadow of vulnerability over Old Media.
This is a veritable showdown at the "Everything Is Not-So-OK" Corral and Old Media has been forced to "draw".
When Clear Channel went on a buying spree in the mid-90s ushered in by deregulation, Internet Radio, streaming audio, mp3 players, content on cell phones, broadband, WiFi and WiMax didn’t exist.
Now, they are all converging to create the backbone of the New Media coupled with Satellite Radio (a snicker among radio executives 10 years ago) to demonstrate that people will not only seek out audio content elsewhere but even pay for it - if need be.
This Clear Channel announcement is a big reality check many in Radio knew was inevitable but were reluctant to face. Radio is not the same business it was even five years ago and New Media has guaranteed it will never again be what it once was. (See my article from August, 2006: The Coming Devaluation of AM and FM Radio)
The Monopoly is Gone
Radio had a monopoly for a long time in the arena of audio entertainment, but at a time when iPod owners can become virtual Program Directors and program their own portable "audio stations" from a music library containing thousands of songs, you gotta' know the paradigm has shifted.
Today, computer users listen to Internet Radio easily and with practically as much fidelity as their local FM radio stations. And soon, Internet stations will be in cars and on other mobile devices.
What music format do you want? What talk topic do you wish? Whatever it is, there is streaming audio, a satellite channel, or a Podcast just waiting for you to access it.
A Silver Lining
Look for more Radio companies to slim down as media ad dollars continue to be spread more thinly between competitors.
But, there is a silver lining in all this: releasing all these smaller radio stations “back into the wild” from their corporate ownership will help to promote more independent ownership as well as smaller companies to run them.
This will make the marketplace more competitive and as a result will make programming better for listeners.
