A Fistful of Dollars

A recent post on Tom Taylor’s blog on Radio-info.com painted a stark picture of radio revenue over the past couple years, a situation precipitating fevered moves among frazzled radio execs and a few big bankruptcies. The funk in commercial radio sales was trumped by a decade-long sag in the fortunes of public radio, which bent their bean counters to wheeling and dealing like Wall Street traders, buying and selling stations, bartering their stations’ good names on the bloated hype of HD channels, and turning their playlists into an amalgam of automat music du jour:

The numbers don’t lie

New Census data shows the 2007-2009 revenue dropoff in stark detail.
What the Census calls “radio stations”, as distinct from “radio networks”, produced these revenue estimates — for 2005, $14.447 billion. For 2006, an almost equal $14.616 billion. For 2007, $14.871 billion. Remember that the economy started getting funky around late 2007, and here’s 2008 – $13.958 billion. Here’s the real stinkeroo — for 2009, station revenue was $11.693 billion. That’s a drop of over $2.2 billion, year to year. In its own numbers, the RAB estimated that 2008 was down 9% and 2009 fell 18%. We haven’t seen the RAB’s full-year totals for 2010 yet, but you could guess the revenue gain will be in the 4% range. The just-released federal Census data shows that compared to owning radio stations, running a radio network remained a pretty steady business. Here’s the five-year trend, beginning in 2005 — $2.999 billion. $3.829 billion. $4.124 billion. $4.295 billion. And in 2009, $4.259 billion.

So the clever public station owner — a University of Texas or a University of Houston or a USC — figures the road to riches lies along the consolidation path, one time-worn by the mega companies like Cumulus and Clear Channel, who bought up stations left and right. Not to spread their good sense and good music, mind you. Just to squeeze the revenue from them by chopping expenses (like those money-sucking employees) and make the airwaves profitable enough for a handsome salary for the deserving few, biding in comfort ’til the time is ripe to turn them over for a fistful of dollars.

Don’t mind the extra expense gobbling up other stations: You can program them with a tape machine from the home planet, NPR, or PRI, or the like. You might lose a few longtime listeners, but, hey. What are they gonna listen to, eh? That commercial crap on the other stations? Or is that what your suits read in the tea leaves of Arbitron too — the commercial crap? Well, hey, it’s bidness, right? So with that overriding sense of a noblesse oblige, find that least common denominator with the most return, and let those underserved huddled masses take their gripes to the FCC. Yeah, good luck with that.

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