Top 10 Reasons Why Radio is Going Bankrupt

The titans in cor­po­rate radio are final­ly going bank­rupt (like we pre­dict­ed).  Here’s why.

  1. They failed to bring new rel­e­vant con­tent. They pushed lis­ten­ers to the inter­net in search of the new music that radio aban­doned.  If radio does play new music now, it’s from cor­po­rate playlists.
  2. They failed to fea­ture their local com­mu­ni­ties.  Cor­po­rate radio can’t pro­mote a local com­mu­ni­ty when nobody is live in the stu­dio to inter­act with the locals. Fur­ther­more, DJs are restrict­ed to endors­ing the cor­po­rate script, which leaves lit­tle time for local music, local char­i­ties or local busi­ness­es.Radio Suicide
  3. They suc­ceed­ed in fool­ing the finan­cial press. Con­sol­ida­tors bought healthy sta­tions at such high prices that fir­ing the staff was the only way to pay off the inflat­ed debt. When is the press going to ask ques­tions about cor­po­rate debt and how it relates to Pri­vate Equi­ty and mass fir­ings?
  4. Pri­vate Equi­ty (PE).  When a hold­ing com­pa­ny (PE) can put debt on an indus­try but not be respon­si­ble for that finan­cial bur­den, bad man­age­ment can be expect­ed. To be fair, PE does not own all of radio, but they own enough of it to have arti­fi­cial­ly inflat­ed the prices of radio sta­tions across the mar­ket. As long as Pri­vate Equi­ty remains part-own­er of radio, sta­tion prices will con­tin­ue to be arti­fi­cial­ly high in their mar­ket val­ue and unaf­ford­able to those who want to revive local radio.
  5. They increased com­mer­cials.  This doesn’t mean radio increased rev­enues because they also made those com­mer­cials cheap­er.  More repeat com­mer­cials per hour now grate on our nerves. Thanks.
  6. They fired all the DJs. Ok, there are still some DJs but they’re over­worked and they can’t curate music. And when night shifts were elim­i­nat­ed, there was no longer a place for new DJs to hone their skills. The skill of inter­act­ing with a live audi­ence is not some­thing you can devel­op in a pod­cast. Live DJ’s were the heart and soul of local radio.
  7. They elect­ed to buy­out the com­pe­ti­tion rather than be bet­ter than it.  This is actu­al­ly a para­phrase of some­thing that DJ/host Man­cow told me. “When you buy­out the com­pe­ti­tion there is no incen­tive to be the best”.
  8. They divid­ed lis­ten­ers instead of unit­ing them. They stopped broad­cast­ing and start­ed nar­row­cast­ing.  The cor­po­rate own­ers divid­ed us into nar­row demo­graph­ics to adver­tise to. Most peo­ple are more com­plex and nuanced than this.  Divid­ing us up has also had a dam­ag­ing effect on our nation’s pol­i­tics.
  9. They gut­ted news depart­ments.  Imag­ine a time when rock sta­tions had their own reporters and you will get a pic­ture of a much more informed soci­ety. Even those who did not seek out news were exposed to some amount of infor­ma­tion to stay involved in vot­ing, local char­i­ties and emerg­ing local busi­ness­es. Cut­ting the news depart­ment also made it hard­er for the sta­tion sales staffs to sell sta­tion ad time because they couldn’t pull the heart-strings of adver­tis­ers with sto­ries of what good the sta­tion was doing in the com­mu­ni­ty.  It made it hard­er to mobi­lize their audi­ences.
  10. The tele­com act of 1996.  What? Yeah some­thing that con­gress did in 1996 ulti­mate­ly is behind all of these rea­sons.  This is what changed radio from a local­ly owned busi­ness into a high finance trad­ing chip.  Thanks Bill Clin­ton / Newt Gin­grich Con­gress of 1996.

Cumulus/Clear Channel/“I Heart” want their killing of radio to be swept under the rug.  We can’t let that hap­pen, or they will repeat the cycle. This is why we put Cor­po­rate FM on Ama­zon Prime.

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