What Nationalization Will Mean to American Radio

Over the course of the last year, the programming strategies for American commercial radio’s ‘big boys’ – Clear Channel and Cumulus – have come increasingly into focus. Whether they believe it is the right thing to do for ratings, or for cost containment, or both, the two “Big C’s” are rapidly nationalizing the programming across their groups.

As I live in the New York City area, I’ve been able to witness perhaps the most public manifestation to date from up close. Nash-FM signed on here a little over a year ago with virtually no pretense of being a New York station. From day one it was billed as “America’s Country Station,” and if not for the top of the hour ID and occasional traffic reports one would have no idea at all it was ‘local radio.’ More recently, they signed on “America’s Morning Show,” which is also piped in from Nashville. Cumulus’s public statements have made it clear that Country is just the first of the ‘verticals’ they plan to nationalize.

Meanwhile, Clear Channel has long pursued a strategy of eliminating local talent in its smaller markets via voice tracking and their Orwellian-named “Premium Choice” networks. More recently, moves by Clear Channel leadership seem to be bringing their nationalization strategy into greater focus. Having successfully created a national brand around iHeart Radio, it seems inevitable that they will be replacing their local branding with something built around that name.

The history of American radio branding eliminates the nationalization by Clear Channel or anyone of the “Kiss” or “KIIS” brand. Neither can Z100 be leveraged into a national “Z” brand, nor “Power” nor any of the usual suspects. Cumulus invented its own brand with “Nash;” and you can place your bets on Clear Channel pushing all-in on iHeart. Z100 and KIIS-LA and the ‘big’ Clear Channel Top 40 in every market will eventually lift the iHeart branding above the station brand. Soon Elvis Duran will likely do mornings on every single station and Ryan Seacrest will be on middays – on a national iHeart Radio Hits channel. Similarly, Bobby Bones will anchor mornings on all “iHeart Radio Country” outlets. And repeat for all other formats.

In the process, naturally, dozens if not hundreds of local air personalities will be shoved aside, as well as any local producers.

Is this a bad thing? Well, I’ll say: “Not entirely.” But…mostly.

Certainly, I went on record at Country Radio Seminar a few weeks ago against both Nationalization and Voice-Tracking, calling them a ‘disaster’ for the radio industry. That’s because I’ve been doing research on the American radio industry, but mostly on the consumers of radio for over a quarter century now, and I feel like I have a pretty good sense for what the ‘brand’ of radio is for people. And that brand is ‘local.’

In the last year Edison Research has been hired to perform several studies on just the question of how to keep younger consumers listening to FM radio. We pretty much hear the same things over and over – they do and will continue to go to radio for unique compelling content – and to be in-the-know on what is happening locally. Young listeners talk to us about the chance to actually meet the personality they hear on the radio and the announcements of local events or concerts. They understand – their local radio stations are providing them with something that Pandora and Spotify don’t.

So the question is – will the nationalized radio content be so great, so amazing, so compelling, that the consumers of tomorrow will stay loyal to FM?

That’s really the key. Because when radio is great it should find itself nationalized. Howard Stern and Rush Limbaugh were both once local personalities – and they never could have been held in radio had they not been able to nationalize. Radio talents such as these deserve to have fans across the country. These two guys in particular were such major talents that they pretty much got great ratings everywhere they were aired.

But that’s not necessarily what’s happening today. Politeness keeps me from commenting on specific shows, but some of the national options today are barely an improvement or in some cases no upgrade at all from what it is replacing locally.

Nationalization clearly allows radio’s two biggest platform-owners to demonstrate their influence. Clear Channel’s concerts and television specials (both branded around iHeart) and Cumulus’s venture into a “Nash Magazine” would be much harder to execute without national branding. I get that.

But it is hard to deny that a significant part of what makes radio stand out in the media landscape is lost through this process. Nationalized radio stations become USA Today – with that one lame little paragraph of ‘news from your state,’ as opposed to your local paper. There are already TONS of national media options.

If other owners are willing and able to capitalize on it, the decision to nationalize could be a boon to the ‘rest of the industry’ – basically everyone but Cumulus and Clear Channel, because ‘local’ will no longer be a basic price of entry to the business but a clear point of differentiation. I think we can expect the stations that do have ‘live and local DJs’ to find that emphasizing this point will resonate as never before. We may readily see that ‘localness’ will supplant music images as the single most vital aspect of stations competing with the national programs. In this sense the ‘zag’ to the big boys’ strategy could possibly lead to more ‘net localness’ on radio than before.

My guess is that the Cumulus and Clear Channel vision for radio’s future is fully nationalized stations whose only remaining local elements are traffic reports (because they can sell these) and weather (natch). The model is not NBC – where at least one gets local news injected through the day to create local branding – like my local “News 4 New York.” The model is, of course, MTV – a national channel with no local elements that, they hope, exerts enough coast-to-coast influence to assemble the hoped-for ‘leverage’ and ‘scalability.’

And maybe this model will work. But if it doesn’t, then everyone will be agreeing with my use of the word ‘disaster.’ Because if it fails, the re-establishment of ‘local’ on all these stations – and hiring all the local people back – seems inconceivable.

27 replies
  1. Gavin Stief
    Gavin Stief says:

    Well said Larry. Hope that you are doing well, and congrats on doing so well — a long way from Bolton research! And by the way, having been inside CC I completely agree. And Bob Pitman did start MTV!

    Best Gavin

    Reply
  2. Gary Oshust
    Gary Oshust says:

    I listen to wmmq all the time. The best program was Larry Allen and his passing was a very sad moment. But his programming was the best, because it wasn’t the same 50 songs over and over again. If you did away with local DJ’s you would do away with me. I have tons of CD’s to listen to the talking is what keeps me listening. Now if you would do away with the same 50 song rut your in you would nail it.

    Reply
  3. Stephen
    Stephen says:

    Sadly, hard truths such as you have outlined here are a little too “big picture” for the boardroom, I think. I sincerely hope that enough smaller companies will zag and invest in great local content. Only by improving the content (and improving rate integrity) will radio flourish, IMHO.

    Reply
  4. Dennis Constantine
    Dennis Constantine says:

    So true. I’ve likened it to the return of Network Radio, where local transmitters become the relayers of a national network, much like the TV networks, with only local IDs, spots and traffic/weather/news updates.

    And not even done locally. Here in San Francisco, the traffic reports on the Cumulus stations are being done by Radiate Traffic headquarters in Dallas. Local towns and landmarks are regularly mispronounced. Listening to KFOG, I heard a traffic report about a backup at the “Golden State Bridge.”

    Reply
  5. Steve Hoffman
    Steve Hoffman says:

    Great points all, Larry. You asked a great question: “[W]ill the nationalized radio content be so great, so amazing, so compelling, that the consumers of tomorrow will stay loyal to FM?”

    Being Jewish, I am compelled to respond to your question with a question: In how many places are local operators offering localized content that is so amazing and compelling that the consumers of today, much less tomorrow, feel compelled to listen to their local radio stations?

    Sadly, not many.

    Reply
  6. Jim Coda
    Jim Coda says:

    The 10’s of 100’s of us that have lost our careers since the ’97 Communications act have been saying this for years. But not only those of us lost without an industry anymore, but even Programmers that KNOWhow to run a station will tell you; If you put the money into live and local air-talent, they can make the bottom line ned result much more profitable. Unfortunately, the first Big Dog in this hunt was Lowry and CC who, from a business perspective, only saw amount of input first and end result second with no faith in the business that those of us who know how it works. Now I can listen to The CC Classic Rocker out of F. Collins heading down I-25 and as it fades out, switch to the CC CLassic Rocker out of Colorado Springs to hear the same damn song. Neither of which will ever mention where they are outside of the Legal ID and both of them constantly cutting more and more to make the new false profit for the 2 or 3 calling all the shots.

    In this volatile political world, if someone would push for all radio stations living up to their license of “Serving their community of license ..” and demand at least 75% of programming originate from the station live and local, not only would we have a viable business again, but every displaced radio person in the country would be voting for them. Additionally, you would never again hear of a local emergence and the “local” voice tracked station silent on it.

    Reply
    • Panama Jack
      Panama Jack says:

      Couldn’t agree more, Jim. As a former broadcaster with 30 years in all aspects, air talent/PD/SM/GM, it makes me puke to hear what crap is on today’s airwaves. I rarely listen anymore. With competition from digital and TSL downtrending, especially with younger demos, CC and CUM are doing exactly the wrong thing at the wrong time. Younger listeners think Radio is “old school”, and the only money demo listeners that will remain are those who can’t afford iPhones. Radio is dying a slow death, sad to say.

      Reply
  7. Bill
    Bill says:

    I’ve seen in the past two years how destructive Cumulus is. When they bought Citadel, they took over four stations in my local market. Over 1/2 the jocks there were either fired or quit within the first six months. The active rock station that I listen to from the cluster has noticeably changed – and not for the Better. After they fired the afternoon jocks, they switched to 6 hour shifts between 6a – midnight. Evenings completely voice tracked, middays VT’ed 2/3 of shift & mornings VT’ed after 10am. Song selection and sound of station has noticeably changed for the worse. Station is a shadow of itself. Thank God I have XM….

    Reply
  8. Ron Frizzell
    Ron Frizzell says:

    I agree fully.
    Plus hundreds of markets have lost their local radio stations. Lewiston, Maine, the state’s second largest market, is typical. It has five radio stations licensed to it. None broadcast from it any more. The big companies have moved them to Portland 23 miles away. Public service for that city is gone. This has happened all across America.
    Also older formats have disappeared. Hundreds of independent owners made a good living with soft A-C, Oldies and the big bands. These formats are forbidden in large companys who only tolerate younger more profitable formats.
    The public has lost out. Why not switch to Pandora. It sounds just like the nationalization of radio.

    Reply
  9. Ron Frizzell
    Ron Frizzell says:

    I agree.
    Plus hundreds of local markets have lost their stations. Lewiston, Maine, the states second largest market is typical. It has five stations licensed to it, Most have been dragged to Portland, 23 miles away. There is no more public service for that city.
    Older demographic programming is GONE. Independent operators knew how to make a living with soft A-C, oldies or even big bands. With consolidated sales staffs, the Big Companies are incompetent at selling older demographics. Why not listen to Pandora. It sounds just like Clear Channel or Cumulus.

    Reply
  10. john Parikhal
    john Parikhal says:

    Hi Larry,

    This has been underway since consolidation began in the mid-90s.

    It’s just accelerated so much in the past two years that it is more visible.

    The motto of the big 3 could be “the way forward is to go backward – to 1953″. Networks ruled the roost then and they will do it again.

    It’s bad for radio because there is no training ground for talent and there is no bench strength.

    It’s good for a few top shareholders because they make money every year.

    It’s bad for ‘fairness’ because these ‘scarce’ frequencies no longer have to serve their communities ‘locally’. They have been hijacked.

    And, it’s part of a trend. Today, 6 companies control 90% of the media in the U.S. In 1983, it was 50 companies.

    That’s bad for jobs, experimentation, creativity, public service, and …

    Anyone can add to the list.

    Reply
  11. Dave Logan
    Dave Logan says:

    GREAT talent always wins out. It’s AVERAGE talent that gets eaten by evolution. Survival of the fittest.

    One thing no one seems to mention is perhaps a big reason why Pandora is so huge is because there are no announcers, or more correctly, no bad announcers. For younger listeners who have grown up in a world with thousands of tracks where they can create their own version of radio, average announcers are no longer a must-have item. Quite the opposite in fact… they’re seen as intrusive.

    Personalities like Howard Stern however, remain relevant and in-demand because they entertain in a unique and compelling manner. And guess what? He was NATIONAL when he was on terrestrial. It didn’t hurt his appeal or his ability to put money on the books.

    I also think it’s a poor carpenter who blames his tools. Systems like Prophet are amazing and someone who has time and the desire to devote themselves to making it work for their show can definitely have an impact. I’ve seen a talented mixer turn ordinary Ryan Seacrest VTs into a successful show. But most stations now live in a PPM world where we play to the technology, not the audience. One jock told me his direction from his boss was to “say something new and interesting” about the same Foreigner cut he’s been playing for 35 years and to do it in 7 seconds or less.

    Is it any wonder listeners don’t care as much anymore?

    Reply
  12. Scott Carpenter
    Scott Carpenter says:

    Well that should come as no real surprise, although I’m a bit mystified how this guy is the only researcher I’ve heard about who’s focus groups showed listeners preferring LOCAL radio. I’d be interested in perusing the questions.

    But Let’s address “Nationalization” shall we? It’s not a new concept really, it happened before in the 50’s when TV was on a tear to replace radio, and radio stations simply hooked up to the network feed. Then along came rock-n-roll, and everything changed.

    As my old CHUM PD J. Robt. Wood always said, “It’s what comes out of the box.” You can research it, quantify it, weight it and analyze it until you’re blue in the face but it all comes down to who has the best product, local or otherwise.

    Until local stations begin to seek out and nurture local radio stars, so called “nationalization” will be the norm. And yes, there can be radio stars.

    I know, I was one.

    Reply
  13. Fred Buc
    Fred Buc says:

    Thanks for the enlightening piece, Larry.

    Do today’s money demos want to go back to the days of national network radio where the whole family gathered around to hear Amos & Andy, Uncle Miltie, The Lone Ranger, etc.??? I don’t think so. And “the Big Cs” don’t care. Radio to them is just a commodity. It’s a shame and a disservice to the REAL owners of our airwaves — the Public.

    Reply
  14. jbb1985
    jbb1985 says:

    Back in 2003, there was an extensive Wall Street report entitled something along the lines of “Is Management-Intensive Radio Helped by Big Radio?”. These folks, whose toast was buttered on the other side actually said the opposite — their research of the numbers across 10+ years of increasing consolidation but still somewhat fragmented radio vs. other concentrated media, had seen its giant platforms almost all lose advertising share and audience share out of the big 4 except for one. 10+ years later it is has gotten worse as the one large platform was that outperformed was bought by the Dickey’s. It would be intriguing to see how CCMO, CBS Radio, Cumulus and let’s toss in Entercom have done in radio ad rev share and audience share since then adjusted for ongoing, massive, and obscuring acquisitions. It is sad to hear/ read Pittman and others claim they are local and Pandora is not when the obvious nationalization of radio has been going on for 15+ years. Portions of going from an AM-FM combo to a super duopoly can be a positive for radio and its listeners as well as its ad clients. But that promise has been trampled by the giant platforms. A pity for the radio people, the radio culture, and the radio listeners who grow sparse and feel set adrift by NASH and iHeartRadio, programming by bean counters, radio by excel spreadsheet. Yeah, that will engage the youngsters growing up with many more audio choices than before.

    Reply
  15. Bill Guertin
    Bill Guertin says:

    Larry, I appreciate your candor about the state of Radio and its direction. While it may be the recipe for short-term profits, the cost to its efficacy in the long term is incalculable.

    Radio’s differentiator has always been its ability to be each community’s local voice. We’re gradually losing that trump card… and as you pointed out, will be nearly impossible to reclaim.

    Reply
  16. Gordon Ryan
    Gordon Ryan says:

    While terrestrial stations continue to eliminate local air talent, Rock Factory Radio (an internet-only station) is doing the exact opposite. We’re picking up the best local talent that Clear Channel and Cumulus are letting go, and as a result, we’re gaining local listeners daily. Go figure.

    Reply
  17. Duke And Banner
    Duke And Banner says:

    The corporations ruined AM with their programming, and ran to the FCC for help, concluding that it couldn’t possibly be their programming that’s primarily aimed at angry seniors.

    Now they’re trying to ruin FM.

    I reflect to my college days, where I had to build a pirate station because no licensed station liked my selection of oldies.

    I also reflect to kids today, listening to low-quality internet videos with noise and distortion, but enjoying it because it’s their kind of music, despite what the corporations want them to hear.

    Reply
  18. Logicman
    Logicman says:

    Amen Fred Buc, Amen. When PICaN went out the window, the ‘business’ changed for the worse. And when the current FCC chair was explicitly approved because he wouldn’t try to go after campaign finance abuses in the media the deal was sealed once and for all.

    If an when ‘the business’ can ever get back to PUBLIC interest broadcasting, we might resurrect things, but for now, over the air broadcasting — if it continues along the path it is on — is dead. I hope I’m wrong, but the conclusion of the article “maybe this model will work” is WAY too generous. This model can NEVER work for the benefit of the public, and if it doesn’t, our public asset of the radio spectrum is being used to make a few people rich at the COST of public benefit. Sad.

    Reply
  19. Scot
    Scot says:

    I agree; radio is at its best when it’s local. But what is good local? Is saying the team name of the AAA baseball in a weather forecast good local? Is saying Shelly Longjohn from Center City wanted to hear this one good local?

    It was mentioned in the comments already; many listeners will take entertaining over local. So at what point does local tip the scales? If you had to give your green staff the criteria to make that decision, what would you tell them?

    I think it comes down to local is not enough on its own. Local needs to be paired up with one of the other strengths of radio.

    The strengths of radio:
    Intimacy
    Interaction
    Immediacy

    Pair local with those, then you’ve got something. I believe that’s the part most jocks miss.

    Reply
  20. Johnny P
    Johnny P says:

    I’ll take ‘Radio 1983′ anyday over “Radio” 2014. Live and local beats voicetracking or a nationally syndicated show every day of my week. I’d rather have a college kid playing music in afternoon drive than an out of towner. I’m turning more to internet radio, and ironically, it IS to listen to terrestrial radio – a small AM local station in NY State that IS live and local – with a weird selection of music all over the place – but that’s what I like – a guy (and gal) that talk about when they remember first hearing the song that they’re going to play, and talk about their local girl’s hockey team in the playoffs – real radio – still out there on a few 1KW AM locals. That’s radio.

    Reply
  21. Tom Watson
    Tom Watson says:

    Larry hit the nail on the head. In my 25 years of consulting radio stations, î have always emphasized “Local”. In my option live and local will beat any generic brand any day and I have the ratings track record to prove that. Tom Watson, President, AC Consulting &Marketing International. Laxconsultant@gmail.cm

    Reply

Trackbacks & Pingbacks

  1. […] Talking Point: Edison’s Larry Rosin Explores ‘Nationalization’ of Radio.  The question of just how far Clear Channel and Cumulus Media will go in eliminating the costly local programming elements from their O&O stations to be replaced by nationally syndicated programs (which they own) is one that’s been discussed much by people in the industry as well as written about in such publications as this.  Edison Research president Larry Rosin spoke about it openly at the recent CRS in Nashville and follows that up with a blog piece on the Edison site.  Rosin suggests that Clear Channel’s full-steam-ahead move to brand its stations iHeartRadio and Cumulus’ stratagem in the country realm with “NASH FM” are manifestations of the “nationalization” of radio programming by those companies and, while that may save some money and give corporate a monolithic control over programming, ultimately, he believes it’s not going to work.  Rosin says the results of his research lead him to that conclusion particularly with regard to younger people and the use of AM/FM radio.  “We pretty much hear the same things over and over – they do and will continue to go to radio for unique compelling content – and to be in-the-know on what is happening locally.  Young listeners talk to us about the chance to actually meet the personality they hear on the radio and the announcements of local events or concerts.  They understand their local radio stations are providing them with something that Pandora and Spotify don’t.  So the question is: Will the nationalized radio content be so great, so amazing, so compelling, that the consumers of tomorrow will stay loyal to FM?”  So the argument about local versus national programming continues.  Perhaps Clear Channel and Cumulus are banking on their reach and relationships with labels and artists to deliver what they consider the best content.  Other operators are going the “live and local” route.  Time will tell who wins this one.  But the cost could be heavy.  Read Rosin’s entire piece here. […]

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