Privately some radio groups admit that they cannot go on without cutting jobs in the workforce.
The past few months have been very challenging for even the good radio groups that don’t resort to booking trade as cash and running cheap remnant ads.
The overall economy is booming and radio is barely breaking even.
This does not bode well for the industry and even without a recession that someday must arrive, more cost synergies will be needed for radio owners to pay the interest on their debt.
The station that is likely to be designed is very different from what we see today.
- More tower real estate sold – Owners are aware that if they sell their towers, they will have to become a tenant on someone else’s tower. Yet, with revenue to pay down debt hard to come by, more tower sites will be sold.
- Office space will be reduced – Even the use of office space resellers such as WeWork will provide cheaper space for sales forces at a lower price point, more flexibility and less commission for what few employees will be left.
- More national programming – And this is the absolute worst strategy to turn the radio industry around because no matter how attractive radio can only survive as a local business. SiriusXM is a platform that cannot do local radio but it can do one format in certain defined genres and not have expenses in every city. Radio owners would like to be SiriusXM right now in programming although I am sure they would not like the high cost of keeping satellites in space.
- The market manager will become an endangered species – These are usually the highest paid employees at stations so eliminating their salaries makes a big difference. The plan is to have one or two sales managers per cluster who reports to a regional executive. The sales manager will not make anywhere near what a market manager makes but will take on some of the responsibilities.
- Programming will be less local – This is another way of controlling costs and also eliminating the need for a program director at every station. This is taking place now, of course, and it doesn’t deliver strong ratings but with only personnel to reduce costs, program directors will continue to disappear even in major markets.
- Beware of podcast director or digital director – These are not positions that you will see a lot of in radio in spite of the industry’s desire to garner more revenue from this space. One digital director, yes. More than that? Unlikely. Digital is a myth in radio – a myth financially challenged radio groups need to sell the future. But for the same reasons they are cutting executive talent, a big hiring boom is not in the future. Most radio groups that tout digital do not even have 5 digital employees in the entire company. That is not likely to change in spite of the rhetoric that radio is going after digital revenue.
One would think that due to the need for revenue salespeople would find security in where radio is headed.
That’s not quite true.
There may be more sales jobs but commission structures will be designed to favor the house so to speak and not the seller.
More radio ads will be sold online – commission free and free of any human relationship.
The reality is that radio is condensing now out of necessity pushed by high interest rates, lower billing and their inability to compete against digital.
The idea that by becoming more digital these radio groups will do better is not altogether true as they are creating more inventory that will drive down the price of on-air spots.
We’re entering a period of hunkering down for an uncertain future.
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