Inside Music Media

The SAG/AFTRA strike coupled with the screenwriters work stoppage embraces the upswing of unionization in the private equity economy and has real ramifications for the radio industry that has been flirting with a workers uprising for decades.

Why it is important: While everyone is prematurely looking in the direction of artificial intelligence as the cost-effective savior, radio and other media still run on people and personalities.

Bad blood exists between workers and private equity backed consolidators who have a great disparity between compensation for failed CEOs while programming, sales, engineering and operations professionals go without raises.

Many iHeart (formerly Clear Channel) employees have gone without raises including cost of living escalators for between ten and 20 years.

Audacy workers many of whom have also gone without pay raises have watched their CEO beg to stay out of bankruptcy while giving himself a pay raise just months ahead of having to file a pre-packaged reorganization or downright bankruptcy.

Bob Pittman and his exec team were rewarded with new agreements as they went through bankruptcy, an affront to workers where the company has ended the radio careers of well over 10,000 people.

BUT, radio is no different from TV where the one percent make the big money while the rank and file face issues that concern their future.

The issues

Fear of artificial intelligence and how that could further adversely affect people still working in media – relevant to both TV and radio.
Lack of pay.
Job security – again, issues that affect radio.

The rest of the story

Radio can’t embrace AI fast enough as Futuri has become a bad guy to some for marketing ways to eliminate jobs through voice cloning, robotic task help and now more recently providing radio spots to advertisers without a human being involved – this adds tinder to the firestorm.
Studios may benefit from the strikes because according to DealBook: “In some ways, the strike could actually benefit studios and streaming platforms. The lack of new shows and movies may allow them to back out of expensive production deals they signed during the content boom”.
Mistreatment of radio employees by actively attempting to keep them from working as competitors when radio groups don’t want them may come back to roost.
iHeart, Audacy and Cumulus are the most probable unionization targets – in that order.

What it all means

AI is in everyone’s future but not as another private equity “good idea” replacement for people that cuts costs, damages the product but lets the top execs take more profit.
Keep an eye on the Starbucks and Apple Store situations where employees on a local basis organize to form a union instead of trying to win a big vote nationwide.
Private equity owners and their minions are already looking to the exit but they cannot get out fast enough because they are stuck with the companies they damaged – at least for now.
There are rumors aplenty that local radio clusters are looking to pull a Starbucks and in major markets – a trend that could force even odious owners to change their practices.
The SAG/AFTRA and screenwriters strike if it lingers on could have effects on media that were not intended and may wake up long suffering radio clusters to organize one by one on the local level to right the wrongs of radio consolidation.

Jerry Del Colliano is a professor at NYU Steinhardt Department of Music and Performing Arts Professions Music Business Program. His background includes Clinical Professor of Music Industry at the University of Southern California, TV, radio, program management, publishing and digital media.

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How Streaming Impacted the Value of Music -- The transition over the last decade from purchases of CDs, vinyl albums and downloads to subscription and ad-supported streaming has had an enormous impact on the music industry. And not just on revenue, but on the multiples of revenue sophisticated investors have paid for music rights. Listen to NYU Professor & Music Business Program Director Larry Miller’s Musonomics podcast here

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If you can’t run a group of radio stations profitably when you essentially have only three major competitors, the industry finds itself in bigger trouble than before.

Why it is important: Many markets are owned by groups that have failed to figure out the balance between local programming and lower costs and now they are competing in the shambles of an industry that has lost listeners as well as advertisers.

A chunk of radio – AM is now irrelevant to the public and the auto manufacturers who used to be radio’s in-car monopoly.
Arguing that AM is essential to public safety is actually pointing out the weakness of the band – fewer are listening to AM when there is no emergency.
Audacy is ready to become the third of the three big monopolies that will head to bankruptcy court – they squandered the CBS merger, failed to monetize their scale and seem clueless about radio’s future role.
What the big consolidators do affect is everyone – keep in mind the iHeart rep monopoly Katz controls competitors revenue by keeping the lion’s share of ad buys for its stations and then parcels the rest to other clients.

The rest of the story

Almost every station is for sale, but there are no buyers.
Smaller market, independent owners may turn out to be the savior of the industry if they can stick to local broadcasting and market presence.
Radio popularity is being groomed by Nielsen which counter-intuitively programs to its technology instead of to programming popularity – average quarter hour is a self-inflicted wound that has been hurting radio for decades but none more than now and cume is all that matters.
Private equity wants out, lenders who were forced to become owners want to liquidate what’s left of their assets.
iHeart will eventually be sold in whole or part, Cumulus is just milking what they can get from an asset that has no revenue upside and Audacy wants what Cumulus has, a list of assets it can sell while liquidating the company for unhappy lenders.

But wait, there’s more

Beasley and Urban One are on shaky ground debt-wise, Saga is getting ready to shoot itself in the foot – soon there will be no leader, no mentor, no way out.
Apollo is selling off Cox squandering another excellent radio group that was fed to private equity.
Radio is missing an important trend: audiences want free, no more paid subscriptions; they want context and local with their music and prefer it on Spotify or Apple Music that requires a monthly fee.

What it all means

There is no leader in the radio industry, try to name one.
Five or more radio groups will have gone bankrupt at least once within the next few years – most of them large operators controlling the best signals and markets.
Consolidation doesn’t work except for private equity that thrives by wrecking companies it buys for fees and a profit.
The industry will be rebuilt from the bottom up this time – medium and small market groups operating pure play local clusters and maintaining ad rate integrity.
The radio industry is increasingly like Camden, NJ – a blighted area that is rebuilding itself through community policing and pride of ownership.
Key: even the best station in a blighted radio market (i.e., consolidation, out of market programming and management) does not constitute a turnaround but when there are many stations competing for ratings and dollars, radio will return as a music and local force to reckon with.

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