Disney's Devastating Signal About Radio

Way way back, I think it was about 1998, I made a prediction in Radio Ink that talked about how one day all of radio would be digital and online and we would see a time when AM and FM stations were no longer the primary means of distributing our programming. I went so far as to say that some would sell off their properties because they were no longer needed. I got lots of hate mail on that one.

Yesterday, Disney, one of the world's most respected media companies, sent a signal to the media and advertising world that could be devastating for radio. Essentially, they said they are selling off their AM and FM signals because they no longer need them, since only 18 percent of listening is coming through AM and FM. The rest is coming from digital or satellite.

Let me restate that.... One of the world's giant media companies is saying we no longer need AM and FM stations because our listeners are digital. Ouch. This is the first time in history where there is actual action from a radio broadcasting company to remove AM and FM from their distribution. It's the first sell-off of AM/FM properties because their listeners are digital.

If you think this is some tiny story that does not matter because no one really considered Radio Disney a major player in radio, think again. This isn't about Radio Disney, really, it's about a GIANT media company that owned radio stations, sending a signal to the world that radio is no longer important to listeners.

We can find lots of "yeah but" statements to tell why this really isn't a big deal, but those will fly under the radar. Media will ignore that Radio Disney was not a giant part of the radio landscape, they will ignore that Disney has so many other distribution channels like their TV networks to drive digital listening, they will ignore that theirs is just one research study, or that there is other research, which indicates that digital is not impacting radio listening that much yet.

What they will pick up is that Disney research, which is probably believed to be the most credible, only indicated that 18 percent of listening was coming from AM and FM, and since most was on AM they may send a message that AM is even less valuable. That can't help, especially in light of BMW's recent announcement that AM is being removed from their new electric car.

I'm already getting the calls from the analysts, board members, advertisers and investors.... Is this the beginning of the end of radio?

Should we sell off our stations while we can?
This just proves that digital is crushing radio. Something seemingly so small as Radio Disney is sure bringing a lot of attention to the concept that young listeners are not using AM and FM radio.

THE VOICE OF DISNEY CREDIBILITY
If this were some small company that no one ever heard of, this would fly under the radar. But since it's a respected media company that has decided to shed radio as its distribution channel, it sends a giant signal about how they feel about radio.

Radio, of course, will state its case about its continued strength, its growth, its relationship with listeners, its domination of the car, and all the other expected arguments, and as always it will appear defensive because it's coming from us, even though there is truth and fact to support much of those arguments. The fact that it's radio people saying it is a lot less powerful than Bob Iger saying, "Disney is selling radio stations because our listeners are listening online." (Note: There has been no statement from Bob Iger that I'm aware of, but when Disney makes a major move like this, he would have to bless it.)

RADIO'S PR NIGHTMARE
This event is just another continuing part of radio's ongoing PR problem. Yet nothing, it seems, is being done. No giant PR firm is making radio appear hip and relevant in this digital era, no campaigns are reinforcing radio's story. Instead, many advertisers and business owners are are being told and believing that radio is dying. Just yesterday the head of one of the world's largest advertising agencies told me, "Pandora is doing a better job getting face-to-face with the advertisers and telling their story than the entire radio industry. Whether any of it is true or not, they are presenting data radio does not have, showing exact listening times radio does not have, and able to identify exact listeners in exact zip codes and deliver custom ads to those listeners; plus have they have a huge team in front of the customers and are making enormous progress."

On top of this is the giant automotive issue where the big car brands are putting Pandora and Slacker in their dash, and where, since our DASH conference last year, Google and Apple have entered the space to own the dash and dominate its audio.

RADIO NEEDS TO OWN THE PRESS, NOT JUST THE AIRWAVES
Radio needs a giant PR and ad budget now. It needs to be handled by a major New York advertising conglomerate and it cannot be about using radio to promote radio.We always default to that alternative, yet we need to own the press, not just the airwaves. It needs to hail radio's relevance and find powerful stories that are believable and third-party research not related to any radio company or radio research company that builds credibility for its case. And it needs a giant team that is out meeting and promoting radio in a relevant fashion. Rather than trimming the RAB budget, the industry needs to increase it. Radio has a very capable leader in Erica Farber who needs to be empowered to take on this PR nightmare by directing the world's leading ad and PR professionals in a massive radio relevance campaign. I once heard that Pandora was spending $18 million on PR and yet the entire RAB operating budget is a fraction of this, and there is probably zero devoted to PR.

PERCEPTION VERSUS REALITY
Am I overreacting to the Radio Disney announcement? I hope so. I see it as a major PR nightmare for radio (and definitely AM Radio), and a reminder that there will be more things in the future supporting the digital world which reinforce radio's declining distribution, whether true or not. Remember: It's perceptions that people believe, not reality, and it is perception which needs to be changed.

Perhaps they had to pick up the AM stations as sort of a bundle with an FM station. Could have been an FCC requirement or just a package deal. Can’t buy the FM station without the AM station..

That’s the likely scenario because anybody who thought an AM station was a good idea would be laughed at during any management meeting on the subject.

Rush! Rush! Save radio, Rush! AM radio was dead in the 1980s and I remember how boring FM music radio was — Stairway to Heaven seemed to be on an endless loop. I was at a lake in the Poconos in about 1990 at age 37 when an uncle-in-law in a lounge chair introduced me to Rush. I never looked back to FM. Rush, you can do it again! Hand-pick a bunch of talent and create a real EIB network. Buy both AM and FM stations, and also figure out a way to put these stations (with local advertising) online. If I had a choice between listening to an online station with local news and weather reports and advertising, or one without, I would choose the one with. You can do it again, Rush — Roger Ailes is 74. You’re 11 years younger. You’re both fabulous innovators. Be the new Roger Ailes!

The meta theme is that when people “go digital”, the gatekeepers lose control. Liberals don’t know how to respond when they cannot seduce or force people to stay on their plantation.

AM and FM are relics of a long ago era in electronics. There are literally billions of dollars invested in legacy capital plant, (including receivers) but the sooner they die, the better.

I used to listen to whatever station through my Andriod on iHeart Radio....I never turn my radio on in my vehicle anymore...unless it is a CD....tech has moved us pass this....

As long as they have radios in cars and they also charge for wireless data transmission, radio AM/FM will be viable. The big change would be no limit mobile data. Then you could use the internet for your car radio. But the data transmission would also have to cover all the major and minor highways in America.

Radio’s going to be fine. It’ll find a niche. The way its programmed right now isn’t going to work.

In NYC, late on weekends, or early on Sundays, you’d have a DJ with huge depth in a certain genre and it was something people taped so that they could hear it when they woke up.

All that was was an early form of podcasting. Sports on the radio still works, very well.

The business model is going to change a little. When those teens start commuting, they’ll listen to the radio. They’ll listen to their iPhones and other things too, but radio will be part of the mix.

I stopped using a portable radio to listen when it got too much to buy batteries every couple of weeks. Now when I listen it is to my android cell phone.

Many listen via Net streaming/smartphones or HD. I do have a portable HD radio at work and can hear WRKO 680 Boston at work on WEEI-FM HD2 only it cuts out. Have better luck with TuneIn (or iHeart, since WRKO’s Howie Carr is also on a network feat. CLear Channel’s WHYN in western MA)

I remember growing up in the late 1970s and my father would have a cardboard box of 8-track tapes on the floor in the back seat of his car. Now they had stopped selling 8-track tapes in stores for years and cars no longer came with 8-track players as even options. But my father was loyal to his Johnny Cash, Wanda Jackson and Glen Campbell 8-tracks right to the bitter end.

This sort of reminds me of AM/FM listeners today. Old men in hats, driving their Buicks and Oldsmobiles at 45mph in the middle lane, both hands clenched to the wheel, as they wait for their radio show to come out of commercial.

“I want AM in the car, oh and bring back a straight bench seat option while you are at it.”

And running boards and a crank starter...
(I keed I keed)

Clear Channel changed their Pitt. FM talker to country to cash in...and got a so so AM station to pick up Beck, Rush, Sean etc “Now you can hear all this on AM radio!,” the promos say,,,wow! As if that’s something to brag about Better than nothing I guess

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