Is there a 'radio bubble' and has it burst?

Is there a 'radio bubble' and has it burst?

On the level, let's take a look back, as what has happened in the past in certain areas of the economy has led to recession and other woes, and although the collapse of radio company stock values will not have an impact on the overall economy, it may reshape the industry significantly as things play out.

1999: The 'Dot Com' bubble. In the early days of the Internet people began setting up companies with 'pie in the sky' dreams, and some did survive, but alot of them collapsed. I saw this coming when I heard that streaming audio site apb.com went bankrupt and another company bought those assets. Soon after alot of other things failed and the tech-heavy NASDAQ Index lost two-thirds of its value and still have never even approached the level it had been at.

2007/2008: The 'housing bubble'. After years of slick advertising for Adjustable Rate Mortgages and subprime loans of every sort, some companies bragging they had 'hundreds of loan programs' for people to buy homes through, many of the ARMs began to reset, and soon the problems began to occur. Now foreclosures are high, and in some areas prices for homes, both new and existing, are dropping. In some areas this has caused all kinds of problems, including layoffs in the homebuilding business, and the dominoes are falling all over now, with more layoffs in banking and brokerage houses that underwrote alot of the ARMs and subprime loans.

2008: The 'Radio Bubble'. After 12 years of consolidation after the abolishment of the 'Duopoly Rule' completely along with other tweaks in ownership caps, many large radio companies are finding their investments failing to deliver, and the stock values have dropped dramatically. One only has to look at the 52-week or multiyear charts for these companies stocks to see where this has all taken place. Reports on multiple radio industry blogs and news sites and forum sites indicate that in some cases the companies stocks have dropped as much as 90 percent. I have no news on the actual asset value of these companies, stock charts are available at any financial news site, but many are laying off staff, dumping valueable airstaff that reeled in ratings, and any number of other cost-cutting measures just to stay in the game.

Another problem is that large companies in large markets have duplicated each other, if one has a successful country station, the other two or three owners usually followed suit with one of their own, sometimes with mild successes, but other times it has been disastrous. Another thing that has happened is short lived 'fad' formats like 'Jack-FM', 'Movin', and most recently 'Fresh' which will go through its cycle for sure in a year or two, and that last one is only a rebranding of soft-AC as the playlist on stations that use that branding remains the same as any other soft-AC in the markets they are in. The one that has actually done well in some areas, sometimes unexpectedly, is Movin', as while the format's master playlist is exactly the same from station to station, it has been successful only upon how that playlist has been programmed and what songs from that master playlist have been selected by the individual station's music directors.

Yet another problem is that a few companies, not many, who have stations in multiple markets, impose a corporate 'master playlist' that is somewhat tighter than Movin's is, and while Movin's is a master playlist, local variations within the larger playlist provided by the consultant have had very good impact. Master playlists that are tight stifles localism, and the FCC has launched a proceeding to look into that as part of a larger review of radio localism, since they do not account for local successes. Gone seem to be the days where a Bob Seger could dominate a local market long before they ever hit the national radar.

The real solution then, is to find new, innovative music formats for FM and try them out. After all, that is how rock and roll got started, or disco even though that was short-lived, and even the currently successful CHR/Rhythmic format is doing now. Some have done marginally well like the rock/country hybrids, or alt-based AC, but I think it's time for an entirely new approach, maybe picking up a musical style that is off the radar, for example jazzy house. The industyr needs to be more innovative and creative with formats to be fully competitive with other media that is siphoning listeners away, and by doing so will ensure its survival, and eventually allow investors to see good returns on their investments again, and allow stations to retain highly-desirable airstaff once more.