Monday, April 13, 2009

A Tale of Two Strategies

The radio industry appears to be dividing into two distinct strategy camps:

1. "Leverage our National Talent"
2. "Live and Local"

Let's take a closer look at the two paths.

"Leverage our National Talent"

  • Syndicated big talent/national footprint
  • Big margins/low expenses
  • Smaller sales force
  • Hit the numbers or you're gone
  • "Ad Council" PSAs
  • Strict adherence to tried and tested format rules
  • "One to Many" programming strategy
  • Heavy reliance on national revenue
"Live and Local"

  • Talent involved in the communities
  • News departments staffed with news people
  • Good margins (but much lower than the first scenario)
  • Keep adding salespeople so long as the incremental revenue is greater than the incremental expense
  • Budgets are flexible; management is responsive to local opportunities
  • Local PSAs
  • Will break the format "rules" if prudent
  • "One to One" programming strategy
  • Heavy reliance on local revenue

Both strategies may work. But I'm betting on "Live and Local," especially in smaller and mid-size markets. Those are my thoughts; what are yours?