In the days before deregulation and consolidation, choosing a format was a simple matter. We looked at what listeners wanted to hear and picked the most popular format that was unserved. If all formats were covered, we attacked the weakest competitor serving the largest audience with the goal of splitting the audience. Today, however, things are not so simple. In most markets, there are other stations within the group that potentially complicate our decisions. What if the largest formats are covered by sister stations? What if the weakest competitor is our own station? If we have a one share and our sister station has a five share, do we declare success when we grow to a three, but our sister falls from a five to a three?
And what of the revenue implications of our actions? If a competing company has one of the top billers in the market, does it make sense to deploy a sacrificial station to attack the top biller, in hopes of chipping away at the station’s ratings? If the strategy ends up freeing dollars that our whole group takes, do we declare victory despite anemic ratings?
Finding formats that achieve individual station success while simultaneously advancing corporate goals is not an easy matter. Generally, we can do one or the other, but in markets where groups have more than two stations on a single band, we can rarely do both equally well. Maximizing a station’s individual share too often hurts sister stations. Protecting fellow group stations too often produces an underachieving station.
These are not intuitive conclusions for a radio person who remembers radio before consolidation. We all developed a "take no prisoners" approach. Back then we all fought for share where ever we could find it whether it be ratings or revenue. While the business has changed since then, the ingrained competitive spirit continues in sales departments that fight for dollars even against sister stations. We see it in programming departments that will take listeners from any station–even a sister station. And most importantly, we see it at the corporate level where every programmer and sales person is punished for not acting this way.
If radio is to benefit from consolidation, we must recognize that these old ideas are ingrained in virtually everyone in a position of power within radio. We speak of synergies of consolidation, but our instincts are to fight our family members as hard as we fight our competitors.
We must develop a new understanding that choosing formats today requires a coordinated market strategy that recognizes that maximizing corporate revenue in a market does not always coincide with maximized ratings. There are occasions when the best market revenue strategy is not the best format strategy at the station level. Formats should be chosen taking into account both our competitors as well as our fellow stations in the group. The decision regarding each station’s format should be part of a market strategy, and formats should be changed not because the individual format is failing, but instead because there are options that better aid in executing the market strategy.
Comments