The Next Two Big Dominoes: TV and Radio

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It’s become commonplace for us here to chronicle the decline of newspapers and magazines, but two other arms of traditional media — TV and radio — are next in line to fall before the financial tsunami that is engulfing the entire industry.

Two new reports detail just how dire the situation has become.

Cumulus Media President Lew Dickey Jr. predicts that half of all radio companies in the U.S. will die over the next three years. Not only are ad revenues down in radio, the stock market turbulence is lowering many companies’ valuations to precipitously low levels. Dickey says the industry has not seen any challenge this daunting in more than 20 years.

Meanwhile, Variety predicts that the major television networks may be forced to take “drastic” measures in coming months, due to the same factors threatening radio — declining ad revenue and market upheaval — plus the long-term decline in viewership share, as more and more people turn to cable TV or to the web for their video-viewing experience.

Among the changes Variety envisions is that one or more of the major networks — NBC, ABC, CBS and Fox — will have to drop an hour of prime time, limiting their programming window to only 8pm to 10pm, and handing the extra hour over to affiliates. This would help curtail costs, of course, and eliminate less competitive programs, but it also would be a structural change that, once made, might be difficult to ever reverse.

One of the most significant advertising categories for TV has long been automobiles, but with one or more of Detroit’s “Big Three” — GM, Ford, and Chrysler — apparently teetering on the verge of bankruptcy, and chances for a government bailout fading, the networks are poised to take a huge hit in 2009.

Like their print industry counterparts, TV and radio execs have had years to prepare for the transformation of their sectors. Over the coming period, we’ll see just how good a job of planning for the future they’ve done. One certainty is that those who have only started adapting recently, with the flood waters already rising around them, will not survive.

For these companies, it is already too late.

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Thanks to Michael Goodman for help with this piece.

Tags: Advertisement, Industry, Radio, Dickey, Advertising & Promotion, TVs, Tv & Home Theater, Marketing, Personal Technology, Home Entertainment, David Weir

In addition to serving as a BNET Media analyst/blogger, David Weir is a veteran journalist and the author of several books. Weir is a co-founder and vice-president of the Center for Investigative Reporting, as well as an editorial board member of The Nation.

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1

seanclark

11/25/08 | Report as spam

RE: The Next Two Big Dominoes: TV and Radio

Having worked inside and out of these two industries, I'm afraid that it is indeed the case that in general, they are very much in trouble without the possibility of parole.
And like you, I know that while there are some organizations more prepared through earlier attention given to evolution and adapting,the majority have not.
I think that the main problem has clearly been a combination of disbelief in the change that has been taking place around them for some time, the arrogance in believing that the "as is" medium is stronger than the consumer and a reliance on the inert activity of "planning to do" rather than actually "doing".
2

believe_in_angels

11/25/08 | Report as spam

RE: The Next Two Big Dominoes: TV and Radio

I just started an internship in a new radio station that is still on a construction permit. We are not on the internet yet & it is not at it's full capacity yet.I really don't know if it is going to make it but am helping out just to learn the industry and out of boredom of moving to a small town. Being a fanatic radio fan I was just wondering how radio can be saved.
3

believe_in_angels

11/27/08 | Report as spam

RE: The Next Two Big Dominoes: TV and Radio

The station owner is very resistant to the idea of online at this juncture but since I do almost everything online I see the possibilities of this shift. I am becoming more interested in tv and movies etc thru my computer. Arrogance wow there is that. I think the resistence is more about the requirements and regulations of what has to be done to do that. I would like to learn more about that to see what these are. Right now it is for mostly driving down the road and having something to listen to in the middle of nowhere. At home I am more inclined to try more stations out on line. I think the next generation is already hooked into with ipod and downloading itunes but this station is 1978 to 1988. The age group uses computers to some degree but not so much for there media experiences. I take classes have meetings and am waiting for the phone to go through my computer here. So we are stuck in the past with those that don't go for change where even playing classic top 40 is a change. I hope that when we are up and running that we will catch up.