Tough Times Hit Home at Recession-Proof Radio
Radio is recession proof, the saying goes. New technologies come and go, the economy fluctuates, but radio still keeps plugging along.
Put that in the past tense.
San Diego radio, which has been one of the strongest markets in the country for the past several years, has finally begun to feel the effects of the economic troubles that have already hit publications and other media.
Just two years ago, in 1989, revenues for San Diego radio stations increased 17% over the previous year, according to figures compiled by the Los Angeles accounting firm of Miller, Kaplan, Arase & Co. for the San Diego Broadcaster’s Assn. Last year, revenues increased by a healthy 9%.
But in the first nine months of 1991, revenues are down 6%.
“It’s tough to maintain double-digit growth,” Miller, Kaplan partner George Nadel Rivin pointed out. “The average growth for the three-year period (in San Diego) is very close to the average growth rate for radio across the country.”
But that average includes a leap from 17% growth to a 6% decline. The net result is that the San Diego radio market, once the boom town of the industry, is now just another player in a national picture of economic woe.
It’s not news to most businesses that there is a recession, but it is news that it is impacting San Diego radio.
“One of the things you throw out the window is that you can’t look at it from a historical perspective anymore,” said Mike Stafford, general manager of KSON AM (1240) and FM (97.3).
Even stations that are doing well ratings-wise, such as KSON and KIFM (98.1), have seen a drop in revenues. The last three months have been particularly tough, radio executives say.
“It was as if (advertisers) suddenly stopped and said, ‘Let Christmas take its own course,’ ” said Bruce Walton, KIFM’s general manager.
Recently, the national picture has been having a bigger effect than local factors. Stafford said the revenues his station receives from Los Angeles--i.e. national advertising--has dropped by as much as 50% the last few months.
“You can’t make up for (the loss of national advertisers) with Joe’s Burger stand,” Stafford said.
To a degree, many of the factors that made San Diego such a strong radio market are still in place: a growing population, increased freeway traffic and an outdoors-oriented population. But times are tough all over and it’s finally catching up to recession-proof radio.
Increased taxes, cutbacks in the building and defense industries, and a general lack of consumer confidence are all factors that have hurt radio, according to Steve Jacobs, general manager of KIOZ-FM (102.1).
“Merchants are all scared to death,” he said, echoing the feelings of others.
KIFM’s Walton said that the reality of the economy doesn’t justify the fear. “I’ve never seen fear this bad, but there is no substantiation for it,” he said.
The new theme in advertising is “target marketing,” aiming at very specific audiences, Walton pointed out. Ironically, that has always been radio’s main selling point--it’s ability to offer advertisers a specific audience.
“What has been radio’s strength now has more competition than ever before,” Walton said.
Like many stations, Walton cut KIFM’s staff by 10% earlier this year. KFMB went through a major staff upheaval. Staff juggling is just one of the many responses to the increasing fiscal pressures.
Most stations are growing more conservative, particularly in terms of programming. As anyone who listens can tell, none of the stations are taking any chances. The most noticeable example has been KGB-FM (101.5) pulling back from its album-oriented rock format to become a classic rock station, hoping to target a more specific demographic group.
Some executives feel that the hard times are making better managers of local executives, forcing them to cut fat from their budgets and so-called “feather-bedding,” protecting longtime employees, a point of view many longtime employees may disagree with. Other stations are cutting advertising and promotional budgets, which some executives feel is a big mistake.
“In hockey, the best players don’t go where the puck is, they go to where the puck is going to be,” Stafford said. “Businesses are going to have to go where the puck is going to be.”
On the bright side, there might be good news on the horizon. Revenues appear to be up for November and December. A rebound may be in the works. Or at least that’s what the radio operators are hoping.
“So much of it is momentum, and momentum shifts back and forth,” Stafford said.
Local TV sports guys may notice that Channel 51’s Rod Luck, despite all his quirks, actually manages to follow commonly accepted style and list the visiting team first and home team second when flashing scores. And they said it couldn’t be done. . . .
Remember, KGB-FM (101.5), which desperately wants to find its own programming niche, is now “Rock ‘n’ Roll Classics,” which shouldn’t be confused with “Classic Rock,” KSDO-FM (102.9).
CRITIC’S CHOICE: AIDS CRISIS: THE DOOR MAGIC OPENED
Gays might be justifiably upset that the country’s attention really didn’t focus on the horrors of AIDS until Earvin (Magic) Johnson revealed that he had tested positive for HIV, the AIDS-causing virus.
When the perception existed that it was “just a gay disease” no one seemed to notice. But except for saying that it is long overdue, there is no downside to the media attention now being focused on the epidemic.
On Thursday at 6:30 p.m., KNSD-TV (Channel 39) will present a special edition of “Third Thursday” titled, “AIDS Awareness: The Door Magic Opened.” The program will attempt to answer questions about the disease, with a panel that will include Jack Campana, coordinator of the HIV/AIDS Prevent Project for San Diego.
