Written Sep. 30, 2010 by Tom Webster in Terrestrial Radio with 1 Comment
I missed the RAB/NAB Radio Show's group heads panel, but a little birdie told me that a great deal of time was spent lamenting the fact that "no deals are getting done," or speculating that "more deals" (specifically, more consolidation) would jump-start the industry and wake it from its doldrums.
I don't know much about this side of the business, to be honest - I assume that stations are currently trading at a multiple of "x", and for deals to start happening, they have to trade at "Z," where Z<X. I am glad to see the captains of the radio industry hungry for deals, but I am afraid that the "deals" they are waiting for represent a pretty myopic view of the opportunities that are out there.
Consider: for the price of a few major market radio stations, some enterprising radio group could have closed a "deal" for TechCrunch, which AOL just snapped up for a reported $25 Million. TechCrunch is one of the biggest blogs in the business and generates tons of content every day. Furthermore, it's possible that some empire building radio group could make a deal for Gawker Media, which operates top-ranked blogs on topics that include gadgets, sports, cars and gossip - the mainstays of many a radio morning show. Presumably Gawker would fetch a higher price than TechCrunch, but it's exactly the kind of deal that radio groups should be making - content deals.
Too rich for radio's blood? There are other, potentially attractive partners out there, from RawVoice to Wizzard to Revision3. Want to make a credible claim on music discovery/curation? Why not snap up IndieFeed or The Hype Machine? Self help/advice is another great category, and there are players like Quick and Dirty Tips or Personal Life Media throwing off loads of content every day.
Now, I have no specific knowledge that any of these properties would even entertain a sale - but maybe they would. In any case, an investment in any one of these properties would be a content investment, and it's ownership of original content that the radio industry desperately needs - not more towers.
Besides: what happens if radio's lust for consolidation reaches its natural conclusion - all programming centralized in one location and syndicated worldwide via the web with no local jocks? Well, you'd have Pandora - and they are already there.