Radio Hopes for Boost From Political Ads, Online Radio

At UBS Media Conference: CBS Radio Dan Mason; Sirius' David Frear

By Published on .

NEW YORK (AdAge.com) -- In his lunch keynote at the UBS Global Media & Communications Conference yesterday, Les Moonves, president-CEO of CBS Corp., expressed worry over several of the changing properties in the CBS stable such as CBS News ("I am concerned that average watcher of the evening news is 61") to the acquisition strategy for CBS Interactive, headed by former Netscape exec Quincy Smith ("Quincy comes in my office about three times a day and I probably understand 50% of the things he tells me.").
Dan Mason
Dan Mason

It's encouraging for old-school radio, then, that Mr. Moonves was nothing but hopeful in his outlook for his CBS Radio division. "For the first time in awhile I am guardedly optimistic about potential for growth in 2008 for radio," he told the lunchtime crowd of investors.

From red to black
He pointed to the appointment of CEO Dan Mason as well as a revamped sales and digital team as key players in helping to carry out this new growth phase, and the estimated $2.5 billion to $3.5 billion in presidential campaign spending of 2008 to help CBS go from red to black in the new year.

"We like the fact that the number of candidates is higher this year, and we also like the fact that the number of candidates with a lot of money behind them is higher this year," Mr. Moonves joked.

Mr. Mason will take an aggressive approach in using Arbitron's new, accountable portable people meter data to help the radio industry go from a frequency industry to a reach vehicle. And in the political arena, the medium has not traditionally done the best job of communicating its ability to geotarget markets for specific campaigns.

"We should've been on this a long time ago," Mr. Mason said, citing a newly created website, CBS Radio's Campaign 08, to better help campaign managers utilize his stations. "Electronic measurement will be a way for us to revitalize the radio industry."

Waiting on Arbitron
But the industry will have to wait a little bit longer before that revitalization can take place -- eight months, to be exact. Arbitron announced last month that it would delay PPM rollouts in key markets such as Chicago, Dallas, Los Angeles and New York, after consumer groups accused Arbitron of undervaluing urban and minority radio listenership in previous markets such as Philadelphia and Houston. Mr. Mason said Arbitron's decision did not affect any sales strategies in cities such as Los Angeles or New York, where WFAN frequently ranks in the top five most-listened stations.

Instead, CBS Radio is also finding increased sources of revenue in streaming radio. During the first week CBS Radio went online, the stations totaled 370 million streaming minutes, with WFAN accounting for 10% of those streams. The group has already partnered with online radio-sales group TargetSpot to help local advertisers buy online radio just as they would on-air. CBS's online streaming audience has grown at an annual rate of 140%, so the next step will be monetizing it more significantly.

In an earlier radio panel, David Frear, Sirius Satellite Radio's exec VP-chief financial officer, spoke to investors about the value proposition a proposed merger between Sirius and XM Satellite Radio would bring to the market. Sirius alone has experienced strong revenue growth in its five years of formal existence, grossing $242 million in 2005 to nearing $1 billion in revenue by the end of 2007, a figure Sirius CEO Mel Karamzin seemed to be quite proud of. "Mel tells me it took Westinghouse 80 years to reach $1 billion in revenues," Mr. Frear said.

Passing congressional muster
Revenues are also turning around as investments in talent and marketing have begun to stabilize. Howard Stern recently renewed his high-profile contract with Sirius with a cool $83 million stock bonus, while other deals with the NFL and Martha Stewart show no signs of ending. "There aren't any other big programming deals for us to do," he said.

The biggest thing on satellite radio's plate is getting the merger to pass Congress, with a decision expected to come down by the end of the year. Mr. Frear said he is encouraged by the hearings the company has had thus far since proposing the merger in February. "AT&T and Bell South had no hearings and that was an $80 billion merger. We'd had four," he said.

Should the merger pass, Mr. Frear said the plan will be to take things slow as the new company introduces satellite radio 2.0 before taking on the audio industry as a whole. "It's not like we're going to go out after the merger, identify who's satellite's competition and turn that one off," he said.
In this article:
Most Popular