PODCASTERS LEARN “IF YOU CAN MEASURE IT, YOU CAN SELL IT” • WILL COMMERCIAL RADIO BANKRUPTCIES CREATE OPPORTUNITIES FOR NEW NONCOM STATIONS?

Classic marketing strategy met the brave new world of podcasters at the RAIN Podcast Business Summit March 22^nd in New York. Despite the increasing popularity of podcasting, the industry is still searching for the right metrics to sell ads to media buyers. Paid spots is now the top money source for podcast publishers.

The Summit was hosted by RAIN (“Radio and Internet”) founder Kurt Hanson, and RAIN president Brad Hill. NPR was the “presenting sponsor” of the event. Pubmedia attendees included Gina Garrubbo, CEO of National Public Media; Joel Sucherman, senior director for Digital Products at NPR; and Kerri Hoffman, CEO of PRX.

Perhaps the hottest topic at the Summit was the need to find a way to better measure an “impression,” the currency used to evaluate digital media consumption. The podcast industry has lacked a method of standardized measurement since its birth.

Most observers who monitor podcast consumption use the number of downloads without regard for the actual time a podcast is heard. Critics of using only downloads as a metric feel some publishers are purposely over estimating their audience by counting mere seconds of listening to reflect an entire show.

Traditional measured media doesn’t have this problem. Nielsen’s PPM methodology provides client with tune-ins, tune-outs and the length of listening.

Lex Friedman

Lex Friedman, COO of Midroll Media described the problem this way:

“Everyone knows that five minutes is an inflated download. The download problem can be solved by making sure everyone [uses] a standard time window of listening.

Others at the Summit felt it is time to go beyond downloads and focus on patterns of listening. However, the podcast industry has yet defined what constitutes a “listen.”

Vendors such as Podtrac only use the gross number of downloads as the basic metric.

NPR, the most successful podcast publisher, is trying to get the industry to make its Remote Audio Data (RAD) the industry standard. RAD can deliver what advertisers want but NPR has had trouble getting others to use their system. NPR only uses RAB to measure listening to NPR One.

Meanwhile Podtac has released its February rankings of what it considers to be the Top 20 Podcasts (chart on the left). 

The Podtrac chart is based on the number of downloads tabulated by using a non-disclosed proprietary method.

According to Podtrac, The Daily, published by the New York Times appears to be making the biggest gains. 

NPR’s competitor Up First also seems to be on the way up.

Fifteen of the Top 20 podcasts (75%) are produced by publishers affiliated with public radio.

 

POINT-COUNTER POINT: WILL THE BANKRUPTCIES OF iHEARTMEDIA & CUMULUS PUT SOME THEIR STATIONS ON THE BLOCK?

Last Friday [link] we reported on an article by Gene Ely in Forbes magazine that forecast a sell-off of stations now owned by iHeartMedia, Cumulus Media. Both companies are now in Chapter 11 bankruptcy proceedings. Ely suggests that both companies may sell some stations for need cash. Ely wrote in Forbes:

Expect to see a dramatic shedding of radio stations, likely hundreds, many at rock-bottom prices. Never mind statements put out by the company that stations will not be sold off. That’s intended to quell fears among employees and stem any flood of talent.

Based on Ely’s conjecture, I took it a bit further and recommended that public radio folks might be able gain new frequencies at low prices. Radio World featured our article and we received several comments. Perhaps these were the most interesting comments:

Aaron Read

Aaron Read wrote:

That Forbes article is utter nonsense. Putting aside for a moment the fact that Forbes' website is a clickbait factory these days, there's not a shred of sourcing anywhere in the story. Nothing to even hint at why the author thinks these outrageous claims. In short: it's all wishful thinking masquerading as "analysis".

A simple examination of what the tax burden will be to iHeart or Cumulus were they to "sell off" at "fire sale" prices, compared to what those licenses would garnish on the open market, quickly destroys all of the already-thin logic holding the article together. If either of them hold a "fire sale" they'll end up LOSING a lot of money. That doesn't make a whole lot of sense to the creditors, who are looking to maximize their return on their investment.

It *IS* possible that you'll see some swaps going on. But only swaps (which avoid incurring taxes) and probably only on small scales. There's not a whole lot of fat in either IHM nor Cumulus' inventory these days; they've already gotten rid of those signals over the last ten years.

Then Spark News reader Mark Heller wrote and said Read has it wrong:

Aaron, taxes do not apply in a bankruptcy....survival does. If you have a money loser, that you've written down, you can unload the 'turkey' or even 'donate' it, and your balance sheet looks better, as a result.

There are a pile of money losing sticks in both company's inventory. Class A's on rented towers, for example. Weak sister station doing a simulcast of another rimshot on the other side of the market.

Today, for example, one of my bankrupt competitors is selling spots at $5, just to fill up the schedule. These [stations] will NEVER go back to $14 or $18, not now, not in a year, not in three years...not in a format flip.

And, Aaron, Cumulus is swimming 'under water' in signals that have no audience / no billings and they will NOT get swapped out. That's why they aren't filling out the final engineering on some AM translators, and haven't paid some landlords since January....because they can't figure a way to make them financially viable, after the bankruptcy court approves their deals.

Remember, BOTH companies are now controlled by the folks that are owed gobs of money. The bondholders have already taken a bath. They are NOT going to operate long-term and lose more money.

KEN SAYS: Both readers make good points. I believe that both iHeart and Cumulus will shed stations because the cost of keeping poor performers on the books may not seem like a path to solvency.

I am glad Heller brought up the option of companies donating stations too noncom organizations. In sone cases this will make sense because of tax advantages.

A GOOD PLEDGE DRIVE IDEA FROM AARON READ

Speaking of Aaron Read, I saw a post he made on the PRADO email list with a helpful suggestion to keep volunteers plugged into programming during pledge drives.

As you can see on the right, Read’s shop – Rhode Island Public Radio (RIPR) – is using a large poster showing NPR program clocks to keep everyone aware when the next pledge break will occur.

Another advantage of RIPR’s big clock is that volunteers will now when to plan a bathroom trips. 

You can learn more about creating your own clock here.