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Paul Kelly and his three business partners became the new owners of five radio stations at a scary time last year.

Kelly’s company, Linwood-based Atlantic Broadcasting, bought WMGM-FM 103.7, WJSE-FM 102.7, WTKU-FM 98.3, WOND-AM 1400 and WTAA-FM 1490 in October 2008, just as the financial markets collapsed and it looked as though the recession might turn into a depression.

“It seemed like pretty much as soon as we got here is when the economy really went south. We have been learning a lot on the fly,” Kelly said. “It’s been tough, but we have been doing well. ... It hasn’t been easy.”

Kelly could be talking about the radio industry in general. In the past year, stations across the country have been hit by the double whammy of recession-related advertising woes and declining audiences as more listeners turn to the Internet, satellite radio and MP3 players to get their music.

Local station operators and the industry as a whole believe they have survived the bad economic times. They see revenue starting to climb and are investing again in people and equipment.

Questions, however, remain as to radio’s long-term future in the Internet age.

“Over the air broadcast radio will always have an audience as long as we continue to provide content that cannot be duplicated elsewhere — local news and information, local contesting, local callers participating, etc.,” Kelly said.

Lost advertising

That radio advertising is beginning to bounce back is good news for more than just the radio station operators. Radio typically gets hit first by economic hard times. It also bounces back sooner than other businesses.

“Radio did go into an ad recession before the general economy. Radio typically is a leading indicator because, unlike TV, it’s often seen as a peripheral media for advertisers. When they need to trim their budgets, they cut radio first,” said Frank Saxe, a managing editor for the industry newsletter Inside Radio. “However, it often leads in the recovery too, because it’s cheaper than TV. Advertisers dipping their toe back into the marketplace are looking for cheap place to advertise their products — hence radio.”

The recession hit the radio industry hard. Nationally, radio-advertising revenue dropped from a high of $21.6 billion in 2006 to $19.4 billion last year, according to Radio Advertising Bureau, the industry’s sales and marketing arm.

In southern New Jersey, some car dealers — one of the area’s prime advertisers — made major cuts in their radio advertising spending.

Overall advertising revenue for 2008 was down 15 percent from the previous year at the five stations owned by Access.1. But revenue has increased 9 percent from this year compared with last year during Atlantic Broadcasting’s ownership, Kelly said.

Car advertising is about 12 percent of the company’s advertising dollars, and that is down from what it used to be, Kelly said.

At Equity Communications, which owns five stations in the market, car-advertising revenue is down about 15 percent and casino revenue dropped about 10 percent. All other ad revenue is flat or up slightly, according to Gary Fisher, Equity’s president/owner.

Fisher believes the worst of the recession is over. He’s gambling that advertising spending will continue to rise.

The company spent more than $100,00 during the last four months, Fisher said.

Equity hired a new promotion director and a new director of sales. It purchased four new promotional vans. Hiring the new WZXL morning team of Joe Ciapanna and Scott Friedman also added to the company’s expenses.

New competition

The return of advertising dollars will prove only a temporary boom, however, if radio executives don’t figure out how to deal with increasing electronic competition.

The Internet, cable television and satellite radio are drawing ad dollars that were once spent on radio and other traditional media.

When finances got tight, Kindle Auto Plaza in Cape May Court House stopped advertising on radio and broadcast television, reduced spending on newspapers and maintained spending levels on the Internet and cable television, said Dave Sharp, general manager.

“For us, it was as simple as what could we see results in,” Sharp said. “With the Internet, it’s instant feedback. You see where the business is coming from.”

In the war for survival, the fight for the audience’s free time is as important as the battle for advertising dollars

Over the years, the number of consumers listening to the radio weekly has declined.

When the iPod was introduced in 2001, 94.9 percent of all consumers age 12 and older listened to the radio each week, according to Arbitron, a radio audience research company. By last fall, the percentage dropped to 91 percent, with teenagers being the group turning to other, new forms of entertainment.

Plan of attack

Southern New Jersey radio companies are attacking these problems by targeting their programming and expanding their reach.

The Millennium Radio Group owns 12 New Jersey radio stations, including several that can be heard in this market. WPUR-FM 107.3, based out of Linwood, provides listeners with younger country acts, such as Taylor Swift and Carrie Underwood. Meanwhile, WXKM-FM 97.3, also based in Linwood, provides local and national talk shows for sports fans of all ages.

WJSE-FM 102.7, the main station in Atlantic Broadcasting Group, tries to attract younger listeners by playing such acts as Weezer, Muse and AFI.

“According to the numbers I have seen, there is plenty of teen listening happening in this market, not only with JSE, but with a lot of other stations as well,” Kelly, the station’s owner, said.

Equity targets the young market with WZBZ-FM 99.3, commonly known as Kiss FM, which plays music by such popular stars as Rihanna, Miley Cyrus and Jordin Sparks, said Fisher, the company’s president.

“We have always felt that we need to have one of our frequencies dedicated purely to the youth market,” he said.

Radio stations are looking beyond traditional broadcast technology in an effort to keep in touch with listeners. A free iPhone app is available allowing listeners to tune to for WJSE anywhere on the planet, Kelly said. WTKU, the oldies station, has an online stream that plays only Christmas music all day, every day. The station plans to offer even more Web formats starting early next year, Kelly said.

“People don’t really buy radios, so that’s why we want to make radio as available as possible in as many different places as we can,” Kelly said.

The six Equity radio stations are polishing up their Web sites, so that the company can achieve convergence — where listeners can hear the stations through over-the-airwaves broadcasting, online and at festivals and events, Fisher said.

In this era, radio has to compete by getting on as many mobile devices as possible, said Dennis Wharton, executive vice president, media relations, at the National Association of Broadcasters.

The Apple iPod nano has a radio remote to allow listeners to hear FM stations. Microsoft introduced the Zune HD with a built-in high-definition radio receiver. There are talks taking place with communication companies that could result in cell phones being able to tune to FM stations, Wharton said. The transition to HD radio will increase radio’s clarity and sound quality, Wharton said.

“With Web sites, streaming, video, podcasts, e-mail databases, texting contests, HD radio, FM in iPods and cellphones and personalities building their own communities of Facebook friends, radio stations realize they are no longer analog and no longer limited to towers and antennas,” Fisher said. “Modern radio stations are now content providers across multiple platforms. It used to be said ‘content is king.’ Now the user is king.”

Contact Vincent Jackson:

609-272-7202

VJackson@pressofac.com

5 comments:

• Tanner (38) posts 9:34 am

  I am glad that a few other agree with me on missing The Bob and Tom show. I would like to at least know why they were canceled. When I called the radio station to inquire, I was treated rudely and was told "it was not of concern to me". I joined the millions of other Sirius subscribers. Sorry South Jersey local radio, you're out, satellite radio and Pandora.com are in.

• JoeBrokeler (101) posts 5:01 pm

  I and my wife agree, no bob and tom no listen. I can't stnd the thought of hearing anymore 30 year old billy jole or bob seeger anymore. Soon the tired old moronic right wing radio will be history also I hope.

• Morbo_ (2) posts 12:54 pm

  They still have terrestial radio out here in the sticks? How quaint. Only the press would think competition in business is 'bad'.

• wild1innj (2) posts 12:18 pm

  I agree with "Tanner"! Once they stopped Bob & Tom I tuned the station right out. AND they canned 101.5 on 97.3!!! Bob and Tom was a hoot and I miss them alot. And I know at least 15 people who feel the same way. And when 101.5 was on 97.3 you could get news, weather, traffic, etc. thruout the day and night. Guess how I get that info now????????? THE INTERNET!!! HAHA you dummies who own the station, your plans backfired. Now I use the internet and my phone all the time and the radio stays OFF!!!! Bring back Bob & Tom and i'll tune back in.

• Tanner (38) posts 5:40 am

  Once 103.7 stopped broadcasting The Bob and Tom show, I stopped listening. Although some people thought Bob and Tom were to risque for radio, they were a bright spot in morning radio and I am sure I am the not the only person who feels this way. Cool 98.3 used to play A LOT more oldies, but now the "oldies" they are playing are catering to those born in the 80's instead of playing music from the 60's, 70's and 80's.

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