The radio industry doesn't like to serve up public information about its private business. This may account for the shroud of secrecy that has existed for nine months, only to be swept away when Dial Global fell by nearly 92 percent (over 1 year), with most of the drop occurring in one day. Dial Global blamed Rush Limbaugh.
Cumulus Media is also in trouble. In May, Cumulus CEO Lew Dickey said that Limbaugh had cost the company a couple million in each of the two previous quarters. In August, Dickey alluded to ten "underperforming" stations (out of 570) that were responsible for all of the network's losses. In November, Dickey again complained about the ten stations, blaming them for the company's "material decline" in top-line revenue.
Dickey didn't name the stations. But Radio Ink speculates that likely candidates include, "in New York, WABC-AM; in Los Angeles, KABC-AM; in Chicago, WLS-AM; in Dallas, KGO-AM [sic*]; in San Fran, WBAP-AM [sic*]; in Washington, DC WMAL-AM; and in Atlanta, WYAY is all news."
Ten stations. Out of 570.
Examining a few of these ten may explain why the titans of the radio industry are falling, and how tens of thousands of volunteers are helping to bring significant elements of one of the most powerful industries in the country to their knees.
KGO is in San Fran, hat tip to TX Freethinker and Mimikatz)
Let us first consider one of the ten stations, some of which are surmised by Radio Ink. WABC carries the Rush Limbaugh Show. One week after his attack on Sandra Fluke, WABC was in the headlines. Business Insider reported, Bereft Of Ads, Rush Limbaugh Broadcast 5 Minutes Of Dead Air Yesterday.
That was the result of two things: a widespread, powerful social backlash, and a spontaneous exit by approximately 142 name brand national companies within the first ten days after Limbaugh/Fluke.
Every time WABC contracts with a new advertiser and then puts their ad in the Rush Limbaugh Show, that advertiser is flooded with emails, tweets, phone calls, private messages, Facebook posts, letters, and maybe even faxes about Rush Limbaugh. The volunteers know that new sponsors are likely unaware of their own advertising schedule, so the messages will be friendly and (hopefully) helpful: "hi, I wonder if you are aware...?"
The database is so sophisticated, consumer-activists can report to a sponsor how many times their ad has been heard on the Limbaugh Show, and each date it has been run.
WMAL also carries Rush Limbaugh. WMAL has a similar list of advertisers in the Stop Rush database.
These appear to be four of the ten unidentified stations that CEO Lew Dickey is talking about, according to Radio Ink.
But the same is likewise true for hundreds of other radio stations across the country. Wherever there is a volunteer Rush monitor, those radio stations are having difficulty keeping advertisers.
To understand why the Flush Rush movement is so devastating to the radio industry, I need to explain a dirty trick that the radio stations are using. It didn't start out to be a trick; it was, rather, a simple business convenience. Ad sellers provide a couple of options; one is targeted advertising (at premium prices), and the other is Run Of Station, otherwise known as bulk, or remnant, advertising. Many advertisers opt for the lower rates. In doing so, they give up control over when their ads are aired.
So long as there is no controversy, no problem. But the Rush Limbaugh Show is classified as "controversial programming". The large national advertisers frequently pay more to avoid controversial content.
When Mom's Pizza runs an ad, they trust the station. But last week, Bill's Barbeque learned it was advertising in Rush, and Bill pulled the ad. So the radio station slots Mom's right into that vacant slot. And Mom doesn't even know.
Radio analyst Norm Pattiz reports that seventy percent of Rush Limbaugh's sponsors don't know they are his sponsors. Many are shocked when they receive that first email or tweet, and immediately withdraw their ads. And then the cycle starts again.
The result: the radio network conglomerates — already deep in debt — are desperate for advertising, but are failing to attract and keep quality sponsors.
The truth is, revulsion on the part of advertisers is already widespread. The initial advertiser exodus was spontaneous and deep, and came within days of the Limbaugh attack. The volunteers are just acting as messengers, using their own free speech to add critical information that is currently missing from the free market. Sponsors are free to make decisions based upon that information, and upon perceived public sentiment about the Rush Limbaugh program.
Primarily because of Limbaugh, talk radio has an unsavory reputation throughout the business community. Even radio's share of political ads dropped this last election cycle — a rather astonishing development post-Citizens United.
To be fair, the radio conglomerates were already on the verge of crippling themselves. Massive debt, ultra-lean operations, elimination of locally created content, reliance upon single point of failure strategies, and ownership and exploitation by private equity firms... the list of mis-steps is lengthy. The industry was already facing a challenging business climate when Limbaugh spouted off. Talk radio was losing ground, and demographic and technological change presented challenges. But Limbaugh's fate may have been sealed when his only on-air apology to Sandra Fluke was couched in the language of attack. His arrogance was matched only by the heads of the radio networks who saw no reason to punish, or even to acknowledge or reprimand him for his depravity. Many believe the networks whose financials are dropping into junk bond, very high credit risk status have only themselves to blame.
In related news, industry insiders are reporting that Cumulus is headed for bankruptcy, or something similar. Clear Channel will accelerate their stealth layoffs.
In March and April, Mike Huckabee was held up by some as the anti-Limbaugh. The conservative talker was marketed as a more thoughtful, less vitriolic alternative in the aftermath of Limbaugh's attack on Sandra Fluke. In many markets, Huckabee is in direct competition with Limbaugh. The one major question last April: would Huckabee catch on?
It appears the answer is yes. Huckabee has just passed the 200 affiliate mark. Cumulus Media, his radio network syndicator, is expected to drop the Limbaugh Show on up to 40 of its stations in the coming year when contracts expire. That would possibly move Limbaugh downward in affiliate count from 600 to 560, while increasing Huckabee's count.
Cumulus also syndicates Michael Savage, who is likewise gaining affiliates for his evening show.
Meanwhile in the immediate aftermath of the election, Clear Channel is sweeping progressive radio from KPOJ in Portland. But other progressive talkers are under the gun as well.
Mid-West Family Broadcasting has laid off Madison's John "Sly" Sylvester of radio station WTDY, who resisted political labels but stood with workers when they were under the gun from Wisconsin's Governor Scott Walker. Sly had been on the air in Madison for more than 25 years. Commentary about the Madison layoff included the statements that radio is becoming "an unsustainable business model", and that "local radio is all but dead."
All part of a theme that is increasingly heard throughout the industry.
The diarist is active in Flush Rush on Facebook:
|Rush Limbaugh's talk radio career is in a slow downward spiral in part because of the activism of consumers, volunteers, and activists who seek to hold Rush accountable for his hate speech. One very active group in this cause is Flush Rush on Facebook. Flush Rush and other, similar groups use the StopRush Database to inform advertisers about where their ads are appearing.
Please consider joining. Small donations are also accepted to fund data storage; visit StopRush for more information.
UPDATE — Fri Nov 23, 2012 at 9:48 AM PT:
Now there have been THREE progressive radio stations stifled
since the election — this is beginning to look like a crass political move.
The three radio stations are owned by three different companies, however.
This bears watching.
Seattle’s KPTK expected to switch from progressive talk to sports
hat tip to Eyeball Kid