Cumulus Meltdown: Consolidation Karma

The thud heard ’round the industry: Cumulus Media, the second-largest radio station conglomerate in the country, ousted its founders in late September. CEO Lew Dickey has been demoted to a vice chairman, while brother John (an executive vice president) has already cleared out his office.

The move was orchestrated by private equity firms who hold a significant portion of Cumulus’ stock and have not been pleased by the company’s meltdown this year, which has seen its stock price tank by more than 80%, from north of $4 at the beginning of 2015 to 75 cents at the close of trading last week. As I write this, Cumulus’ market capitalization in total is $169.5 million. That’s a valuation more than $1 million less than what DTS bought the HD Radio system for. Think about that: hundreds of stations, a passel of networks, and online properties worth less than a mostly-ignored technology. Read More

Voltair Controversy: The Seduction of Denial

Next month is the National Association of Broadcasters’ annual radio convention, to be held in Atlanta. I wish I could be a fly on the wall in some select panels and the local off-hours watering-holes. Fireworks are expected over an issue that’s been feistily percolating for more than a year — the integrity of the U.S. radio ratings system.

First, a quick primer about radio ratings in the United States. Administered by Nielsen, the ratings are collected by two primary means: listener diaries and Portable People Meters (PPM). The PPM system is a small pager-like device that selected listeners carry around with them; when exposed to a station’s broadcast, the meter logs the station and time spent listening. How? Stations that subscribe to the Nielsen ratings in PPM-enabled markets broadcast a special audio watermark that is inaudible to listeners, but that PPM devices can hear. The watermark is a 1000-3000 Hz tone; as a proprietary technology, the only way to work out how it really operates is by observing it in the wild or by examining its patents.

When the PPM system was introduced in 2007, it was touted as a new era for measuring radio ratings because listeners aren’t all that great about accurately and meticulously recording all the stations they’re exposed to. For example, radio often functions as background noise in places like restaurants, stores, and offices; when you’re at the dentist are you really paying attention to the smooth/lite pabulum oozing from the waiting room ceiling? Today, four dozen markets are measured using PPM technology. Read More

AM Broadcasters Still Seek Translators, Digital Authorization

When the FCC announced the creation of an “AM Revitalization Initiative” in 2013, the proposal included a grab-bag of industry desires, such as the right for AM stations to utilize FM translators and for AM stations to move from hybrid analog/digital broadcasting to the all-digital AM-HD protocol. But to the consternation of industry lobbyists and HD-backers there’s been no movement on this initiative — so now they’re beginning to whine about it.

Case in point is a commentary published in late June by Frank Montero, an attorney at D.C. communications law powerhouse Fletcher, Heald & Hildreth, which laments that AM broadcasters are being held hostage without access to FM translators and accuses the FCC of playing political football with the future of AM itself. It’s full of questionable assertions and revisionist history. Read More