Consolidation: Fact, Fiction and the Future

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ConsolidationFact, Fiction and the Future

• Ed Krampf
• Regional Vice President, Northern California

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(No Transcript)
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Is This Really Consolidation?

• 13,000 radio stations
• 3,800 owners
• Multiple ownership voices in every rated US market

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What Industries are Really Consolidated?

• Top Companies / Market Share
• Wireless Telecommunications Companies 8/87.2
• Car Rental Companies 6/93.5
• Automotive 6/86.8
• Airlines 10/91.3
• Pharmaceuticals 10/67.7
• Beverages 10/63.4
• Radio 10/43.1 (revenues)
• Radio 10/ 16.8 (stations)

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Media Consolidation?

• Record Companies 5/84.5
• Movie Studios 8/84
• Cable Television 10/67.4
• Radio 10/43.1 (revenues)
• Radio 10/16.8 (stations)

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Clear Channel Radio is Centrally Controlled ...

• Clear Channel Radio Corporate Staff in San
  Antonio
• 15 People
• including assistants

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Clear Channel Radio is 275 Local Businesses

• 250 General Managers
• 300 Traffic Directors
• 900 Program Directors
• 750 Sales Managers
• 400 Engineers
• 30,000 local employees working at

1,229 local radio stations
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Clear Channel Has a Political Agenda

• Glenn Beck
• Rallies for America
• Glenns Rallies promoted on all affiliates
  airwaves
• Clear Channel
• ABC/Disney
• Infinity
• Emmis
• They were Glenns Rallies Not Clear Channels

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Clear Channel Has a Political Agenda

• Prohibited titles after 9/11?
• Didnt happen
• Banned Dixie Chicks after Natalie Maines
  statement
• Wasnt us
• National politically motivated playlists?
• There arent any
• Never have been

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Clear Channel Personalities Promote a Single
Political Agenda
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Its Not the Politics!

• Entertaining
• Compelling Content
• Informative
• Hold Their Audiences
• High-Profile
• Unique Consistent Performers
• Deliver Results

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Technology is Ruining Radio ...

• Just like
• The demise of the 30 minute radio drama
• Records
• Disk Jockeys
• Rock Roll
• The death of the single take
• Splicing tape
• The ET
• The radio cart
• The CD
• The digital editor

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To Every Old Radio Warrior ...

• The younger generation has been ruining radio for
  the last 75 years!

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Radio is Too Homogenized ...

• Clear Channel alone
• Over 2 million research calls
• Over 10,000 regularly scheduled annual local
  research reports
• Local market research - Spend over 1million
  locally
• Test thousands of individual titles
• Response to hundreds of local radio personalities
• Measure desires of thousands of radio listeners
• More local research than ever before

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Radio is Too Homogenized ...

• More Musical Diversity
• Between January and April 1999 radio exposed
• Just over 33,000 songs performed by
• Just over 7,000 artists
• Between January and April 2003 radio exposed
• Almost 58,000 songs performed by
• Over 11,000 artists

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Radio Doesnt Expose New Artists

• Only on monitored stations
• Over 1,000 never-aired artists in the last 12
  months
• KKSF new artist showcase
• Artists like ...

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Consolidation Has Been Bad ...

• Diversity
• Talent Development
• Local Service
• Format Variety

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The Facts

• Format Diversity
• In 1993, The M-Street Radio Directory listed 32
  recognized radio formats
• In 1999, 34 are listed
• In 2003, M-Street lists 83 radio formats

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Dominant 1 Choice Of African-Americans !
Clear Channel Radio Delivers The 1 Share of
African-Americans Across All Demos
50.8
Clear Channel Radio
18.3
Inner City Bdcstg.
7.1
Infinity
5.1
Bonneville
Disney
1.5
Black Adults 18-34
0.5
Susquehanna
44.0
Clear Channel Radio
24.6
Inner City Bdcstg.
8.6
Infinity
2.9
Bonneville
Susquehanna
2.9
Black Adults 18-49
2.2
Disney
41.3
Clear Channel Radio
25.1
Inner City Bdcstg.
8.1
Infinity
4.0
Bonneville
Susquehanna
3.2
Black Adults 25-54
3.0
Disney
Arbitron, San Francisco Metro, Spring 2003,
Mon-Sun 6am-12mid, Black AQH Shares, KCNL Is A
Chase Radio Property In A JSA With Clear Channel
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1 Choice of Hispanics !
Even Beating The Spanish Stations
Clear Channel Radio
25.6
24.0
Hispanic Broadcasting
11.0
Entravision
8.2
Infinity
3.9
Bonneville
1.6
Susquehanna
Hispanic Adults 18-34
1.5
Disney
Clear Channel Radio
22.6
19.7
Hispanic Broadcasting
11.5
Entravision
9.3
Infinity
3.7
Bonneville
3.7
Susquehanna
Hispanic Adults 18-49
2.0
Disney
Clear Channel Radio
18.3
18.2
Hispanic Broadcasting
11.0
Entravision
10.3
Infinity
5.1
Bonneville
5.1
Susquehanna
Hispanic Adults 25-54
2.7
Disney
Arbitron, San Francisco Metro, Spring 2003,
Mon-Sun 6am-12mid, Hispanic AQH Shares, KCNL Is A
Chase Radio Property In A JSA With Clear Channel
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Ethnic Composition Mirrors The Market ! 12
Ethnic Composition
Arbitron, San Francisco Metro, Spring
2003, Mon-Sun 6am-12mid, Persons 12, Cume
Persons , KCNL Is A Chase Radio Property In A
JSA With Clear Channel
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The Facts About Consolidation

• More News Information available than ever
• 9/11
• Columbia
• Iraq
• Ability to venture into formats that
  single-station owners cant risk
• Better Neighbor with More to Offer the Local
  Community
• Raise Millions to Serve Millions

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9859 mentions 5,915,800
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The Facts About Consolidation

• Serving advertisers better
• More to offer
• More solutions
• Effectively elevated radio in the media mix
• Working for local businesses

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The Facts About Consolidation

• Serving Radio Employees Better
• More opportunities for personal growth without
  geographic disruption
• Better facilities
• Better training
• Better financial opportunities
• More benefits for employees
• Making more money
• Serving more people

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The Facts About Consolidation

• Serving the radio business better
• 1996 60 of all stations losing money
• Radios share of total advertising up from 7 to
  9 during the past 7 years

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The Facts About Consolidation

• It has absolutely changed radio
• Absolutely necessary
• Beneficial
• Its the key to continued growth

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The Future ...Fact Fiction
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Little Guys Cant Compete ...

• Sacramento
• Diamond Radio
• KMBM
• 4 12
• 2 18-34
• San Diego
• Midwest Group
• KFMB
• 6 12
• 3 25-54

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Little Guys Cant Compete ...

• Riverside
• Anaheim Broadcasting
• KOLA
• 4 12
• KCAL
• 6 12

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Little Guys Cant Compete ...

• Philadelphia
• WEAZ Broadcasting
• WBEB
• 1 12
• Dallas
• Service Broadcasting
• KKDA
• 1 12
• Washington, DC
• Howard University
• WHUR
• 6 12

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The Key to the Futureis Found in the Past ...

• Great passion
• Great talent
• Great execution
• Great radio
• Thats whats always won and will continue to win

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Advice

• Be flexible
• Be willing to change
• Continue to find great people

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Advice

• Focus
• Serving the listener
• Serving the advertiser
• Not on the competition