SABO SEZ: They Want What You Have
By Walter Sabo
a.k.a. Walter M Sterling
Host, Sterling Every Damn Night
WPHT, Philadelphia
Sterling On Sunday, Syndicated, TMN
Dozens of brand-new audio hardware and software companies have been launched during the past 20 years. These start-ups are usually funded by venture capital money. VC money is not invested to return a profit, it’s poured in to – pour it in. Their money is “different” than the cashflow that fuels your business. Start-up money buys time to profit.
Amazon lost money its first 10 years. Spotify launched in 2008 and turned a full year profit for the first time – last year.
MOST venture-backed start-ups do not make it to profit, they close.
With virtually unlimited funds and no deadlines, what are the strategic markers for success of most fresh, new audio businesses? Having performed due diligence for many start-ups, this is an informed summary of their goals:
— Significant distribution of the product.
— Robust, broad-appeal content offerings
— Proven metrics for securing advertising dollars
— Positive cultural impact
— Embraced by late-stage adopters
— Advertiser credibility
Hold radio to the above checklist. 92% of the population has a radio – more households than own a TV. Radio’s distribution is elegant, wireless, and free. Streaming? Yes, radio has streamed to the car since 1938. How’s UCONNECT or APPLE PLAY working in your KIA? Buffering now? Bluetooth pairing? At-home streams cost about $1,000 for a computer, $100 a month for WiFi, $150 for software upgrades and repairs. Radio distribution: turn it “ON.” No startup audio service will match radio’s distribution system.
Mature means predictable. Content offerings on radio are understood, accepted, and quickly adjusted if not appealing. Audio start-ups are rarely run by execs with audio entertainment experience. Their execs tend to be recruited from two groups: techs and discoverers. Techs because somebody has to make it work. Discoverers because you would be shocked at how many audio newcomers were funded on the wacky premise that AM/FM fails to see how badly Americans want to hear brand new music! Lurking among workers within the streaming and satellite communities is the harsh prejudice that pros with actual radio experience are satanic dinosaurs.
Most start-ups flirt with doing good for the country, ie; positive messaging, lots of jazz or world music. AM/FM has hardcore positive impact witnessed by the fact that most public radio stations enjoy ratings dominance. No other medium – none – raises more money for community charities than AM/FM.
Driving a new product past the innovators, early adopters, early majority to late majority is the path to success in any industry. AM/FM reached late majority when Bing Crosby had his own show. How’s mom doing with Spotify?
Advertiser credibility: Procter & Gamble returned to radio in the early 2000s. Last year P&G landed near the top of radio advertisers. Procter has no sense of humor or time for nonsense. If P&G buys a lot of radio, end of story. Again.
Not legacy media. Proven media.
Walter Sabo has been a C Suite action partner for companies such as SiriusXM, Hearst, Press Broadcasting, Gannett, RKO General and many other leading media outlets. His company HITVIEWS, in 2007, was the first to identify and monetize video influencers.. His nightly show “Walter Sterling Every Damn Night” is heard on WPHT, Philadelphia. His syndicated show, “Sterling On Sunday,” from Talk Media Network, airs 10:00 pm-1:00 am ET, and is now in its 10th year of success. He can be reached by email at sabowalter@gmail.com.
eliminating filled positions, we are talking about our colleagues – people whose skills, spirit and talents help make NPR what it is today. This will be a major loss.” The story goes on to state, “On an annual budget of roughly $300 million, Lansing says, revenues are likely to fall short by close to $30 million, although that gap could reach $32 million.” Folkenflik notes, “The layoffs are in keeping with an increasingly grim landscape for media companies over recent months. Vox Media cut jobs by 7%; Gannett and Spotify by 6%. The Washington Post, owned by Amazon founder Jeff Bezos, eliminated its Sunday magazine and a handful of other jobs. After becoming part of Warner Bros. Discovery, CNN cut hundreds of jobs and killed off its brand-new streaming service, CNN+.” 
from digital sales in 2023 and more local ad revenue coming from video streaming than audio streaming spots.” RAB president and CEO Erica Farber comments, “Digital continues to be the catalyst for growth in today’s environment. A solid foundation in digital is a key driver for today’s successful marketing professional. As technology evolves, revenue and sales gains can only be obtained via digital services and training know-how. RAB continues to provide the training, tools and services needed to realize these gains.” The annual report shows that digital sales in 2022 comprised 19% of total ad revenue, representing between $85,064 for the average small-market station and $1.2 million for a station in a large market. Some market clusters were making tens of millions of dollars from digital ad sales. The full report – an analysis of online ad revenue from 3,753 radio stations, as well as survey responses from 851 local radio buyers and 169 radio managers – is available to RAB members.