What would Lew Dickey do differently at Cumulus Media today if given a chance to rewrite history? Rely less on centralized programming and put more power into the hands of local programmers. That was the surprising response the former Cumulus CEO gave at the Conclave Learning Conference during a lively discussion Thursday afternoon in Minneapolis.
In his first radio conference appearance in three years, Dickey startled attendees by saying he would have reversed course on one of the things the company was most criticized for during his tenure: programming and management decisions that emanated from its Atlanta headquarters. Dickey was ousted as CEO of Cumulus in September 2015, replaced by current chief executive Mary Berner, who made putting control back in the hands of local managers a top priority. Dickey, currently chairman of Modern Media Acquisition Group, said that as Cumulus grew from a small player in a handful of cities to a top radio consolidator in 150 markets it needed to institute basic controls and best practices – and those became “the DNA of the company.” But as it entered the largest markets through its $2.5 billion acquisition of Citadel Broadcasting in 2011, Cumulus would have been better off decentralizing. “We could have, should have maybe changed course at that stage when it became that much bigger,” Dickey said, appearing with his brother John Dickey, in an interview with Jerry Del Colliano, professor at NYU Steinhart and author of Inside Music Media. The best way to run a 100-market radio group, “would not be centralized, it would be fully distributed… you push all the power back out to the markets with some basic guidelines,” Lew said. But Cumulus didn’t start as a 100-market radio group, he pointed out for context. It grew incrementally over the course of 150 different acquisitions.
John Dickey, who previously ran programming for Cumulus and now is CEO of ORA Media, disagreed, saying the programming train “has left the station.” Programming will be “less localized and more centralized,” John predicted, “not because we don’t have talented people in the markets that can figure out how to put on a good radio station,” but because the opportunity to reduce operating costs by delivering content through the cloud will be irresistible to investors. Sales, on the other hand, will head in the opposite direction, he predicted – more local and less centralized, augmented by automated sales platforms that make buying radio easier and open it up to more potential buyers. And while many say radio spotloads need to be reduced, John suggested broadcasters could quadruple their ad loads through the use of ZoneCasting. ZoneCasting technology, which is pending FCC approval, would allow a radio station to divide its signal based on a market’s geography. The technology would permit a radio station to air different news, traffic, weather, PSAs and advertisements based on where a listener is located. It offers a way to reduce the price of spot inventory and deliver more value to small business advertisers, John told Conclavers.
More Investment Needed
Lew, meanwhile, postulated that radio needs “to go into an investment cycle,” similar to what the automotive and retail industries are doing, by allocating more money for content creation and technology. The catch is that requires capital expenditures that some companies cannot afford in today’s marketplace. With Americans now spending almost four hours a day on their smartphone, radio also needs a “viable mobile strategy,” Lew said, one that involves creating more personalized audio content that can be consumed on demand. Just as Netflix spends huge sums investing in content, Dickey said so must radio by hiring more producers and writers to create fresh content. That in turn, would open up more inventory that can be monetized in a direct to consumer relationship. “Radio needs to innovate its model,” Lew declared by expanding into subscription-based content, and ecommerce opportunities. “We have to ramp up with multiple revenue streams to keep the business rolling and growing.”