Suddenly, the watchword in radio is clutter.
Soon after Clear Channel Communications Inc., which owns eight Los Angeles radio stations, announced plans to reduce the amount of commercial time on its airwaves beginning next year, other station owners and operators were applauding the move. Many, though, are hedging whether and to what extent they will join the San Antonio-based radio giant in cutting commercial and promotion times, sometimes referred to as "radio spot load."
"I'd love to see commercial loads lightened," said Pat Duffy, vice president and market manager for Infinity Broadcasting Corp.'s L.A. stations. Infinity, a unit of Viacom Inc., owns seven stations locally and commanded a 27.8 percent share of the L.A.-area revenue pie, second in L.A. to Clear Channel, according to BIA Financial Network Inc,
When Duffy look over last year, he ordered a reduction of the clutter of ads and promotions on news talk station KFWB-AM (980). "KFWB ran more inventory. It wasn't smart for thern to do that," he said.
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Walter Sabo, chief executive of Sabo Media, a New York radio programming and management company, labeled this "Capitalism 101."
"It's common sense. It's overdue, and will result in a healthier industry, because it helps ads to stand out better," Sabo said. "This is the first law of capitalism. Lower the inventory to increase demand and put pressure on price."
Excess inventory has prompted routine price-cutting in recent years, which turned off Wall Street and led to stock declines. Under its new plan, Clear Channel stations would not be able to run more than 15 minutes of advertising in a single hour. That compares with the 20 minutes or more of advertising that some stations currently program.
The decision to cut back on ads highlights a dilemma that station operators have grappled with for some time: How to maximize advertising revenues without chasing away the listeners that advertisers covet?
Dot-com effect
George Nadel Rivin, partner in charge of broadcast services at accounting firm Miller Kaplan Arase & Co. in North Hollywood, said radio station ad loads grew in the midst of the dot-com boom when demand for airtime was big.