JV: Paul, has Internet radio and satellite radio had much effect on the business of terrestrial radio there in Canada?
Paul: Sure. We have the same stuff you do, although there are some bigger issues with streaming signals that have to do with copyright laws and royalties and things like, which you guys are probably still dealing with down there. We abandoned streaming simply because while it gives you worldwide access, the performers want worldwide royalties, and the bunch of our income is based on central market delivery of audience.
As for satellite radio, they are available here, but they’re not focused here yet. They want to grow the American market first. But all that technology will be available here.
As far as any effect on Canadian radio, sure; it’s had an effect, although the statistics keepers will tell you that the amount of radio tuning hasn’t gone down. If it has, it’s marginal. We’re still in the neighborhood of twenty hours a week spent with radio, and the issue hasn’t really shown up in our ratings.
And having said that, while we’ve been doing this thing on the sales side, we’ve also been growing our products. We’ve seen a 40% increase in our audience delivery. So it’s not just about what we’re doing on the sales side. We still want to deliver numbers, certainly for our national people. So we’ve seen growth, and I’m not sure if it’s been hampered by some of those other technologies. But they’re out there. The consumer is using streaming audio. It’s using audio on demand. Direct TV gets into a lot of the households in Canada through the gray market, and they have a host of 100 audio channels on there as well. So it’s all there. I mean, there isn’t really a border between you and us. So anything you’ve got there, we’ve got here.
JV: Perhaps there’s no border in that sense, but there seems to be more emphasis on the client and the creativity at many Canadian stations than at most U.S. stations, particularly at the management level.
Paul: I think a lot of that is a function of what I see as the American model with consolidation and the whole notion of synergy and consolidation, etc. It has created a scenario where unfortunately the creative has suffered, and you have sausage makers. The salespeople are out there and are bringing the orders back. Then they’re writing the commercials, they’re going into production, they’re voicing the commercials themselves sometimes. And so they’re trying to get something on the air that isn’t the best possible thing for the client, but because of economic reasons, they’re doing it that way. That’s maybe not fair, but that’s what I see more often than not.
Whereas, because of the health of the Canadian economy, perhaps we haven’t gotten there yet where the economic pressures are such that we have that happening. I mean, a market like Toronto for all intense and purposes has eighteen signals. A market like Toronto in the States has 50 plus. What’s the population of Detroit? Three or four million? Toronto’s greater metropolitan area is 3 ½ million. How many signals in Detroit? Maybe 30 or 40? Toronto has only 18.
JV: Why is that?
Paul: Our “FCC,” if you will, has seen fit to license fewer frequencies along the way than your FCC. Now, as we get into issues of the spectrum opening up and digital and so on, it’s different. But they viewed those frequencies as scarce resources, and so they only license X number. It’s a historical phenomenon more than anything else.
And so when you only have 16 players and maybe 8 owners, each of them is doing okay. So they’re not looking to cut it back to one writer and one producer and having salespeople writing stuff, etc. Now, your bottom lines might be better.
JV: That makes perfect sense. Steve, what toys does Paul give you guys to play with?
Steve: We work on Pro Tools out of one and a half studios.
JV: All that work in one and half studios? They must be running around the clock.
Steve: Almost. We have two full-time shifts. The first one starts at 7 in the morning and the studio is going until about 11:00 or 11:30 at night. But it’s not as hectic and hairy as you might think. You really have the time and the space to develop the product we need to develop. It doesn’t sound like a lot but that’s really not an issue, the time.
JV: Producing a ton of quality commercials takes a ton of voice talent. Do you have resources outside your in-house talent?
Steve: We’ve got tremendous talent in-house, but it’s great to be able to go outside and give different flavors to different campaigns with outside voices. And the technology in this industry allows us to do that. I would say we probably have a voice talent bank of 30 to 35 people right now, not including in-house talent.
JV: That’s great. And Paul, he’s not biting too much into your budget for all those voices, is he?
Paul: Not yet. But you know what, clients are beginning to understand. When we say to them in a meeting, “this might require using a fresh voice that isn’t heard on the station; we don’t make money on the voice, but they need to get paid,” they’re okay with picking up the tab for the extra voice. And it is a direct cost. There’s no mark up. We’re literally just paying the talents. The client’s writing us a check and we’re writing a check to the talent.
Steve: We use it to enhance their product, not to generate revenue on our side.
JV: Gentlemen, you’re doing a great service for radio! How about some parting thoughts from each of you?
Paul: It’s about the client. It’s about developing an effective message to help that client grow their business, and if that happens, we have partners moving forward, and they’re willing to stick with us and work with us, and it’s as simple as that. How do we do that? That’s what separates us from everybody else, I think.
We tell our clients that the number one mistake advertises make—and this is right out of Roy Williams—is the desire for instance gratification, that somehow you put a quarter in the gumball machine and turn the knob and out comes the results. We ask our clients not to think that way, and if that’s what we’re asking them to do, why is it that we think that way? Why are we looking for a quick hit. There is no easy way to get to where we’re going. It’s a long, difficult, time-consuming process; but in the end, if it helps our clients grow their business, I think it’s worth it. Some may not. Some may not see it as being worth it. Others may get out there and get it. Our salespeople are representatives of our company and our approach in the way we want to do business, and if they start to cut corners and all they’re really doing is reaching into somebody’s pocket to try to pick their pocket, it’s not looking good on us.
JV: Steve, what does a Production/Creative Manager need to do to get their department on the right track?
Steve: I would say get together with your Sales Manager first. When you all share the same vision of generating results for your customers, it all falls into place, and you all help each other grow. I think that’s the critical part of it. And that’s why I like Paul being here. What he’s brought to the station is a vision, and we all get it, and we all understand it, and we all see the power of it. And all the decisions you make after that become very simple.
♦
