The View From the Top

The 64th BCAB conference was held in Kelowna in early May and one of the most popular sessions was the Presidents’ Panel where six of Canada’s broadcast heavyweights got together to discuss radio, its future and the challenges faced by broadcasters today. The panel was moderated by John Parikhal who kept the session lively and interesting. John is well known for asking great questions and he broke the ice by asking each of the Presidents what keeps them awake at night?

Paul Ski, CEO of Rogers Radio: “There are three things that keep me awake at night. How we attract good people to the broadcast business, and in particular radio. Radio is a collection of good people doing extraordinary things and I think we have to find better ways to attract better people. Secondly how do we adapt to the current changing environment that we are going through, and lastly how can we find better ways of distributing our product on the devices people are using.”

Chris Pandoff, President of Corus Radio:  “In our company we have been talking about the importance of content and perhaps radio does not always have the depth of talent who create the content, the announcers and the Program Directors. At the end of the day we will make it to the various devices if the content is relevant to our listeners and strong. What we have learned is that on music stations what happens between the records matters more now than it ever did before, and on News Talk stations the personalities and their profile they bring with regard to the connection to the community is really important. I am also worried about PPM”

Terry Coles, President of Vista Radio: “The thing that bothers me the most is all the naysayers who keep predicting the death of radio. Radio is solid and people will want to listen to it and advertisers will want to keep using it because it is such an effective medium to get their message across.”

Rick Arnish, President, Jim Pattison Broadcast Group:  “We are concerned about the continuing increases in copyright fees and radio’s profitability has been tremendously affected by the collectives continuing to come after our money because they have not wrapped their arms around the changes in Social Media so these collectives have gone after the Copyright Board and the increases for radio have been significant. I worry about this perception that radio is ‘old tech’ and I don’t think this is the case at all. Radio is wrapping its arms around Social Media and I think radio has a very bright future. I am also concerned about the introduction of smart phones in automobiles and we are seeing from research that more and more people are using these devices to stream out of market radio stations.”

Chris Gordon, President Bell Media Radio: “There are four things that keep me awake at night. I worry about relevance, PPM, authenticated or non authenticated content and the amount of time not spent listening to radio in the car. But I do think that we are a very relevant business and we will remain a very relevant business as long as we stay focused on our key values.”

Jacques Parisien, President of Astral Radio/Astral Media:  “I am very positive about the media landscape in Canada. But I do worry about our margins and the increases in copyright fees are greater than the increases in revenue and we cannot keep going this way. I worry about the bouncing effect of PPM. Advertisers’ behaviour and consumers’ behaviour changing as quickly as they do.  Lastly the predictability of the regulator is also a concern. We are seeing more and more decisions coming out of the CRTC that are difficult for us as operators and owners of radio to accept.”

Parikhal`s next question was what are you excited about looking forward and what makes you want to come to work every morning?

Paul Ski: “I think there are a lot of opportunities for radio moving forward and it has proven to be a very resilient medium for the past 75 years. Radio was the original social network and talk radio was the original chat room. The great thing about radio is that we have been able to adapt and move forward. If radio can harness the power of on-line, mobile and other emerging platforms then I think radio will be in a unique position to take advantage of these opportunities. Nobody does local better than us, and most digital plays are trying to figure out how to be more local. Radio is the best at doing that, and that is what excites me.”

Chris Pandoff: “There was a report from Merrill Lynch from the USA that listed the three important factors required for success in this new digital world. The first was ubiquitous computing meaning better access and more bandwidth moving forward. The second was the continued rise of social networking and the last trend was the importance of local, and that people really want to connect with their communities. So if you want to know what is going on in a market, just turn on a local radio station.  So for me the relevance of radio is what keeps me excited.”

Terry Coles:  “I think radio has a great opportunity moving forward because of its ability to be local and our ability to bring new personalities to radio. Sometimes I wonder if we have not been too mechanical and I think there is an opportunity to bring creativity to a higher level in our business.”

Rick Arnish: “I am excited about the future of both radio and TV. Being local is the winning strategy for all of us. Having great personalities on radio and TV is important. When you look at the local evening newscasts across Canada for example there are stars in every market.”

Chris Gordon: “I am excited about the future. If you look at the next year from a technological point of view where things are going and how quickly things are going to change I think radio is well positioned. Our listeners and advertisers are looking for local and I think radio is well positioned to provide this both on air and online so we have a great opportunity to generate revenue both on the air and online and that excites me.”

Jacques Parisien: “What excites us at Astral is that all these changes offer some exciting opportunities for radio and television.” When asked how he would like things to change between the industry and the regulator, Jacques said, “Have an open communication with them. Table our differences. They have to understand as much as possible, in minute detail, the challenges and threats we have and the opportunities we’d like to develop. That is done through communication. Astral has and will continue to support the CRTC. They have done a good job. But because the world is changing and the challenges we are having and they are also having, sometimes it starts to slip and we have to sit down as an industry with the Commission and say maybe it’s time to revise some of the policies and regulations or even with a new majority Government maybe it’s time to address what the Broadcast Act is all about. We have a great system in Canada and everyone should support it but we have to do it hand in hand with the Commissioners and the CRTC. More dialogue, more responsiveness, more recognition, more clarity, predictability. The law is the law, a regulation is a regulation, and a policy is a policy. Let’s not let them decide in a hearing on a policy issue which impacts all of us for the long term.”

Chris Pandoff: “We have an established platform but we don’t just compete with each other, we compete with all kinds of digital, satellite and internet services across the country. The main premise is for broadcast organizations to continue to be strong financially so they can continue to create programming we can export. Corus owns Nivana Films that sells Canadian produced programming in over 160 countries in over 200 different languages. Our ability to do that is contingent on the strength of the company.

Paul Ski: “In previous times, we were swimming in a lake. We knew where the boundaries were and where we were and there were not a heck of a lot of surprises. Now we’re swimming in an ocean. We don’t know what’s over the horizon and what’s coming next. What’s required is flexibility and predictability.”

Terry Coles: “My concern would be over licensing. We’ve seen that in some markets in Canada where too many licenses are granted and it creates a problem for the industry. I worked on the border for Windsor/Detroit. We were two Canadian stations competing with about 35 American stations. A lot of those stations were minimally making a dollar or two. When there are too many licenses in a market it makes it very difficult to produce quality radio.”

John Parikhal: “One concern I have is not just over-licensing but gaming the system. People come to you and say, “We’re going to do this kind of programming” and it’s politically correct but nobody wants it but they are given the license, they never do anything they said they would and they sell it for a bucket of money. If you are given a license in an over-licensed world, there should be consequences, rather than just rewards for gaming the system.”

In the US, “people” is a symbol for expense and expendable. They fire all the people they can and automate all they can. People are really important. As presidents, what are you doing to attract great people to your company? What are you doing to retain great people?

Rick Arnish: “To attract great people, you have to have a great company.  You have to ensure your company is not only well run but also give the power to run divisions within your company. Give them tools to do that and allow them to do their job. I believe we’ve worked very hard on the culture and I’m proud to say in the recessionary times, we didn’t lay anybody off. We reduced our fixed costs, but kept everybody employed. I’m a firm believer that we ask our people to deliver in good times – it was time for us to be loyal and deliver to them in poor times, and keep everybody employed. At the end of the day you get loyalty from employees. Give them the tools to do the job and allow them to do it, that’s the sign of a well-run company.”

Chris Gordon: “Let’s make the differentiation between Canada and the United States. Every one of us here today bought radio stations and consolidated activities because of the strategic value of being in the radio business, rather than to buy properties to trade through arbitrage in the United States. The larger companies in Canada saw it as an opportunity to create good programming and find a business they could build, versus having to relate to the Wall Street issue of quarter by quarter performance. We’re a publically traded company so we certainly live under that, but we try to invest in our products more, and reduce the bureaucracy. You’re getting audience or you’re getting money for the audience and if you’re not doing one of those two things, you’re ancillary to the process.”

Paul Ski: “I think we learned a long time ago that people join organizations but they leave because of people. One of the things we’re trying to do is train our managers, especially at the local level, that the most important managerial level is that of the local market because we build our success one station, one market at a time, so it’s important that we raise the value of those managers in terms of attracting better people, incentivize them in some way and try to retain them in some way. It’s not an easy task because with the different age groups that are now coming into the stations, along with the people that have been around for a long time, there’s a bit of a generational firewall. We bring in HR people to help us with those things. As we become better managers, it’ll help us to keep and attract really good people.”

I heard PPM mentioned. If you could improve PPM is there one thing you would do that would make PPM better?

Jacques Parisien: “I would probably give a stronger voice to the broadcasters on the PPM organization, the way it’s structured with advertisers, broadcasters and agencies. I would also address the panels in the major markets where we see a lot of bouncing around which is not justified and can’t be explained by PPM. I don’t see PPM as being supportive of our problems.”

Chris Pandoff: “Somehow we should be talking to mobile providers, RIM, Samsung, to get the devices embedded in smart phones so the data can be delivered effectively and have greater sizes of participation.”

Jacques Parisien: “I agree. When you table that at the PPM/BBM it doesn’t get any traction. We sound like cry babies, but this is a very constructive suggestion that we should be looking into.”

Paul Ski: “We need a recalibration of the ratings system. We’ve been using PPM for some time now and unfortunately it’s produced a lot of confusion and it’s hurt perceived value. That’s something we have to try to get back. If you look at rating points these days, we’re in a more difficult position than we were a few years ago.”

How much money are you willing to put from your company into increasing the sample size of PPM?

Jacques Parisien: “I would be willing to put good money.”

Paul Ski: “We’ll see how much Jacques puts in first. We would continue to invest in PPM technology. Because the reverse is we are having actionable data that our customers are asking us for and the two biggest words in advertising are measurability and activation and PPM goes a long way to helping in both areas. In the television world, not withstanding the differentiation between formats and companies, the large scale view is in television that a unified system is a good thing. It has its problems and we need to invest more.”

Next month we’ll get the Presidents’ views on copyright, new technology and staff training.