NEWS BLOG (WSAU) Years ago, I remember news stories lamenting the bankruptcy of Pan Am. The airline was the first to fly many international routes to South America, and was a pioneer og American aviation. When they went belly-up, the news reporting told us that an era had passed. Same thing when TWA went out of business some years later. The air transportation industry was changing -- and wasn't that sad.
Actually, I was happy that Pan Am and TWA faded away to corporate oblivion. When I lived in New York, discount Southwest Airlines didn't fly into any of the major New York City airports. Older, most established airlines controlled all the take-off slots and gate space. Only when some of the dinosaurs died off could Southwest move in. And JetBlue. And Airtan. Now I can fly JetBlue from Buffalo to JFK for $59; they get me there for half the price, and land at what was once TWA's main terminal.
This is called creative destruction. The old, the inefficient, the tired get weeded out in our economy, making way for the new, the hungry, the more efficient. While this may not be a good thing if you worked for Pan Am or TWA, it is a good thing for consumers and for the economy as a whole.
I predict that 2010 will be a year of creative destruction for the radio industry. While the change may be painful at times, in the long term it will be good for radio listeners and the economy.
We are already seeing the start of this trend. Citadel Media filed for bankruptcy earlier this month. They own the ABC radio network, and a handful of radio stations in large cities. They are not considered top owners. In most cities, their stations are not top-rated. They did a poor job grooming a replacement for Paul Harvey, one of the best-known and most profitable broadcasters. Their ABC News radio brand as been declining while Fox News has risen. And they are facing these trends in a weak advertising environment.
Citadel and its ABC brands will emerge from bankruptcy towards the end of 2010, and they will have to re-think the way they do radio. They may have to sell off some of their radio stations. Perhaps they will fall into the hands of owners who are better broadcasters. Some old, tired network shows will be dropped. Maybe the ABC newscasts will have a new and improved sound. All of these changes could give the audience a better listening experience.
This is just the tip of the iceberg. Two much larger broadcasters, Clear Channel and Cumulus, both have unprecedented levels of debt from acquisitions and financial deals that were made when the economy was stronger. Both have scrambled to refinance and delay some of their payments. The long-term outlook for both companies is uncertain. What would happen if Clear Channel and Cumulus had to sell of large numbers of radio stations? You'd hear new programs, new ideas, there would be new, reengergized ownership and managers. I would be excited by these kinds of changes within the industry that I love so much.
Creative destruction sometimes brings short-term pain for long-term gain. It is coming. Let it come.
Operations Manager, Midwest Communications-Wausau