Following disappointing Q4 results, Bell Media announced some significant cost-cutting measures, which unfortunately included the elimination of 4,800 jobs. It’s the biggest restructuring in 30 years. Part of that restructuring involves selling off 45 of its 103 regional radio stations. Because Bell is opting to sell them, rather than close them down, some media agency leaders see a silver lining in the otherwise grim news. Especially since the buyers of the radio stations in British Columbia, Ontario, Quebec and Atlantic Canada are seven established regional operators: Vista Radio, Whiteoaks, Durham Radio, My Broadcasting Corp., ZoomerMedia, Arsenal Media and Maritime Broadcasting.
Nicole Brown, President, Amplifi, Dentsu Canada, says, “Reducing small market presence by such a large media company is disappointing – but it is however heartening that the decision was to sell and not shutter those radio stations. Radio is community building. There is an opportunity for more regional-type ownership to grow valuable community connection, engagement, and attention value.”
But even with that opportunity to grow communities, Scott Stewart, general manager of Glassroom, worries about what Bell’s divestiture means for the radio industry on a macro level. Stewart says we’re starting to see local media suffer the same fate across the board, that outside of the major top five to seven market centres in Canada, national media operators view local media as a financial burden to their operational bottom line and no matter what they do, national advertiser ad dollars just aren’t trickling down. “Thankfully and unlike what we have seen in publishing over the past several years, there are multiple, passionate buyers lined up and ready to purchase these operations and continue to service these communities, however, my biggest concern is for the broader radio industry as a whole. When you have a top player like Bell Media divesting almost half of its stations however, no matter what – it sends a pretty clear signal to both agencies and advertisers alike that there is instability and lack of demand which, any way you slice it – hurts the industry perception-wise.”
“Radio is powerful for connecting with communities, and ranks the highest for trust and attention,” says Sarah Thompson, president of media at Dentsu. “The absence of radio and the risk at large is both for communities and advertisers. We rely on radio to deliver us news and local updates and it delivers opportunities for advertisers in high quality ways. We need radio in our country and we hope everyone makes it viable and supports it.”
Jeff Vidler, president founder of Signal Hill Insights, agrees. He is hopeful that the new owners of small and medium market stations will be more willing to invest in regional media than Bell is. “By selling 45 of its small and medium market stations to regional broadcasters, Bell is putting these stations in the hands of broadcasters who specialize in serving these smaller markets. While the potential return from these markets no doubt pales in comparison with what Bell can get from its wireless and internet operations, local radio is still a good business for smaller regional broadcasters. That means they’re willing to invest in local radio in a way that Bell isn’t, and that in turn means better radio for small and medium market radio listeners and advertisers.”
“With Bell Media news outlets closing across Canada, it’s a wake-up call to stand behind Canadian media and local news,” says Shannon Lewis, president CMDC. “It’s not just about staying informed; it’s about preserving our Canadian identity. Now is the time to stand together. That’s why, for over three years, we at the CMDC have been advocating for the Canadian Media Manifesto, dedicated to supporting and investing in local media.”
Devon MacDonald, president of Cairns Oneil, calls this a tough moment for media and for the industry, but it’s also an outcome that reflects the continued shift in advertising dollars away from traditional media to digitally based investments. “We feel for our colleagues at Bell Media, and trust that the new owners of the stations find a model to continue to deliver the valuable service that local radio brings to communities.”
“Marketers continue to look for scalable investments that can clearly demonstrate business impact. Local radio provides a valuable role for businesses in driving store traffic in communities. But it lacks measurement capabilities that digital can provide linking outcomes and audiences day by day. This is key for planning and measurement.”
Jennifer Bidwell, VP of Business Solutions at Horizon Media, thinks we’ll see more of these kinds of cost-saving moves and, from the agency’s perspective, there’s been a decrease in radio investment year-over-year. She says it’s important to think locally once you get outside of bigger cities, and radio is important to Horizon as it buys nationwide for client, Tim Hortons. “I think there’s certainly a shift away from the traditional news on at the top of the hour and more on demand, that you can access through to a lot of the digital channels. Then music the way you want it through an experience like Spotify. Bell was the first one to make this separation and I think we probably will see the same thing happen from Corus and Rogers, who’ve also reported declines in their revenues from advertising.”
