Richard Branson warned radio programmers Thursday that the consolidation of the industry could further alienate listeners and that “programming has taken a back seat to profits.” He also chided the industry for preferring to “engulf and devour rather than grow from within.”
Branson, chairman of the Virgin Group of Cos., which encompasses V2 Records, Virgin Atlantic Airways, Virgin MegaStores and Virgin Cola, made his remarks during a keynote speech at the Radio & Records 1998 convention.
The four-day confab for radio execs and label promotion honchos kicked off Thursday at the Century Plaza Hotel.
Seagram CEO Edgar Bronfman Jr. will open Friday’s session, but he is not expected to offer anything substantive as the company is in a Securities & Exchange Commission mandated “quiet period.” As a result, he is prevented from speaking in any depth about the company’s acquisition of Polygram.
The enigmatic Branson also suggested that the fractionalization of radio, with its numerous and narrow programming genres, is stifling creativity and preventing the airing of a wide range of music.
“In these days of rampant consolidation … and the attendant pressure to secure market share, programming has taken a back seat to profits, which is a dangerous direction in an era in which unique content is getting spread awfully thin,” Branson said.
“If radio doesn’t give the people what they want, the people will go to other mediums. Already the Internet is teeming with live broadcasts. If you thought TV stole your audience, wait until cyberspace breaks through in everyone’s living rooms,” he said.
His remarks echo the sentiment of many of the music industry’s more forward-thinking record execs, who believe the Internet could challenge radio as a medium that is being used with growing frequency to tout the arrival of new music to younger consumers.
And while radio is not expected to be dismissed entirely by fans, especially older consumers who may mostly listen to news channels or talk radio in between listens to the classic rock stations, labels and their parental conglomerates have recently become more aggressive in hawking their wares directly to the consumer.
Warner Music Group and Windham Hill Group are among the music industry congloms using direct-to-consumer campaigns on TV, the Internet and in print to herald the arrival of their artist’s new releases.
And outfits like Universal Music Group’s MCA Records and Hip-O Records are joining Sony Music labels in linking top-rated shows, such as NBC’s “Profiler” or Fox TV’s “Ally McBeal,” with their acts’ music in an effort to get consumers’ attention.
Creating a brand
He urged radio programmers to be innovators, not duplicators, and create a brand, as he has done with the Virgin name. He singled out for praise tastemaking stations like LA’s KROQ and Gotham’s Z100 for becoming a part of listener’s lifestyles.
“You may be able to purchase a radio network for several hundred million dollars, but you can’t purchase loyalty,” Branson said. “For me, going against the grain, against conventional wisdom, against what research demographics and call-out (the process where radio researchers play a song snippet over the telephone to get a reaction) tells us. It means going by your gut.”
As typical in a Branson speech, he reminded that his business philosophy is to keep things small and empower his work force. When one of his companies gets too big, he splits it into smaller entities.
“Our way has always been to develop many different ventures and grow organically,” he said. “I don’t see where the broadcasting business couldn’t profit from this mentality, even if the theory now is to engulf and devour, rather than grow from within.”
He urged execs to put employees first, which fosters a well-motivated work force.
“Every time I’ve given Virgin (Group) employees more opportunities and responsibilities, they have responded with a greater enthusiasm and zest for work,” Branson said. “The results for us have been terrific.”