Emmis Communications CFO Patrick Walsh, while at the Noble Financial Conference in Charleston, SC yesterday, was asked about the threat to terrestrial radio from satellite radio.
Walsh said that while he saw satellite radio as "competition" he did not consider it to have a "measurable effect." He cited other outlets such as the iPod and Internet radio as each being an additional "threat" to this company.
"We at Emmis have viewed the threat as being much more fragmentation from the iPod and Internet streaming and the fragmentation from media, whether it be YouTube or other media being delivered on the Internet just fragmenting peoples' time.
"Satellite radio doesn't show up in our diaries very often. The people that utilize satellite radio often toggle between AM and FM and satellite radio, and it really hasn't caused a measurable effect in our business yet. We reach hundreds of millions of people every day. Ninety-three percent of Americans listen to AM/FM radio every week.
"Satellite radio is a niche business focused on people willing to spend 13 dollars per month for the radio. Which for long-haul truckers or people who are advocates of a music format which may not reach a mass market - if you're a passionate Blue Grass listener in New York City - it probably makes sense for you.
"But I think they're still challenged. It's a challenging business model to launch a billion-dollar asset in space and try to build up a mass-market audience quickly. And with 15 million subs it's tough, which is why they're trying to get the merger done. In large measure they're trying to work with the government to solve a business model problem.
"So, it's not one that keeps us up at night. What we're working on is trying to offer compelling programming in a multi-platform environment to grow our business.
Patrick Walsh concluded by saying that satellite radio "is competition but I don't think it's the principal competition for radio going forward."
In essence, he's just define radio - and satellite radio - as being part of a greater audio entertainment market. Thanks Patrick, that was quite the compelling argument there.
"What we're working on is trying to offer compelling programming in a multi-platform environment to grow our business."
Did Mel or Gary say that? I get confused in the large audio entertainment arena.
I guess the comments aren't too surprising though...If he'd come out and said "Hey, Satellite Radio is a threat and we need to watch out. We're losing listeners, and could lose even more if the merger goes through", his NAB membership would likely be revoked, and Emmis would be made outcasts of the radio landscape...Or something. It IS fun to watch these radio guys argue against satellite radio as competition, all the while proving it IS competition and is part of the broader landscape.
Terrestrial should at least learn to get its story straight.
It's hilarious to watch these guys constantly contradict themselves. It's one thing to say "yeah, we compete with satellite" but it's another to completely support the "greater audio entertainment" argument.