DARTMOUTH – Radio is not thought of as a sexy media any more. It’s now called "traditional media" or "old media," or worse.
Despite its easy ubiquity, many mouthy know-it-alls have been predicting its dramatic weakening, or even its demise, in the face of new media or satellite radio or some other bugaboo supposedly about to kill it off. It’s not true, though. Radio in Canada has been steadily holding its own in the face of ubiquitous Internet, devices like iPods and new delivery vehicles like satellite radio or broadband.
Small towns have probably never been described as sexy either. But, despite our natural fixation on the larger centres like Toronto, Montreal or Vancouver, much of the nation’s work (like mining, pulp and paper and oil & gas production) gets done in small towns (like Sudbury, Corner Brook and Fort MacMurray).
It’ll be no surprise to industry followers that NewCap Radio has stations in all three of those towns. The company has 77 licenses spread across Canada now and is really the country’s only “pure play” radio owner (even if it does own the two conventional TV stations in Lloydminster, AB).
While it has two stations in Calgary, and a pair in each of Edmonton Winnipeg and Ottawa, the rest of its stations are in smaller centres, from Halifax on down to Slave Lake. About a third of the company’s stations are the only media in town, save perhaps for a community newspaper, said Rob Steele, president and CEO of Newcap Radio during an interview with Cartt.ca this fall.
The company sprang out of Harry Steele’s Newfoundland Capital Corporation, a conglomerate he launched in 1976 along with Eastern Provincial Airlines, a commercial airline serving eastern Canada. The company would add trucking, car dealerships, hotels, community newspapers, commercial printing and so on.
However, in 1986, the company bought CHTN in Charlottetown and began to build a small radio group, adding to the multi-faceted corporation that has come to be known as Newcap.
But when Rob joined his father’s firm in the mid-1990s, he began to recognize the conglomerate’s shortcomings. “You can’t be good at everything,” he said. It was hard for the market to put a value on a company with assets in many industries (EPA was sold to CP Air in 1982, however, but a large oil painting depicting a plan from the former airline in mid-flight still hangs in Newcap’s head office in Dartmouth) and so the decision was made to concentrate on media – and for Newcap, that meant radio.
And since it began in small-town radio, Newcap bought small-market stations first, earning a reputation as a company which was more comfortable running lone stations in Lac La Biche or somesuch than big-city groups of stations.
But those were, and are not now, Newcap Radio’s goals. It just has so far turned out that way. “The low-lying fruit, as it were, was in the smaller markets,” said Rob Steele. “So we bought those up while all the time looking at those larger markets and saying we want to go there when we can.”
Being a pure play radio company might strike some outside observers as a bit dangerous in the media landscape of 2008, given consumers constantly shifting tastes, but Steele is unfazed and believes FM radio still has plenty of life, plenty of growth, left.
Revenue is still on the rise, too, as Newcap reported third quarter revenue, for the three month period ending September 30th, rose 5% to $26.7 million and 7% over the first three quarters to $76 million. It did get tagged for a loss in the quarter as the company’s investments took an $8.5 million hit thanks to the market volatility.
Here are some of the company’s highlights from 2008 so far:
In March, the company re-launched CIQX-FM in Calgary as XL103-FM, "Calgary’s Greatest Hits Radio", featuring classic music from the 60s, 70s, and 80s. Before this, the station played smooth jazz. Ratings results released in July and October 2008 showed improved market share. The company also entered into an agreement with CTVglobemedia to acquire the remaining 50% interest in Metro Radio Group (which owned CKUL-FM Halifax) for $8.5 million.
The company also changed the format of one of its FM stations in Edmonton so that it’s now known as Capital-FM, playing Classic Hits. Recent ratings were very strong for this station.
Then in June, the company launched three new FM stations in Fort McMurray, Alberta, Kentville and Sydney, Nova Scotia. The Fort McMurray and Kentville stations feature Classic Rock while the Sydney station plays Top 40 music.
In July Newcap announced it had an agreement to exchange radio stations with Rogers Broadcasting, which has since been approved by the CRTC. The company will exchange its AM broadcast licence in Halifax, Nova Scotia and receive in return Rogers’ AM licence in Sudbury, Ontario and cash consideration of $5 million. Both parties will switch both stations to FM.
Newcap also announced in July it will buy 12 English FM radio broadcasting licences in Ontario from Haliburton Broadcasting Group Inc. for $18.95 million, subject to CRTC approval. These assets include The Moose stations in Muskoka, North Bay and Timmins. This group of licences is the most significant geographical expansion for the company since 2002 and considerably expands its reach in Ontario. Ten of these licences are in markets in which there is no other local radio station at present.
“Radio is thought of as the poor cousin, it seems, of this media landscape,” says the CEO. “I mean, the sexy industry now is wireless and cable, but radio has a perception problem I think. It’s perceived as this dinosaur, you know, technology is dated.”
But radios are everywhere. It’s ubiquitous and remains the best way to get out various messages – from a charity auction, a big home electronics sale, or a new cut from Carrie Underwood – to local communities.
The idea, added Steele, is to think of the company not as a radio station owner, but one that delivers content any way that it can, starting with its powerful radio signals.
“People always ask ‘what’s going to replace FM?’ Well, technology really doesn’t get replaced, but we’re carving out more niches… so the (advertising) pie is getting carved up a bit,” said Steele.
“We’re seeing a little bit of decline in listenership, not a lot, you know. But with the emerging technologies, you have to view yourselves as we – and I assume other broadcasting companies – do, as an audio content company.”
That means streaming or downloads or wireless – any way Newcap can deliver its station’s content to listeners is fine by Steele, who says that besides radio, he is a fan of Sirius in his car, as well as what he has on his own iPod. “I love music and try to get exposed to new music as often as I can.”
But while getting listeners from around the world who may be listening to Q104 Halifax through their WiFi router in Dublin might be a nifty thing, it can’t be monetized. Local listening is where the bread and butter come together.
Stations have to constantly enhance their brands and develop local personalities that folks identify with and come to know, love and listen to. “And I think we got away from that about 10 years ago,” said Steele. “A lot of radio was just kind of cookie-cutter… people started diluting content by putting a lot of ads on.
“So, in a lot of ways, the emerging technologies have forced the old line technologies like FM radio to get better.”
And they must stay on that track as the economy enters a serious period of uncertainty. "We are cautious heading into the fourth quarter,” said Steele upon the company’s Q3 release last month. "We are monitoring results across our radio network very closely in light of the current market volatility.”
And despite that volatility, more growth is still planned. “We continue to look at radio acquisition opportunities, as they arise, that fit the company’s growth strategy,” he added.
