Pandemic Impact On Media: The View From An Independent Broadcaster

May 13, 2020

I asked Jeff Ziesmann, owner of Middletown's WNKN-FM (105.9) and Dry Ridge's WNKR-FM (106.7) Classic Country stations, about the coronavirus pandemic's impact on his broadcasting business. He's unique among local broadcasters because he's a small business competing with major chains (iHeartMedia, Cumulus, Hubbard, Radio One) that relies on many small businesses to buy advertising. Here's what he wrote:

How are we doing? Well, like everyone else in this business, our advertising revenue has taken quite a hit.

Owner Jeff Ziesmann at WNKR-FM in Dry Ridge in 2017.
Credit John Kiesewetter / WVXU

Clients seem to fall into just a few categories. They are either completely shut down; open partially and experiencing just a trickle of the traffic they had before the lockdown; open fully with reduced traffic due to stay-at-home orders; or they are essential businesses like grocery stores and have actually seen increases in business. The last is very rare, but all of these categories of businesses have one thing in common: They are being very careful about what they spend, how they spend it and where they spend it. And, under the circumstances, you cannot fault them for that.

Your next question was: "Six weeks later, with no end in sight, what do you think?"

There has been an understandable prioritization in all of this toward the medical side of things. Only now are government officials and their constituents getting around to fully appreciating the economic impact of their actions. It is only this economic side of things that my comments here are intended to address - about the impact of the pandemic on radio broadcasters…

Credit WNKN-FM

I have successfully guided our stations through almost every set of economic conditions you can imagine, including the 2008 Great Recession. But this is truly something new. Never before in our history have we quarantined the healthy along with the sick. Never before have we crashed an economy intentionally to prevent the spread of a disease.

There is obviously no road map for a manager or owner to follow in these unprecedented circumstances. We are being forced to write the book on how to do this as we go, through trial and error. And there have been errors.

You could say, with substantial justification, that some of the closures and restrictions are, in effect, a war on small business. How else do you explain the fact that furniture stores cannot sell furniture and clothing stores cannot sell clothing -- to name just two on a very long list of examples -- but Walmart and Kroger can sell both in addition to the supplies they sell that are deemed "essential?"

An additional studio being built in 2017 with the addition of the Middletown WKNK-FM signal.
Credit John Kiesewetter / WVXU

Small business is, by its very nature, specialized business. Yet, in this situation the more specialized you are, the more likely you are to be shut down. These policies created circumstances in much of the retail sector where the biggest businesses are protected while the smallest, most defenseless players are the ones impacted the most.

The lack of thought that went into many of these arbitrary decisions is, I think, slowly beginning to dawn on people. As a result, there is pressure to walk some of them back and to gradually reopen state economies. Unfortunately, this will likely lead to even more confusion in locations such as ours caused by the fact that there is no uniform approach to reopening between the states. What flies in Ohio might be completely different than Kentucky or Indiana.

There is also no doubt that the real toll of the virus is in the millions -- the thousands who have died or gotten sick, plus the millions who have seen their businesses and/or their jobs vaporize before their eyes in the past couple of months. These indirect victims are the collateral damage, each representing the financial well-being of a family or somebody’s lifelong dream in the process of being shattered. As I write this, over 33 million jobs have been lost to this crisis, a truly staggering figure and a figure with massive consequences.

Whether these businesses, jobs and ways of life can be saved or restored remains to be seen. Intermediate government aid, while welcome and necessary, is intended only to be a temporary and partial solution.

The station's promotional van.
Credit John Kiesewetter / WVXU

The great unknown here is the individual -- who ultimately will decide for himself. Will consumers flock back to restaurants, concert venues, travel destinations and so on as soon as they are available to them or will their personal concerns result in a much more gradual return to the levels of acceptance those businesses enjoyed before? How many of their former customers will no longer be able to afford to buy their goods or use their services? How many businesses are already damaged beyond repair and will not reopen at all? Again, there is no history to go by, so we will be seeing the answers in real time as they happen.

As commercial broadcasters, our health is tied -- and tied without recourse -- to the health of our advertisers and the business community in general. The long-term impact on local commercial broadcasters will be significant, because it is very difficult to predict consumer behavior and the exact nature of the many lingering effects from the crisis for advertising purposes. However, a strong case can be made for advertising aggressively to convince a consumer that a newly reopened business is safe and to gain market share during a period when the competition might be more conservative in their approach. Quality content and marketing creativity will have to be the main priorities if the industry is to not only survive, but eventually prosper again.

You ask if this is tougher on small broadcasters like us or our larger competitors. These days, (especially in major markets) few "local" broadcasters are actually "local broadcasters." The vast majority are the remote outposts of large corporations that own anywhere from dozens to thousands of stations scattered around the nation. There are advantages and disadvantages to being in their shoes and also to being in ours.

They enjoy economies of scale. In times like these they can cut deeper and wider by consolidating a job task for multiple markets in one, centralized location. They enjoy vastly superior representation in front of national advertisers as well as the increased advertising flexibility an eight station cluster in a given market provides. But many, if not most, of them are (still) deeply in debt, are concentrating on digital advertising to the detriment of their core business, are operating out of high-rent studios and offices instead of utilitarian facilities and are, unfortunately, over-staffed.

Sign at the WNKN-FM tower in Middletown,.
Credit john Kiesewetter / WVXU

On the other hand, we have those utilitarian facilities, located inconveniently, but with enough space to distance easily. Because of the long drives involved to get to our studios, a large percentage of our staff already had the capability to work remotely. We had the technology in place already to easily meet any contingencies the virus imposed when the crisis began. And, we have a staff of professional self-starters who can be depended upon to deliver the very best service to listeners and advertisers regardless of where they happen to be physically located at any given moment.  

We are also fortunate to enjoy outstanding relationships with local advertisers, many of which use little other media and the majority of which continue to advertise - even in times like these. They relate to us because we are one of them. Our debt level is very small by comparison to the larger companies. If we have made fewer cuts, perhaps it is because we were much closer to being "right-sized" to start with. As many of our (currently closed) clients reopen, we look forward to guiding them through the process of re-establishing their businesses through advertising.

So far, our ratings have stayed level during all of this. I think this is indicative of the bond between our stations and our listeners. Our policy of a unique music format coupled with a high-quality presentation, ample news coverage and a lower commercial unit count than our competitors has helped. Our audience seems to use us when they can, wherever they are, regardless of what their day entails. For that, we are truly grateful.

We will have additional sales issues if the ban on sports extends into the UK season, since we carry their football and basketball broadcasts on WNKR. But we are not experiencing the massive losses taking place nationwide as the result of the cancellation of all sporting events. I expected to see the current ratings bounce for news/talk in view of what is going on. Long term, however, I have serious doubts that listeners really want four hours a day of governors, mayors and health officials, especially when there is only about 15 minutes of actual relevant content in those hours. We will see. It promises to be interesting.

Middletown's WPFB-FM farmhouse studio, dating back to 1947, has been empty since Northern Kentucky University bought the station in 2011, and moved broadcasting to Kentucky..
Credit John Kiesewetter / WVXU

Since we acquired Middletown's WNKN (105.9) from Northern Kentucky University in late 2017, we have achieved, by far, the highest ratings for the station in its entire 60-year history. For the first time, the station is truly a major factor in the Cincinnati metro market, in addition to being a significant player in Dayton. It has taken us less than three years to achieve what couldn’t be done in the previous six decades. Added to WNKR-FM and sold in combination, it is formidable. We were well on our way to fully monetizing that growth before the current crisis hit. Our hope is that we can resume where we left off as the restrictions on business slowly lift.

I believe the restrictions will be largely lifted over the next 30 days. We are already seeing movement in that direction. It simply isn’t economically feasible for the nation to leave them on much longer than that. However, if that is wrong and we are still doing this in a year, the entire industry will need a massive bailout.

Our licenses come with a service requirement. We are expected to continue to provide that service regardless of the financial circumstances. However, no broadcaster, big or small, commercial or non-commercial, can survive indefinitely with a mere fraction of the revenue they used to have.

            --Jeff Ziesmann, Grant County Broadcasters