To the 47-year veteran of radio, iPods, digital signals and Internet streaming are as much opportunities to be exploited as they are threats to Regent Communications Inc., a company that posted $84 million in revenue in 2004.
“Radio, ever since I’ve been in it, has been called ubiquitous,” says Stakelin. “Well, broadband is becoming ubiquitous, and we don’t look at it as something to be feared or brand-new competition out there. We look at it as opportunities to grow and expand our distribution system and expose our product to more and more people.”
President and CEO since last year of the 900-employee company he and partner Terry Jacobs started in 1996, Stakelin is following a strategy of acquiring radio properties in mid-sized markets and clustering stations in each to gain economies of scale and provide programming across a variety of formats.
Stakelin talked with Smart Business about how he’s stretching radio’s opportunities via new technology and why radio has to be local, local and local.
Have you focused on mid-sized markets because of your core competencies or because of the opportunities?
It’s a combination. Core competencies are certainly there, but I think one, it’s the reality of the marketplace. This is not your daddy’s radio company. The new opportunities that are being brought by the expansion of media convergence just give brand-new opportunities to lots of people, and we want to make sure that we expand and play in the modern-day arenas.
How do you evaluate opportunities for expansion?
We examine all the opportunities for the distribution of our audio product. Radio is a product-driven business, and it’s the product that is the key, the content, the software, if you will, of this business.
The very first thing we do is try to make sure we are producing content, programming that is entertaining and informative and worthy of the consumer’s time. As long as the consumer wants what we have and is spending time with us, then we have our core element, our core business in place.
The rest of it is simply expanding into the new areas going forward with extending the distribution system.
How do you determine what properties to buy?
We like for it to be a good technical facility. If they can’t hear it, then it’s hard to grow it. So you want to make sure you buy a competitive signal.
All radio signals and radio stations aren’t created equal, so we try to make sure that we are buying a technical facility that can be competitive. We also want to go into a market that is big enough where we can generate a minimum of $1 million in cash flow, because what we’ve found is in order to attract good talent, do good programming, the market has to be of a certain size to sustain that.
What is your strategy in each of your markets?
What we look for is the ability to cluster or own as many radio stations in a given marketplace that the law will allow.
It’s very difficult anymore for a lone ranger to exist in a marketplace. It’s very difficult for someone that owns one or two radio stations to compete with someone who owns six.
After that, we take a look at format opportunities and how we cluster them, how we market them and how we sell them to the different segments of the consumer and advertising base in each of those markets.
We go in by opportunity. You buy something looking for a new opportunity, or you buy something knowing that you can do it better than the guy you’re buying it from. So you have to analyze the marketplace, see what formats are there and how well things are being done.
Then you can make your decision as to how you’re going to design your product for the marketplace.
How do you determine that you can do it better than the other players in a given market?
You make sure that you understand and analyze the market properly. You certainly have a lot of data in your hands.
If you’re looking at buying a specific facility, you know what the ratings are, so you know whether or not they’re good ratings with the format they have. If you have the financials, then you know what their margins are, what share of the market revenue they are retaining.
Is it in line with the ratings they have, are they underperforming or overperforming? How many competitors are there in that particular format, and might they hinder your growth?
There are all kinds of things you can analyze, but saying you can do better than the other guy is usually based on the fact that they have pretty good ratings, but they are unable to sell and market their product.
How does your selling and marketing technique differ from others in the industry?
A large part of my background was as the CEO of the Radio Advertising Bureau, developing sales and marketing, developing different techniques and systems and teaching and training programs. We put a large emphasis on it inside our company after the development of a product, which is always primary to our operation.
Even in downtimes, as a small company, we’ve been able to continue to perform at the top of the radio sector. I contribute that to the fact that we are able to do so much of what we call direct business without the middleman or the agencies in a lot of our marketplaces.
We’ve coming up with the ideas, we’re establishing the approach and the relationships and partnerships directly with the client, and that means we’re more in control of our financial destiny rather than relying just on ratings or cost-per-point or agencies to place business.
How do you develop strategies to take advantages of those opportunities?
It starts out with trying to make sure that you educate yourself and your people to the opportunities that are there. We spend a great deal of time as a senior management team educating ourselves so that we can come up with the strategies and the education of our own people to be able to play in this game and expand, rather than fear change and sitting on the sidelines hoping we’ll be OK.
How do you view the challenges posed by emerging media?
New technologies have come along ever since I’ve been in the business. I can remember when 8-track tapes would put us out of business, cassettes would put us out of business, movies would go out of business because of television.
I see what’s happening now with the iPods, satellite radio and other delivery systems as a continuation of that evolution, and certainly, the marketplace continues to change. It’s the person who can take the content and keep the interest and the time of the consumers with whatever, they’re going to win the battle in the end.
How to reach: Regent Communications Inc., www.regentcomm.com