To most people, 2009 looked like a catastrophic year for radio. Advertising revenue dropped 23 percent during the first nine months of the year. The introduction of Arbitron Inc.’s Portable People Meter showed that people listened to radio stations in shorter bursts than previously estimated. And on Dec. 20, Citadel, the third largest radio broadcaster in the country, went into bankruptcy reorganization.
But to Neal Schore, chief executive of Triton Media Group in Sherman Oaks, it’s paradise.
“There has never been a better time to be in radio,” said Schore. “Our company is heavily invested in the growth and re-emergence of radio. It’s time for the re-invention of radio.”
Triton, which produces and distributes radio programming, is growing thanks to an emphasis on developing Web sites, and providing them with online content and promotions.
Triton’s production business is old-school radio, as a network supplying programming to stations. The network produces shows featuring political commentators Laura Ingraham and Neal Boortz, plus pop music programming, jokes of the day and news tidbits. Triton makes money by attaching advertising to the content.
But its Internet business is designed for the age of Web 2.0. Triton sells software for streaming audio and video, and manages loyalty and reward programs that drive traffic to station Web sites – listeners can log on to a Web site and enter drawings for concert tickets or music downloads, for example. The company also sells software that measures the audience of online audio ads, and it sells ads for station Web sites. Triton then splits the ad revenue with the station.
The company estimates 2009 revenue at $225 million, with 80 percent coming from traditional radio content and 20 percent from Internet services. “Both sides are growing, but digital is the heavier growth sector,” Schore said.
Web site clients in Los Angeles include KRTH-FM (101.1), KIIS-FM (102.7) and KFI-AM (640). Triton has 5,100 client stations across the United States for its digital services.
Schore expects an ad-buying rebound this year as the downturn eases. Radio was hit especially hard by the recession, because the medium’s largest advertisers – automakers, banks and retailers – didn’t buy the airtime they used to because they were in crisis mode.
Meanwhile, the Internet side of the business is growing, as online ads offer measurement tools that help advertisers know where their dollars produce the most sales.
“We expect the recovery on the ad side to be heavily dependent on accountability,” Schore said. “Radio has always been a targeted medium so when you combine traditional radio with the real-time metrics of streaming audio, it creates a compelling package for advertisers.”
As advertisers and their agencies learn how radio and the Internet work together, Schore expects more money will pour into radio advertising, starting this year.
But Mary Beth Garber, president of the Southern California Broadcasters Association, said there are lots of companies trying to help stations monetize their Web sites, each with a different measurement system, creating a marketplace of confusion. Plus, the marketplace is evolving as digital agencies enter the field to handle online ads.
“What’s difficult is translating the data we have into a form that digital agencies understand,” she said. “That’s where Triton and others are stepping in. But the challenge is selling to the digital agencies because it’s very different from how you sell radio.”
Ahead of history
Schore, a former private equity fund manager, started Triton in 2006 with partner Mike Agovino, a former executive at radio ad sales firm Interrep. They had financial backing from Oaktree Capital, a private equity fund in Los Angeles.
Even as Triton began with mostly traditional programming, the founders knew that the Internet side would be their growth engine.
“We launched knowing that broadcasters would need our service, but they might not yet recognize that need,” Schore said. “I attribute our success to focusing on a need in advance of the marketplace recognizing what was happening.”
Today, Triton’s primary shareholders are the founders; Oaktree; and Black Canyon, another L.A.-based private equity firm. About 100 of the company’s 550 employees work in the Sherman Oaks headquarters, or in offices and recording facilities around Los Angeles. The others are in offices in most major United States markets.
In addition to riding the anticipated upswing in advertising for 2010, Schore plans to expand his services beyond radio. He believes TV stations, newspapers and even sports franchises can use Triton’s loyalty programs and site management software.
Finally, he hopes to prove wrong the skeptics who predict the death of radio because of MP3 players, the Internet or other new media. He also notes that 92 percent of the U.S. population listens to a radio station every week.
“When TV launched, people said radio was dead; when cable TV launched, people said it would hurt radio; and when satellite radio launched, people thought it was the end of over-the-air radio,” Schore said, “none of that happened. Although the ad market has been challenged the last couple of years, the audience has not been challenged. Radio stations still have an incredible connection to their listeners.”
Triton Media Group
HEADQUARTERS: Sherman Oaks
FOUNDED: 2006
CORE BUSINESS: Radio programming and Internet services
NUMBER OF EMPLOYEES: 550 (up from 310 a year ago)
GOAL: Turn radio station Web sites into revenue generators
THE NUMBERS: Estimated 2009 revenue of $225 million, 80 percent from programming services and 20 percent – the fastest growing segment – from Internet services
