Podcasts and streaming music are wounding Charlotte radio

Plus: Heart of wealthy Chapel Hill declared disadvantaged; Coke Consolidated stock surges; Wells Fargo CEO rumor mill

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Local ratings fall at 16 of 20 Charlotte stations; ‘urban’ format posts gains

Charlotte-area radio stations lost 8% of their listeners in the last year — a big drop that could show that listeners are defecting to other options such as podcasts and streaming music in significant numbers.

The figures, obtained by the Ledger from market-research firm Nielsen Co., show that the damage between March 2018 and March 2019 was widespread, with 16 of the top 20 radio stations losing listeners. The majority experienced double-digit drops.

It might sound obvious that listeners of terrestrial radio have been ditching it for other options — such as local and national podcasts, Pandora, Spotify — much in the same way that viewers of network TV have turned to Netflix and Hulu and video-subscription services over the years. Yet within the radio industry, that claim is surprisingly controversial.

Death exaggerated: The radio industry has claimed that reports of its demise are premature, suggesting that dips are cyclical, claiming millennials love AM/FM radio, and pointing out, rightly, that their medium reaches far more people than any other. More than 90% of Americans listen to AM/FM radio at least weekly, industry figures show.

But drops in the Charlotte area and elsewhere could reveal larger trends, says Mark Ramsey, a broadcasting strategy and research consultant in San Diego who reviewed the ratings for the Ledger. “I’ve looked at a bunch of markets, December to December, and I found declines anywhere from almost none to at least this large,” he says. “Podcasts, Spotify, Pandora, Apple Music — the assumption is they are all zero? They don’t matter?”

The Charlotte-area ratings from Nielsen showed:

  • Country is king. The two stations with the most daily listeners were Country 103.7 and 96.9 The Kat, though each lost listeners in the last year.

  • Urban formats are thriving. Of the four stations that gained listeners, three were “urban” stations that play hip-hop and R&B. Ramsey says listeners of those stations are less likely to pay for subscription-music services and listen to podcasts.

  • “Oldies” station gains: The station with the biggest gain was 102.9 The Lake, an “adult contemporary” station, which is industry lingo for “oldies” — as tough as it is to swallow that ’80s music is now considered “oldies.” It added nearly 28,000 listeners, or about 20%. The station did not reply to a request from the Ledger to comment.

  • Link losses: The biggest drop in listeners was at 107.9 The Link, another “adult contemporary” station. It lost more than 41,000 listeners, or 27%. It didn’t reply to a message, either.

  • Consolidation: Of the top 10 stations, nine were owned by either Beasley Media Group (five, HQ: Naples, Fla.) or iHeartMedia (four, HQ: San Antonio, Texas).

What it means: Listeners come and listeners go, and there are different ways to measure how many people are listening and for how long. But in a time when consumers have plenty of choices, it seems clear that the trend for terrestrial radio is downward. The question is, can radio stations hang onto some of these listeners by developing their own on-demand products? Local stations often tout their apps and make morning shows available for later listening, but they might have to get even more creative.

Competing choices: Locally, a lot of people and media companies are getting into podcasting. When WFAE, the local NPR station, held a competition this year to find the next great Charlotte podcast, it received more than 370 submissions. Nationally, podcast listening had its biggest year of growth in 2018, with one-third of Americans saying they listen to at least one a month. Streaming is surging, too: Nationally, Americans streamed 611 billion songs in 2018, up 49% from a year earlier (No. 1: Drake’s “God’s Plan”), Nielsen says.

Effect on advertising: Ramsey says radio stations need to be honest with advertisers — and themselves — about the shift away from AM/FM listening. But it’s not the end of the world, he says: “They have to take their lumps from advertisers. They they have to go to advertisers and say, ‘We are still the greatest way to reach people with sound, and here’s how we are going to do that for you across platforms.’”

Where it is all going: “The future of radio is to recognize that there are very few ways to aggregate audiences together around entertainment content that is generated from within that market,” Ramsey says. “How do we connect people with stuff they are interested in? We should be able to do that locally better than anyone else — whether it’s events, festivals or something else. It could mean a variety of things that have nothing to do with what goes over the air. … If you provide real value to your fans, your future looks bright, but it’s going to depend a lot on innovation. If you just want to sell spots harder, then you are just valuing your past.”

Opportunity knocks in Chapel Hill

One of the hottest things going in real-estate investments right now are “opportunity zones,” federally designated areas that offer tax advantages to investors. They were included in the big federal tax cut bill in 2017 and intended to revitalize economically distressed areas.

Now, as the rules have become clearer, developers are announcing some real-estate projects. And it turns out that at least one opportunity zone is not in a downtrodden area: The News & Observer reports that one includes Franklin Street in the heart of wealthy Chapel Hill:

With plans to take advantage of a new federal tax program, Charlotte-based Grubb Properties has acquired one of the largest office buildings on Chapel Hill’s Franklin Street and is eyeing a major renovation for the aging office tower. …

Clark Spencer, a senior vice president for investments at Grubb, said the company was attracted to the building because of its location within a federally-designated “opportunity zone” that stretches from East Franklin Street to Estes Drive. …

Opportunity zones are a new feature in the country’s tax code that allows developers to earn savings on capital gains by investing in economically disadvantaged areas. Most people aren’t likely to think of Franklin Street as a disadvantaged area — though the census tract is home to a lot of students, many of which are renters and don’t have full-time jobs.

“It is a bit of a head-scratcher why it is an opportunity zone,” Spencer admitted in a phone interview, though he noted that the building likely wouldn’t be getting a much-needed renovation without it.

The building is about a block from campus, beside a Cold Stone Creamery and across the street from the venerable Carolina Coffee Shop. The town of Chapel Hill is promoting the zone to investors on its website, and it claims credit for successfully lobbying to have the tract included. The allegedly depressed zone includes a lot of student apartments, retail shops, restaurants and a significant number of fraternity and sorority houses.

Sounds like quite an opportunity … for Grubb and its investors.

Wishful thinking on new bank HQ

There’s a banking rumor going around town. Maybe you’ve heard it.

Like most good rumors, it’s not totally implausible. It mixes some facts with some speculation and a healthy dose of wishful thinking. It goes something like this:

  • Wells Fargo is looking for a new CEO (true).

  • Wells Fargo would like to hire an outsider (true).

  • Wells Fargo would like to hire a woman as CEO (reported by Reuters a couple weeks ago).

  • Cathy Bessant, Bank of America’s chief operations and technology officer, is an outsider and a woman (true).

  • Cathy Bessant has been reported to be in contention for the Wells CEO job (she appears frequently on speculative lists by analysts and industry figures, and American Banker named her the “Most Powerful Woman in Banking” last year).

  • Cathy Bessant lives in Charlotte and is involved in the community here (true).

  • THEREFORE, the thinking goes, wouldn’t it make sense for Wells to hire Bessant … who could then move Wells Fargo’s HQ to Charlotte?

That would also have the advantage of saving Wells some money by shifting more employees here from high-cost San Francisco, where wages and benefits must be huge and where average downtown office space rents on average for more than $81 per square foot — triple the cost of uptown space in Charlotte.

Is it possible? Maybe. Probable? No. These CEO searches can take a while, so it is unlikely that board members know who they want to install at the top job. Institutional forces and traditions are powerful. Then again, with this bank, maybe a fresh start is a good idea. Send that stagecoach east.

The rumor smacks of a Chamber of Commerce-inspired fantasy. The prospect of snatching a second bank HQ from San Francisco 20 years after Hugh McColl did it sounds delightful.

But for now, it’s just a dream. And as they say, if you can dream it, you can meme it. So maybe we can spread these and make it happen:

Reader response

Ledger readers respond to recent articles:

On last week’s neighborhood dispute between former Rep. Robert Pittenger and LendingTree CEO Doug Lebda:
  • I don’t know whose side to take in the millionaire country clubber dispute!

  • Juicy details on the lawsuit — I like it!

  • Great rich-guy theater.

  • The Lebda-Pittenger blow-by-blow made me laugh out loud. 

  • Tear down the Lebda house. It looks like tacky crap in any case!

  • Pittenger is being petty.

  • Life must be terrible for these two #richpeopleproblems.

Have an opinion? Share it here.

In brief:

  • Local home sales flat, prices up: Home sales in the Charlotte region rose 0.1% in April compared with April 2018, and median prices rose 5.6%, the Charlotte Regional Realtor Association said Friday.

  • National news: How a retired flight attendant from Charlotte copes with early-onset dementia. Shocking stat: “There are more people living in the US with Alzheimer’s right now than currently live in Oregon or Alabama.” (Quartz)

  • No scooter citations: The Charlotte City Council passed an ordinance in January prohibiting e-scooters from being ridden on sidewalks in the busiest parts of uptown. Four months later, a police spokeswoman tells the Ledger that no citations have been written yet.

  • Election tomorrow: The Republican primary for the special election in North Carolina’s 9th Congressional District is tomorrow (Tuesday). Registered Republicans and unaffiliated voters in most of south Charlotte are eligible. Polls are open 6:30 a.m. to 7:30 p.m.

Taking stock

Unless you are a day trader, checking your stocks daily is unhealthy. So how about weekly? How local stocks of note fared last week (through Friday’s close), and year to date:

Coke Consolidated posts loss, stock keeps surging

In a down week for the markets, Coke Consolidated’s stock continued moving upward, gaining nearly 16% for the week. Since Jan. 1, the Coke distributor’s stock has more than doubled (up 118% year to date).

The big mover this week seemed to be the company’s quarterly earnings report, in which the company posted a net loss of $6.8M, smaller than the $14.2M it lost in the same quarter in 2018.

But operating income was up big, and sales increased, which apparently was all the market needed to know.

Got a news tip? Think we missed something? Drop me a line at editor@cltledger.comand let me know.

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The Charlotte Ledger is an e-newsletter and web site publishing timely, informative, and interesting local business news and analysis Mondays, Wednesdays, and Fridays, except holidays and as noted. We strive for fairness and accuracy and will correct all known errors. The content reflects the independent editorial judgment of The Charlotte Ledger. Any advertising, paid marketing, or sponsored content will be clearly labeled.

The Charlotte Ledger is published by Tony Mecia, an award-winning former Charlotte Observer business reporter and editor. He lives in Charlotte with his wife and three children.