RADIO ONE, INC.

COMPANY

Radio One, Inc. is a multi-media company that primarily targets urban consumers. While the company primarily focuses on radio broadcasting, it also has ownership in TV One, Reach Media, and Interactive One, which are digital resource outlets that provide users with

information and news. With fifty-five broadcast stations in sixteen United States markets primarily geared towards African-American listeners, Radio One is the largest radio broadcasting operation [2].

Radio One has also branched out in television media. It recently acquired a controlling interest in TV One, which produces cable programming that like the radio network is designed to target a primarily African American audience [4].

KEY EXECUTIVES

BACKGROUND

Radio One is targeted at minority audiences and was itself founded by an African American woman, who continues to own a majority stake in the company. Catherine Hughes began her career in gospel radio in Washington DC, before eventually buying her first station with the help of bank loans, her own savings, and a loan from the African American venture capital firm Syncom, which funded African American media start-ups. Hughes’ overcame constant struggles with debt, eventually hosting her morning drive show herself as the bank refused to allow her to pay a salary for someone to host the slot. Gradually, Hughes’ venture achieved profitability and expanded, though she still had to contend with banks that insisted she programmed her stations to include white music for white audiences. Hughes was convinced that black programming was the way to profitability, and the entire history of her company vindicated her insight and self-belief. Hughes retired in 1993 and was replaced by her son Alfred C. Liggins III, who oversaw the massive expansion of the station in the 1990s, following the relaxation of ownership rules. Ironically, Hughes had feared that relaxing ownership rules would concentrate ownership in the hands of a few large corporations: Radio One has become the largest African American owner of stations in the United States [9].

In 2012, Radio One was expected to generate revenues of $433 million dollars. When asked how she had the vision to start such a venture, Hughes pointed to her need to take care of her son. She did not want him to become another statistic as part of the loss of African American youth in our society [10].

In 2013, Radio One acquired a majority stake in Reach Media. This allowed the company to expand its black talk radio programming, designed to offer an alternative voice to white conservatives such as Rush Limbaugh. The network features the Reverend Al Sharpton and other popular African American hosts and commentators [11].

However, before gaining success, Radio One faced financial difficulties in the mid 2000s and was forced to abandon its black audience formatting in some of its stations. In 2007, Radio One changed its format in Houston, Columbus and Cincinnati to cater to mainstream white audience because of the difficulties of generating sufficient revenue. At the same time, black radio stations in New York City were forced to merge because of falling revenues [12].

ADVERTISEMENTS

Part of Radio One’s success has arisen from its ability to get customers to advertise on its shows by convincing them that they can connect with African American audiences and give them the tools they need to do so. Vision Critical, a marketing organization, has been instrumental in helping Radio One develop the systems it needs to connect with its advertisers and inspire new companies to advertise on its stations [14].

RESTRUCTURING

Recently, Radio One has restructured certain facets of itself in order to target the modern African-American. On March 1, 2016, Radio One reported that Deon Levingston would return to the company as the General Manager of Indianapolis and Regional Vice President of Detroit and St. Louis. Since leaving Radio One, he played a role in the success of mainstream hit African American shows such as The Steve Harvey Morning Show, The Wendy Williams Experience, and Circle of Sister [14]. This experience has given Levingston the tools to create strategies to more accurately target modern urban consumers.

 

 

FINANCIALS

Since its first radio station was acquired in 1980, Radio One has hired 1,740 employees and has accumulated a sales revenue of $303.2 million [16]. Radio One held a revenue increase each year since the start of the company until 2014 when its revenue decreased by 2% from 2013’s fiscal of $448.7 million to 2014’s fiscal of $441.4 million [17]. As of April 24th, 2016, Radio One’s stock is steady at a high of 1.8300 and a low of 1.8300 with a declining 7.11 per cent change. Radio One holds an Avg Vol (3m) at 42,237 and a market cap of 92.36 million [18]. While Radio One’s stations have received higher ratings in the first quarter of 2016 than the fourth quarter of 2015, Alfred Liggins, the CEO of Radio One, reported in February 2016 that the company’s revenue has decreased. Radio One’s revenue decreased by 4.3% in the first quarter of 2016 since the fourth quarter of 2015 because of  a decrease in listeners in the Houston, Atlanta, Baltimore, and Indianapolis markets. Liggins explains that Radio One’s strategy to increase ratings have worked; however, the company is still searching for ways to increase revenue. Liggins feels that one of the issues  the company faces is that there are not enough young account executives employed [19]. While many Radio One listeners are of the 18-24 demographic, some Radio One executives are not young enough to execute appropriate strategy plans targeted towards a younger demographic. In addition to the company’s decline in overall revenue, Radio One saw an advertising revenue decrease of 5.2% between the fourth quarter of 2015 and the fourth quarter of 2014 [20].

DEBT 

Despite its success, Radio One carries around $1 billion dollars of debt that it chose to refinance in May of 2015. CEO Liggins is confident that Radio One can continue its profitability in the light of increasing minority audiences and the increasing spending power of underrepresented groups. As he stated, “In the continuingly browning America, multicultural advertising continues to rate strong and move forward and I think that we’re right at the epicenter of it. We’ve got some more exciting announcements and initiatives in the coming months as it relates to really firming up and filling out this platform.” [21]

FUTURE

Company executives have had the chance to examine the reasons behind the company’s revenue declined and are prepared to set up a strategy to increase revenue for the next quarter. Radio One’s plan for the next quarter is to develop its cross-platform sales and marketing strategy through One Solution which offers advertisers more opportunities to reach Radio One’s urban consumers [22].

SOURCES

[1] Radio One Logo. Retrieved April 25, 2016. http://www.earlboston.com/testimonials/

[2] Radio One: The Urban Media Specialist. Retrieved April 25, 2016. http://home.radio-one.com/about-us/

[3] Interactive One Logo. Retrieved April 25, 2016. http://www.frequencynews.com/wordpress/urban-music-formats/interactive-one-presents-its-all-black-music/

[4] Radio One: The Urban Media Specialist. Retrieved April 25, 2016. http://home.radio-one.com/about-us

[5] Alfred C. Liggins Headshot. Retrieved April 25, 2016. http://soba.iamempowered.com/content/alfred-c-liggins

[6] Linda Vilardo Headshot. Retrieved April 25, 2016. http://www.directwomen.org/alumnae/alumnae-biographies/linda-j-vilardo

[7] Peter D. Thompson Headshot. Retrieved April 25, 2016. http://thesoundla.com/2014/12/mark-thompson-host-new-mark-morning-show-beginning-february-2015/

[8] Catherine Hughes Headshot. Retrieved April 25, 2016. http://www.mbda.gov/blogger/mbda-agency/women-history-month-profile-catherine-l-hughes

[9] Radio One, Inc. – Company Profile, Information, Business Description, History, Background Information on Radio One, Inc. Retrieved April 25, 2016. http://www.referenceforbusiness.com/history2/40/Radio-One-Inc.html

[10] Cathy Hughes, Radio One: From Teen Mom To Media Mogul. Retrieved April 25, 2016. http://www.huffingtonpost.com/2012/08/17/catherine-hughes-radio-one_n_1798129.html

[11] Radio One, Reach Media Launching Urban Talk-Radio Network. Retrieved April 25, 2016. https://www.targetmarketnews.com/storyid10310501.htm

[12] A Radio Merger in New York Reflects a Shifting Industry. Retrieved April 25, 2016. http://www.nytimes.com/2012/04/30/business/media/a-radio-merger-in-new-york-reflects-a-shifting-industry.html

[13] Vision Critical Logo. Retrieved April 25, 2016. http://www.lisagoller.com

[14] Radio One Announced Changed in Local Leadership. Retrieved April 25, 2016. http://www.prnewswire.com/news-releases/radio-one-announced-changes-in-local-radio-leadership-300228791.html

[15] Deon Levingston Headshot. Retrieved April 26, 2016. http://www.insideradio.com/features/insider_interviews/q-a-deon-levingston-gm-emmis-communications-nyc-cluster/article_4ed43390-7369-11e5-8d0c-ff558f527f8a.html

[16] Radio One, Inc. – Company Profile, Information, Business Description, History, Background Information on Radio One, Inc. Retrieved April 25, 2016. http://www.referenceforbusiness.com/history2/40/Radio-One-Inc.html

[17] Radio One, Inc. Rankings & Reviews. Retrieved April 26, 2016. http://www.vault.com/company-profiles/radio/radio-one,-inc/company-overview.aspx

[18] Yahoo! Finance: Radio One. Retrieved April 26, 2016. http://finance.yahoo.com/q?s=ROIAK

[19] FMQB Thinking Ahead. Retrieved April 26, 2016. http://www.fmqb.com/Article.asp?id=2993698

[20] FMQB Thinking Ahead. Retrieved April 26, 2016. http://www.fmqb.com/Article.asp?id=2993698

[21] Radio One Gears Up For TV One Deal. Retrieved April 25, 2016. http://www.insideradio.com/free/radio-one-gears-up-for-tv-one-deal/article_4de2e636-cecb-11e4-9469-0701768ec384.html

[22] Radio One Gears Up For TV One Deal. Retrieved April 25, 2016. http://www.insideradio.com/free/radio-one-gears-up-for-tv-one-deal/article_4de2e636-cecb-11e4-9469-0701768ec384.html