Local Radio’s Future May Depend On Being More Local, Not Less

Local radio has no shortage of challenges. Agency dollars have dwindled, digital platforms have captured an ever-growing share of local ad spend, traditional audience measurement is increasingly difficult to rely on, and younger listeners are growing up without the same relationship to the radio dial.

But Tom Birch isn’t ready to write radio’s obituary.

In the latest episode of In the Vicinity, Tim Hanlon sits down with the Lakes Media owner and radio research pioneer to get a ground-level look at what’s actually happening in small-market radio.

Listen to the full In the Vicinity podcast above or get it on Apple Podcasts and Spotify.

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Tim Hanlon: Hi, hello, and welcome. You are In the Vicinity. My name is Tim Hanlon. I am the founder and the CEO of the Vertere Group here in Chicago, where we consultatively advise tons of companies in and around the media and technology spaces. Spaces? Spaces. Yeah, that's what I'm trying to say. It's been a long day.

Give me a break. And I'm happy to welcome you to the proceedings. As you know by now, this is our little weekly sojourn into all things local media, and we're gonna turn the corner this week and step out of the TV space where we've spent an inordinate amount of time over the last couple of weeks and go into the the world of local radio, which is having its own set of issues for sure.

And I couldn't think of a better person to rope into the conversation this week than my old pal Tom Birch at Lakes Media. So Tom Birch is a name you may know if you're in and around the radio business in the past. Not only was he a boss jock back in the day at the old Y100 Miami and KOMA in Oklahoma City, that jingle that you heard probably preceded even his time there in the late '70s.

But also as the founder of a, an important and oft-forgotten challenger to then the supremacy of Arbitron, which was at the time, back in the '80s and '90s the gold standard and frankly maybe even the monopolistic player in the world of radio ratings upon which the transaction of advertising relied upon.

We'll talk about that story of founding Birch and what it began in bringing new dollars and new sensibilities into measurement. But Tom has now come full circle after an amazing career in front of and behind the microphones. He's the owner of Lakes Media, which is a group of radio stations centered in the northern North Carolina and Southside Virginia region.

It nibbles around some of the DMAs in that area, but also stations that literally are dependent on and solely focused on their specific local towns and counties. It's a hearty group of stations and as you'll hear from Tom, endemic to the region and emblematic of what small group owners today endure and deal with in terms of challenging all the other media opportunities that are out there from the world of digital and television and streaming and all these kinds of things.

The challenges are very real but the opportunities are also very real as well as the uniqueness of the proposition. You'll hear from Tom more eloquently than I'm fumbling in this description about how local radio can stand out as a unique proposition in a sea of media choices out there that seemingly have ignored or forgotten the regions that they were originally set up to entertain and to inform.

So I'm not gonna waste any more time. You will thoroughly enjoy this conversation. Let's learn more about the reality check about what's going on in local radio with my pal Tom Birch. We had this conversation late last week, and I encourage you to please, as always, enjoy.

Give us some background on what you do today, and then I wanna backtrack because your background is phenomenally interesting and very well suited, I think, for understanding the real world that local radio is. But where do we find you today, in your career? You're in North Carolina, correct?

Tom Birch: Northern North Carolina and Southern Virginia. And we have a group of six radio stations, FMs and AMs with translators. And our audience size, our monthly cumulative audience is about 150 to 160,000 different listeners. The radio business, I bought these radio stations. We call our group Lakes Media. 

Tim Hanlon: What markets are you in, Tom?

Tom Birch: We are in Danville, Virginia, which is in the Roanoke-Lynchburg DMA, South Boston, Virginia, also in Roanoke-Lynchburg. We're in Oxford and Henderson, North Carolina, and in South Hill, Virginia, which is in the Raleigh-Durham DMA. So these are very small markets. I bought these radio stations in 2005, and I've seen a dramatic change in the way business is being conducted since we first bought the radio stations.

Tim Hanlon: All right, we'll get into that in a minute. Why did you buy these radio stations? Is this a career change, evolution, and stuff, and then we can maybe backtrack, and then we'll go back to the current state, because I wanna drag your past into all of this. 

Tom Birch: I bought these stations, believe it or not, thinking that this would be my quote unquote "retirement."

Big mistake. It's not my retirement. I'm working harder now than ever. As I built Birch Research Corporation, which we ultimately sold to a company that became Nielsen in the 1980s. And then in the 1990s, I started a number of different businesses. I ultimately ended up in the late 1990s working at Simmons Market Research Bureau with my former business partners.

And after I left that company I went out for a couple years trying to figure out what to do, and I thought, "You know what? I love radio, so I'm gonna try to find a small group of radio stations that we can afford to buy, that are profitable, and that we can build." And I found this group originally bought three radio stations from a guy named Tom Joyner, not the Morning Man Tom Joyner, but the broadcaster Tom Joyner, who had built a number of very successful radio stations and groups across the southeast.

I bought from him our stations in Oxford and Henderson and in South Hill, and then a year later, I added South Boston, WHLF, and then two years later, I added our two stations in Danville. So we ended up with the group that we have now. 

Tim Hanlon: All right. We'll talk about the ratings thing in a second as well, but we finally get to it.

You're a radio guy from your earliest days as a professional, or maybe even before being a, quote-unquote professional, was this a return to that? What were you doing earlier in your career, and what did you think you were getting into by then, if you will, returning to radio in this way by buying stations in the aughts?

Tom Birch: I thought that this was gonna be a very easy acquisition. And, back at the time in 2005, these radio stations, about 30% of our revenue was derived from advertising agencies, and 70% local. And between 2005 and about 2009, that was very stable. It started to deteriorate after 2009, and after COVID 2020, it tanked.

At the present time, about 5 to 10% of our revenue is now agency derived, and the rest is local. And what's happened is digital is taking a huge slice of our business, and our tiny little staff is not able to contend with that. And we could talk about what we're doing about that now, but we've lost a lot of revenue to digital.

Tim Hanlon: Okay, but these stations, right, are the way you describe them, are quote-unquote small markets, or maybe not, right? They also traverse some bigger DMAs and stuff too. So maybe explain a little bit about how uniquely positioned, positively or negatively, these properties might be given that you're ostensibly part of a bigger DMA, perhaps not with the reach across all those DMAs.

But you're also smaller and more community-oriented by level of size and stuff too, separate from the DMA. How does that play into the ad agency versus direct local sales dynamic? 

Tom Birch: The most important thing about our radio stations is that we are local. 

Tim Hanlon: Okay, define that. Because I think a lot of people say they are, but they're not, right?

Tom Birch: Our morning men have been on the air for decades, and they are the Johnny Carsons, if you will, of their local markets. They walk down the street, everybody knows them.

Our salespeople are members of the chambers of commerce, of local organizations. We are completely connected locally. One thing that we're doing that may not be common to most radio station groups is that 100% of our over-air programming is simulcast online. We're streaming. Back in 2014, I was fortunate to put a deal together with iHeartMedia, and so we are on iHeartRadio, on the iHeartRadio app, which is incredibly important to us.

Our local revenue is derived primarily on relationships. The two Rs in our world is our relationships and results. 

Tim Hanlon: And how does your sales staff then derive revenues, plural both from over-the-air as well as digital, and maybe beyond ad agencies which are declining, how else do you derive revenue?

I'm curious, especially on the digital side, how your revenue comes from that too, because I have to think that you sell, some of that can be sold, quote-unquote, "locally," but you're probably also becoming more enmeshed into the programmatic technologies that surface your zip codes that you cover, et cetera, for the digital ads.

Tom Birch: We are way behind Tim in this, and this is why just last week I signed a deal with Townsquare's Ignite subsidiary, and Ignite is gonna come in and train our people. They're basically gonna be our white label provider of digital services, something we should have done five years ago at least.

We have right now almost zero digital revenue coming into us, and I think the potential for us is that we can add. To give you a perspective. This small company does about a million dollars a year of revenue. We're profitable. But we that means that we're doing $80 to $100,000 a month in over-the-air revenue.

I think we can add $10 to $30,000 a month in digital with this relationship that we're putting together with Ignite based on my conversations with them and my research that I've done on their current partners. So I think there's a big upside to us. But right now we're nowhere in digital.

Tim Hanlon: I was not looking for a self-induced mea culpa of any sorts. Is that indicative of what most, shall we say, smaller market local radio station dynamics have been, where it's been all hands on deck, keeping the signals alive, keeping the relationships and the ad flow still coming to the extent you can, but then figure it out. It's a priority, yet it's not a priority, right? Versus say, being a part of a bigger conglomerate where those things are a little easier to essentially put into place. 

Tom Birch: My tiny sales staff, and when I say tiny, I have one full-time salesperson and four part-time sellers.

And they're very smart people. One of my quote, unquote, "part-timers" was the president of a major advertising agency in Montgomery, Alabama, and she knows exactly what she's doing, and she's spearheading this drive into digital for us. But most of our people know nothing about selling digital, so this is gonna be an education for them and we're going into training believe it or not next week, for the next two weeks, and we hope to hit the ground running in late September with our program to start recruiting digital revenue from local advertisers.

Tim Hanlon: See, this is great because this gives us a real-world view of what's going on at the ground level, and I'm sure there are hundreds of other stations in similar situations that are trying to figure out their best way to move forward. Yep. Some of them frankly losing their AM signals or station groups getting rid of some of their signals and stuff.

But tell me this, though. I’d like to know what you thought you were getting into versus what has transpired over the last number of years. Yeah, I'm really more interested in the local radio, quote, unquote, all things digital, all that kind of stuff, all the extensions.

Is there still, I wouldn't call it a benefit, but a positive aspect to the business and/or the proposition versus some of the, I would argue, probably more common narratives of negativity out there because of the changing dynamics of media and digital and stuff. I have to think there's something that still keeps you compelled to stay with this business.

Tom Birch: Oh, it's fun. I love radio. You should turn on our stations. Go to lakesmedianetwork.com, click on one of our station websites and listen in. These stations sound fantastic. I enjoy listening to them personally. I, by the way, I program them, and the way I do it is we subscribe to Media Base, and I know the radio stations across the country that have the best research.

And back in the day, that's how I made my living. But before I started in audience ratings, I developed call-out research, and I was one of the pioneers of call-out research in the 1970s. And call-out research, back in the day, consisted of us having a panel of listeners, partisans to our format, whether they listened to our station or our competitor, we would recruit them into our sample.

And we'd play about 12 to 15 segments of songs, and we'd ask each panelist to rate. First, are you familiar or unfamiliar with the song? Second, on a scale of one to five, whereas one, I hate it, and five, I love it, we'd have them rate the song. That's what we call a semantic differential. And then our last question is, are you not at all, somewhat, or very tired of hearing it?

And we fed that into a computer program that I developed back in 1976, and it produced a playlist that was perfect. This is what people really wanted to hear. And by the way, it didn't sound anything like what we were playing before we did this research, and nothing like our competitor across the street.

Tim Hanlon: By the way, for our audience, where were you in 1976? What market and what were you doing?

Tom Birch: At that time, I was the program director of KOMA in Oklahoma City, and our competitor, when I arrived at KOMA, our competitor, WKY, which is owned by the Oklahoma Publishing Company, which also owned the local TV station and the newspaper, they had a 16.7 share of audience, and KOMA had a 4.5.

One year later, after I plugged in this call-out research and moved it up against WKY, I exited with KOA having a 10.6 share and WKY a 10.1 share. It was the first time in 20 years that KOA beat WKY. And by the way, an aside, WKY had a commercial load of about 12 minutes an hour. We were playing 18 minutes of commercials an hour.

But because our music was exactly what people wanted to hear, that's why we succeeded. And so today, what I'm trying to do, even though I don't have capability of doing call-out research with these little radio stations, I emulate larger stations that I know are using these research practices.

And so when you turn on, for example, when you turn on our classic hits station, Rewind 101.9 in South Hill, Virginia, you're listening to WCBS-FM in New York. 

Tim Hanlon: That's interesting. But I'm guessing that call-out research is what became the grist to build out what became a very successful, for a time in the '80s, business.

Was it called Birch Research? What was it after?

Tom Birch: It was Birch Research Corporation. 

Tim Hanlon: For our audience, explain what that was, and what were, quote-unquote, "ratings" at the time. Who was dominating that and all that?

Tom Birch: Arbitron was the dominant provider. And when I started this business in the early 1980s, we started out as providing basically a programming tool. We came out with monthly audience ratings, with shares and Qs. What ended up happening is our subscribers started using it as a sales tool, and they started selling with it.

And so we expanded the business. In 1981, I bought a major company that Jim Seiler started, who was the founder of Arbitron back in the early 1950s. And we expanded from 50 markets overnight to 150 markets. And we ended up opening up sales offices in New York, Chicago, Dallas, Los Angeles, Atlanta, and we had a Canadian subsidiary with offices in Toronto and Montreal.

We became a major company, and over time refined our processes so that it would be acceptable to media research directors at major advertising agencies. And our first agency that switched over was BBDO New York, and right after that we got McCann Erickson, and then Ogilvy & Mather. And we got major advertisers like McDonald's, Sears, and Budweiser.

They switched over from using Arbitron as their currency for buying radio to Birch Radio, and we became pretty big. At our height, I think we had about a 35 to 40% share of agency primary utilization. That means that they were using us to price what they're paying for buying radio buys.

And I ultimately ended up selling the company by the end of the 1980s to VNU, the United Dutch Publishing Companies, which ultimately bought Nielsen. 

Tim Hanlon: And Nielsen ultimately bought Arbitron, which I could not believe in the odds because I thought for sure that was a restraint of trade of some sort, but still to this day is not, the logic has still never been.

But having worked in the agency space and having worked with startups in a previous life as a ventures guy, I actually worked with a couple of companies that got under the skin of Nielsen and/or Arbitron, particularly one company called IMMI, if you remember them.

Tom Birch: Sure. 

Tim Hanlon: They were focused on using sort of the first iteration of cellphone technology to use as essentially a replacement or better people meter, so to speak but for audio listening and that kind of stuff. And when Nielsen/Arbitron, then conjoined, gets wind of that and/or gets a little worried about that, they smother it to smithereens and stuff.

But let me ask you this, though. It’s not my job to wail on Nielsen. I've done that plenty of times in my past because they're an easy target. But let me ask you this though. Through that knowledge and through that experience how then does today's challenged local radio, quote unquote, "properties," how do they get measured, especially given that there is no Arbitron. There's a dearth of that in radio generally, and certainly probably even in local markets specifically. What is the currency now? Are we in the midst of some change in what advertisers are looking for, especially for local audiences that are so small and/or not cared for or cared by the bigger companies out there?

Tom Birch: I stopped using Nielsen two years ago. Believe it or not, I was a subscriber to Nielsen for most of the time that we owned these radio stations. 

Tim Hanlon: Did they measure  your markets, or were these the DMA adjuncts? 

Tom Birch: No, this is county coverage, and when I first started, they were putting 30 to 60 diaries of the spring and the fall into our areas. That has dropped down to 20 to 30, and if you divide that by 2.5 people per household, that means 10 to 15 households. So what Nielsen is basically is a lottery. It's completely unreliable. 

Tim Hanlon: It's also anachronistic because not only is it a small sample, but it's also the manner by which. The diaries.

Tom Birch: Yeah. Oh, it's horrible. Tim, have you ever gone to any of the Nielsen or prior to that Arbitron, centers and looked at diaries yourself to see how they're filled out? I have. What is phenomenal is that most of the diaries are filled out by the female head of household.

So whatever radio stations she thinks other members of the household are listening to, that's what she's writing in, and she's writing in, of course, what she was listening to. So the diary methodology back in the 1980s was antiquated. And that's how we got these major agencies and major advertisers like McDonald's to switch over to our telephone methodology.

Today it's crazy, and Nielsen is finally coming around. They're going to do a multimodal approach to measuring. By the way I am still a member of the NAB Committee on Local Radio Audience Measurement, so I have some say in what's going on there. But Nielsen is completely antiquated, and they need to stop measuring outside of the top 50 markets.

You can't measure markets with these tiny sample sizes that they're putting out there. 

Tim Hanlon: All right. Then how does a local radio group station digitally evolve, et cetera, how do you go to market? How do your smart salespeople know, what is the, quote-unquote, "currency?" How do they relate and/or create that monetizable conversation, whatever, with data that either is creaky, old, or non-existent.

Tom Birch: You can't do it with data in my size markets. Yeah, I go back to the two Rs: relationships and results. Now we do use Triton, and Triton is a census, so we can show them an overall trend of how our stations are doing with Triton data, which is 100% accurate.

Tim Hanlon: And for our audience who doesn't know, Triton Digital is? 

Tom Birch: Triton measures our digital stream audience. And so they can provide, they can show the session starts, they can show cume, they can show time spent listening, they can show location. So Triton is very accurate, and we use it extensively.

What I have done to give our potential advertisers some sense of our total audience size, I used the last Nielsen survey that we subscribed to, which was in spring and fall of 2025, as a baseline, and then I show how it's changed relative to changes in Triton from the base period to the current period to give them an idea of our estimate of how the base audience has increased, plus here's the census of our stream audience.

But it's not terribly accurate. The accurate measurement is what are we doing for the client? Are we bringing people into their store? 

Tim Hanlon: Okay, so let's wrap all this up, and we'll wanna touch base with you in the months ahead to see how your transition with the folks at Town Square and that kind of stuff evolves.

Yeah. This is really interesting to keep tabs on, because this is a real world situation that you're in the midst of. But let me ask your general feeling and or proposition of Local media, in particular local radio or whatever local radio is evolving into, the town squares, the small group- squares, versus say the more challenged, it seems, bigger groups that consolidated and gorged on putting various station groups together, the iHearts, the Cumulus', the Citadels or some that don't exist anymore, which have gone through an Audacy, various points of bankruptcy and or public and private and all that kind of stuff, and still feel really challenged and or difficult to value going forward.

Is this as simple as saying that local is better? Or explain to me why maybe you're sanguine on local still when the national overlords seem to be flailing big time. 

Tom Birch: Yeah. I am so happy to be where I am down here in southern Virginia and northern North Carolina and these small markets. We are part of the community, and that has not changed.

If you listen to our stations, you're gonna hear obituaries at 5:00 in the afternoon on a couple of our stations. You're gonna hear high school sports on Friday night. We are local, and our listeners love us for it. They know our personalities. They have been listening to these stations for their entire lives. We have a connection that is not available from the larger market stations. So that's why we're surviving, and that's why we're still profitable. 

Tim Hanlon: Is that, though, the exception or the rule in other local markets out there?

Tom Birch: I think it's the rule. I think in any local market broadcaster that is surviving today is pretty much doing what we're doing in our markets. We're not the exception. 

Tim Hanlon: So those are the small stations like  yourself, but also the Town Squares and maybe the Alpha Medias and those companies that are looking at trying to be using community and being relatable in the local markets. 

Tom Birch: You have to be connected to your community. If you're not connected, you're not gonna be successful. 

Tim Hanlon: All right, and then crystal ball, what do you think, how do you think your audiences will evolve with you given that digital and streaming seem to be so central, and almost for younger audiences, just first and foremost in their media consumption habits?

Do you think your digital moves are gonna be a replacement or become more outsized than your over-the-air, or is it going to be in concert with each other, they'll be equal? What do you see as the future of audio for a small group like yours and your audience? 

Tom Birch: Yeah, I'll break it into two parts. The older audience, the audiences that are 45 plus are gonna be with us. The younger people, I don't know. That's a tough one. If I look at the percentage of our total audience audiences over air versus stream, we've now reached a point where about 30% of our total audience size is now streaming, and the fact that they're, the people are listening on the stream is very encouraging to me because the radio dial disappears from the automobile.

Everybody's listening online. I wanna be sure that we have a major presence digitally. But it's a challenge. I think that for the next 10 years I think we're gonna be okay. After that, with younger people coming in and not experiencing radio the way you and I experienced it growing up, the radio, you know, we may see its audience declining significantly.

Tim Hanlon: But it does seem, maybe to end on a ray of hope, that there is an absolutely strong role for truly local accessible content. 

Tom Birch: Yes. 

Tim Hanlon: In this world where everything is streaming first and available at a touch of a button and generically right? Ironically, this stuff could actually stand out in the midst of a sea of all this digital stuff, and I think the real interesting challenge is how can you transform your local goodness and ensure that it survives in new forms and fashions that are more common to the younger audiences.

Because it's still about being locally informed and entertained. Maybe it's just not over the air on an antenna. 

Tom Birch: Exactly. Our listeners have to be engaged with us, and that's what we strive to do at all of our stations.

Tim Hanlon: My thanks to Tom, and highly encourage you to check out the various stations across the Lakes Media Network. If you don't happen to be in the northern North Carolina or south side Virginia region, you can check out their streams right online there. Just go to lakesmedianetwork.com. Lakes is plural, so it's lakesmedianetwork.com, and check out these stations for yourself, and you will understand just how Tom and his teams are programming for a quickly changing local media landscape.

And I think you will find them to be exactly as he describes. And certainly if you'd like to send him a note, you can do so through the website as well. My thanks of course to the great folks at TVREV for being our infrastructure to put these little shows for you out each and every week.

Of course those are Mel Hourigan and Mike Gasbara and Jason Damata and Jessika Walsten. You probably knew that already. You probably also know that our sponsors for this extravaganza are our friends at Madhive, and we'll be looking to have CEO Jim Wilson back on our airwaves for his monthly visit relatively soon.

And thanks of course to Jerry Payne for his ongoing and continuing audio excellence. Thank you, kind sir. And thanks to you for listening and telling your friends and hopefully you're enjoying the proceedings and more to come in the weeks ahead. We'll see you soon here In the Vicinity.