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October 24, 2014

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Reflecting Pool: Spanish Broadcasting Systemís Raul Alarcon Jr. Examines His Companyís First 25 Years, And The Opportunities That Lie Ahead For All Of Hispanic Radio (05/19/08)


Spanish Broadcasting System thrives today thanks to the determination and hard work of its founder, Raul Alarcon Sr. After building a successful radio operation in his home country of Cuba, Alarcon Sr. brought his passion for radio to the United States, starting from scratch and embarking on a second career that spanned from on-air work in New York all the way to station ownership in 1983, when SBS was formed.

Hispanic radio was a small niche market then, but through a commitment to service and a vision for the importance this audience would someday hold for radio, Alarcon Sr. built one of the country's premier Spanish-language radio operations.

His son, Raul Alarcon Jr., learned the family business firsthand, demonstrating the same skill and savvy that made his father a success and rising through the company's leadership ranks. SBS's president since 1985 and CEO since 1994, he was named chairman in 1999, and stands today over a group that owns and operates 20 radio stations in some of the nation's top Hispanic markets.

As the company marks its 25th anniversary, at its second-annual Hispanic Radio Conference Radio Ink will proudly present Raul Alarcon Sr. with the Medallas de Cortez Lifetime Achievement Award. In connection with the award presentation, we asked Alarcon Jr. about the legacy his father created, the journey Hispanic radio has taken from those early days, and what he sees ahead for this fast-growing segment of the radio business.

RADIO INK: Discuss how you feel about the legacy Raul Alarcon Sr. created. What enabled him to find business success serving a niche market?
RAUL ALARCON JR.:
Radio has always been the love of my fatherís life. From very humble beginnings as a radio announcer at age 19, he eventually established a small network of stations in Cuba throughout the 1950s. To have lost everything ó including his country ó and to have regained it on an even grander scale in an adopted homeland is a testament to his unbounded ability to persevere against almost insurmountable odds. Itís an amazing life story, which he credits to the opportunities afforded to him by this great country.

RI: Describe your feelings about the presentation of the Medalla de Cortez to your father.
RA:
First of all, let me take this opportunity to thank Radio Ink, and very especially Mr. Eric Rhoads, for this special lifetime achievement award for my father. There are many, many other individuals in Spanish radio who are just as deserving of this great honor. For my father to have been chosen among this select group will always be a source of enormous pride for my family.

RI: Discuss how far Hispanic radio has come since SBSís early days, and what the future holds both for the company and the sector.
RA:
I clearly remember the days of $35 spots in New York City! That all changed, of course, throughout the í80s and í90s, when Spanish radio was validated by virtue of the sheer size of the audience it was able to deliver, which continues to this day. The future of Spanish-language radio will always hold great promise so long as we continue to find creative ways to develop compelling content for our listeners.

RI: How can Hispanic radio guard against losing its loyal audience?
RA:
Here again, the more competition exists, the more compelling you need to be, whether that involves specialized formats, innovative music formulas, or most importantly, on-air talent.

RI: How are you addressing the threat posed by listeners gravitating to new media?
RA:
By embracing it. We have very big plans in the works for our online umbrella portal, LaMusica.com, and how it can serve as a global showcase for Latino music and entertainment, augmented by our radio formats, on-air personalities, and editorial content.

RI: How long do you expect the explosive growth trend for Hispanic radio to continue? At some point, doesnít this kind of growth have to level off?
RA:
All media are subject to slowing growth at some point. Iím confident that radioís strongest assets ó i.e., its universality, its mobility, and its ability to hyper-localize its content ó combined with continued Hispanic demographic growth, will allow Spanish radio to flourish for a long, long time.

RI: Long term, what will keep the sector growing?
RA:
The same thing that keeps any mass medium growing: its audience. Of course, thatís always easier said than done ó and even easier done than monetized. For years, Spanish radio has overdelivered on audience and underdelivered on revenue. That has to change.

RI: How important are digital initiatives (texting, social networking) to Hispanic radio stations? What is SBS doing?
RA:
Digital applications are important to the extent that they can enhance a listenerís interaction with radio. Weíve just begun to scratch the surface of any meaningful interplay between radio and, say, the many available wireless applications. The challenge is to avoid having these digital strategies turn into a gimmick.

RI: How important is attracting national advertiser accounts to Hispanic radio?
RA:
All advertisers are important. Obviously, blue chip national accounts not only validate the medium but are also important economic drivers for any Spanish radio station. Frankly, any national advertiser not utilizing Spanish radio today is missing an enormous opportunity.

RI: How are local clients reacting to economic downturn?
RA:
Any time the economy squeezes the consumer, local businesses are affected. The current slowdown, exacerbated by a slump in jobs and all the negative noise around immigration, is certainly not helping Spanish radio. I think itís safe to say everyone is looking forward to a more healthy economy in the future.

RI: What is your outlook for how the overall industry can spur growth?
RA:
I think the radio industry has suffered from a lack of commitment on the part of radio owners during the last few years. We desperately need to get back to the days when radio engaged, embraced, and enthralled its listeners. The money always follows the audience.

In terms of Spanish radio, Iíve always been a strong proponent of Hispanic ownership of the media, not only for reasons of economic opportunity, but also because I believe a Latino owner of Spanish-language media will be fundamentally more committed to serving, with full-fledged determination and sensitivity, a cultural community to which he or she actually belongs.

It is doubtful that SBS would be celebrating its 25th anniversary this year had it not been for the lifelong commitment of its Hispanic owners, and yet, as I look around today, there are far fewer Latino broadcasters now than there were in 1983. As for me, Iím not ready to give up that fight.

RI: What are your thoughts on HD Radio for Hispanic radio?
RA:
Aside from the very real benefits of enhanced audio, HD opens up a whole new world of alternative programming possibilities on the adjacent digital channels. Hopefully, this will engender new economic opportunities as well.

RI: How will PPM affect Hispanic radio?
RA:
Weíre keeping a very close eye on PPM, as you can imagine. The bad news is that initial indications do not paint a very pretty picture for Hispanic radio. The good news is that Arbitron seems willing to talk about how it can improve PPM accuracy. I believe it all comes down to a proper representation of Hispanics in the PPM panel. If that can be achieved, everyone wins with accurate audience measurement. If it canít, Iím afraid weíre in for a long, hard fight.

RI: How will PPM affect the future for language weighting with the diary? Since the diary will remain currency in many Hispanic markets while the PPM is rolling out, what do you expect will happen with the diary service for Hispanic radio in the next few years?
RA:
Iím certain that Arbiron will completely phase out its diary methodology, even in smaller markets, if itís economically viable to do so.
So long as the PPM panels are properly configured and unbiased, who in Spanish radio wouldnít want the accurate electronic measurement promised by PPM? SBS was one of the first groups to sign up for the PPM service. But first thingís first ó letís get the panel sample right.

RI: As Hispanic stations attract wider audiences, how do you retain your key talent?
RA:
We try to apply what we call our 5-P Program with respect to on-air radio talent (due to the recent economic strain on the industry weíve added a sixth P).

1) Procure: Weíre always on the lookout for new and promising talent.

2) Perfect: Senior programming people are brought in regularly to provide guidance.

3) Promote: Weíre big believers in externally promoting our talent, our shows, and our brands.

4) Police: Weíre constantly monitoring and advising talent as to the doís and doníts of on- air content.

5) Pay 6) Prudently: Weíre all for rewarding performance but, in these volatile economic times, prudence dictates a more measured approach.

RI: In addition to possibly losing talent to Hispanic rivals, is the possibility of an air talent crossing over to English-language stations a concern for you? Are there examples where bilingual talent find success across genres?
RA:
Although talent is becoming all the more important, you can never allow yourself to be at the mercy of any particular on-air personality, or their agent. At SBS, we strive to provide an environment where talent is fostered, nurtured, promoted, and appreciated. Hopefully, they wonít even think about joining a competitor, Hispanic or otherwise.



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