Radio One Takes a Long View

Not that the radio industry has been doing well. Listeners are being lured away by the Internet, iPods and the expanded choices offered by District-based XM Satellite Radio and its New York rival, Sirius Satellite Radio. (Radio One programs one of XM's 100-plus channels.) Stocks of satellite broadcasters aren't doing better than those of the earthlings. XM is down 21 percent so far this year, Sirius 25 percent.

In that environment, radio revenue is growing only 3 to 5 percent a year. Radio One's revenue grew by a scant one-tenth of 1 percent in the fourth quarter of last year and could actually fall this quarter, analysts said.

Radio's problem, Liggins said on a recent conference call, is that "we're not creating new advertisers, which as an industry we need to do."

The frustration of Liggins and other Radio One executives blared as a backbeat during last month's hour-long session with analysts. They sounded frustrated trying to make money in a mature industry, frustrated by the cutthroat competition for advertising dollars, frustrated by what's happened to Radio One's stock price, frustrated by Wall Street's unwillingness to embrace the company's diversification into television broadcasting and program syndication.

Radio One's most promising move beyond its radio roots is TV One, a joint venture with Comcast Corp. Radio One owns a 35 percent stake in the TV venture, which aims to rival Black Entertainment Television, a network created by Robert L. Johnson, Washington's most successful minority entrepreneur.

Expanding slowly across Comcast's vast web of cable networks, TV One is on track to generate $80 million a year in cash flow within five years, Liggins said.

But Wall Street gives the company little credit for its move into TV, even though the strategy was suggested by media industry investment bankers.

"We played the game just like we were supposed to," Liggins lamented. "We ended up with the stock price where it is, based on doing everything we were told to do."

Becoming a minor partner in one of the several bidders for the Washington Nationals franchise and making an effort to break into movie distribution with an obscure indie film also generated a lot of skepticism.

More interesting to investors is Radio One's partnership with talk show host Tom Joyner, the nation's top black radio personality. Joyner's show is broadcast on several Radio One stations and syndicated to stations owned by other companies.

The partnership in turn is lining up other black talk-radio hosts -- Al Sharpton among them -- to build the first talk-show network aimed at black audiences. Distributing programming isn't considered as good a business as running stations, but black talk radio is a wide-open field, just as urban music was a decade ago.

Also regarded as a promising diversification possibility is Radio One's effort to develop a major Internet portal for African Americans. Others have tried, none with great financial success.