Are stations shooting themselves in the foot?

[bobdavcav]

I've read in multiple places over the years of following this industry that radio's ad revenue continues to decline, so shouldn't stations be selling as many spots as they can? The reason I frame the question this way is that over the last 10 years or so, I've noticed an increasing number of stations doing an increasing number of long commercial free blocks. While this concept isn't new, I don't remember it being quite so prevalent as it is now. An extreme example took place in my market almost 10 years ago now. In fact, it was around this time of year that the format shuffle that lead to the launch of this station took place. The station in question used to do the following:
Two hours commercial free at 8, and possibly even at 6, I was going through some pretty serious depression at the time so was never up that early to check.
Normal clock from 10 to noon.
An hour commercial free at noon for the lunch break.
Normal clock at 1, though breaks were at top and bottom of the hour rather than 15 and 45 as usual.
Two hours commercial free between 2 and 4.
Another 2 hours between 4 and 6.
Normal clock the rest of the day.
When I aircheck, I try to get the station's normal clock, and in drive time if possible, but all this playing with clocks makes that extremely difficult.
I could note many more examples, but I'll just use three now, all from my current market, not the same one as mentioned before.
1. The variety hits station runs three hours commercial free from 9 to noon seven days a week.
2. The local AC runs an hour commercial free at 8:30, followed by 103 minutes commercial free. This gets over about 11:15.
3. The Classic Hits station runs 106 minutes commercial free at 4:00 every afternoon.
I'm sure I'm missing a bunch in my market, but I said I would only give three. I've also seen 60 minute, 90 minute, or longer breaks three times a day, usually at 9, noon, and 5. So, I guess to sum it all up, it seems like stations should be doing everything they can to maximize revenue, yet commercial free blocks have never been more prevalent. What's going on?

 

[TheBigA]

I've read in multiple places over the years of following this industry that radio's ad revenue continues to decline, so shouldn't stations be selling as many spots as they can?

No. Listeners HATE commercials.

In the interviews Edison conducted among Gen Zs, VP Megan Lazovick said they heard some complaints about radio’s ad spotloads and the ability to skip past the commercials on digital streams. “There are options out there and this is a smart generation so they don’t have the tolerance for 14-minute commercial breaks,” she said.

 

[RadioGuy1864]

No generation has the tolerance for 14 minute breaks. That's just too much for anyone to have to get through.

 

[michael hagerty]

So, I guess to sum it all up, it seems like stations should be doing everything they can to maximize revenue, yet commercial free blocks have never been more prevalent. What's going on?

They're using the commercial-free hours to drive longer listening and increased quarter-hour shares for the full day, which then helps them maintain a quarter hour share at the end of the month that will command a decent price per spot when they air.

If they were to simply sell out all the hours (and that's supposing they could), the listening times would likely plummet and the price per spot would drop along with that.

 

[K.M. Richards]

They're using the commercial-free hours to drive longer listening and increased quarter-hour shares for the full day, which then helps them maintain a quarter hour share at the end of the month that will command a decent price per spot when they air.

Not to mention the additional TSL from listeners who stay tuned in during the regular hours, which also increases the exposure to the ads in those hours. Once a typical listener perceives that a station runs some of its hours commercial-free throughout the day, they will stay there out of a subconscious fear that they will miss the next ad-free block if they tune elsewhere.

 

[spiritof67]

When I aircheck, I try to get the station's normal clock, and in drive time if possible, but all this playing with clocks makes that extremely difficult.

In 1994, the PD at KPNT monitored the clocks of the competing stations in order to find when those stations took commercial breaks. Then he altered The Point's clock so their station would be in a song while stations like KSHE and Q-104.1 were playing ads.

With consolidation, this is less of a thing. My YL grumbles at me as she drives and hears blocks of ads all over the dial at the same time.

 

[K.M. Richards]

In 1994, the PD at KPNT monitored the clocks of the competing stations in order to find when those stations took commercial breaks. Then he altered The Point's clock so their station would be in a song while stations like KSHE and Q-104.1 were playing ads.

A lot of us did that back in the day, especially in very competitive situations.

With consolidation, this is less of a thing. My YL grumbles at me as she drives and hears blocks of ads all over the dial at the same time.

It wasn't consolidation that caused that, it was the PPM.

 

[landtuna]

..

 

[landtuna]

I gave up on live radio years ago. Figured out I could set up my own personal music library and listen to whatever I wanted without a single commercial. With over 6,000 selections there isn't a big risk of repetition and since very, very few of those selections are post 1985 I don't have to listen to the current crap being broadcast.

And even if you don't want the time or expense of setting up your own music library it doesn't take much effort to go to streams like YouTube.

The only listening I do now is occasionally in the car - mostly a juke box station (Oldies). The hours spent in the car are very few and I could easily just carry a flash drive for that too if I wasn't so lazy.

Too bad radio. Just as the technically increased the content went to junk.

 

[bobdavcav]

That's another thing that doesn't make sense to me. An hour has four quarters, so why do all stations go after the same two? To me, if I have direct competition, I would take my breaks to line up with the opposite quarter hours as my competition, so I'm always in music when they are not. I still get a quarter hour credit if I'm in music while my competition is in commercial, but they then get the credit when I go to commercial because the listeners have flipped to the competition. I can see why offsetting your breaks doesn't work anymore, but as long as you aim for two of the four quarters of the hour I wouldn't think it would matter which two you were aiming for.

 

[spiritof67]

A lot of us did that back in the day, especially in very competitive situations.



It wasn't consolidation that caused that, it was the PPM.

It isn't necessary now, as the former competition now shares the same empty building.

Side note--I heard recently over the holidays that Hubbard St. Louis had one of their stations run hours of ads and liners on New Year's Day. Two years earlier, Hubbard's KSHE had a computer mishap that ran several hours of ads and liners without music too.

Look, it's a business and all, but if they don't care, why should anyone else?

Like Landtuna, I gave up on OTA radio, and add music into a cheap Android burner phone with an SD card. That, SXM, classic airchecks, and a few internet stations I like are what I do now.

 

[Huff]

That's another thing that doesn't make sense to me. An hour has four quarters, so why do all stations go after the same two? To me, if I have direct competition, I would take my breaks to line up with the opposite quarter hours as my competition, so I'm always in music when they are not. I still get a quarter hour credit if I'm in music while my competition is in commercial, but they then get the credit when I go to commercial because the listeners have flipped to the competition. I can see why offsetting your breaks doesn't work anymore, but as long as you aim for two of the four quarters of the hour I wouldn't think it would matter which two you were aiming for.

They aren't going after the same two. They straddle commercial breaks across the quarter hour boundaries. An eight minute commercial break spread over a quarter hour boundary will only penalize you for four minutes in one and four minutes in the next. Some cross over :15 and :45 (called "bow tie" breaks) and others go across :00 and :30 ("hourglass" breaks.)

 

[b-turner]

We shot ourselsves long, long ago. First, told the audience commercials were something they were not supposed to like. Yes the subject came up from listeners but not often. After we pushed that commercials were bad, we placed them in the least listened to quarter hours.

 

[michael hagerty]

We shot ourselsves long, long ago. First, told the audience commercials were something they were not supposed to like. Yes the subject came up from listeners but not often. After we pushed that commercials were bad, we placed them in the least listened to quarter hours.

We didn't push the idea that commercials were bad so much as emphasize that we had more of what the audience tuned in for---music. What happened was that stations that played fewer commercials than their competitors said so---they made it a selling point.

And this has been going on for 50+ years. The early-mid 70s had even still-vital giants like KHJ in Los Angeles including it in their top-of-the-hour legal ID: "KHJ, Los Angeles, with up to 52 minutes of music an hour! (Time) with (Jock)." That was in response to new FM competitors (KKDJ, KIQQ) that ran fewer commercials because they couldn't sell out an hour yet.

You can go back even further. In 1965, KHJ's "The Much More Music Station"...that was a direct attack on KFWB and KRLA, which were still doing a commercial or two after every record. The only way you play more music is to play fewer commercials. KFWB and KRLA played the then-NAB maximum 18 minutes an hour.

KHJ was 14 minutes.

And look, the advertisers didn't help. Radio used to have spots like this:

Now it's a cold-voice hardsell for Bud Dickman Mitsubishi.

 

[TheBigA]

The other part of this conversation is being able to control your inventory. We know that right now, for whatever reason, demand isn't very high for broadcast radio. Remember the rule about supply and demand. If demand is low, then the right response is to control the supply. I think that's what's happening at those stations that are doing commercial-free hours. They're keeping their inventory in high demand areas, and by doing so, are keeping their spot price stable.

Meanwhile, a lot of companies are building new areas for revenue. That's where the future of broadcasting is. At some point, digital revenue will be enough to support broadcasting, and the broadcasting will drive people to digital.

 

[bobdavcav]

They aren't going after the same two. They straddle commercial breaks across the quarter hour boundaries. An eight minute commercial break spread over a quarter hour boundary will only penalize you for four minutes in one and four minutes in the next. Some cross over :15 and :45 (called "bow tie" breaks) and others go across :00 and :30 ("hourglass" breaks.)

I like those terms. My point still stands though. When Seattle had two Hot ACs, both took hourglass breaks. The well established station had been doing so for years, and the upstart took that. If I'm running a direct competitor, why not take the bow tie breaks, so you're always in music when your direct competition is in commercial? I've seen this is direct competition quite a bit.

 

[ted chittenden]

I like those terms. My point still stands though. When Seattle had two Hot ACs, both took hourglass breaks. The well established station had been doing so for years, and the upstart took that. If I'm running a direct competitor, why not take the bow tie breaks, so you're always in music when your direct competition is in commercial? I've seen this is direct competition quite a bit.

You are, of course, making two assumptions that may not be true:

1) Enough businesses are willing to buy the advertising time available if the station makes its blocks available; and
2) your format competitors will not change their break times the moment (or within weeks) of your radio station doing the same.

Keep in mind that every business relationship is a dynamic one and not a static one.

 

[bobdavcav]

I don't see how either of those points matter.
1. Are you saying that advertisers are more likely to buy when their competition is also in commercial? If that's not the case, then I don't see why number of advertisers is an issue.
2. How much say do the advertisers have in when the breaks are placed? I will grant that my experience with being an advertiser was with a small organization paying the lowest rate the station offered for only a couple spots a month, but we did not have a say in the times placed. We did tell the station which days of the month we wanted, but when those days came around, we got an email telling us when our spots would air. I would imagine that with a higher package, we would also get the choice of say only drive time or all day, but still I would not expect specific times to be available to us.

 

[michael hagerty]

I don't see how either of those points matter.
1. Are you saying that advertisers are more likely to buy when their competition is also in commercial? If that's not the case, then I don't see why number of advertisers is an issue.
2. How much say do the advertisers have in when the breaks are placed? I will grant that my experience with being an advertiser was with a small organization paying the lowest rate the station offered for only a couple spots a month, but we did not have a say in the times placed. We did tell the station which days of the month we wanted, but when those days came around, we got an email telling us when our spots would air. I would imagine that with a higher package, we would also get the choice of say only drive time or all day, but still I would not expect specific times to be available to us.

No.

What Ted is saying is that you're assuming they can sell all the ad inventory if they were to put the commercials back in those hours. There's no guarantee they can. Most stations I worked for assumed 70% of available ad inventory would be sold and budgeted accordingly. If you beat that, great. Then your revenue exceeded expectations.

As for placement of spot breaks, what Ted is saying is that you can't assume your competition will sit still. If you put your spot break so that you're in music when I'm in commercial, it's not a huge deal for me to move my spot break so that it ends just before you go into yours. Then I'm in music when you're in commercials.

We can chase each other all around the clock if we want to. Nothing says anyone has to stand still.

Advertisers have ZERO input into break placement, or even where their spots air in a given break. There might be someone out there still trying the old trick of charging more for a guaranteed first spot in a break, but not many.

Advertisers absolutely can and do have the ability to ask for their ads to run in certain dayparts and not others, but they pay different rates for different dayparts and if they want morning drive but it is sold out, they're gonna have to settle for a daypart with available inventory.

 

[TheBigA]

We're also talking about the first quarter. Historically the first quarter has the lowest level of demand. The only big sell point is Valentine's Day for jewelry or other similar advertising. Just because a station is doing "commercial free hours" now doesn't mean they're permanent.