Are Programming And Format Changes Increasingly Being Driven By The Desire To Cut Costs??

[Joseph_Gallant]

Are Programming And Format Changes Increasingly Being Driven By The Desire To Cut Costs??

Thinking over programming and format changes of late, I have come to the conclusion that many of them are being driven not just by the desire for the stations making them to get more listeners (which in turn would lead to more revenue from advertisers), but also to cut costs.

Examples:

(1) The "Jack FM" format and it's clones. Nearly all "Jack" type stations run without live announcers. Since the biggest single expense at more radio stations is airstaff salaries, eliminating airstaffs will result in a huge reduction of overhead. Even if "Jack"-type stations bring in less revenue than the former formats at those stations, profits may well be higher, given the lower operating costs.

(2) Chicago's WZZN-94.7 recently flipped from rock to oldies, and for the moment is using the "True Oldies Channel" satellite format 24/7. As recently as a couple of years ago, such a move would have been short term until the station had hired an airstaff for the new format to replace the satellite programming. But the station has announced they will only be live during weekday drive times and Saturday nights. The satellite service will remain in other dayparts, aproximately 15 hours a day during the week (and more on weekends). And Chicago is the number-three market.

(3) Country-formatted KSD-FM in St. Louis got rid of it's local morning show to pick-up the syndicated "Big D and Bubba" show from Premiere Radio which, like KSD, is owned by Clear Channel. Given how big Clear Channel is, the company undoubtely has country-music stations in other large and major markets. Premiere recently acquired "Big D and Bubba"; could it eventually replace all the other local morning shows at CC-owned country stations??

(4) "Free FM". While many stations that are adopting (or will adopt) the format will have some local shows, it appears to me that after reading the initial reports about the format, most of the schedule on "Free FM" stations will consist of syndicated programming. And even shows that are local on some "Free FM" stations will be syndicated to others. I would venture to guess that prior to their becoming "Free FM", many of these stations had a number of local personalities, personalities whose jobs in many cases are being eliminated.

(5) Jones Radio Networks and the Lifetime cable channel have launched a national morning show for Adult Contemporary stations. I don't think there's been any previous attempt at a national morning show targetting AC stations, but if "Lifetime Radio" gets to be a success in a few markets, lots of broadcasters may decide to use it to replace local AC morning shows.

(6) And that's on top of all the voicetracking and satellite-fed formats.

The "Golden Age" for someone trying to break into radio was probably the late 1970's and early 1980's. At that time, many formerly-automated FM stations in markets large and small were replacing automated programming with live announcers. And many AM stations were still local and live 24/7 (or if daytimers, sunrise through sunset). Thus, there were plenty of jobs for announcers/air personalities.

I don't have the exact numbers, but I would not be surprised if voicetracking and syndication have eliminated about half of the jobs for radio announcers that existed in 1980, with many more jobs to be eliminated in the next couple of years.

Do you think that many programming and format changes are being driven by cost-cutting??

 

[davideduardo]

Re: Desire To Cut Costs?? No!!!

>
> (1) The "Jack FM" format and it's clones. Nearly all "Jack"
> type stations run without live announcers. Since the biggest
> single expense at more radio stations is airstaff salaries,
> eliminating airstaffs will result in a huge reduction of
> overhead.

Actually, the biggest singel expense is sales commissioning. And, very often, promotion and marketing is much bigger than airstaff expense.

Except for stations with huge, personality morning shows in major markets, airstaf costs are really 5 to 6 fulltimers and a couple of part timers. We are not talking about that much savings oourside of mornings, and in most statins, mornings is not a big ticket item... the sales manager makes more, believe me.

Still, someone has to cut spots, do imaging, manage on-air operations, etc.

> Even if "Jack"-type stations bring in less revenue
> than the former formats at those stations, profits may well
> be higher, given the lower operating costs.

Most Jack stations are bringing in a lot more money, due to salable demos. The idea that there is a significant savings is just not true anyway.

A mid day jock in LA, the biggest radio revenue market, may make from $35,000 to $125,000 in a market where stations may bill from $10,000,000 to 60,000,000 a year. A sales manager probably does $300 thousand and up... way up.
>
> (2) Chicago's WZZN-94.7 recently flipped from rock to
> oldies, and for the moment is using the "True Oldies
> Channel" satellite format 24/7. As recently as a couple of
> years ago, such a move would have been short term until the
> station had hired an airstaff for the new format to replace
> the satellite programming. But the station has announced
> they will only be live during weekday drive times and
> Saturday nights. The satellite service will remain in other
> dayparts, aproximately 15 hours a day during the week (and
> more on weekends). And Chicago is the number-three market.

So they will save maybe $200,000 a year on $15 million in revenue. Just a couple of billboards cost more.
>
> (3) Country-formatted KSD-FM in St. Louis got rid of it's
> local morning show to pick-up the syndicated "Big D and
> Bubba" show from Premiere Radio which, like KSD, is owned by
> Clear Channel. Given how big Clear Channel is, the company
> undoubtely has country-music stations in other large and
> major markets. Premiere recently acquired "Big D and Bubba";
> could it eventually replace all the other local morning
> shows at CC-owned country stations??

Not likely. They did this in St Lousis because they had trouble getting the numbers they wanted, and the show researched better than the show they had. They pay the show big bucks via Premiere, since the talent takes a cut on every additional station they get. The motivation was not likely savings, which would be minimal, but ratings... even if it is Clear Channel.

In many cases, companies do very big morning shows at one station, and split the costs among many by sharing with other stations. This way, a show no station could afford... like oen that costs $2 to $3 million a year to do... can be affordable when split up. No savings, just a far better show.
>
> (4) "Free FM". While many stations that are adopting (or
> will adopt) the format will have some local shows, it
> appears to me that after reading the initial reports about
> the format, most of the schedule on "Free FM" stations will
> consist of syndicated programming. And even shows that are
> local on some "Free FM" stations will be syndicated to
> others. I would venture to guess that prior to their
> becoming "Free FM", many of these stations had a number of
> local personalities, personalities whose jobs in many cases
> are being eliminated.

And what the local personalities cost (mostly Stern) will be split up in the costs of Adam Corolla, David Lee Roth and the salaries of the syndicated talent. Again, syndication has a cost, either in lost revenue or talent costs to the syndicator if the syndicator is in house.
>
> (5) Jones Radio Networks and the Lifetime cable channel have
> launched a national morning show for Adult Contemporary
> stations. I don't think there's been any previous attempt at
> a national morning show targetting AC stations, but if
> "Lifetime Radio" gets to be a success in a few markets, lots
> of broadcasters may decide to use it to replace local AC
> morning shows.

And they will pay for it in inventory, which means lower revenue. A staiton will do this if the show is better than what they can do locally. Just as stations not owned by NBC carry Jay Leno instead of trying to do a late fringe show locally.
>
> (6) And that's on top of all the voicetracking and
> satellite-fed formats.

Same as in the 70's, 80's and 90's, just different distribution models.
>
> The "Golden Age" for someone trying to break into radio was
> probably the late 1970's and early 1980's. At that time,
> many formerly-automated FM stations in markets large and
> small were replacing automated programming with live
> announcers.

Not necessarily. Stations that used voice traced syndicated programming (voice tracking is automated, just not on reel to reel) then often switced to satellite programming. Much of this change came when Beautiful Music died, causing stations in the mid-80's to look for other formats.

> And many AM stations were still local and live
> 24/7 (or if daytimers, sunrise through sunset). Thus, there
> were plenty of jobs for announcers/air personalities.

The real issue today is the legal logjam for anyone to start working at a station. Liability and EEO and posting requirements and wage and hour laws and such prevent internshiips, let alone the gopher of the 60's and 70's. It is hard for owners to let anyone in a station, which is why the often prefer delivered programmming, even if it costs more in inventory than doing it locally.
>
> I don't have the exact numbers, but I would not be surprised
> if voicetracking and syndication have eliminated about half
> of the jobs for radio announcers that existed in 1980, with
> many more jobs to be eliminated in the next couple of years.

There are about 3,000 more stations now than in the mid-80's, and there are probably more jobs. In general, raido imployment is about 25,000 people higher today than then.

> Do you think that many programming and format changes are
> being driven by cost-cutting??

They are bieng driven by a desire to get better ratings via better programming.

I'm involved with building a multi-station network via internal syndication, and we have taken the local talent budgets and combined them to get superstar talent, build a state of the art studio and production facility and do fabulous TV commercials, etc. It will cost us more, but the aim is to et better programming for better ratings and better sales.

 

[PTBoardOp94]

Re: Are Programming And Format Changes Increasingly Being Driven By The Desire To Cut Costs??

> Thinking over programming and format changes of late, I have
> come to the conclusion that many of them are being driven
> not just by the desire for the stations making them to get
> more listeners (which in turn would lead to more revenue
> from advertisers), but also to cut costs.
>
I would say it depends on the company. Some companies axe local shows if they take a minuscle loss on it, and it has to be replaced with something. This is more likely if the station is a loss leader for the company and the company is smaller.

Were I a Clear Channel executive, I couldn't think of any reason not to originate content on my AM in San Fran and syndicate it to KFI and a couple other California Talk stations. I might not want to port it to New York City or Atlanta because it would take away from the "locality" of the show to the California listeners.

That's my idea of the perfect use of syndication anyway -- keepin' it in closeby but on several stations still.

The business sense is probably lacking a bit, but that's why I'm not a CC executive. ;-)

 

[Joseph_Gallant]

Re: Are Programming And Format Changes Increasingly Being Driven By The Desire To Cut Costs??

PT BoardOp 94 suggests:

> Were I a Clear Channel executive, I couldn't think of any
> reason not to originate content on my AM in San Fran and
> syndicate it to KFI and a couple other California Talk
> stations. I might not want to port it to New York City or
> Atlanta because it would take away from the "locality" of
> the show to the California listeners.

Wouldn't regionally syndicated radio programming heard only in California be more likely to originate in Los Angeles than in San Francisco??

I would think San Francisco would only become a center for regionally-syndicated radio programming if such programs are heard only in the northern half of California (i.e. San Francisco/Oakland, Sacramento, Fresno, Eureka, and Redding).

 

[Joseph_Gallant]

Re: Desire To Cut Costs?? No!!!

David Eduardo, who posted a very insightful response to my original post, commented:

> There are about 3,000 more stations now than in the
> mid-80's, and there are probably more jobs. In general,
> raido imployment is about 25,000 people higher today than
> then.

Can you get any information on how many people now work as radio announcers compared to what the number was in 1980??

Again David, thanks for your comments. As usual, you posted an interesting response that adds much to the discussion. I always enjoy reading what you have to say on these boards.

 

[PTBoardOp94]

Re: Are Programming And Format Changes Increasingly Being Driven By The Desire To Cut Costs??

> Wouldn't regionally syndicated radio programming heard only
> in California be more likely to originate in Los Angeles
> than in San Francisco??

The point stands whether it originates at KFI or any other station owned by CC...The answer is yes, KFI would be the more likely originator.

 

[gr8oldies]

Re: Are Programming And Format Changes Increasingly Being Driven By The Desire To Cut Costs??

That's assuming that what works in LA works in SF and SD, or the reverse. There was a discussion about regional syndication in Ohio, and for the most part Clevelanders have no interest in Cincinnati or vice versa, so there'd be no common interest except when the Bengals play the Browns.