dying AM radio

[Avid Listener]

The thing is, regardless of the technical details about isolated stations here and there, to the ears of the average, ordinary radio listener, turning the dial on the radio in the dashboard of his car, AM never sounded as good to his ears as FM did. I don't much care about how it sounded to an oscilloscope or some other piece of electronic equipment. Nor do I care about the technical details of why AM sounded worse, or what hypothetical events might have happened differently to change things. The point is that right now, in the year of our Lord 2014, listening on the the radios currently in use to receive the signals, AM radio sounds pretty bad compared to FM.

On top of the bad sound, there is very little compelling programming on AM that would make most listeners put up with the crappy sound. Sure, aliens who can't speak English, or who are nostalgic for anything from the old country will listen to programming in their native language on AM, since the alternative is not listening to any native language programing at all. And old people (and we know how much advertisers love them!) listen to AM because they don't know how to switch to FM, or the only station playing Perry Como is on AM.

This thread is full of isolated anecdotes about the few AM stations that are making money. And I suppose that "dollar a holler" brokered-time preacher programs, or running a station with a fully automated satellite feed and no live humans collecting paychecks, and maybe a volunteer "intern" doing all the work for the thrill of working in radio are interesting. But what no one as posted is a ratings list for a major or semi-major market where there are more AM stations reaching the money demos than there are FM stations. No one has posted a comparison ratings list that shows the AM stations in any major or semi-major market experiencing an increase in listenership in the money demos.

When a collection of businesses are sliding into oblivion, with a tiny handful clinging to the top of the slippery slope and therefore sliding a little slower than the rest, trying to isolate one single factor is a waste of time. There are multiple factors at play in the decline and fall of AM radio.

 

[davideduardo]

This thread is full of isolated anecdotes about the few AM stations that are making money. And I suppose that "dollar a holler" brokered-time preacher programs, or running a station with a fully automated satellite feed and no live humans collecting paychecks, and maybe a volunteer "intern" doing all the work for the thrill of working in radio are interesting. But what no one as posted is a ratings list for a major or semi-major market where there are more AM stations reaching the money demos than there are FM stations. No one has posted a comparison ratings list that shows the AM stations in any major or semi-major market experiencing an increase in listenership in the money demos.

Not all AM stations need ratings to make good money.

In the fiercely competitive LA market, a good example is KIRN. It was bought 18 years ago for $4.2 million. It now has a Farsi language format and likely cash flows just under $3 million a year on just over $5 million in revenues. That's over a 50% ROI and a margin of well over 50% also.

Or take KASN. It was sold in the peak years for $12 million, and brokers much of the programming so there is little program cost. It bills nearly $7 million, with more than half likely to be profit. That's still a huge ROI, and highly sustainable.

In smaller markets, there are many owner operator AMs where the owner pays themselves a salary, gets lots of trade, while the station appears to break even at best. For the owner, it is perhaps immensely profitable.

Add in the thousand or so AMs with sports, talk or all news formats that are, for the most part, profitable, and you will see that the bulk of AMs are viable still. No, KIRN is not going to bill $60 million like KIIS but on the other hand it did not cost $300 million as a breakout of the valuation of the Jacor / Clear Channel merger would peg it at.

Then look at the large number of religious stations that sell time blocks for programs. A profitable model.

And so on.

That's why there are only a handful of silent AMs and very few have surrendered their license to the FCC.

 

[CTListener]

Not all AM stations need ratings to make good money.

In the fiercely competitive LA market, a good example is KIRN. It was bought 18 years ago for $4.2 million. It now has a Farsi language format and likely cash flows just under $3 million a year on just over $5 million in revenues. That's over a 50% ROI and a margin of well over 50% also.

Or take KASN. It was sold in the peak years for $12 million, and brokers much of the programming so there is little program cost. It bills nearly $7 million, with more than half likely to be profit. That's still a huge ROI, and highly sustainable.

In smaller markets, there are many owner operator AMs where the owner pays themselves a salary, gets lots of trade, while the station appears to break even at best. For the owner, it is perhaps immensely profitable.

Add in the thousand or so AMs with sports, talk or all news formats that are, for the most part, profitable, and you will see that the bulk of AMs are viable still. No, KIRN is not going to bill $60 million like KIIS but on the other hand it did not cost $300 million as a breakout of the valuation of the Jacor / Clear Channel merger would peg it at.

Then look at the large number of religious stations that sell time blocks for programs. A profitable model.

And so on.

That's why there are only a handful of silent AMs and very few have surrendered their license to the FCC.

Makes for a bleak listening scenario for middle-aged (and older) English-speaking white guys, I suppose, but nobody says a radio station has to serve the interests of 100 percent -- or even 10 percent -- of the population of its market, or originate programming, or play English-language music, or even broadcast live. 540-1710 khz is useless to the telecoms for cell phone or broadband internet, so there's no temptation to auction it off. I guess that's the future: a localized version of most of what's currently left on shortwave.

 

[landtuna]

Makes for a bleak listening scenario for middle-aged (and older) English-speaking white guys,

Which is why the radio(s) in my house and in my car(s) are almost never on.

 

[RadioFan2J3]

Here is a 1981 Proof of Performance for a smaller AM in Texas. It shows an AM transmitter down by only 1.1 db at 10 kHz. Many transmitters could get to 14 to 15 kHz and be down less than 3 db.

http://www.americanradiohistory.com/Archive-The-Crypt/KKYR-OoP.1981.pdf




Comparisons with FM are hard, as the typical FM proof showed the 15 kHz down about 14 db due to the preemphasis used in FM.

In the block diagram for the equipment lineup, is something out of place?

 

[RadioFan2J3]

On top of the bad sound, there is very little compelling programming on AM that would make most listeners put up with the crappy sound.

Perhaps, but I do admit that the last time I lived in the DC area, I would regularly listen to Andy and Grandy on 630 WMAL while communting between home and the car pool meeting point.

But, alas, things change, Andy and Grandy are gone and I can much easier listen to the news and traffic on one of the several FMs that carry WTOP's programming.

 

[rbrucecarter5]

Makes for a bleak listening scenario for middle-aged (and older) English-speaking white guys, I suppose, but nobody says a radio station has to serve the interests of 100 percent -- or even 10 percent -- of the population of its market, or originate programming, or play English-language music, or even broadcast live. .

Nothing says that a radio station has to have any listeners at all. If you have somebody that wants to use a station as a personal juke box to hear their music over the air, or somebody that wants to hear them self talking on the radio - as long as they have the money to pay the bills, the station will be on the air. So you have the weird mixture of AM formats. I doubt some of these foreign language outlets in Houston have over a few dozen or a few hundred listeners. Same with the Christian stations. Lots of good intentions, nobody cares to listen. But those putting the station on the air pay for the programming and don't care that they really aren't serving the public interest, or are tying up a frequency that could be better used to serve more people.

 

[Avid Listener]

Not all AM stations need ratings to make good money.

No, but if the number of successful AM stations remaining on the air dwindles down to only a few niche stations, how long do you think the people making radios will continue to even include an AM band receiver? I can remember a time when a large percentage of the radios on the shelf at Radio Shack had multiple bands, including AM, FM, and a few shortwave bands as well. Now, those radios are rare and getting harder to find, much like Radio Shack stores.

How long do you think that a station that caters to first generation immigrants will survive when the first generation is replaced by second and third generations? Aside from those who speak Spanish, most immigrants come to America in order to become Americans. That means learning English and adopting American culture.

In fact, your laundry list of profitable AM niche formats echoes my own similar list in one of my earlier posts. What do you think I was talking about when I said, "'This thread is full of isolated anecdotes about the few AM stations that are making money. And I suppose that 'dollar a holler' brokered-time preacher programs, or running a station with a fully automated satellite feed and no live humans collecting paychecks, and maybe a volunteer 'intern' doing all the work for the thrill of working in radio are interesting."

The thing is, all of those niche formats are either targeted to aging population segments that aren't being replaced with new, live listeners. I mentioned "money demos", since you're always so quick to point out how important ratings are when that makes your point. When it doesn't, then you shift gears and claim ratings don't matter if you have a profitable niche audience. But one simple fact is that whether you're making profit from ratings to demos that the advertisers want, or you're making profit from a niche audience, you have to have live listeners. When the audience is aging, and few younger listeners are tuning in, that means your audience will soon be dying. That's an irrefutable fact of life. People keep getting older for a period of time, then they die. A station that turns a great profit airing niche programming to immigrant grandparents nostalgic for the old country this decade won't have that audience in another decade or two. They'll be dead.

When a segment of the radio industry relies mainly on an older, dying audience, it will share the same fate as the audience.

 

[Avid Listener]

Perhaps, but I do admit that the last time I lived in the DC area, I would regularly listen to Andy and Grandy on 630 WMAL while communting between home and the car pool meeting point.

That's an example of the "compelling programming" I was talking about. A little over a decade ago, I would tune in to an AM station in Pittsburgh that had local call-in talk shows where they hosts tended to talk about local subjects. For me, that was compelling programming. And though her show was the least objectionable content on the air at the time, Lynn Cullen's voice was so abrasive and annoying that nothing would have improved the sound, not even the best FM transmitter in the world.

But as you said, things change. Just as Andy and Grandy are gone, so are most of the other shows worth hearing on AM.

 

[TheBigA]

Just as Andy and Grandy are gone, so are most of the other shows worth hearing on AM.

However, before Grandy & Andy were fired, listeners had already deserted their daily show. Bad ratings is what led to the demise of a lot of great talk shows. Not the other way around.

 

[davideduardo]

No, but if the number of successful AM stations remaining on the air dwindles down to only a few niche stations, how long do you think the people making radios will continue to even include an AM band receiver? I can remember a time when a large percentage of the radios on the shelf at Radio Shack had multiple bands, including AM, FM, and a few shortwave bands as well. Now, those radios are rare and getting harder to find, much like Radio Shack stores.

The lack of radios at Radio Shack (which is something I have been pointing out for half a decade) is in part due to Radio Shack refocusing on being a cellular phone outlet but mostly on the fact that owners of smartphones do not buy radios. The platform is moving.

But there are hundreds of millions of AM capable radios out there, and they will be used for decades.

How long do you think that a station that caters to first generation immigrants will survive when the first generation is replaced by second and third generations?

Oh, maybe 40 or 50 years. Look historically at WOV and WHOM in New York. They were Italian language stations until near the end of the 50's even though significant immigration of Italians had ended prior to W.W. I nearly 5 decades before. Or look at the still-existent Polish language stations in Chicago. Or how long there was Portuguese broadcasting around Fall River, MA and Gilroy, CA, long after any significant migration from Portugal occurred.

Aside from those who speak Spanish, most immigrants come to America in order to become Americans. That means learning English and adopting American culture.

But the first generation of all groups tends to remain significantly tied to the birth tongue. That's because of the immense difficulty in learning a new language in adulthood and the lack of time that most immigrants have to study a new language.

In fact, your laundry list of profitable AM niche formats echoes my own similar list in one of my earlier posts.

It's not in any way similar. I described several of the areas of opportunity for AMs, starting with the most widely profitable which are spoken word: news, talk and sports. Nearly a quarter of all AMs fall into this category, and it's generally quite profitable. I went on to detail the next best options, which are ethnic and religion, also quite profitable. I did not even get to the local community stations that survive in many markets by doing whatever they do best... start with KRVN in Lexington, NE, and you will find many such stations.

The ones that are not profitable and will not survive long are the terrible technical facilities... the directional daytimers at 1510 or the stations in towns incapable of supporting a station, AM or FM, because the population is too small.

The thing is, all of those niche formats are either targeted to aging population segments that aren't being replaced with new, live listeners.

The thing about aging is that folks only get one year older each year. So even if a format appeals mostly to over-40-year-old listeners, it likely has a 20 year or more remaining life span. Since a large portion of the AMs (other than the news / talk / sports ones) do not live on ratings, their income is based on relationships and service to a particular constituency.

I mentioned "money demos", since you're always so quick to point out how important ratings are when that makes your point.

I mention money demos when discussing stations that compete for agency dollars, generally called "transactional business" because it is numbers based. Even in markets like LA, only perhaps 25 out of 72 commercial stations go after agency money. The rest sell direct to smaller constituencies. Nationally, perhaps 75% of all stations get little or any agency business and don't subscribe to ratings.

When it doesn't, then you shift gears and claim ratings don't matter if you have a profitable niche audience.

Most of the discussions on this board deal with signficant stations in rated markets. If you want to discuss Iuka, MS or Blythe, CA, there is a whole different out there for stations in those markets.

But one simple fact is that whether you're making profit from ratings to demos that the advertisers want, or you're making profit from a niche audience, you have to have live listeners. When the audience is aging, and few younger listeners are tuning in, that means your audience will soon be dying.

If you call 40 years "soon" feel free....

That's an irrefutable fact of life. People keep getting older for a period of time, then they die. A station that turns a great profit airing niche programming to immigrant grandparents nostalgic for the old country this decade won't have that audience in another decade or two. They'll be dead.

If you take the linguistic groups that account for most non-English programming, you can see you are wrong.

Hispanics: average age well under 30, so there are at least 40 if not more years left on formats appealing to first generation immigrants. Plus there is considerable inbound migration to supplement the aging of the current populations.
Asians: Similar to Hispanics. Young, and many decades of life left on many of the specific languages like Tagalog, Chinese and Hindi. Others, like Vietnamese, will be limited mostly to the existing population but that still leaves many decades of life to such formats.
Russian: big centers of growing population will sustain a few Russian stations in the US for decades.

In other words, none of the concerns are in the immediate or even intermediate future. And by then, the distribution platform will have changed totally anyway as that transformation is already well underway.

When a segment of the radio industry relies mainly on an older, dying audience, it will share the same fate as the audience.

Yeah, in 30, 40, 50 years... nobody plans that far out in an era of changing technology.

 

[frankberry]

At one time, I lived in the mountains just east of Albuquerque. Cedar Crest.
Even though that location was only a few miles from the TV and FM transmitters, the reception was almost impossible.
The mountains blocked the signals. Other mountains caused multipath.
AM radio was the only broadcast service that we could reliably receive at that location.
AM radio may not be quite so dead in mountainous regions. (As I recall, AM stations "lead the pack" in the San Francisco market).

 

[davideduardo]

AM radio may not be quite so dead in mountainous regions. (As I recall, AM stations "lead the pack" in the San Francisco market).

San Francisco has a bit higher than average AM share... about 17 to 18 share points. Compared to LA, with 13 shares, that's about 50% more.

Almost all the AM shares in San Francisco are between KCBS and KNBR with an average of 11 shares between them. Then KGO and KSFO have about 5 total shares, and all the rest have a total of about 2 shares.

LA is much less a sports town, which explains why there is a large difference between the two... few sports shares.

And KGO, KCBS and KNBR do a much better job of covering the whole metro which runs from Santa Rosa to Campbell than any of the FMs do.

Add in terrain, and SF is a better AM market than most... but only for a couple of stations.[/SIZE]

 

[K6JHU]

"At one time, I lived in the mountains just east of Albuquerque. Cedar Crest."

I live just East of Cedar Crest. FM is still non-existent. Even worst in the Tijeras Canyon. And at night (except for KKOB) AM is unlistenable.

I don't like talk/sports radio. So AM is out. My answer is Sirius/XM and USB Flash drives.

BTW, Many of the ABQ AMs have migrated to FM translators on Sandia Crest.

 

[ContinuousWave]

Here is a 1981 Proof of Performance for a smaller AM in Texas. It shows an AM transmitter down by only 1.1 db at 10 kHz. Many transmitters could get to 14 to 15 kHz and be down less than 3 db.

http://www.americanradiohistory.com/Archive-The-Crypt/KKYR-OoP.1981.pdf

Comparisons with FM are hard, as the typical FM proof showed the 15 kHz down about 14 db due to the preemphasis used in FM.

EHH thats nothing...in the 1970s, KOLE Port Arthur, TX could pass a FM audio proof of performance with a 15k loop driving the site from the studio...not bad for a tube Gates transmitter

 

[Avid Listener]

However, before Grandy & Andy were fired, listeners had already deserted their daily show. Bad ratings is what led to the demise of a lot of great talk shows. Not the other way around.

It doesn't matter why they're gone. The point is that they're gone.

 

[TheBigA]

It doesn't matter why they're gone. The point is that they're gone.

Causality matters. Had people continued to listen, they'd still be there now.

One can blame owners or "suits" (as you call them) for screwing everything up. But in the case of the death of AM, a lot of the decisions were made by listeners who chose to desert the AM stations that they once loved. That's a listener choice. They make that choice for a number of reasons, but once they make that choice, it's over.

 

[Avid Listener]

Causality matters. Had people continued to listen, they'd still be there now.

One can blame owners or "suits" (as you call them) for screwing everything up. But in the case of the death of AM, a lot of the decisions were made by listeners who chose to desert the AM stations that they once loved. That's a listener choice. They make that choice for a number of reasons, but once they make that choice, it's over.

Do you understand the difference between a broad principle and a specific example?

A once popular radio show ends because a decline in popularity took it below the minimum threshold of listeners. If a show goes from a 5 share to a 4 share, and they pull the plug on it, those folks in the 4 share were still listening. Those with the power to decide what goes on the air have the responsibility for putting shows or programming on the air that attracts listeners. If the suits who are responsible for attracting audiences fail to replace failing shows or programming it's the fault of the suits when the station fails. The listeners make the choice to accept or reject the replacement programming or show, but if the listeners reject the content the suits put on the air, don't blame the listeners, blame the suits.

When a show starts to slip in the ratings, it's the responsibility of the suits to fix it. If listeners are lost, it is the responsibility of the suits to get them back. When a listener leaves a particular show or station, chances are that some other, more attractive alternative captured them. The suits are engaged in a contest with each other to capture listeners. Listeners transfer their loyalty from one show to another. They don't just decide, "I'll stop listening to the radio and just enjoy the silence". They decide, "This show was good and I liked it, but now this other show is better so I'll switch". So, it's the fault of the suits who (1) allowed their show's appeal to go downhill, and (2) didn't come up with something better than the competition to get the audience back.

Once a listener chooses something new, it is not over. If a person demonstrates that they'll change once, then it's always possible to persuade them to change back by enticing them with something even better.

 

[JeffM]

Oh, come on now. If your theory about the networks' purpose being to keep a show running were true, "Amos 'n' Andy" would still be on the air!

 

[ContinuousWave]

Originally, the FCC was to pick from the field of five systems and issue an approval no later than the beginning of 1978. Disputes and the Kahn Laboratories suit delayed this for about 5 years and ended up being a marketplace solution.

In 1977 or 1978 there was enough AM listening... about half of it... to stabilize the declines of AM and to preserve music formats. 5 years later, it was too late.

WELLLL, actually the FCC did pick Magnavox first in 1980 or 81 iirc...THEN came the lawsuits (mostly from Leonard Kahn) and the FCC's back pedal under the Reagan's admin "let the marketplace decide"....It was not until 1990 iirc when the FCC finally adopted CQUAM as the standard. Radio manufacturers gave up waiting on the decision and went back to mono only by then...and the music stations had left AM because of the delay. (WLS survived until 1988 iirc)