radiokmac said:
... the finance industry caused a functioning market system to fire it's best talent just for the sake of consolidation (that's where the debt came from). These firings have driven listeners away from radio in droves.
If the truth is told, many of the "live local talent" reductions are due to an entirely different set of reasons:
First, the PPM, rolled out about 5 years ago in the top 48 markets, showed that excessive talk was a negative, and that many "name" talents did well in the diary survey due to name recognition and memory, but were not getting much listening.
Second, the newer generations of listeners don't necessarily want DJs and talk. They want good mixes and the right music. As evidence, in both 18-34 and 25-54, one of the top 2 shows in NYC in mid-days is a mix show!
Third, just as American Idol is a national show, national talent is doing very well in local markets. The technology we have today, coupled by the very low Internet and corporate WAN costs, allows stations to play locally programmed music with national quality talent, such as Seacrest and Elvis Duran.
My ipod does not give me traffic information but I feel compelled to listen to it in the car because the product of radio has become too canned.
If there were ever a time that radio was "canned" it was in the 70's. Automation came of age, and many formats did not require or need live hosts... yet several of the top 5 stations in 'most every market had no jocks and were automated.
As for the comment that radio was losing money before 96 in small markets. That's a fairy story that consolidators told the government to allow them to gobble up the mom & pops (that the NAB betrayed).
Going back 6 decades and more, the FCC required annual financial reports to be filed... a practice only discontinued in the last 25 years. And, no sooner had the FCC licensed all manner of new stations, daytimers and FMs following W.W. II than we saw that half the stations did not turn a profit. That was proven year after year and the data is still available.
Consolidation did not, as a rule, soak up the mom & pops. Mom & pops were in the smaller markets, not in New York and Chicago and LA. Consolidations sucked Jacor into Clear Channel. Groups with 7/7 became groups with 14/14 in the first stages of consolidation, and then the bigger groups merged with or bought other groups.
And, as a sidebar, many of those consolidation moves were done via mergers or equity exchanges, not with cash and not with debt financing. No DJs were sacrificed in the making of most of those movies.
Station broker Michael Bergner comments about this in Business Week. Since 1987, "Even if you knew nothing about the business, you would have to go out of your way to lose money"
That's just a lie. In the very same late 80's, the FCC pushed through Docket 80-90 and severely multiplied the number of stations in most small markets and rural areas and expanded competition via move-ins and upgrades in larger ones.
But no new revenue was created. The slices of the pie got smaller
Example: I was responsible for WDSR and WNFB in Lake City, FL in the late 80's. Lake City had one FM and two AMs, and adjacent Live Oak had an AM FM combo. The FCC dropped 5 FMs on the market; revenue got spread so thin that nobody could afford to do local news or even the HS football games. WDSR had 4 hours a day of local news and community information, spread in blocks in the morning, mid-days and afternoons. With the reduction of revenue, the GM who did much of the on-air community stuff, had to take a greater role in selling... Eventually, the station was sold for a third of what it cost, after losing money every month following the sign-ons of the new stations (all of which took satellite formats and sold for a buck a spot).
Oh, and while that was happening, WalMart came to town, accompanied by a few other Big Box stores, and they killed much of the local retail ad revenue base.
Of course NY mom and pop stations participated in public service. ALL stations corporate or family owned, back then had to prove to the FCC that they were serving the public interest. Certainly many broadcasters tried to squirm out of this agreement.
Broadcasters large and small knew that in certain formats, running lots of news or public affairs shows was hated by everyone but the FCC. So we buried the shows on early Sunday morning and ran 10 minute newscasts overnight. The FCC got the statistics they wanted, the station got to play more non-stop music.
The public interest was often playing more good songs, but the FCC forced stations to insert stuff that often was despised.
The best broadcasters realized that by serving the public interest, they were building audience to sell to their advertisers. The consolidators today could not care less about the advertisers. They make their money a different way. Through fees and interest.
Radio stations make money the same way as always, by selling ads. To sell ads for good rates, you need goodly sized audiences.
Again, serving the "public interest" does not mean having live DJs or lots of news or discussion shows. It means giving the public what they are interested in hearing.
The radio part of the 96 telecom act was discussed pretty much only on the opinion pages and in business trades after it happened. But now that the finance industry has fired so many of radio's best people, the inside story is emerging.
Among the biggest reasons for staff reductions are:
Docket 80-90. Thousands of new and upgraded stations and no new revenue.
The PPM which shows vastly lower listening levels and thus lower ad rates. 70% of the US population is in a PPM market.
The growth of entertainment alternatives, including cable, gaming consoles, the Internet, etc.
The consolidation of retail into big box categories, from WalMart to Bed Bath & Beyond, many of which use limited local radio. Same goes for other categories ranging from restaurants to pest control... national operations using national media with little local ad expenditure.
The recession, which took about 30% away from radio's revenue base.
Technology which allows better programming with fewer people and wide and flexible distribution of that programming.
And, of course, consolidation in the cases where the consolidator is a bad operator. But we've had bad, quirky and even insane operators for nearly a century of radio... so that is not new.
