FIVE or TEN years from now ... what's your forecast?

[LITTLEBOYBLUE]

Had an interesting conversation yesterday with a buddy about how things will be shaking out over the next decade.

What's YOUR take on what our market will look like in the next several years?

May want to keep in mind any or all of these ... (a) Continuing dominance of cable & satellite vs. over-air distribution; (b) shift in how people receive news (will it be all on-demand or sit-for-broadcast); (c) Possible over-saturation of signals to available audience; (d) Technology evolution -- will AM/FM/HD spectrum be completely redefined; (e) Networks ongoing discussions to eliminate local affiliates in distribution model.

My own bias is there is probably room in this market for about 10 FM music formats -- and with some degree of variation (soft AC vs. Hot, for example) and competition that gives you probably 15-25 viable FM stations (geographic considerations excluded -- such as serving local areas vs. the metro) ... and I suspect there is not room for more than about 10-20 AM stations which are all some degree of spoken format (religion, news, sports, local emphasis, etc.). Obviously that's a significant shave-down from the signal count we currently see. If the spectrum changes technically .. then those formats can co-exist and survive on a unified spectrum.

Biggest question on TV is whether cable will gobble syndication niches...and if that happens will MY-Q, CW, etc. be viable? I find it ironic that PBS is already so unique and isolated in what they do they can survive from a CONTENT perspective, but wonder about their financial one.

 

[TVradioguru]

Interesting post and question! Thanks for posting something interesting and not laced with the same old hyperbole and dumbed-down speculation about what radio station will flip format next in Seattle.

In a nutshell, here is my prediction to radio and TV in general:

1. In five years, the number of active AM stations will be reduced by 20% nationwide.
2. In ten years, the number of active AM stations will be reduced by an additional 30% nationwide.
3. In five years post government spectrum grab, 18% of small and medium market TV stations will choose to turn in their licenses and take the options of a government pay out, giving up their market channel for use as Internet broadband. The problem will be that because consistent channels won't be available nationwide, large chunks of previous broadcast TV channels will become vacant.
4. In five years, the first cars with Internet access built in will be rolled out. Unfortunately because of safety concerns, the radios will have limited access to anything but stored music and spoken word files, essentially emulating an IPOD-Podcast or... radio. Radio stations will begin producing specialized programming for distribution to cars equipped with these units. Sales of these units will be slow because of the limited capabilities, cost of purchase and subscription costs to access the Internet.
5. Within the next five years, over 75% of the LPFM stations nationwide will be silent.
6. Over the next ten years, surviving radio stations will grow market share, continuing dominance as the free choice for wireless music, news and entertainment.

 

[TheBigA]

A lot of the distribution point has to do with cost. It's obvious that cost for cable will not be going down. The cable companies are looking for ways to increase the amount of money their users pay each month. Same with ISPs. So as that increases, and becomes more of an issue, I see consumers looking for alternatives. Already, satellite TV has proven itself to be cheaper than cable. While not killing cable, it has provided an opening for DirecTV and Dish. I expect to see people looking for ways to get the radio they want without additional cost. That could open a window for new uses for broadcast, or a broadcast revival. Certainly on HDTV level, once people see they can get local TV signals comparable to cable on free over the air TV, they will make changes in their plans.

The news issue is another one that will vary, depending on circumstance. Some newspapers are looking for ways to put a paywall on their online presence, as the Wall Street Journal did. Some are just more aggressive with advertising. I think it will be a combination of things, but it will be interesting to see how the 24/7 cable news channels evolve. If they will continue towards personality driven news presentation, or more towards the hard news side. Some consumers will opt for the personal delivery of news, but I think we will get to email overload at some point.

I agree that the number of AM stations will decline. I see no new investment being done for AM, ither in terms of programming or ownership. Unless the FCC does something to change the playing field, I think we'll continue to see a handful of AMs per market continuing to be viable, but the rest will become non-players, either going to brokered, ethnic, religious, or dark.

I agree that the growth of internet radio in cars will be hampered by a combination of things: Lack of an organized system of distribution, either WiMax, wi-fi, or cell service that is as dependable and as efficient (cost) as broadcast. Certainly particular music fans who seek a certain kind of content will do whatever it takes to get what they want. But it won't be a significant number. I agree that safety concerns will lead to regulations having to do with the use of internet in cars.

And I agree that financial challenges will hurt the growth of LPFM and LPTV. This was a great idea in principle, but the costs simply exceed the income. High power non-coms are struggling, so it can't be any better or easier for low-power.

In other words, things will continue to shift and consolidate. People don't want to pay for the content they enjoy, and those who can provide the most for the least will survive.

 

[WDAE-FM101]

KMCQ will still be looking for a buyer!

 

[LITTLEBOYBLUE]

KMCQ will still be looking for a buyer!

...with no change in asking price!

 

[peetah]

Cloudy with drizzle. Hi: 52.
Oh, I thought you were talking about the Seattle weather forecast...

;D

 

[radioguy123]

1. Performance royalties will be eating into radio revenue forcing 50% of music radio stations to move into a variety of new spoken word formats to reduce costs. It will reduce the number of internet and pandora style knock offs as well as the crack down for royalties escalates. What will emerge is a variety of spoken word formats aimed not just at the aging news and talk demos, but younger.

2. AM stations in major markets will be in simulcast with FM partners in spoken word. This gives the stations reach with AM, with FM office penetration and access to smart-phones that will be forced to carry FM. Already beginning to happen. In small markets AM stations will be simulcast on FM translators, that shift is already happening too.

3. FM Music stations will be much stronger, with fewer of them.

4. FM will be in all phones and will use part of their bandwidth to deliver the next generation of social networking and content. HD signals will be used for a variety of content delivery systems to your phone and computer. It is the next forefront for radio.

Radio will adapt and grow.

 

[Bongwater]

OK, where will radio be in five years?

1. THESE will be called the "good old days"

2. Kids ALREADY ask me what a radio is.

3. "HD Radio" in six words "Too late, too few, too boring"

4. Congress starts talking about the future of the AM band seriously.

 

[Wonderfulwino]

I see the rebirth of am/fm simucasting dove-tailed into the internet.. Music formats are getting scalded to death with royalties and the competition from internet based stations is emerging quickly. If broadband infrastructure steps it up and expands into backwoods geographic areas like everyone expects, then the free radio music medium will face some additional challanges. Investment in AM has to either increase substantially in programming creativity or call it good and let it go the way of CB radio. Talk radio is exhausted, especially for the political hacks. Shock jock is over. The survivors will be those that provide talk radio as an entertainment venue rather than some place for the listeners to tune in and get mad. Bob Rivers has the right idea. He's kind of the Arthur Godfrey of our time..sort of..
This may be a pipe dream, but part of that reinvestment in AM (or FM for that matter) may well be in recreating local, live radio. Put the local jocks back on the pedastal some of them deserve to be on and cultivate community talent rather than let NewYork or LA manage it..

 

[TVradioguru]

The problem with doing live and local on an AM station is you have to play to your demos. The fact is that for the vast majority, nobody under 40 listens to AM. Moreover, the 50+ crowd that listen to talk radio are not sought after by advertisers anymore with those very advertisers also feeling that AM is technically inferior to FM or the web.

So there you sit, live and local expense with little or no chance for a return on your steep investment? Chances are you wouldn't be in business very long.

Even many of the existing synde-talk stations just barely scrape enough in a month to keep the lights on. Most are money losers.

 

[equalinercard]

The problem with doing live and local on an AM station is you have to play to your demos. The fact is that for the vast majority, nobody under 40 listens to AM. Moreover, the 50+ crowd that listen to talk radio are not sought after by advertisers anymore with those very advertisers also feeling that AM is technically inferior to FM or the web.

So there you sit, live and local expense with little or no chance for a return on your steep investment? Chances are you wouldn't be in business very long.

Even many of the existing synde-talk stations just barely scrape enough in a month to keep the lights on. Most are money losers.

Odd, because in 2009, of the top 10 billing radio stations in the United States, 5 were AM stations. 6 were news or news-talk.

It can still be a very, very profitable format if you have the right signal and put on a quality product.

I would still maintain that KIRO dumping that 50,000 watt blowtorch signal was one of the biggest radio blunders of all-time.

 

[TVradioguru]

Well then I guess much has changed in a year and continues to change for AM stations. Take markets larger than Seattle like Los Angeles, San Franscisco, Dallas, Washington D.C. and New York. Not many of the major markets have top rated AM stations anymore. Even a station such as KGO, top of the list for almost 20 years has fallen to middle of the pack in ratings and upper middle in revenue as compared with FM N/T stations.

Now with PPM, I doubt KIRO would have held up even on AM. A disjointed format is a disjointed format, no matter what band it's on.

 

[equalinercard]

Well then I guess much has changed in a year and continues to change for AM stations. Take markets larger than Seattle like Los Angeles, San Franscisco, Dallas, Washington D.C. and New York. Not many of the major markets have top rated AM stations anymore. Even a station such as KGO, top of the list for almost 20 years has fallen to middle of the pack in ratings and upper middle in revenue as compared with FM N/T stations.

Now with PPM, I doubt KIRO would have held up even on AM. A disjointed format is a disjointed format, no matter what band it's on.

Odd, because in the July 2010 PPM ratings that doesn't ring true

In SF 3 of the top 5 stations are AM's, and 4 of the top 5 are news, talk or sports.

In Chicago, the top 2 stations are AM, and 3 of the top 6 are AM,

In NYC, there are 3 AM's in the top 10.

In LA, KFI is #5.

Granted those are all 12+ numbers. But I think all of those stations are in the top of the heap in their markets in revenue.

There's no question that AM radio continues to struggle, but so do an awful lot of FM's

I don't disagree with your overall assessment of the health of AM radio, but we should try to include some facts in the discussion.

Seattle, which was once a rock-solid AM market, is now a dismal AM market. I'd suggest, again, that has more to do with incredible programming and strategy blunders than with the AM band itself.

 

[TheBigA]

I'd suggest, again, that has more to do with incredible programming and strategy blunders than with the AM band itself.

Allow me to suggest it might be all of the above. As others have said, the band itself is overcrowded with a bunch of mosquitoes. It reminds me of a city where I used to work. They kept trying to do some urban renewal to encourage businesses and offices to move downtown. But the area was such a ghetto, no amount of tax breaks or incentives would cause private business to move there. That's kind of what AM radio is now. Thankfully, each town has a couple of exceptions, with a few high power AM stations that attract an audience. But they're not enough to overcome the overall atmosphere.

 

[SandyG]

It's all about CONTENT. The perfect example I hear over and over is the TV show MAD MEN. It is on AMC...American MOVIE Classics. Why on earth would one watch THAT show on THAT channel. If you have great content, people will find it. If Justin Beiber, or any current superstar flavor of the week, started doing a show on AM, guess what, kids would be asking their parents for an AM radio.

 

[TVradioguru]

It's all about CONTENT. The perfect example I hear over and over is the TV show MAD MEN. It is on AMC...American MOVIE Classics. Why on earth would one watch THAT show on THAT channel. If you have great content, people will find it. If Justin Beiber, or any current superstar flavor of the week, started doing a show on AM, guess what, kids would be asking their parents for an AM radio.

Isn't his music featured on Radio Disney? And does RD show up in any ratings in any market? Nope. Before Beiber, it was Hanna Montana a regular feature on RD, yet I saw no surge in AM listening below the age of 25. The reality is kids purchased CDs or MP3,s. Your theory doesn't hold up in the real world.

AM is a technically inferior media form as compared with all the other choices. The only ones who are supportive of it are those who grew up with it and advertisers are not as interested in that age bracket.

 

[radioguy123]

Good discussion. AM does do well 12+, but not 25-54, except possibly in mornings. As I mentioned earlier AM radio, when combined with FM are the perfect match. A big stick AM gives you more reach than an FM and is great in cars in cities like Seattle and SF. The FM gives you office listening and clarity. The combo of AM and FM make the most sense, the best of both worlds. WSB in Atlanta was the latest to make the combo move today. The impact of performance royalties will lead to many more combos. In small markets AM is being broadcast on FM translators.

KIRO made a HUGE error in breaking up the 710 AM/ 97.3 combo. They were number one and might have held that number in the PPM, especially if they included Mariner broadcasts at night. Big blunder.

 

[scott salvatori]

KIRO did make a mistake in eliminating new/talk/radio on the legendary 710AM. they should have just added the simulcast with 97.3. 770AM should have been their sports outlet. especially now when you see the ratings of the corporate conservative talk channels. perhaps seattle only has room for one now...KVI?

as far as listeners of the AM band being only us 40-50 age plus, who grew up on it. who cares? if advertisers were smart, they'd realize it is us, in this age bracket that have money, who will spend money on products that we need. sure the younger generation of KUBE hip rap listeners are rabid buyers of products, but who has more money, us or them?

i also have high hopes for the AM band through niche programming. the price will come down for AM outlets, allowing a new group of activist owners, or investors, an outlet for their niche, whether it be music, or talk. the AM band will be an outlet for the 40 year old plus crowd, who carries a ton of political, and buying weight. the fact is, there is a lot of info, and education(news,politics) and music(via internet), just waiting to get out through the AM air waves for the 40 plus crowd. one must consider that nostalga plays a big roll in me making this key point. the 40 year old plus crowd loves nostalga, and trying to relive the past, through products, music, and radio. making them aware of it, and tuning in, is the challenge. along with finding the advertisers who can get the benefit, and take advantage of this demographic.

 

[Jay Peninger]

It's all about CONTENT. The perfect example I hear over and over is the TV show MAD MEN. It is on AMC...American MOVIE Classics. Why on earth would one watch THAT show on THAT channel. If you have great content, people will find it. If Justin Beiber, or any current superstar flavor of the week, started doing a show on AM, guess what, kids would be asking their parents for an AM radio.

Isn't his music featured on Radio Disney? And does RD show up in any ratings in any market? Nope. Before Beiber, it was Hanna Montana a regular feature on RD, yet I saw no surge in AM listening below the age of 25. The reality is kids purchased CDs or MP3,s. Your theory doesn't hold up in the real world.

AM is a technically inferior media form as compared with all the other choices. The only ones who are supportive of it are those who grew up with it and advertisers are not as interested in that age bracket.

I would agree with you 100% on that, I am not sure that anyone under the age of 25 even knows there is AM radio much less actually tune it in and listen to it.

And I don't think advertisers really focus on the 40+ set because most of those people are very set in their ways and have more of a fierce brand loyalty so why spend money advertising to a group of people who likely aren't going to be motivated enough to switch brands or try something new based on a 60 second radio commercial.

Most of the 25+ are out in the marketplace and very active, usually tuned in via a mobile device of some kind and they are much less brand loyal and apt to be receptive to the marketing.

The AM band is headed to much the same fate as Citizen Band Radio after the Cell Phone revolution, it might linger on but it will be a fraction of its former self.

The decline in commercially viable AM stations might give rise to community based Low Power & Part 15 broadcasters who could fill the gaps....

 

[SandyG]

You totally missed my point. Radio Disney was not "The Hannah Montana Show"...if it was the ONLY place you could get an EXCLUSIVE Hannah show (but that would be hard now, since they'd also make it a podcast...but my point is IF they only did it on an AM station, then the kids would have found it. You can put a great restaurant in a crappy location in the middle of nowhere and it CAN do well, but only IF it's GREAT. Corporate radio isn't interested in content as much as they are feeding the masses, so instead of an exclusive bistro, they are making McDonald's and putting them next to Burger King.