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How do these stations make money?

B

bobdavcav

I know that commercials are annoying to the listener, so I can understand why stations would want to play more music, or at least create that perception. However, 2 examples come to mind right away of stations I don't understand how they make money.
1. WNRG always plays 60 minutes of nonstop music, then I don't know how long there breaks are. How could they survive on this strategy long-term?
2. I was listening to KFRH earlier today and I think I heard 2 spots in about an hour and a half. Again, how do they survive? I can understand a strategy like this would be good for TSL, but is it a money making one?
 
The answer is low overhead. WNRG doesn't have any jocks and the PD oversees several stations. WNRG is on a tower shared with its Saga sisters, and shares a studio building with them.

For Saga, what are the marginal costs of running this station? There's the startup cost of buying the antenna and transmitter and studio equipment, and a fairly small recurring cost for maintaining it. There's the music licensing and a little bit of time to maintain and update staff the web site. You need someone to handle the traffic and billing and sales, but all of those resources are shared among the cluster.

The electricity for running the class A WNRG is a rounding error compared to the power so consumed by two full class B stations there. Same for the studio building: WNRG can share a studio with one of its sisters or be diplexed into the production studio at Saga Milwaukee. Its automation computer can fit very nicely in a rack in a closet somewhere.

Summary: It doesn't take a whole lot of revenue for a clustered station to be profitable. The reason stations like this seem to change formats a lot is because managers think a flavor-of-the-month format might be more profitable than whatever they're currently airing.
 
I really hope I stop listening to CHR before Energy 106.9 dies, this is a good station. On the other hand, KFRH Las Vegas is a different story, running at 6 times the power and the owner seems to be a small broadcaster although the PD also probably programs KREV as well. They too don't have any jocks except for syndicated Billy Bush which runs at a very odd time, 1-5. They are also the most boring CHR I've heard in a long time I thought KIXZ was bad!
 
I am growing weary of hearing the fat chick wanting to quit losing weight due to excessive use of Wrong Size Smoothies...
 
WNRG in Milwaukee is a small 3000 watt station in the same building as three other FMs with more history, more stability, more listeners and more money. They've been through several formats over the past few years, and their planned flip to CHR a couple years ago, beginning with lame stunting, failed horribly when Clear Channel got wind of Saga's badly-kept secret and suddenly flipped a low-performing station (The Brew) to CHR with a similar name (Radio Now vs. the planned "106.9 Now"). Needless to say, 106.9 had a lot of egg on their face, and after extending the stunting, opted to go with classic country. Two years later, after the country format drove them to the bottom of the ratings, they went CHR anyway.

The new format works well for Saga. They had already been doing the same rhythmic CHR format on translator stations in Des Moines and Champaign, IL. This way, both translators have a mothership in a bigger market with a PD programming both. None of the three stations have air talents, so that keeps overhead down, in addition to being part of a cluster. And it's not like Big Buck Country was pulling in tons of money either. In addition, Energy 106.9 allows Saga to give Clear Channel (and Entercom, for that matter) the middle finger.
 
Yep agreed. Now on to KFRH please? Is that situation any different? I would assume a little since they may only have 1 other station in the building where they are at and have presumably 6 times the cost, at least the power bill should be about that much different from WNRG to KFRH.
 
bobdavcav said:
Yep agreed. Now on to KFRH please? Is that situation any different? I would assume a little since they may only have 1 other station in the building where they are at and have presumably 6 times the cost, at least the power bill should be about that much different from WNRG to KFRH.
Click to expand...

KFRH is billing about $2 million a year. If the costs are fairly well controlled, they can make good money off that.

Remember that many profitable smaller market stations bill $250,000 to $300,000 a year. The average billing for stations in the US before the recession was less than $500,000.

The power bill is not a major factor in the operation of most larger market stations. For example, a 50 kw AM in LA might have an electric bill of around $9,000 a month. A 100 kw FM is going to be quite a lot less, as FM transmitters are more efficient and much of the power gain is in the antenna... a 40 kw FM transmitter in LV might cost $4,500 a month in power... a small expense when compared to big ticket items like insurance, music rights, salaries, sales commissions, etc.
 
KFRH is billing that much with their low spot load? As I said yesterday, I only heard 2 spots in maybe an hour and a half or more.
 
bobdavcav said:
KFRH is billing that much with their low spot load? As I said yesterday, I only heard 2 spots in maybe an hour and a half or more.
Click to expand...

A) When were you listening? 3PM or 3AM?
B) Many stations schedule commercial-free hours at certain times of the day...
C) It is January--not May or October...
D) Two spots an hour times $50 a spot (just an example)=$100 an hour X 18 hours a day=$1800/day X 312 days a year (Mon-Sat)=$561,600 per year. If the station is just the 4th FM tacked-onto a cluster with 3 killer stations and thus has only incremental expense assigned to it, it could easily be spinning off 60% profit... or $336,960.

America is a great place.
 
bobdavcav said:
KFRH is billing that much with their low spot load? As I said yesterday, I only heard 2 spots in maybe an hour and a half or more.
Click to expand...

KFRH in Las Vegas only runs 2 or 3 spots an hour. They've been doing this for a couple of years. The station is all automated, virtually no staff, although their AM station does have board ops for some of the syndicated talk shows. The owner is apparently rather eccentric.
 
bobdavcav said:
Agreed on the last point, America is a great place. I was listening between 1 and 2:30 in the afternoon on a Saturday.
Click to expand...

A Saturday afternoon in January is not going to have many spots in it. And if it does, they are likely bonus spots for a buy that is focused on 6 AM to 7 PM.
 
Spot rates are important. I've known stations to run exceedingly high spot loads and have very low revenue. This station may be the inverse of that.
 
TomZ said:
I am growing weary of hearing the fat chick wanting to quit losing weight due to excessive use of Wrong Size Smoothies...
Click to expand...

Yeah, you'd think by now she would have just disappeared into thin air
 
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