Jockless Jukebox without Account Execs

[spymovie7]

It looks like the face of Radio is changing forever:

* No Disc Jockeys
* No Commercials
* No Sales Account Executives

I ask the rhetorical question: Will the FM band become a virtual "ghost town" with no live human beings?

If you'll check out the following news item from today's R&R Online, THREE Long Island FM stations are flipping to commercial free jockless formats:

http://www.radioandrecords.com/Newsroom/2005_09_12/topstory.asp

Actually, since we now have the Internet, you actually could run a radio station without any outside Sales Account Executives.

On the air, you simply invite people who would like to advertise on the station to go to your web page. Every Monday morning, there would be an online auction, kind of like eBay, with the various commercial spots going to the highest bidders. At least that would be a lot better than going commercial free for months on end like Mighty 1190.

How much can a Radio Station be worth that isn't playing any commericals? It looks to me like we're going to begin seeing Radio Stations being sold for less than the historical cost that the current owner purchased the station for years ago. With Sales declining, the Account Executives will quickly realize that they're better off selling some other type of advertising or something else.

 

[Tom_Desmond]

> How much can a Radio Station be worth that isn't playing any
> commericals?

This goes to the concept of "stick value", which basically is what a buyer is willing to pay for access to a particular market when purchasing a station with negative or non-existent cash flow. In most instances, an unprofitable station does have some value because there is probably someone out there who is convinced that they can turn the station around and make it profitable.

> It looks to me like we're going to begin
> seeing Radio Stations being sold for less than the
> historical cost that the current owner purchased the station
> for years ago.

Since station prices were overinflated at the turn of the decade, it is reasonable that at least some station prices will need to drop to reflect more realistic valuations. There's nothing inherently wrong with this, because there is no law of economics that says that asset values must always increase. In fact, I'd argue that it is good, because reasonable prices mean that radio ownership becomes accessible to a wider range of entities.

 

[AliceTheCook]

OK, let's say you're First Broadcasting, running 2 jockless, commercial-free stations. This does several things: builds share, attracts attention, keeps costs down and makes the bottom line look great, puts SOMETHING on the air for potential buyers to test the quality and reach with, and makes you look like a savior to local listeners who hate commercials anyway~~~building some loyalty there that First hopes to keep when the spots DO start playing. It's not a new trick, by any means. Even "WKRP" mentioned its merits in an old episode. Surely it predates even that, though most commercial-free formats have typically been short-term stunts in the past.

And part of the Clear Channel model mentions a mass sales force that covers a whole cluster (and likely expands to a region in some areas) that's one-stop shopping for ads on all their stations, their billboards, etc. I can't see the AE positions ever going away, but do expect all the major players to centralize them (that haven't already,) and have them hammer only national accounts~~~~which is yet another way localization of radio is being stolen away. Unlike jocks and management and an office staff, AE's are free to the station unless they sell something.

> It looks like the face of Radio is changing forever:
>
> * No Disc Jockeys
> * No Commercials
> * No Sales Account Executives
>
> I ask the rhetorical question: Will the FM band become a
> virtual "ghost town" with no live human beings?
>
> If you'll check out the following news item from today's R&R
> Online, THREE Long Island FM stations are flipping to
> commercial free jockless formats:
>
htt> p://www.radioandrecords.com/Newsroom/2005_09_12/topstory.asp
>
>
> Actually, since we now have the Internet, you actually could
> run a radio station without any outside Sales Account
> Executives.
>
> On the air, you simply invite people who would like to
> advertise on the station to go to your web page. Every
> Monday morning, there would be an online auction, kind of
> like eBay, with the various commercial spots going to the
> highest bidders. At least that would be a lot better than
> going commercial free for months on end like Mighty 1190.
>
> How much can a Radio Station be worth that isn't playing any
> commericals? It looks to me like we're going to begin
> seeing Radio Stations being sold for less than the
> historical cost that the current owner purchased the station
> for years ago. With Sales declining, the Account Executives
> will quickly realize that they're better off selling some
> other type of advertising or something else.
>

 

[gdvanc]

> And part of the Clear Channel model mentions a mass sales
> force that covers a whole cluster (and likely expands to a
> region in some areas) that's one-stop shopping for ads on
> all their stations, their billboards, etc.

Speaking of radio and advertising, I ran across this very brief article a couple of days ago from a site apparently dedicated to Radio Advertising:

Radio Industry: "Dying From Within"
http://www.audiographics.com/agd/s1091205.htm


That story linked to this much longer article on another site (Advertising & Marketing Review):

Is Radio to Survive Again?
http://www.ad-mkt-review.com/public_html/docs/fs105.html



Both web sites could use some design help. Isn't there a radio-pro-turned-webmaster (or two) here?