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KIXI Begging?

In a sense, it is like McDonald's or Starbucks closing under-performing stores while expanding in other places. It's just that radio companies are not used to surrendering a license, as prior to this new era the license was always worth something to somebody.

Groups that have already sold their vertical real estate to a tower company simply will have to show the declining value of the intangible assets like goodwill and the license. Most major broadcast companies have taken charges already on the overall decline in asset values, so many will have the AMs on the books at very low asset worth; "impairment charges" can be seen all over the industry among the public corporations.

I read the column on this topic this morning by the guy who charges $99 a year to tell you that the industry is going to hell.

Thing is, I can't disagree with turning in those licenses. Both are class D, and I have light bulbs with more watts than either ran at night. Translators aren't full power FMs. (or, at least the ones that are built lawfully) At some point you have to stop throwing good money after bad.

I'm reminded of the class C on 1230 I used to run. Our backup transmitter was an old Bauer that had been out of service for close to 20 years and wasn't fixed because the owners didn't think it was worth the money. We took a lightning strike and were down for three days. The loss of revenue did not equal the cost of either fixing the Bauer or putting in a new aux. And this was on a station that had the highest profit margin in the cluster (because it cost nothing to run).

Unlike the trade publisher turned professor, I think turning in the license on a crappy underperforming AM station is the way to revitalize the band. If the signal no longer covers the market and isn't viable, turn it off and make what's left of the band cleaner for those still on it. If nobody wants to buy your fixer-upper, maybe it's because it's better off being torn down.
 
And that's another one of the challenges AM station owners face: Expansion isn't an option, when your primary business is already running low or negative cashflow. Cutting under-performing assets is an expense no-brainer, but Shareholders and lenders want to see a plan of how that will be made up after they bless shutting some stations down. Larger groups can fall back on growth in streaming and digital assets. Smaller groups don't have that option.

That's a problem because so many broadcasters think that towers and transmitters are part of our business. Our real enterprise is entertainment and information. Leave the transmitters to Nautel.

Little local stations that don't already know that the Townsquare model of combining radio with new media works are simply behind the time.

It seems like AM stations are run 'impaired' for an awful long time. I suspect part of that are long-term owners who would rather go down with the ship than turn in a license. Larger groups are probably looking at maximizing the end result when the tumor is finally cut out.

It would seem that the Corona Virus is a good mask for other impairment charges. Nobody expects good performance this year, so non-viable AM stations should close, take the write-off, and move on.

The FCC could help immensely by allowing AMs with translators to continue with just the translator. Just doing that could elimnate well over 1000 horrible AM stations.
 
Unlike the trade publisher turned professor, I think turning in the license on a crappy underperforming AM station is the way to revitalize the band. If the signal no longer covers the market and isn't viable, turn it off and make what's left of the band cleaner for those still on it. If nobody wants to buy your fixer-upper, maybe it's because it's better off being torn down.

I agree that the publisher in question tends to awfulize the situation, but the underlying truth is that at least 50% of AMs should not survive. As I mentioned in my prior post, eliminating the requirement that translators keep their AM would be a good start. Translators could be converted to a new class... Class Z for all I care... with 250 watts at whatever height can be made to fit; they should be granted protection as well.
 
KIXI and KKNW are on leased land and I doubt the transmitters and towers are worth much. In their case it will cost them money to decommission the site and turn in the licenses.
 
KIXI and KKNW are on leased land and I doubt the transmitters and towers are worth much. In their case it will cost them money to decommission the site and turn in the licenses.

I'm sure Hubbard has done the math, but the cost of decom against early-exit land lease, utilities, maintenance, taxes, FCC-related costs, not to mention future capital expenses like a replacement transmitter, those decommissioning charges would be easily recovered in 5 years, or less.
 
I'm sure Hubbard has done the math, but the cost of decom against early-exit land lease, utilities, maintenance, taxes, FCC-related costs, not to mention future capital expenses like a replacement transmitter, those decommissioning charges would be easily recovered in 5 years, or less.

Which brings us back to the subject of this thread.
 
It's always interesting to read the posts from those who not only proclaim that AM is dead, but talk like everyone else should agree and turn in their licenses.

Having owned 3 of them and now engineering enough to live reasonably well as a contractor for a few smaller groups, I would respectfully disagree. I would imagine that some, with an actual dog in the hunt, might feel the same way.

It's been observed that AM sites may be more expensive to maintain, compared to many FM installations. That might not be universally true, once you factor in the recurring fees that are charged for a little piece of (insert major commercial landlord(s)) tower to hang your antenna on.

Not all AM real estate is worth more than the towers they host. Those that are just garner more attention... like occasional airplane wrecks vs daily car crashes.

While the mainstream audience may have migrated away from AM, they have been replaced by folks who might have been lucky to afford LPFM, not too long ago. For many of them, the audience doesn't care whether they're AM, FM, shortwave or 2 cans and a string. If they're looking to hear what the broadcaster has to say, the medium isn't necessarily that important (music formats aside).

Well-supported niche applications are everywhere. As a longtime drive-in theatre owner, I have some first-hand knowledge of this. Talk, news, religion and ethnic programming still find homes on AM.

With only a couple of exceptions, my clients take reasonably good care of their properties and allow me anything I need to keep their sites reliable and compliant. That's not to say I don't have a dump or two on the list, but the ratio is much lower than some here might want to believe.

Most of my clients are not talking about losing their shorts to AM. One, in fact, is in the process of picking up at least 2 or 3 of them from mainstream broadcasters who have thrown in the towel on the medium. Granted, these are not top-40 broadcasters, hoping for national ad buys.

None of my sites is operating junk in primary positions. In the past 2 years, I've installed 4 new Nautels as replacements for older rigs. In the next couple of weeks, we'll be retiring a working DAX to standby service to a new Nautel. People who have abandoned the medium might be more inclined to look for a few foreign jugs for their old Bauer. Come to think of it, I have 2 of those rigs I'd be thrilled to hand over to a ham operator around here. If the medium was so worthless and dead, I doubt I'd be seeing any new equipment rolling in the door.

Format and band crowding discussions are pointless, and only serve to highlight the personal positions of one vs another. Everyone I work for/around got their licenses by following the rules and regs applicable at the time. Moral and personal choice opinions (do we really need another one of those on the dial) are amusing since everyone is free to make use of the same pathways to broadcasting and, once there, can pretty much do whatever they want with it. The difference is that some, have... and some who haven't, content themselves by throwing rocks from a distance (yes, I know there are exceptions).

As for KIXI begging... they're not the only one soliciting for subsistence in the Seattle area. Another for-profit operator has beat them to it. They are clear that the "offerings" are not tax deductible and make no pretense as to why they're asking for help. If their audience is willing to support them in that way, more power to them, imo.

Mixed- for / non-profit incomes are nothing new, either. Kings Garden, now Crista, has done this for decades. KGDN (now KCIS) vs KBIQ (now KCMS) are good examples, as well as the income producing branches of Crista in general. Another religious broadcaster here also does both forms of fundraising and operates on AM and FM, both reserved band and above. So long as they program appropriately, and separate the income and pay taxes on the commercial side, they appear to be OK.
 
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While the mainstream audience may have migrated away from AM, they have been replaced by folks who might have been lucky to afford LPFM, not too long ago. For many of them, the audience doesn't care whether they're AM, FM, shortwave or 2 cans and a string. If they're looking to hear what the broadcaster has to say, the medium isn't necessarily that important (music formats aside).

While a few Top 100 markets have a couple of successful AM stations, you'll find that those are the only AMs that even come close to covering the market. The rest are relegated to doing paid religion, secondary foreign languages and infomercials. A few have become non-commercial, engaging in "preaching to the choir" in most cases.

In smaller markets, the majority of AMs that are breaking even or profitable have FM translators because the audiences that advertisers want is no longer listening to AM. In fact, in the average rated market, among persons under 55, less than 5% of total listening is to AM.

And then we get to daytimers and low night power AMs: 2464 US AMs (almost exactly half of all of them) have less than 500 watts at night. They are stations that sign on half way through morning drive in the winter and are off before PM drive in that season. The ones that survive, of course, are the ones that have FM translators as they are virtually useless on the AM channel.

Add in the dramatic increase in man made noise in the last several decades where a station's coverage area has been reduced by half or more, and you have a system that needs to be ended. Other nations, including both of our neighbors, have created plans for the migration of AM stations to FM. The US simply gave a few of them translators.
 
As for KIXI begging... they're not the only one soliciting for subsistence in the Seattle area. Another for-profit operator has beat them to it. They are clear that the "offerings" are not tax deductible and make no pretense as to why they're asking for help. If their audience is willing to support them in that way, more power to them, imo.

I'm of the opinion that if the public wants it, and will pay enough to cover the expense, KIXI should continue. That's why they're asking their listeners to respond to the poll. There was a time when oldies music was able to attract enough advertising. Now its starting to dry up. But a lot of people would like to continue to hear that music over the air, rather than on the internet or satellite. They should have that choice. The time to do it is now, before the station goes away. Because there are cities that don't have oldies radio stations. People in Chicago are listening to the audio from a TV station. People in Boston have several small AMs that ring the city. In Seattle, they now have a very powerful AM station. All they have to do is support the station directly. It'll mean fewer commercials, and a station that will pay attention to what its listeners want.
 
I have to agree with Grounded Grid especially when it comes to small markets. One station I know well has a translator but was easily #1 prior to the translator. Of the 50 or so signals listeners could choose, this station is the only one serving the local area with local news and local sports. Amazingly it is a music based format. Sure it might be an exception but it shows that unique programming not done by anybody else (local in this case) can make an AM viable. In large markets AM has few choices for revenue and especially if you're a daytimer without a translator.
 
Another example of what happened at the turn of the 80's into the 90's.

The market is Los Angeles. KABC was at the end of about two decades of market leadership where it was sometimes #1 and sometimes close to that.

They had balanced, local talents. They were outbilling nearly everyone.

Then came KFI with PD Dave Hall. They took a station that had run more formats than I can name and built a full talker around Rush and Dr Laura. They developed an outstanding morning show. They brought in a great afternoon show from New Jersey. They went through many night hosts, but had Art Bell at night and some interesting weekends.

KABC became a 1-share station. KFI had better shows and a 4 to 5 share, and KABC had worn out shows from a past generation. KFI had 50 kw to KABC's 5 in a huge market.

A lot of the success of AM talkers is having a very superior signal and, in most cases, having jumped on Rush in the very early 90's. A lot of people forget that Rush, and to a great extent Dr Laura, saved AM radio when we all thought it was dead and gave it another 30 years of life.
 
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I'm of the opinion that if the public wants it, and will pay enough to cover the expense, KIXI should continue. That's why they're asking their listeners to respond to the poll. There was a time when oldies music was able to attract enough advertising. Now its starting to dry up. But a lot of people would like to continue to hear that music over the air, rather than on the internet or satellite. They should have that choice. The time to do it is now, before the station goes away. Because there are cities that don't have oldies radio stations. People in Chicago are listening to the audio from a TV station. People in Boston have several small AMs that ring the city. In Seattle, they now have a very powerful AM station. All they have to do is support the station directly. It'll mean fewer commercials, and a station that will pay attention to what its listeners want.

I agree with you on all of that, but I do wonder if KIXI would make a better case for surviving off of listener donations if they focused exclusively on oldies programming, and eliminated some of their "standards" programming. Obviously, no one would make the argument that either format would be a big source of revenue, but I think they would be wise to modernize somewhat. I would classify their playlist as "easy listening," not oldies. And while there may not be a huge market for oldies programming of the 1960's and 70's on terrestrial radio, it would surely be better than "Girl From Ipanema" or Connie Francis.
 
I agree with you on all of that, but I do wonder if KIXI would make a better case for surviving off of listener donations if they focused exclusively on oldies programming, and eliminated some of their "standards" programming. Obviously, no one would make the argument that either format would be a big source of revenue, but I think they would be wise to modernize somewhat. I would classify their playlist as "easy listening," not oldies. And while there may not be a huge market for oldies programming of the 1960's and 70's on terrestrial radio, it would surely be better than "Girl From Ipanema" or Connie Francis.

But as BigA mentioned, assuming the donation model succeeded, the programming and demographic reach goes from being advertiser-driven to listener-driven. If the oldster's are giving you their credit card to keep hearing standards in noisy, glorious bandwidth-limited mono, then they call the shots.
 
It's always interesting to read the posts from those who not only proclaim that AM is dead, but talk like everyone else should agree and turn in their licenses.

I for one aren't proclaiming AM is dead, especially when there is only a handful of stations in a rural or small market. But you have to agree, it's on limited life support.

Heck, I cut my teeth on AM stations, and have built more AM stations than most people. The sad fact remain though; remembering all radio is a business, AM continues to age with it's listeners who remember AM. There are zero new listeners going to AM. Most Gen Z don't even know it exists.

Agree with bturner on his comment about AM remaining viable for rural markets, but take a top 50 market like Seattle, which has become saturated with radio stations trying to take a sliver of pie when that pie is shrinking. AM stations are simply being left behind as technology and listening tastes change. Station owners and groups which own large stables of AM stations in saturated markets, are no doubt working on some sort of exit strategy.
 
I have to agree with Grounded Grid especially when it comes to small markets. One station I know well has a translator but was easily #1 prior to the translator. Of the 50 or so signals listeners could choose, this station is the only one serving the local area with local news and local sports. Amazingly it is a music based format. Sure it might be an exception but it shows that unique programming not done by anybody else (local in this case) can make an AM viable. In large markets AM has few choices for revenue and especially if you're a daytimer without a translator.

I'm not advocating that every AM just turn in the license and go home...

If you can serve an audience, serve it. But if you add a translator and people are listening to the translator, the FCC should let them turn off the AM and reduce the mess on the band.

But if you're running a brokered AM that hasn't been able to sign up a client for a couple of years because they get better results from a HD-3 + translator and/or nobody wants to buy your station, the market is trying to tell you something.

If repairing a lightning strike costs more than the station will bill and nobody wants to buy the license and put the thing back on the air, the market is trying to tell you something.

I don't begrudge Hubbard for running spots asking listeners to fund their format. Call it what it is: non-traditional revenue.
 
I am certainly an advocate of any AM station with an FM translator being able to get primary status and then turn in the AM license.

The number of AMs in the situation johndavis points out are all too frequent. KYND went without a paying programming from the time Hurricane Harvey hit until I left 18 months ago. I can point out reasons why I think this happened (and it had less to do with lack of market demand), however, KYND is a prime example of a station that will likely go away. KYND is a 25 kw. 3 tower directional daytimer without a translator.
 
I for one aren't proclaiming AM is dead, especially when there is only a handful of stations in a rural or small market. But you have to agree, it's on limited life support.

Heck, I cut my teeth on AM stations, and have built more AM stations than most people. The sad fact remain though; remembering all radio is a business, AM continues to age with it's listeners who remember AM. There are zero new listeners going to AM. Most Gen Z don't even know it exists.

Agree with bturner on his comment about AM remaining viable for rural markets, but take a top 50 market like Seattle, which has become saturated with radio stations trying to take a sliver of pie when that pie is shrinking. AM stations are simply being left behind as technology and listening tastes change. Station owners and groups which own large stables of AM stations in saturated markets, are no doubt working on some sort of exit strategy.

The viable AM stations fall into just three classes:

First, metro area stations that fully cover the metro, day and night. These have a limited life left as the viable formats are not appealing to people under 50 to any great extent except for the cases of AM-exclusive play-by-play. Of the three main formats, sports is jumping to FM, all news is sustainable only in the few largest markets, and talk is aging out.

Second are a few metro stations that do not cover as well, but which do cover areas with foreign language programming directed at targets that would not sustain an FM. Asian languages, Middle Eastern ones and certain European ones and even Russian can sustain stations for a while, but streaming is likely a better option in the future.

Third are small market stations that provide decent enough coverage to complement sister FMs with things like farm programming. This requires a fulltime signal and decent coverage of the market.

All of these are being enhanced by streaming which may be the long-term solution for local market information stations. However, for stations that combine agribusiness with a music format, streaming may be to costly due to music royalty payments.

The biggest problem is that, in inflation-adjusted dollars, the radio industry is billing about 35% of what it did in 2000. Yet there are more seats at the table, and no prospect for increased revenue. Duopoly was the first reaction to this reduction of revenue and the proliferation of stations. The huge move of listeners to streams and podcasts requires a rather more drastic reaction, such as an extreme thinning of the herd.
 
I am curious what everyone thinks of what a friend says to me when we talk about the decline of AM. If she were to buy a failing AM, she'd make it extremely locally focused, trying to get advertizers nobody else in the market has, with a format that you couldn't find anywhere else. If this is a daytimer, she'd market the heck out of that. I'm not sure if there are any stations like what she'd do, probably the best example would be if WLNG was a daytime AM with an AAA format.
 
I am curious what everyone thinks of what a friend says to me when we talk about the decline of AM. If she were to buy a failing AM, she'd make it extremely locally focused, trying to get advertizers nobody else in the market has, with a format that you couldn't find anywhere else. If this is a daytimer, she'd market the heck out of that. I'm not sure if there are any stations like what she'd do, probably the best example would be if WLNG was a daytime AM with an AAA format.

1. AM is failing for several reasons. Does your friend believe they could personally reverse that trend??
2. Having full time employees with benefits to be "locally focused" is the most expensive way to run a station, not just an AM. Why do you think most AM stations run syndicated or automated formats?
3. Market a daytimer? What, like that's some sort advantage worth promoting??

Look Bob, unless your friend is one of the original 32 founders of Microsoft with a lot of stock to liquidate, they would be better served getting into the restaurant business than some AM station, let alone a daytimer. Oh and promotion?? That's just one of the many expenses. FCC lawyer, leases, fees, utilities, taxes, repair and maintenance, to name a few.

Everybody thinks they can program a station without research, consultants, or other help, and make a killing in the process. If you want a dose of reality, take a look at what's happened to similar optimism with many LPFM's. 70% have failed. And they're FM stations. Sort of..
 
Agreed, especially with the LPFMs. Operators that think they have the format that will turn radio on it's ear tend to realize much later they were the only cheerleader and likely the only fan. Even though your friends said the format was great, they don't even listen. I've seen that way too many times.

Such a station described might be able to pull some listeners in small markets assuming nobody else was doing local info. Daytime only is less of a negative in a rural market. Advertisers want their ads when they are open for business. In places like Texas 7:30 and 5:15 are the worst times and that's only because of daylight savings time. In Nashville it might be 4:45pm or about 8am for the worst, so obviously location is key.
 
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