Question About On-Air Talent Costs

[landtuna]

In another thread there was a brief discussion of "Denise" the avatar DJ and in one of the posts (I think) there was a comment about the "high cost of talent".

With the possible exceptions of the nationwide and/or syndicated talkers I'm thinking, based on comments I've read on R-I, that local DJ's don't make all that much money and probably wouldn't be the primary cost of running a radio station.

Am I underestimating the earnings of the people who play the music or are they indeed the primary labor cost?

 

[bossbill]

In a small rural market, the cost of talent is high compared to the gross revenues. In a major market, I don't understand why we can't have 24/7 live. Sure, I know we CAN voice-track, but that doesn't mean we have to.

 

[SirRoxalot]

I'd consider betting on the idea that the cost of talent - including bennies - averages out to less than the revenue from one spot per hour - regardless of market.

 

[TomT]

Nonsense--not in small markets.

Let's take a typical small market salary of $8/hr., 40 hours week. Add 15% to that for FICA, etc. and you have around $20K, divide it back out and you are looking at around $9.61 an hour

In a small but rated market we get $6~8 for 30's (net). Now, for local direct, you need to take 10~15% off that for commissions.

Out of what's left we pay:

BMI-ASCAP-SESAC
Insurance (liability/fire/etc.)
Electric, gas & water
Telephone
Office staff salaries
program services (e.g. TM/hit discs)
and hundreds more $$$ for things I've forgotten.

Not to mention THE BANK...

Doesn't leave much revenues for live talent

(Incidentally, our one station is live 6 AM to 7 PM weekdays, the other two are satellite.

 

[PTBoardOp94]

I'd consider betting on the idea that the cost of talent - including bennies - averages out to less than the revenue from one spot per hour - regardless of market.

And following this logic, I'll need one spot per man-hour. $20 on the rate card can be consider one hour's pay - maybe $12 after negotiations and commissions.
On a typical work day, that's about 110 man hours.

Wow, I only need 4:30 of spots every hour, 24 hours a day to make money. A 50 minute music hour suddenly sounds like a lot of gravy.

Here's the rub: the revenue reality for hundreds, if not thousands, of radio stations is selling three to five minutes per hour of spots during the day time, and almost nothing at night. That's about two full-time employees - definitely no room for jocks in that picture.

 

[TheBigA]

The real question isn't just about the cost (although it's always about the money), but also what unique material the talent brings. And if talent serves a useful purpose in the programming, or is simply another interruption in the minds of the audience. Sure, when there's a hurricane or a snow storm, it's useful to have a local person on air. But to simply back-announce the latest Beyonce song isn't providing local information. I mean it's nice to know the person reading that back-announce shops at the same mall as you. But it's not going to change anyone's life.

There's a reason why so many companies are out-sourcing so much work to other countries. People cost a lot. And managing them isn't cheap or easy either. Especially when we have had the technology to automate most of this stuff for almost 50 years.

 

[SirRoxalot]

Why should I listen to your radio station - or radio at all - if all I'm going to hear is somebody back-announcing the latest Beyonce single? I can't even schedule the latest Beyonce song on your radio station. I can hear it anytime I want on my MP3 player, or any of several on-line services. In fact, I can likely record it while listening to in on an on-line service, and dump it to my MP3 player.

If that's all you got, see ya. Too bad radio has formatted the life out of radio, and no longer develops talent because programmers are too busy scheduling 5 different stations in 3 different markets on their computer.

 

[SirRoxalot]

Nonsense--not in small markets.

Let's take a typical small market salary of $8/hr., 40 hours week. Add 15% to that for FICA, etc. and you have around $20K, divide it back out and you are looking at around $9.61 an hour

In a small but rated market we get $6~8 for 30's (net). Now, for local direct, you need to take 10~15% off that for commissions.

If you're averaging $6-8 dollars per holler on your station, you've got a problem. Small market stations in our area are getting much more than that. Now, when you say "net", I specifically said the average REVENUE from one commercial - what it costs the advertiser - not what your actual cost is.

$20K - poverty wages - is $9.61 per hour. That costs an employer less than $13 bucks per hour. If you aren't getting more than $13 bucks per spot, you've got a bigger problem with either programming or sales than you do with talent.

 

[TheBigA]

Why should I listen to your radio station - or radio at all - if all I'm going to hear is somebody back-announcing the latest Beyonce single?

But that's NOT all you're going to hear. My question is what makes back-announcing music better when it's done by someone who lives in your town? Radio people have been back announcing pre-recorded music since the 1930s. Back then, it wasn't unusual for people in Iowa to hear someone in NYC back-announcing the music. In the 1950s, running local DJs became cheaper than running the network. That led to local jobs. Now things have gone back to the way it used to be.

What makes your question moot is the fact that in market after market, the most popular radio station is the no-talent music box. The one that anticipates the songs people want to hear, and plays them over and over, with no interruption from some guy who thinks he's a bigger star than the singer.

Too bad radio has formatted the life out of radio, and no longer develops talent because programmers are too busy scheduling 5 different stations in 3 different markets on their computer.

Why do you believe it's the PD's job to develop talent? Rick Sklar didn't develop Dan Ingram or Cousin Brucie. It's the job of talent to develop their own talent. And most of these folks today don't have any. Put the local DJ up next to any of the schlubs on the reality TV shows, and they're going to lose. Back in the old days, the local DJ could BS his way into thinking he was the one with talent because he played records by someone else. Not any more.

 

[TomT]

To Sir Roxalot:

Good for you. Metro with 130K+ people 12+ with 15 stations, & two big groups.

This area has had the middle class cored out years ago. Now the remaining industry is under assault from the EPA enviro-crazies who think we should run everything on windmills.

Already had one plant that employed 60 people move to Mexico --all that's left on the 50 acre site is a substation and some weeds.

 

[TheBigA]

Already had one plant that employed 60 people move to Mexico --all that's left on the 50 acre site is a substation and some weeds.

That's the most important part to this discussion. This is not just a radio problem. It's an American problem. Radio is not exempt.

 

[SirRoxalot]

Why should I listen to your radio station - or radio at all - if all I'm going to hear is somebody back-announcing the latest Beyonce single?

But that's NOT all you're going to hear.

Hey, that's what you said, not me. Read your own post.

What makes your question moot is the fact that in market after market, the most popular radio station is the no-talent music box. The one that anticipates the songs people want to hear, and plays them over and over, with no interruption from some guy who thinks he's a bigger star than the singer.

Not in the market I live in. The first no-talent music box comes in 8th - beaten handily in both ratings and revenue.

Why do you believe it's the PD's job to develop talent? Rick Sklar didn't develop Dan Ingram or Cousin Brucie. It's the job of talent to develop their own talent.

Just demonstrates how little you know about talent. Dan Ingram and Cousin Brucie didn't come out of the womb as radio pros in NYC. They had influential programmers who taught them the business on the way up. And if you don't think that they got input from Rick Skar, that he didn't influence and/or critique both of those guys, and that he didn't develop their abilities to an even greater level, you have absolutely no idea what happens on the programming side of a great radio station.

 

[TheBigA]

And if you don't think that they got input from Rick Skar, that he didn't influence and/or critique both of those guys, and that he didn't develop their abilities to an even greater level, you have absolutely no idea what happens on the programming side of a great radio station.

First of all, if you think that because a PD or OM is running five stations that he DOESN'T give critiques or evaluations of his staff then YOU are the one who has absolutely no idea what happens on the programming side. These guys are critiquing and evaluating every day. And it goes up the food chain to the regionals and national PD. It's what they do. A lot of these guys WANT to program a bunch of stations. It's how they move up the ladder. It's not something they're forced into. If they only want to program one station, they're free to take one of those jobs. There are lots of them. But it probably doesn't pay as well as the multi-station gig.

But Dan Ingram only had a couple of years experience when he got hired at WABC. And he was who he was when he was a student at Hofstra. He was not the creation of some PD. Neither was Howard Stern. You either have talent or you don't. And once again, if you watch any of these reality talent shows, you can see clearly who has it and who doesn't Just because someone happens to live in the town with a radio station doesn't mean he has the potential of being a big radio star. The talent needs to invest in his own abilities, not expect that someone else is going to make him a star. There's no shortage of people waiting outside for that.

 

[SirRoxalot]

Talent makes a difference. You need to have talent. But talent isn't the only requirement. Talent with discipline and training is what gets you past the entry level. Talent without discipline and training gets you fired.

The amount of evaluation and critique from programmers at this stage of the game is minimal. Ask any jock who's been around - and most of them have - and they'll tell you that the only time they hear from a PD is when there's a problem. There's very little talent development these days. That's why most of the "new talent" is either coming from outside of radio, or is in their 40s.

 

[TomT]

Indeed.

It's not the radio business of the 70's or even the 80's.

We don't have people pounding on the door to get on the air. Nor do we have the staff, time, or money to devote to developing talent like we did 30 years ago.

 

[TheBigA]

Talent makes a difference. You need to have talent. But talent isn't the only requirement. Talent with discipline and training is what gets you past the entry level. Talent without discipline and training gets you fired.

But today, it's up to the talent to be responsible for discipline and training, not the boss.

Look, when I got started, my PD ran one station. And he was an alcoholic. He gave more attention to his habit than his station. I got no training, no development, and no support from my PD. And he had no excuse. Yet somehow I learned enough to build a great career. And it's because *I* wanted to succeed, not because of development from my boss. So just because a PD has only one station to run is no guarantee that he will become a trainer and a talent developer. But that's OK because there are lots of talent coaches out there today, and they have lots of experience and don't cost a lot of money. They will also help talent grow beyond the radio station, which is important today. There is no need to blame the boss because you didn't achieve your potential. It's your life, it's your career, and it's your paycheck. The reason a lot of new talent comes from outside of radio is because radio isn't the end goal anymore. Hasn't been for 30 years. Radio is part of a multi-platform media system. If you're a major market talent and don't have other outlets for what you do, you're either lazy, untalented, or suffering from a lack of imagination. There are lots of ways to use your talent in other ways, and it all serves building your fan base, which is how you maintain job security.

 

[SirRoxalot]

You yourself have said that you did NOT build a career as an air personality. And no, I'm not going to go back and dig up your quote.

Your views of on-air talent have also been well documented. You constantly denigrate their efforts, their contribution to the success of the enterprise, and their committment to the industry. Either you're jealous of their abilities - it ain't as easy as it looks - or you think that your "magic format" is the key to success, and that on-air talent gets in the way of your "genius".

Simply put, talent is the difference between the winning stations and the losing stations - even if everything else is close to equal. And talent is required for almost every position in radio - programming, sales, management, and on the air. Companies that refuse to invest in talent suffer the consequences. Companies that invest in talent thrive. It's the same as investing in your product. If you ignore the long haul, you may reap profits in the short run, but you'll be out of business in the long run.

 

[TheBigA]

You yourself have said that you did NOT build a career as an air personality.

That's not the point. The point is that the PD had only one station to run, and he didn't see talent development as part of his job. On the other hand, some do. I've talked with talent who don't like PDs who think they're talent coaches because they meddle too much. It often leads to strained relations between talent and management.

You constantly denigrate their efforts, their contribution to the success of the enterprise, and their committment to the industry.

I've made a career of working with top talent. But I've also worked with talent who thought they were better than they were. I've seen how the talent have hurt themselves, pricing themselves out of a job. Demanding clauses in their contract that diminished their value to the station. And undercutting other talent at their station or within their company. Management didn't do that. Greedy talent did it by themselves. Talent is one part of a station's budget. What makes a winning station is all elements within the station working together towards the same goal. Not just talent. Stations have a lot of things to invest in, and a lot of platforms from which to make money. Not just talent.

 

[TheBigA]

Your views of on-air talent have also been well documented. You constantly denigrate their efforts, their contribution to the success of the enterprise, and their committment to the industry.

Commitment to the industry? Most of these folks are pretty critical of their industry, and do very little to advance it. Instead they're filled with negativity about it. You can read it on these boards every day. They may be committed to their opinions, but not to the industry as a whole. To me, commitment is more than just showing up for work on time. It's more than doing what's expected. It's going beyond, and a lot of talent won't do more than what's required because of their overall negative attitude. There were lots of articles written about air talent who came in to work during storms, floods, and hurricanes. That's great, but truthfully, it's expected. And for every one air talent who came in during a disaster, there were at least four who stayed home and didn't volunteer for extra work because it interfered with their personal life. I'm not kidding.

A commitment to the industry is the willingness to volunteer for things, to give willingly and cheerfully, and help other talent in their endeavors. A commitment to the industry is attending industry functions, not because it's required or for payment, but because you're actually interested. I attend lots of regular industry functions. Some require me to pay my own travel. But I'm there because I'm committed to my industry. But I don't see a lot of others doing the same.

 

[bossbill]

Nonsense--not in small markets.

Let's take a typical small market salary of $8/hr., 40 hours week. Add 15% to that for FICA, etc. and you have around $20K, divide it back out and you are looking at around $9.61 an hour

In a small but rated market we get $6~8 for 30's (net). Now, for local direct, you need to take 10~15% off that for commissions.

If you're averaging $6-8 dollars per holler on your station, you've got a problem. Small market stations in our area are getting much more than that. Now, when you say "net", I specifically said the average REVENUE from one commercial - what it costs the advertiser - not what your actual cost is.

$20K - poverty wages - is $9.61 per hour. That costs an employer less than $13 bucks per hour. If you aren't getting more than $13 bucks per spot, you've got a bigger problem with either programming or sales than you do with talent.

Unlike the cost of bananas or carrots, the dollar value per spot will vary wildly depending on market size and number of stations in the market. It would be nice to think that there might be a "minimum rate" for radio spots, but it doesn't work that way. Also, it is idealistic to think that one can compare one-hour of talent to one spot. Our direct labor cost runs about 45% of our revenues. Our electricity cost is disproportionately high compared to large markets, not because the rates are higher, but because we have much fewer potential listeners per kilowatt than a major market station. We pay the same for a transmitter tube as the station with 50 times the population base under its umbrella. We're in a nice little two-station market; unfortunately there are nine stations here. We run five stations in one building and have five times the utilities cost as a major market station, with a fraction of the revenues.