RADIO (as we know it) is DEAD!!!

[Carmine5]

Ouch! Try selling that formula to potential advertisers.

You know, potential advertisers just might love it.

Look, I'm not knocking radio's formats or current playlists. But we all know that the industry is due for a major shift of some type. Radio has to change to survive.

And you can't tell me that you like what the record labels are attempting to do to the last friend they have, namely radio. In a desperate search for money, the labels are trying to stab their friend in the back and steal his wallet. You know the old adage, "With friends like that..."

I say that it is time to take these entities out of the equation; the record labels, the RIAA even the music publishers. They have done nothing for radio beyond sucking on its teats. And this is why I like the Disney model so much. They have it all: recording artists, radio stations, a movie and television production arm (which does nothing but support its artists) concert promotions and much more. They are self-contained and dictate the terms.

I realize this is not practical for every station or station group but radio needs to get out of its comfort zone of spinning the same platters and selling on-air spots. It needs to beat these so-called "friends" at their own game and expand in new directions.

Radio needs to start dictating the terms, not passively accepting them.

C5

 

[12 In a Row]

OK, try selling this idea to potential advertisers AND investors.

By the way, Disney is one of the worse companies to work for! They treat their employees like crap.

 

[adma]

OK, try selling this idea to potential advertisers AND investors.

OK, consider the abject failure of radio's existing advertiser AND investor strategy over the past decade. (Plenty of colon-blow/baldness-cure/get-rich hucksters + tanking stocks.)

 

[Carmine5]

OK, try selling this idea to potential advertisers AND investors.

By the way, Disney is one of the worse companies to work for! They treat their employees like crap.

I have a friend who worked for Disney as a background artist (worked on Mulan) and yes, according to him, they're terrible. I don't like the company either (and I hate Disneyland).

But I like the Disney model. And I think investors would like it too because it's something they can understand and see a future for. They know it works and is successful.

Don't misunderstand, I'm not arguing with you, 12 in a row. I realize not all radio companies (or stations) can do this and, yes, their might be some dilution of purpose in terms of radio serving its community.

But I just think radio, as a business, needs to expand in new directions. This is one direction.

What do you think radio should do to survive into the future?

C5

 

[12 In a Row]

OK, try selling this idea to potential advertisers AND investors.

By the way, Disney is one of the worse companies to work for! They treat their employees like crap.

I have a friend who worked for Disney as a background artist (worked on Mulan) and yes, according to him, they're terrible. I don't like the company either (and I hate Disneyland).

But I like the Disney model. And I think investors would like it too because it's something they can understand and see a future for. They know it works and is successful.

Don't misunderstand, I'm not arguing with you, 12 in a row. I realize not all radio companies (or stations) can do this and, yes, their might be some dilution of purpose in terms of radio serving its community.

But I just think radio, as a business, needs to expand in new directions. This is one direction.

What do you think radio should do to survive into the future?

C5

We could start a whole new thread on your great question.
Radio will survive likely with a combination of programming.

We do know what works:

In the late 80's, they said AM radio was dead.
Along came Rush and All Sports Stations.
The large market AM's with All News/Traffic will likely do well in the years ahead.

As for FM, the big flamethrowers will survive.
There are just too many stations and not enough advertiser support to keep them all on the air.
Supply and demand.

A lot of radio folks say local is the answer. Depends on how you define "local."
Will that alone attract and keep new listeners. Do they really care anymore?

Because of the internet, myspace, etc. local is no longer your backyard.
Hey, I'm on the East Coast, looks to me like you're on the West Coast.

Another suggestion has been to expand the playlists.

In the many years of doing this, one thing is for sure, listeners lie.
In research, they tell you one thing and than do just the opposite.

For years, listeners SAY they want more variety/larger playlist.
Countless radio stations read the research and expanded their playlists only to watch their ratings take a nose dive.

If you're in the mood for classic rock, when you hit the button you expect to hear a familar classic rock song.
Same goes for any format.

There are some exceptional morning shows throughout the country that are funny, compelling, interesting and informative.
I would take the best of the best and make it available to listeners 24/7.

As for technology, it has become our friend and our enemy.
Numerous industries have lost jobs because of it, radio is just one of the latest.

 

[adma]

In the late 80's, they said AM radio was dead.
Along came Rush and All Sports Stations.

However, when it comes to Rush, especially, it's a case of "if that's what it took for AM to survive, then..."

Mind you, the fact that it's a biz that openly embraces such programming as an example of "what works" ought to have been enough to shoo away those advocates of broader playlists, et al. Ages ago. Hey, you chose your audience, you sleep with it...

 

[Goat Rodeo Cowboy]

In the late 80's, they said AM radio was dead.
Along came Rush and All Sports Stations.

However, when it comes to Rush, especially, it's a case of "if that's what it took for AM to survive, then..."

Mind you, the fact that it's a biz that openly embraces such programming as an example of "what works" ought to have been enough to shoo away those advocates of broader playlists, et al. Ages ago. Hey, you chose your audience, you sleep with it...

I looks like radio jumped on a bandwagon and went for the ride. For now, the ride continues.

A whole generation of people has learned to think and talk in political terms like never before. However, this has developed in a period when one particular political genre was on the rise. Conservatism.

Businesses have to be prepared for the day when conditions change. Car manufacturers some years feature big SUVs because they are in, some years they feature smaller fuel-economy cars because they are in.

What does A.M. radio do if and when the tide changes and an entire generation of people wake up one morning a realize their country still has all the same problems that we did a generation ago, and conservative activism has not been the answer to all the worlds ills.

What does radio have sitting on the shelf for the day public opinion decides to chase the dream of liberalism for awhile? Do you simply slide Rush out of the chair and move in a carbon copy who mouths liberal sayings, or will liberalism require some vehicle other than TALK as we currently know it?

 

[Carmine5]

In the late 80's, they said AM radio was dead.
Along came Rush and All Sports Stations.

However, when it comes to Rush, especially, it's a case of "if that's what it took for AM to survive, then..."

Mind you, the fact that it's a biz that openly embraces such programming as an example of "what works" ought to have been enough to shoo away those advocates of broader playlists, et al. Ages ago. Hey, you chose your audience, you sleep with it...

And here's another problem, talk shows. Most of the talk show hosts are "old" people by teen and young adult standards. They're people the parents and grandparents listen to.

Where is the cultivation of fresh talent, people that the 18-24 (or slightly above) crowd trust? Would giving someone like Amy Winehouse a talk show draw in a younger crowd and retain them?

Here again I don't think radio is tuning in to the issues young people think are important or to the people they trust. But I certainly believe it's important to radio's future.

C5

 

[flashback]

Ouch! Try selling that formula to potential advertisers.

You know, potential advertisers just might love it.

Look, I'm not knocking radio's formats or current playlists. But we all know that the industry is due for a major shift of some type. Radio has to change to survive.

And you can't tell me that you like what the record labels are attempting to do to the last friend they have, namely radio. In a desperate search for money, the labels are trying to stab their friend in the back and steal his wallet. You know the old adage, "With friends like that..."

I say that it is time to take these entities out of the equation; the record labels, the RIAA even the music publishers. They have done nothing for radio beyond sucking on its teats. And this is why I like the Disney model so much. They have it all: recording artists, radio stations, a movie and television production arm (which does nothing but support its artists) concert promotions and much more. They are self-contained and dictate the terms.

I realize this is not practical for every station or station group but radio needs to get out of its comfort zone of spinning the same platters and selling on-air spots. It needs to beat these so-called "friends" at their own game and expand in new directions.

Radio needs to start dictating the terms, not passively accepting them.

C5

reguarding the disney model.wasn`t the old movie studeo model decades ago the same. stars under contract , movie theaters that they owned to show their product. it wasn`t as big as what disney is but it was consitered monopolistic and they had to get rid of it. now it is ok for one company to own multiple stations in one market .
it became legal for ted turner to buy new line studios giving it its own promotion branch and a place to showcase its movies on at least 2 cable stations (owned by ted turner)to show it`s product.

why was it bad then and ok now.

 

[Carmine5]

Ouch! Try selling that formula to potential advertisers.

You know, potential advertisers just might love it.

Look, I'm not knocking radio's formats or current playlists. But we all know that the industry is due for a major shift of some type. Radio has to change to survive.

And you can't tell me that you like what the record labels are attempting to do to the last friend they have, namely radio. In a desperate search for money, the labels are trying to stab their friend in the back and steal his wallet. You know the old adage, "With friends like that..."

I say that it is time to take these entities out of the equation; the record labels, the RIAA even the music publishers. They have done nothing for radio beyond sucking on its teats. And this is why I like the Disney model so much. They have it all: recording artists, radio stations, a movie and television production arm (which does nothing but support its artists) concert promotions and much more. They are self-contained and dictate the terms.

I realize this is not practical for every station or station group but radio needs to get out of its comfort zone of spinning the same platters and selling on-air spots. It needs to beat these so-called "friends" at their own game and expand in new directions.

Radio needs to start dictating the terms, not passively accepting them.

C5

reguarding the disney model.wasn`t the old movie studeo model decades ago the same. stars under contract , movie theaters that they owned to show their product. it wasn`t as big as what disney is but it was consitered monopolistic and they had to get rid of it. now it is ok for one company to own multiple stations in one market .
it became legal for ted turner to buy new line studios giving it its own promotion branch and a place to showcase its movies on at least 2 cable stations (owned by ted turner)to show it`s product.

why was it bad then and ok now.

As you observed, what ended the studio system was the Supreme Court (U.S. vs. Paramount Pictures) when it decided that the motion picture industry had a monopoly by owning both studios and theaters. When the studios divested themselves of the theaters that ended their guarantee that every picture they produced made money, making it harder to get bank financing for their films. So, eventually, they let their stars go and left it up to independent companies to produce the majority of films.

But in light of the fact that the DOJ and FCC are seriously considering this satcaster merger, what's happened is that, over the years, the government has taken a broader, more relaxed view of what constitute a monopoly.

Plus, with cable and the internet, there are far more outlets now for exhibiting product then there were in the past. Actually the biggest danger now is from those who provide us with internet connection such as Verizon, Comcast and others who want to tier and police our internet usage. This is why net neutrality is such a major issue.

But getting back to radio, my suggestion of the Disney model is just a way for the business to survive, thrive and counter the RIAA-backed government intrusion.

C5

 

[12 In a Row]

http://www.pressrepublican.com/archivesearch/local_story_066224610.html.

No local businesses=no local station.

 

[Goat Rodeo Cowboy]

No local businesses=no local station.

For everyone of us who gives a serious thought about acquiring a small town radio station, a story like this gives you a very uncomfortable feeling. That could be ME being quoted about why we went silent.

I looked up the area. Very small town. Beautiful area. I vacationed in Maine one summer and we drove through this part of New York. You look around and say: Is there some way I could stay here and make it home?

The owner obviously gave it his best shot. I got the idea it was a 'labor of love' on his part that he could no longer carry. But in reading the history of what they had done from the time he acquired the station until the end, I didn't see any evidence that he had the "stroke of genius" on how to make a "micromarketstation" survive. Very few people do. I'm trying to find them and pick their brains. :

 

[Carmine5]

No local businesses=no local station.

For everyone of us who gives a serious thought about acquiring a small town radio station, a story like this gives you a very uncomfortable feeling. That could be ME being quoted about why we went silent.

I looked up the area. Very small town. Beautiful area. I vacationed in Maine one summer and we drove through this part of New York. You look around and say: Is there some way I could stay here and make it home?

The owner obviously gave it his best shot. I got the idea it was a 'labor of love' on his part that he could no longer carry. But in reading the history of what they had done from the time he acquired the station until the end, I didn't see any evidence that he had the "stroke of genius" on how to make a "micromarketstation" survive. Very few people do. I'm trying to find them and pick their brains. :

Yes, this is a true cautionary tale. Even though, supposedly, small markets are doing well, if the market is too small and/or isn't growing, going dark is a real possibility.

This reminds me of KPCO-AM in Quincy, CA. Quincy is a charming town, born out of the Gold Rush and nestled in the Sierra Nevada mountains. It also isn't a growth town (which is part of its charm). With the exception of a Safeway market, there are no chain stores. The population has hovered around 2000.

In June 2005, EMF (who has been actively buying stations) sold the station for 100K. But, despite his best efforts, the new owner couldn't make a go of KPCO and in February 2007 filed an STA to take the station dark. Actually KPCO had been silent before this.

http://fjallfoss.fcc.gov/cgi-bin/ws...xt=25&appn=101202025&formid=910&fac_num=54978

Supposedly, the station is now being time brokered and the current owner has it up for sale.

http://www.cmsstationbrokerage.com/stations_for_sale.html

But when I read stories like this and the one in New York I'm reminded of the words a friend of mine who manages an AM station in So. CA said to me, "Unless you know what you're doing and what you're getting into, owning a radio station can be a very expensive hobby."

C5

 

[Basnya]

For everyone of us who gives a serious thought about acquiring a small town radio station, a story like this gives you a very uncomfortable feeling. That could be ME being quoted about why we went silent.

Exactly the first thing that crossed my mind.

"Unless you know what you're doing and what you're getting into, owning a radio station can be a very expensive hobby."

Which is why I'm trying to learn as much as I can before going station shopping.

 

[12 In a Row]

In a sort of twisted way of thinking, if it were not for corporate radio, numerous stations would now be silent.

90% of the clusters has one or two winners, the rest would never survive on their own.

 

[SirRoxalot]

Corporate Propaganda

In a sort of twisted way of thinking, if it were not for corporate radio, numerous stations would now be silent.

90% of the clusters has one or two winners, the rest would never survive on their own.

Nonsense. Corporate radio does not support money-losers, unless they serve a purpose like protecting one of their money-makers from competition. Corporations do not have "hobbies". Corporate radio has rolled out that canard numerous times in the past. It's nothing more than propaganda supporting their attempt to create defacto monopolies in smaller markets. If stations are money losers, turn in the license and let somebody else have a go at it.

If there is not enough local support for a broadcasting facility, it should go dark and free up spectrum for surrounding areas. Conversely, areas that do support broadcasters should not have their facilities usurped by those who wish to turn local signals into rim-shots for distant, but larger markets.

 

[TomT]

A stand-alone AM is a very dicey proposition. But you are right, the majors will warehouse stations, AM's particularly, just to keep them out of the hands of the local competition. Smaller clusters, say two FM's and an AM, can be profitable, the FM's keeping the lights on, while the AM's pulling in that extra margin covering special programs, --sports particularly, whether local or network, such as NASCAR, major league baseball, or high school and college football and basketball

 

[FredRichards]

But you are right, the majors will warehouse stations, AM's particularly, just to keep them out of the hands of the local competition.

I'm glad to hear you say this, especially since I mentioned it years ago and was promptly told that they never tried to prevent competition. We'll see if you need to don your fire proof suit.

The thing that I don't get, considering this economy situation, I'm still surprised at the price stations are selling for, and in particular the thought that 12X is more in line than 7X, even with stations that are loosing $900,000 to $1,200.000 in sales a year, and dropping in the ratings.

I don't want to open a new thread here, but I have to wonder where the majors are holding their cash. Is it that most of their stations are extremely good and a few are failing, or is it that they are juggling the books to hang on with hopes that someone will take their downer cows off the hands and they make a killing. In a lot of cases I just don't see the ROI on many facilities.

 

[Goat Rodeo Cowboy]

The thing that I don't get, considering this economy situation, I'm still surprised at the price stations are selling for, and in particular the thought that 12X is more in line than 7X, even with stations that are loosing $900,000 to $1,200.000 in sales a year, and dropping in the ratings.

There is a part of this cash-flow-multiple thing that I never see discussed in these discussion groups. When you sit down and build a financial model in a spread-sheet and put in formulas so every "what if" change you put in ripples through to the bottom line, it doesn't make sense.

But, the big corporate operators have people smarter than me who build their business scenarios and as long as the national economy was puffing along well, their game plans built around paying too much for the stations worked.

Here is where I see the industry all balled-up. The big boys have accounting that meets the the 'generally accepted accounting practices' and they are audited. When they hand you the books of a station you want to buy, you should be able to "go to the bank" with the numbers.

Small mom-and-pop operators, and larger entrepreneurial operations have been pricing their stations using the same cash flow multiples AND PEOPLE HAVE BEEN PAYING IT!!!. I had a broker handing me that line and wanted me to accept the cash flow "as golden" even though it wasn't in writing. It turned out THERE WERE NO BOOKS for the last 18 months. The owner managed the station and wanted to include MANAGERS SALARY as part of the cash flow. I did my own audit and finally put a pretty good financial staement together. The cash flow was HIGHLY EXAGERATED to say the least.

How many of these people sitting on dark licenses, or sitting there tonight trying to decide to pull the plug bought into this idea that the same cash flow multiplier used in a 30-million dollar deal should also work in a 400 thousand dollar deal?

 

[Chuck]

I can tell you that a few years ago, I made a serious attempt, cash in hand, to buy a floundering AM station. The owner rejected my offer and said "I'm afraid if you had it, what you propose to do would be serious competition to my better stations."

Does that sum it up? It’s true….