Radio is in BIG trouble

[davideduardo]

Re: Cut the What?

Well EX-CUUUUUUUUSE ME. I've been to Plattsburgh, which is in NY.

And parts of CT and NJ are in the NYC MSA, and parts of NH are in the Boston market... and so on. Many, many markets are made up of groupings of contiguous cities, in many cases in two states. "Burnlington-Rock Island-Davenport-Moline" is another example. Depending on which city you search on, you will or will not find the market. Caveat emptor.

If you do a search for Plattsburgh at the Arbitron site, you get nada. Forgive me for not realizing that it's part of the BURLINGTON, VT market. Either way, the example cited was hardly typical of small markets of the era.

Why? It's much larger than 175 of the Arbitron markets.

The Syracuse situation was that there was some very good AM rock radio in the '70s, but "progressive" FM was beginning to make inroads. Syracuse had a student run station at SU, and WOUR in Utica was a monster in that part of CNY. WKFM piggy-backed on the growing interest in FM music stations, which was typical of the era. What happened to WKFM when it got some local FM competition? Automation went away.

Automation did not always go away... in some cases, like Beautiful Music, on about 700 FMs in the top 300 markets, there was increased use of automation thhroughout the 70's.

My impression, base on ratings nationwide, was that progressive (or free-form) developed shortly after the 1967 simulcast decree and was amply nuked by Abram's Superstars int he early 70's... less chatter, less deep cuts, purer air in the studio.

Management is generally making more money now,

If you do a dollar value calculation, I don't think most GMs are making that much more if they run 1 or 2 stations, the most permitted in the 70's. On the other hand, GMs running 6 to 8 stations in a cluster ought to make more.

but programming costs are lower,

In some cases, they are. But the 70's was when a huge percentage, vastly larger than today, of stations were automated and using tapes from TM, Schulke/SRP, Bonneville, IGM, Peters, Churchill, RPM, Kalamusic, Drake Chennault, etc. So the costs today are likely higher on the average.

the programming positions that are left are generally making the same money or less than ten years ago, and listening is down. Yet both of you refuse to see any correlation between programming cuts, listening losses, and declining revenue.

Listening is down because of more competition for the average American's time. Not because radio is bad per se.

Radio is billing less due to the recession, since it was uptrending, albeit only moderately, through 2007.

 

[amfmxm]

Godalmighty, calm down, y'all.

Radio has always been part art and part science, and no one has ever been able to determine which part is more important because there are so many factors involved that change with every different market. From market #138 (Burlington-Plattsburg, no "h") to market #146 (Quad Cities, no "Burnlington," David. FWIW, they gave up trying to name the 4 cities because no one could ever agree whether the 4th city was Bettendorf or East Moline).

Those of us who came up as air talents (Rox?) tend to look at radio from the artist's perspective. Those of us who came up as salespeople, accountants, engineers or formulaic programmers (Big A and/or David?) tend to view radio from a structural viewpoint.

And watching or listening to folks with staunch views from the opposite poles argue their points has always been great entertainment for us radio-junkies.

For awhile.

But, just for fun, concede the other side a point every once in awhile. Consider, occasionally, that you're not the only smart one in the conversation. Look around and assess your own personal success or lack thereof.

We'll presume that if you truly were all that you think you are, you'd have neither the time nor the inclination to slug it out so fiercely on boards like this trying to prove yourself... to yourself.

 

[davideduardo]

Those of us who came up as air talents (Rox?) tend to look at radio from the artist's perspective. Those of us who came up as salespeople, accountants, engineers or formulaic programmers (Big A and/or David?) tend to view radio from a structural viewpoint.

I learned early (at about 16) that I was not going to be on the air, to my disapointment. I then became an owner so I could program my own station... at that time, all by feel... which almost cost me the station. But I have always been associated with very spontanteous talent and format initiatives that didn't seem to research.

But, just for fun, concede the other side a point every once in awhile. Consider, occasionally, that you're not the only smart one in the conversation. Look around and assess your own personal success or lack thereof.

I come down on Rox because he wears blinders and thinks that every issue in radio has to do with fewer chatty DJs and too much corporate ownership. He's right occasionally, in the manner that a broken clock is right twice a day. But in most cases, his simplistic viewpoint fails to take into account the changes since the Top 40 DJ ruled the roost.

We'll presume that if you truly were all that you think you are, you'd have neither the time nor the inclination to slug it out so fiercely on boards like this trying to prove yourself... to yourself.

I think some people watch sports and are armchair quarterbacks, while others, here, like to talk about their passion for radio. That is my assesment of Big A (with whom I have disagreed). Still others like to mash the sour grapes.

 

[SirRoxalot]

Pot & Kettle

I come down on Rox because he wears blinders and thinks that every issue in radio has to do with fewer chatty DJs and too much corporate ownership. He's right occasionally, in the manner that a broken clock is right twice a day. But in most cases, his simplistic viewpoint fails to take into account the changes since the Top 40 DJ ruled the roost.

David is NEVER wrong. Just ask him - or anybody who reads these boards. He wears blinders and thinks that relatable local talent can be replaced by syndication and voice tracking without any decrease in listeners, or change in the way that listeners relate to radio. He sees no difference in impact between radio as "background" and radio that is more front-of-mind for the listener.

He is right occasionally, in the manner that a broken clock is right twice a day. But in most cases, his simplistic viewpoint fails to take into account that advertising is more effective on stations that are listened to instead of simply heard. He also fails to admit that there are differences in the expectations - and response to content - in markets of different size and location. One size DOES NOT fit all. Small town listeners DO NOT hunger for "big city" content. Business outside the top 15 markets is not primarily transactional. Relational sales become more important, and the impact of relational sales is inversely proportional to market size.

David also continues to throw out statements like:

But the 70's was when a huge percentage, vastly larger than today, of stations were automated and using tapes from TM, Schulke/SRP, Bonneville, IGM, Peters, Churchill, RPM, Kalamusic, Drake Chennault, etc. So the costs today are likely higher on the average.

First of all, if you're talking ONLY about FM, this might be true. FM was just evolving as a programming delivery service in the early '70s. If you look at overall ratings during that era, automated stations had a fraction of the ratings of all stations that were live and local during the majority of the broadcast day. Revenue numbers were even more lopsided in favor of local content stations. By the end of the '70s and throughout most of the '80s, there was far more live and local content in most markets than there was automated content. Listening has declined steadily since then when measured using consistently verifiable methods. David refuses to consider that increasingly automated and impersonalized programming content may be partially responsible for that decline.

We are now seeing the consolidators embark on the path proposed by David & TheBigA. If they're right, listening will remain steady or increase despite deep cuts in local programming. If they're wrong, listening will decline sharply, and revenue will follow. The money saved by the deep cuts in programming will be more than offset by the revenue declines. It will be interesting to see how the consolidators will respond if that happens.

 

[amfmxm]

Hmmmm. David, it's too bad you gave up the on-air dream at such a young age. I began at 17, and--by all evidence--was awful. But being willing & inexpensive was able to work at the craft through college and grad school, and by the time 10 years had passed woke up one day to find that I was a large-market air talent. Ten years later (mostly spent dabbling in sales, too) it was apparent that feeding children was more important than climbing the market ladder, so I segued into manangement and ownership. Since then (30 years ago) I've continued to dabble in air work, but only under duress.

But I wouldn't trade the experience for the world. It allows me to see the "other side" much more clearly.

And Rox has a lot of legitimacy to his positions on the importance of relatable air talent and its role in radio's reinvention over the next years and decades. As a reference point, I always think of the pendulum that swung for so many years between the "more music" and "more personality" arguments in Top 40/CHR. In recent years we've segregated the "more personality" talents to Talk Radio and have expected the music alone to carry music-intensive formats.

It's about time the pendulum swung back toward personality taking on a more prominent role in music formats, and as it happens I'll expect a resurgence of the public's perception of radio's overall value.

My two cents.

 

[davideduardo]

Hmmmm. David, it's too bad you gave up the on-air dream at such a young age.

I did nearly 4 years of on-air and board work, but realized that I did not have the right stuff to make a solo career out of it. Then I was in a country where I was not allowed on the air so that ended that.

In recent years we've segregated the "more personality" talents to Talk Radio and have expected the music alone to carry music-intensive formats.

In my corner of radio, there is personality 24/7 on nearly all formats. One of my ongoing projects is with a music format, adult hits, where we go against the grain with a large library and very personality driven shows in all dayparts, even overnights.

But I also know that an increasing number of listeners reject personality radio, and either want just music or actually detest the stereotypical jock who thinks hitting the post is appreciated by today's listeners. There is room... and a need... for everything from the very music driven format with little personality to the warmth of the nearly gone MOR type "friend on the radio."

But to suggest that radio is ailing because of lack of DJs is simplistic, and I reject that. Nothing beats talking with the listeners, and they will tell you what to do.

It's about time the pendulum swung back toward personality taking on a more prominent role in music formats, and as it happens I'll expect a resurgence of the public's perception of radio's overall value.

I think that non-talking things like the iPod and Pandora have changed, forever, the way listeners want music delivered. Talent has to be redefined and today's "personality" is not Dan Ingraham, Sandy beach, Dale Dorman or Dr. Don.

 

[gr8oldies]

Radio utopia did not exist.

The comment was made that "small town listeners don't like big city radio" I'm wondering when that study was done, and it contradicts my experience growing up in a small town, where we listened to CKLW from a city 150 miles away. We didn't as a rule visit Detroit or root for the Tigers, Lions or Pistons. The weather was even wrong for our area. More of the grown-ups than not listened to WOWO, and Ft. Wayne isn't the biggest city but Little Red Barn time ended at 7am. A lot of folks listened to WLW. When album rock came around, people put up antennas to pick up WIOT or WMHE in Toledo or WTUE in Dayton after they flipped. To be sure, our locals had a substantial audience, but it was no where near exclusive. What about folks who go to college in the city but move back to the area. Think they only want to hear broadcasting school graduates hack through the farm report? Get real!

 

[amfmxm]

Radio utopia did not exist.

The comment was made that "small town listeners don't like big city radio" I'm wondering when that study was done, and it contradicts my experience growing up in a small town, where we listened to CKLW from a city 150 miles away. We didn't as a rule visit Detroit or root for the Tigers, Lions or Pistons. The weather was even wrong for our area. More of the grown-ups than not listened to WOWO, and Ft. Wayne isn't the biggest city but Little Red Barn time ended at 7am. A lot of folks listened to WLW. When album rock came around, people put up antennas to pick up WIOT or WMHE in Toledo or WTUE in Dayton after they flipped. To be sure, our locals had a substantial audience, but it was no where near exclusive. What about folks who go to college in the city but move back to the area. Think they only want to hear broadcasting school graduates hack through the farm report? Get real!

Hey, great radio often--but not always--trumps not-so-great radio. You must have grown up in West Central Ohio so had CK & WOWO booming in--and with an antenna, the Dayton/Toledo FMs. I grew up in East Central Illinois and for years I'd fight with my dad over choosing WLS or WDAN. He wanted to hear the local news--what happened at City Council & whether it was going to rain-out his golf game--and I wanted to hear Lujack & Little Tommy.

In today's world there are parallels a little closer to the cities--especially in Class C FM areas, where the life under The Umbrella is very tough on small-market stations. But with AM "clears" a much lesser factor, and with Class B coverage limited to about 50 miles-or-so, those umbrellas aren't quite as all-encompassing as they once were. And in those thousands of communities outside the reach of major market signals, everybody is playing with the same deck of cards.

But even like the Old Days, there continues to be segmentation among audiences. Some listeners do want to hear what City Council did & whether it's gonna rain on the kids' soccer game; some just want to hear AC/DC rock like it was still 1981; some hang on Rush's every word--and don't care where his microphone is located; and some get a vicarious kick out of hearing the local jock they know from Rotary talking about a project they'll both be working on together.

And, that being the case, there are still a variety of ways to make this radio thing work.

 

[Silkie]

It's about time the pendulum swung back toward personality taking on a more prominent role in music formats, and as it happens I'll expect a resurgence of the public's perception of radio's overall value.

That's how it works with the listeners. As long as you have somebody who is and has a personality.

 

[davideduardo]

Radio utopia did not exist.

The comment was made that "small town listeners don't like big city radio" I'm wondering when that study was done, and it contradicts my experience growing up in a small town, where we listened to CKLW from a city 150 miles away.

I agree with your observation. And I can add another anecdotal experience. I spent a lot of time in a town just NNW of Traverse City, and anyone under 20 listened to WLS... even in the daytime with noise. And the older crowd listened to WJR at night, and the local NBC station, WTCM, in the daytime. But, given the chance, everyone, it seemed, listened to big city stations if they could.

 

[SirRoxalot]

Gee, a bunch of radio geek teenagers listened to out-of-town radio when they were kids. Quelle surprise.

Have any of you looked at the ratings of small town stations in the '70s and '80s, before consolidation started to scoop them up and reposition them as bigger-market rimshots? Their ratings killed any out-of-market signals. The hokey, home-town high school basketball and little league baseball broadcasts often pulled 30 and 40 shares.

Often there was a fairly stable morning man/PD, a decent on-air news director, a local owner/GM, a sales guy or two who doubled as sports announcers and/or Production Director, and a revolving cast of people on the way up, or on the way down. There were some toilets, but there were also some gems. There was some very good radio, and there was some awful radio - sometimes at the same station.

All this yammering about small town radio stations is just a distraction from the facts that big radio companies are in big trouble. They're over-leveraged, their station values are in the toilet, and their revenues are shrinking at an alarming rate - almost as fast as their stock prices. The cuts are so deep that they're finally reaching into the executive suite, but they're still not enough to assure that several of these companies will survive.

The well has been poisoned, people. It's going to take a lot of flushing before any investor is going to take a chance on drinking from it again.

 

[TheBigA]

I spent a lot of time in a town just NNW of Traverse City, and anyone under 20 listened to WLS.

The new DX: Internet radio. People in distant markets are listening to streams of FM stations on the internet. Lots of them. If they missed their favorite syndicated show on the east coast, or they just want to hear it again, the listen to a west coast stream. Or perhaps they live in a town where there is no classic country station, so they listen to the WSM stream from Nashville.

This will change the way radio sells itself. Local sales don't matter if people are streaming your station from another state. Radio also needs to address the AFTRA issue with regards to spot talent. That's money left on the table.

What I'm getting at is if people used to listen to out of town radio 40 years ago, they're starting to do it again, thanks to the internet. And that listening needs to be measured, counted with on air listening, and sold.

 

[TheBigA]

Have any of you looked at the ratings of small town stations in the '70s and '80s, before consolidation started to scoop them up and reposition them as bigger-market rimshots?

That was back in the day when a small town station was the only game in town. Not the case any more. It has nothing to do with consolidation. It has to do with the FCC over-licensing the spectrum.

All this yammering about small town radio stations is just a distraction from the facts that big radio companies are in big trouble.

That's a short term distraction. Those who survive the current crisis will be the powerhouses of the future.

The future is right there in front of us. Companies are positioning themselves for radio of the future. Quit complaining that things are not like they used to be. We know that. They never are. Start focusing on the future.

 

[davideduardo]

The new DX: Internet radio. People in distant markets are listening to streams of FM stations on the internet. Lots of them.

As you say, if the format we want is not avaialble locally, we find it on the web. Mine is at http://www.lavallenata.com/ which I listen to part of every day.

This will change the way radio sells itself. Local sales don't matter if people are streaming your station from another state. Radio also needs to address the AFTRA issue with regards to spot talent. That's money left on the table.

Unfortunately, the affected party is not the one with the AFTRA contracts. When agencies say they will cancel if spots are streamed, stations are powerless. What is needed is for the NAB to add this to the "worry list" as something that will bite radio big time in the future.

What I'm getting at is if people used to listen to out of town radio 40 years ago, they're starting to do it again, thanks to the internet. And that listening needs to be measured, counted with on air listening, and sol

It was amazing to hear KOMA in the 60's announcing movie premiers with names of theatres in Jamestown, SD, Lamar, CO and Pampa, TX among others.

 

[davideduardo]

Gee, a bunch of radio geek teenagers listened to out-of-town radio when they were kids. Quelle surprise.

Most were not geeks. They were just listening to the only radio they could get clearly.

Have any of you looked at the ratings of small town stations in the '70s and '80s, before consolidation started to scoop them up and reposition them as bigger-market rimshots? Their ratings killed any out-of-market signals. The hokey, home-town high school basketball and little league baseball broadcasts often pulled 30 and 40 shares.

In the place I refer to, no station broadcast the local games, and the nearest AM was not listenable at night. So, anyone who wanted to listen to radio at night used WGN, WJR, WLS, and maybe WBBM and WMAQ. Those were about the only consistent signals day in and day out.

The nearest FM was 80 or so miles away.

Often there was a fairly stable morning man/PD, a decent on-air news director, a local owner/GM, a sales guy or two who doubled as sports announcers and/or Production Director, and a revolving cast of people on the way up, or on the way down. There were some toilets, but there were also some gems. There was some very good radio, and there was some awful radio - sometimes at the same station.

And, more often than not, the station was a Class IV AM or a daytimer. And it could not be heard 10 miles out of town at night.

Today, thanks to the benefecence of the FCC, that same place with no night service has a 60 dbu from nearly 15 FMs and one AM.

That's why radio in the rural areas is in trouble. There is still only one sponsor for the high school games, but so many stations want to run the games that the school now sells the rights and the winning station makes no money. And there is not enough revenue to go around.

 

[gr8oldies]

Did I not clearly mention adults in my home town listening to WOWO and WLW?

 

[SirRoxalot]

Did I not clearly mention that WOWO and WLW got their ass kicked by local radio stations pretty much everywhere outside their home markets? Especially where there was direct format competition?

Why would the FCC "over-license the spectrum"? Because Big Radio wanted more signals to create their "regional synergies" and rim-shot larger markets. After all, who were the prime proponents of Docket 80/90? The NAB and the consolidators, that's who.

Haven't you guys been reading the trades? Small town radio is typically in far better economic condition than Big City radio. Part of the reason is that Clear Channel sold off hundreds of stations, and many of them for far less than they paid. The small market guys didn't depend on national buys, and that's the revenue stream that's taken the biggest hit.

This isn't the "small market radio" thread. You can find that at http://boards.radio-info.com/smf/index.php/topic,80665.0.html.

You still haven't addressed the basic problems of the industry. Crippling debt, decreasing values, decreasing revenue, and decreasing stock prices scream that the industry is in trouble, and the primary answer from the corporate suite so far is cutting the people that produce the product. If that's "positioning for the future", then the future is pretty bleak for the industry.

 

[TheBigA]

Why would the FCC "over-license the spectrum"? Because Big Radio wanted more signals to create their "regional synergies" and rim-shot larger markets.

That was absolutely NOT the reason. You really need to read the history books. This was long before consolidation, in the 1980s. The Reagan administration wanted the FCC to become a profit-making agency. They were charging money for applications and processing and anything else they could charge for. The more stations, the more money they'd bring in.

The big radio powerhouses, the ones grandfathered with lots of power, were all screaming about these new stations.

You still haven't addressed the basic problems of the industry. Crippling debt, decreasing values, decreasing revenue, and decreasing stock prices scream that the industry is in trouble, and the primary answer from the corporate suite so far is cutting the people that produce the product. If that's "positioning for the future", then the future is pretty bleak for the industry.

Most of those are temporary issues. Once the economy starts moving, they'll take care of themselves. Until the government fixes the primary problem, there will be more & more unemployed voters. The bigger problem is diluting of the audience by too many stations, too many streams, too many choices. All that brings down values, prices, and everything else. Supply & demand. As long as commercial broadcasting is supported by advertising, more choices is not going to improve value.

 

[davideduardo]

Did I not clearly mention that WOWO and WLW got their ass kicked by local radio stations pretty much everywhere outside their home markets? Especially where there was direct format competition?

Outside of most any station's metro and, sometimes, surrounding area, there has been no reason since the early 50's (exception, farm stations like WNAX and KRVN) to program for more distant areas as the way radio is bought, market by market, makes the added coverage and audience of very limited commercial value.

Why would the FCC "over-license the spectrum"? Because Big Radio wanted more signals to create their "regional synergies" and rim-shot larger markets. After all, who were the prime proponents of Docket 80/90? The NAB and the consolidators, that's who.

As Big A said, read the history.

Docket 80-90 came out of the Bonita Springs case. In that proceeding, Dick Friedman, licensee of a class A between Naples and Ft. Myers, FL, filed to change to an adjacent channel and increase from an A to a C. Under existing rules, that "major change" opened up the application for competitive applications. After spending nearly $1 million, Friedman consolidated with other applicants and got back about half his costs but lost the station. The FCC realized afterwards that the system was flawed, and broke down the rules so changes in class, channel and city of license were easy applications with no threat of a cross filing. At the same time, they developed a plan that resulted in a huge increase in channel allocations, mostly in smaller and peripheral markets.

While some 80-90 stations fell inside large metros, very few new major market facilities came out of the Docket. There were many move-ins and upgrades to peripheral stations that made them viable rimshots. However, most of the new facilites, in places like Live Oak, FL, and such, simply made small market radio far less viable and reduced the ability of licensees in such markets to serve as stations in some small markets tripled while radio revenue did not budge a cent.

Haven't you guys been reading the trades? Small town radio is typically in far better economic condition than Big City radio.

Some is, some is not. Rembember, the average radio station in the US bills less than the average McDonalds restaurant grosses. For many, owning a station is just guaranteed lifetime employement, but not a way to get rich. Big fish in a small pond, yes. A lot of satisfaction when the station puts something into the community, yes. But not a really good investment. And in many cases, a big whole that sucks up money.

Until you get a grasp on the history and development of radio in the post-TV era, you are going to continue to make false conclusions based on your misunderstanding of the facts. This example of a total failure to understand Docket 80-90 is but one example.

 

[SirRoxalot]

Rewriting History

Puh-lease. Docket 80/90 happened in the middle '80s - coincidently around the time that computer systems were becoming more common in the real world, computerized music selection was born, and computerized traffic systems became viable. It was born out of an increased demand for FM signals, especially by small markets that had no local FM service. It was also thought to be a way that AM daytimers might be able to offer full-time service to smaller markets. One other effect of Docket 80/90 was a relaxation of studio location rules.

What actually happened? How much programming at Docket 80/90s actually came from the COL? What ended up happening was an expansion of FM service to areas that had none, but not an expansion of local programming to areas that had none.

Who BOUGHT most of the Docket 80/90 stations? Who created the concept of LMAs to get around ownership caps, and pushed the FCC to ultimately expand ownership caps? Who fueled the buying frenzy of the '90s through 2006? Who threw millions at local guys who applied for Docket 80/90 CPs - didn't even build the stations - and turned around to sell the licenses to the consolidators when the FCC opened the flood gates? Not to mention the ones who cobbled together a station, sat-casted for a couple of years, then sold at a huge profit when the consolidators finally got the go-ahead. It sure wasn't the small market operators.

A lot of small operators sold out because the consolidators offered a barrel of cash while threatening them with competition from a Docket 80/90. A lot of consolidators looked at successful small operators and figured that a Docket 80/90 in the same market could "crush" them with "better programming".

Docket 80/90 wasn't "long before consolidation". The limit change from 7-7-7 was virtually concurrent with Docket 80/90, allowing radio companies to own up to 40 stations. That - along with the relaxation of the COL origination rules - was the beginning of the concept of "regional synergies". Add the rise of big consulting companies pitching tighter formats the de-emphasized (and thus devalued) live and local input in favor of the "magical music mix", and you have the seeds of the homogenized, souless radio that we hear too often today.