Radio

[ty]

In the business sense, I know many, many others on this board can school us all when it comes to the in depth end of it. Won't even try myself, but just from my short experience it seems to me that it would make the most sense for radio companies to work with eachother rather than against. It's probably happening as we speak...

Formats, they should compliment one another, not compete.

In the Seattle market, each station has its own blend. Each blend HAS to compliment the other option on the dial. You can't slice the same pie, unless each slice is unique to the taste of the listener as a whole. These stations can compliment one another.

Work together is the theme.

Someone can articulate better than I can. Carry it on.

-Ty

 

[gr8oldies]

That's basically what consolodation did.

 

[LITTLEBOYBLUE]

I agree with you in spirit....but I'm scared of the results. When the companies work together...we get mandates for HD, and we get NAB trotting around the world thinking "Radio Heard Here" is the big answer to everything.

Neither one of those seem to be long-term blips in history in my estimation!

 

[radioprofessor]

In spirit radio has in its own way been working together and in my humble view the results have been less than positive. The HD initiative is a complete disaster. The PPM is a legal nightmare and may take arbitron down which some may view as positive. In fact it would be a disaster. Radio needs a better way to prove its ability to deliver when competing against web which provides actual user data against an out-dated diary system. Like Canadian radio broadcasters should have come together to create their own ratings system. Clear Channel tried to put a coalition together but it fell apart in bickering.

The enemy is consolidation. Radio was more dynamic when stations took each other on. There was a time when LA, Chicago, NY and yes Seattle had four TOP-40 stations pounding on each other. Live staffs around the clock and big promotions. It made for exciting radio. Today, thanks to consolidation, each operator puts money into one station and then has two or three automated flankers. In Seattle, Country and News Talk are the only two formats where there is a competitor. All other formats have their own lanes, some niche and small. Working together is not the answer getting better is. If operators treated each station as a valuable resource and spent the money to try to make it number one radio would not be facing the issues it sees today in my humble view.

Radio operators must invest and compete at a high level to bring this industry back. The FCC must demand localism or things will continue to get worse. I consult in many markets large and small. Small market operators are starting to get it but will the major market players.

 

[ty]

Thanks prof. I dig your opposing viewpoint. Keeps us from getting tunnel vision.

-Ty

 

[TheBigA]

The FCC must demand localism or things will continue to get worse.

Localism in the 21st century is irrelevant. For several reasons:

The typical market has a couple dozen radio stations. Localism is useful if you have a half dozen. Beyond that, there's no need for duplication of local information. Weather, traffic, and the handful of local stories (fires, accidents, elections, etc) and be capsulated into short news segments.

Culturally, we're not build around localism. TV, music, movies, and most other entertainment is national. 80% of TV is national. The internet is international, and it's not suffering anywhere near as much as radio. Most newspapers, excluding a handful of local pages, come from national and international sources.

Advertising is not as local as it used to be. Most retail is national chains, with ad budgets controlled by national agencies.

Forcing radio to be local is placing radio at a competative disadvantage relative to all other media.

The goal should be to create great radio, regardless of location. That's what made radio popular during the first half of its history. The Golden Age of Radio was not built around localism. It was built around quality. There are thousands of radio stations currently sounding awful, with another ten in a row and no talk, and they're all local. They are forcing themselves to be local, hoping it will appeal to their listeners. Local stations simply don't have the resources, the talent, the money, and the staffing to create the kind of compelling radio that will compete against all the media choices available. Just being local isn't enough.

 

[TheBigA]

The enemy is consolidation. Radio was more dynamic when stations took each other on.

Radio was also more dynamic when it had a monopoly over people's attention. And when there were half as many radio stations in town. And when music was less splintered. Lots of other factors contributed, and I doubt we can bring all of them back, regardless of ownership.

 

[LITTLEBOYBLUE]

Local usually HELPS...but mandating it probably would backfire. I'd love to see more accountability for a license holder to prove they serve their local audience ... but I know that would be putting ankle weights on the industry at a time when it's getting measured for a coffin.

Any media connection is about great CONTENT, coupled with creating audience HABIT. In TV's case, it's the content of a particular show that causes someone to eventually develop the habit and, in turn, the loyalty. Radio was less about appointment -- more that there was some consistent product available when someone wanted some kind of companionship. The right product and you create the habit. The problem is the ongoing content used to be MUCH more polished and, in some cases, prepared, than it has for many years.

These days, the right product for some people may be based on LOCAL content ... for others it may be ENTERTAINING content. Bob Rivers plays very little music during his program, but has awesome interviews and is topical without doing same-old-same-old "shtick". Rush does the same-old-same-old and attracts a different crowd. People loved Howard Stern's bag, even though it was EXTREMELY repetitive -- same with Leykis. KJR-FM's deal is no talent but lots of AM music, while KMPS or KPLZ mix personality, local (traffic/news/topical), and music. But in each case...people usually rewarded with something that was significantly more interesting than the canned "coming up...30 minutes of music featuring abc, def, and ghi". But the parent companies like the "coming up..." because it's easy to centralize, and easy to find talent that can service that expectation ... never mind that it's a corporate expectation and not a listener one.

When radio is that "vanilla" (the 30 minutes of music) it becomes a commodity product that people can control more effectively with alternatives that weren't available even ten years ago. Satellite-fed niche channels can outperform a local niche station; and if they don't maybe an iPod or an internet radio, or even a make-my-own-CD or make-my-own-MP3 mix does it quite well.

One would think that local would be one of many strategies a station chooses to employ ... but as we are seeing, usually it's the local owner that is willing to take a chance on local content. The bigger players look at the game now as little more than each station representing an ATM that hopefully collects more in deposits than it doles out in expenses. With CBS antics this week we see how they view their properties these days...the dollar MUCH more important than the strategy or the content.

The one enlightening spot, it seems, is that small markets seem to have some serious potential these days. They still depend heavily on delivering good content to satisfy a community in which it can be much easier (and much less expensive) to focus. Much easier to sell an advertiser who can reach anyone in the customer base who isn't required to drive 90 minutes to reach their place of business. In large markets (especially in television), the potential advertiser usually has to be someone who wants a brand presence throughout the entire coverage area; and in many cases those are national buys or buys controlled strictly by performance metrics. In the smaller markets, it's about the relationship. I would think the most challenging small markets are those who border large ones ... Anacortes, Olympia, for example; but ultimately their challenge is the same as a station owner in Chelan.

Radio has survived for years because it offers one of the most cost-effective potential advertising platforms. But as the 'net begins to offer the same content, and charges based on actual performance, radio will soon lose that advantage too.

To survive now, nearly all media has to rethink itself. Newspapers have amazing news-gathering potential and by redefining their distribution (online), can threaten television news. Television has to deal with time-shifters who blow out commercials, and the lost opportunity when networks make the shows available on-demand online. Radio has to find content it can deliver that no one else can offer and focus on that. It's not about the music, the imaging, or the formatics ... it's about the pieces no one else can offer. An online or do-it-yourself station can't offer great content ... it can only offer the music and the imaging. Ironically ... that great content is the very expense that the owners no longer want to support.

I'm just hoping radio gets a mahogany coffin. It deserves at least that much.

 

[ty]

I had a blast singing alongside "Trace" in lower Queen Anne tonite. Never met him before, he was jammin' on his plastic stringed guitar on the curb outside Dick's. This was after leaving the Weezer show at the Key.

Keep the insight coming, best posts in a long time!

-Ty

 

[TheBigA]

Any media connection is about great CONTENT, coupled with creating audience HABIT.

I think you're right about habit. And I also think that tolerance plays a part.

I was reading a thread about a heritage rock station in New Jersey. It's live and local 24/7, with a huge record library. And even with all the advantages this station has, there was criticism over the fact that they play certain artists this particular fan doesn't like. And that is always going to happen. In fact, when the music library is enlarged, the chances they will play songs or artists the audience won't like is greater.

This has always happened. Back in the 60s, when there were way fewer radio stations, it wasn't unusual to hear Johnny Cash, The Beatles, and Louis Arnstrong all on the same station. And those different artists appealed to different audiences. But those audiences had the tolerance to sit through songs and artists they didn't like, knowing that sooner or later something they DID like would come up. And there was only one or two stations that played music. We don't have that any more.

Today, there is such a glut of content and options that the minute a song comes on we don't like, or an annoying commercial hits, BOOM, we're gone. That's why, no matter what a radio station does, no matter how big the record library, no matter how local the content, no matter how entertaining the DJ, the listeners will find something that will cause them to tune away. The ONLY things that keep them there is (1) laziness, and (2) loyalty. And the loyalty thing is hard to create.

 

[djdan]

Localism is what radio is all about. Just look north of the border where I just returned from a sales seminar. In Canada radio revenue and share has been growing. Radio gets 13% of the advertising dollars in Canada versus 6% in the US. (TV leads in Canada with 29% and internet has 11%). The key is localism. Each major Canadian market has a News/Talk, All News, All Sports and Talk on the AM dial that have full staffs. FM stations are required to play some Canadian artists and choose to use live local talent. There are fewer stations in a market, but not that much fewer and you would think with fewer stations they would get less of the overall advertising revenue but they don't because they invest in the product. They dumped HD after launching it before US stations and focus dollars on their core brands. The result of the conference is LOCAL matters to advertisers because LOCAL gets results. It is even more important than ratings in Canada.

In Seattle I would argue the same. Stations that own the top revenue positions in this market may not necessarily have big ratings, but they are very local. KIRO ranks 14th on a four book in prime demos and KOMO 16th, but both are top seven revenue stations (not including sports) The top billers in the market KMPS, KZOK, KRWM, KPLZ, KIRO, KOMO, KUBE have full staff's and are local. All radio really
has is local. You can listen to syndicated shows on the web so why bother with the local affiliate?

The biggest takeaway from the conference. Canadian radio has seen growing revenues for seven straight years and will be up this year about 3%, even in a down economy.

 

[LITTLEBOYBLUE]

Canada has been following US lead, though, in moving any station they can to jukebox, trimming staff, and just staffing the stations they have to. Some brought back "legendary" talent, but a subset of those are eager to let the contacts run their course without renewal. News/talk staff and approach is very much in line with the expenses and staff size in US. One difference is they stay with those formats (sports, multiple news in a major market, all-traffic, etc.) where US more likely to fill spots from satellite ... though sports in Canada is often highly programmed from bird.

 

[TheBigA]

If localism is what radio's about, and radio is in the dumpster, perhaps it's time for radio to try something else.

People only care about local weather and traffic. They can get both from their cell phones. That doesn't leave a whole bunch for local radio to talk about, except perhaps the school board elections, and we all know how people are just dying to hear about that. And maybe the obituaries. I'd like to hear radio return to broadcasting death notices again. I bet they could get them sponsored by the mortuaries.

Let's talk about local advertisers. Wal Mart. K Mart. Target. Dominos Pizza. Home Depot. Exxon. Great local advertisers, right? When small town hardware stores, record stores, and other local businesses went under, killed off by Wal Mart, that was the beginning of the end of local radio. Now that local car dealers are hurting, you really have problems. They were the last great hope. Even banking has gone national. You see how great that idea turned out to be.

The biggest issue with Canadian radio is that they kept control on growth. 623 radio stations serve the entire country. In the US, we have 14,500. That's wayyyyy toooo many. Shut down about 2000 and you might have a shot. Forget about HD and LPFM. Let's see if we can make do with what we've got. When you over-expand, you get Starbucks. Devalued the cash cow. Not a good idea. Fewer is better. In the old days, most people were willing to drive an extra couple miles for Starbucks. Once there was one on every corner, the cache went away. Same problem with radio.

 

[mightymoose]

The biggest issue with Canadian radio is that they kept control on growth. 623 radio stations serve the entire country. In the US, we have 14,500. That's wayyyyy toooo many. Shut down about 2000 and you might have a shot. Forget about HD and LPFM. Let's see if we can make do with what we've got. When you over-expand, you get Starbucks. Devalued the cash cow.

BigA's on to something. Canadians were smart. Remember when, in the U.S., you could only own one AM & one FM per market? There was something like 5,000 stations in the country and the most that one company could own was about 12 or 14. Then the FCC gets pressured to open up more frequencies, so they do.aaand now we have 14,000+ stations. With about as many owners as we had 30 years ago when you could have just TWO per market. God this is dumb. The FCC shoulda said, "No". But it's a lil' late for that now. Just wait 'til WiFi is seamless from coast to coast.

 

[TheBigA]

Then the FCC gets pressured to open up more frequencies, so they do.aaand now we have 14,000+ stations.

You know who "pressured" them? The government. They rationalized that more radio stations meant more fees they could charge, thus more revenue for the agency. They also rationalized that more radio stations meant more voices. So they over licensed the industry. It's been going on for 25 years. They haven't stopped. Their latest idea is LPFM. They want to slam more 100 watt FMs in between all the existing stations. All it does is create more clutter, and more competition for the same ears.

Regarding wifi, if you think the FM dial is overcrowded, launch an internet radio station and try to differentiate yourself among the millions of competing voices. Soon, everybody in the US will have their own radio station, each with an audience of one. That's not good if you're in ad-supported media.

 

[mightymoose]

Oh you and I are pretty much in agreement "BigA".

Friends (not in radio) ask me if I've thought about starting my own internet station. Ooooo, run your own station. Yeah right. Me and 5 million other idiots. Differentiate myself from the competition? Good freakin' luck. Make money? In your dreams. But internet radio will make life verrry tough for terrestrial radio.

 

[Bongwater]

Oh you and I are pretty much in agreement "BigA".

Friends (not in radio) ask me if I've thought about starting my own internet station. Ooooo, run your own station. Yeah right. Me and 5 million other idiots. Differentiate myself from the competition? Good freakin' luck. Make money? In your dreams. But internet radio will make life verrry tough for terrestrial radio.

Problem here is terrestrial radio is no better at differentiating itself than internet radio. Look at all these ""Mix", "Kiss, "Star", "Hot" "Warm", "Cool" "(Insert Animal Here)", "(Insert Guy's Name Here)" stations we have now. No matter where you are, they all sound the same.....

Internet/LPFM radio currently is very limited in programming options and many are quickly filling the '50s, '60s oldies vacuum. Others are independent talk/podcasts, religion, indie music and sub-genres like thrash metal, techno, uncensored gangsta rap and the like and they are finding audiences in their little niches. Others are "tributes" to legendary stations (even KHIT - remember them?), they have one at http://www.khit107.com

Most operators of independent internet radio stations do it for fun and not profit. Some will ask for donations to cover basic fees or "royalty" extortionists.

And I STRONGLY disagree with Big A's assertion that it was solely the government that pushed for more radio stations. Of these "14,000+" stations, this figure is obviously counting in all those CSN/K-Love/EMF translators. LPFM isn't making even REMOTELY the mess of the FM dial that these translator hogs are and THEY are the ones that need to be yanked from the airwaves.

It's not like the government asked for or the public even NEEDED them, as there is religious radio that is locally owned everywhere. Same would apply to these WSU stations that pop up wherever they have a satellite campus or project. Translators were meant for regional coverage to serve the fringes of their main signal. However, thanks to a loophole that allows non-commercial services to be fed via satellite or other means, you have these translator hogs that choke out potential local broadcasters, be they community or public. That's the REAL problem. The government didn't actually push this loophole (although it DID create it.) LPFMs are the same standing as translators as they can be bumped off or moved around if a larger commercial or public station should want their frequency. KCFL-LP 104.5 in Fall City was a good example (though most people know the KMIH story better.)

 

[TheBigA]

And I STRONGLY disagree with Big A's assertion that it was solely the government that pushed for more radio stations.

I didn't use the word "solely." I'm sure others thought it was a good idea.

But the driving force within government from the Reagan administration, that felt the FCC could be self-funded from fees and spectrum sales. I'm sure the NAB also liked the idea that more owners meant more members and more dues. But I doubt very much that owners in towns where they were one of only two or three stations liked the idea of 10 new competitors popping up. And I believe this current situation is largely the result of too many radio stations.

 

[bossbill]

What opened the door for unlimited ownership was the Telecommunications Act of 1996. If I recall, Reagan was long out of office by then. If the Telecommunications Act had not lifted the limits, there would be no Clear Channel.

 

[TheBigA]

What opened the door for unlimited ownership was the Telecommunications Act of 1996. If I recall, Reagan was long out of office by then. If the Telecommunications Act had not lifted the limits, there would be no Clear Channel.

Clear Channel has been in business since 1977.

The only thing the TCA did was eliminate the 12-12-12 rule. There are still lots of limits, and companies are forced to divest all the time. There are market limits, and revenue limits to control concentration of ownership. There is no "unlimited ownership." And as we've seen, there is no benefit to owning a thousand radio stations. Thus, most companies are in "sell" mode.

Reagan was the one who got the FCC to double the number of radio stations.