Rock in New York City

[MoldaMania182]

This thread should just be locked. Seriously.

 

[davideduardo]

According to what you stated, billing numbers do not take expenses into account, so they measure straight income, not profit

"Billing" in radio is gross income before expenses. In other words, all the money that comes in from the sale of advertising and anything else a station does (such as ticket sales to station events, merchandise sales on a website, etc.).

All formats have some similar overhead, like management and sales, commissions, accounting and traffic department, insurance, rent, maintenance, engineering, music licensing, etc.

And different stations will have different allocations for promotion. Some will use nothing, some will use TV or outdoor, some will use events, some will pour money into new media exposure.

And some formats will have much higher program expense, such as talk, news, sports and stations with big morning shows.

That is purely a station decision.

- therefore, a station which spends no money on advertising (either to the public or to attract advertisers themselves), would show up low in billing, but could be the most profitable station in the market

Unlikely, since a station that does no sales promotion (which includes things like taking clients to lunch and such) and no audience promotion (no ads, no events, no T-shirts, no website) will be a low biller and the expenses will be greater than the income. Remember, most expenses such as rent and utilities and such are the same if you are first or last.

The Alternative format traditionally spends little money on advertising, and relies on word of mouth through concerts, public events, etc.

And the events don't cost money? The staffing, the banners, the stage rental and setup, sound, etc., are free? It's just a different kind of advertising. And it may cost as much or more than buying TV or outdoor.

so many of these stations which "let the music speak for itself" and let listeners discover them would show up ranking low on billing, but could potentially be extremely high in profit

OK, so they shave off a few percent by not spending as much on promotion in your scenario. They still have to pay the traffic department, the sales staff, the chief engineer, the phone company, etc., etc. All they get is a little savings and a lot lower profit and a lower margin.

In addition, if stations truly are successful because of billing numbers, Arbitron information is useless

You need ratings to sell transactional business. That means agency buys and large direct accounts with ad departments. They determine rates to pay based on audience delivery. No ratings, no buy. Low ratings, low rate.

But that is different from the fact that agencies buy certain demos and certain formats more than other ones. An example: alternative stations that do well in 12-17 and 18-24 are often excluded from all beer and alcoholic beverage buys because stations with "too many under-21 listeners" are, by liquor industry "policy" excluded from such buys. In the case of WRFF, they are #2 in 18-24, and #10 in teens on recent three-book averages, so they won't likely do well with beer accounts.

- for all we know, Amp Radio/Boston could be the #1 billing station in that market, and Kiss 108 could be dead to bottom last (since this is what you are claiming about WRFF),[/quote]

KISS is #3 in billing (after WBZ and WEEI) and WJMN is #5. They both deliver 18-49 women beautifully. WEEI delivers the 25-54 men in powerful fashion.

but no one would know unless they spend hundreds of dollars on a resource that, apparently, very few people have access to

Actually, the data services are more in the $10 k per year range. And people with a need for the data... ownership of groups, brokers, bankers and investors, major advertisers, etc., find that to be very cost efficient.

- there would be absolutely no point in paying money to subscribe to Arbitron

Arbitron determines the pricing metrics. The rest of the sales formula is up to the individual stations.

 

[Barry]

Perhaps someone with access to revenue data (i.e. David) could let us know whether WLIR, during the many years it served as an alternative rock rimshot on 92.7, had some good billing numbers.

 

[davideduardo]

Perhaps someone with access to revenue data (i.e. David) could let us know whether WLIR, during the many years it served as an alternative rock rimshot on 92.7, had some good billing numbers.

I looked at the only thing I have available, which is the Duncan's American Radio market reports...

1998. WLIR FM / FM combo $2.9 million, or 7.1% of the Nassau - Suffolk total market revenue.

2000. WLIR FM / FM combo $3.3 million, 6.9% of market revenues.

2002. WLIR FM / FM combo $3.3 million, 6.3% of market revenue.

It was listed as New Rock up to 2000, then AOR thereafter by Duncan (which shows that, except for listeners, there is a lot of confusion on the definition of the alternative format).

This was all for the simulcast, of course... not just Garden City.

By comparison, in 2002 the other stations did:

WALK $14 million
WBLI $9.4
WBAB $8.2
WKJY $5.5
WBZO $3.4

 

[stevensonair]

The wild hair and bail bonds stereotype has very little to do with the "modern rock/alternative" audience in 2013. The format after a period of being way too close to active/hard rock has shifted to become much more female friendly and pop oriented.

 

[chrocket87]

Try telling that to the advertisers. While the music and, likely, audience has changed, I still only hear ads for tattoos, cigars, and gentleman's clubs on my local Alternative. I wish either sales could better sell the format or advertisers had better impressions of the audience, but ATM, it is what it is.

 

[davideduardo]

The wild hair and bail bonds stereotype has very little to do with the "modern rock/alternative" audience in 2013. The format after a period of being way too close to active/hard rock has shifted to become much more female friendly and pop oriented.

If you look at the billing figures of the "newer" non-heritage stations, you can see that the stereotype still prevails, true or not.

 

[atlantaboy]

According to what you stated, billing numbers do not take expenses into account, so they measure straight income, not profit

"Billing" in radio is gross income before expenses. In other words, all the money that comes in from the sale of advertising and anything else a station does (such as ticket sales to station events, merchandise sales on a website, etc.).

All formats have some similar overhead, like management and sales, commissions, accounting and traffic department, insurance, rent, maintenance, engineering, music licensing, etc.

And different stations will have different allocations for promotion. Some will use nothing, some will use TV or outdoor, some will use events, some will pour money into new media exposure.

Exactly - there is a huge variation in how much money individual stations, formats, and even corporations spend on advertising - spending more on advertising will likely result in greater billing, but the profits could very well be thousands of dollars less than stations spending little to nothing on advertising

Profit is the difference between billing and expenses - higher billing doesn't mean higher profits

What is your direct source for stating that WRFF is 18th in billing, and what year is it from?

 

[davideduardo]

Exactly - there is a huge variation in how much money individual stations, formats, and even corporations spend on advertising - spending more on advertising will likely result in greater billing, but the profits could very well be thousands of dollars less than stations spending little to nothing on advertising

Advertising is not the highest expense of a station. Even stations like WBEB in Philadelphia that intelligently use a lot of advertising to create maximum PPM listening incidents don't spend amounts that jeopardize profitability. In fact, they tend to increase their margins that way.

Profit is the difference between billing and expenses - higher billing doesn't mean higher profits

Among music stations, it generally does. That's because, once the fixed costs are covered, the only incremental costs are sales commissions, performance license fees and such. Thus, one you cover costs, every additional added dollar costs less and less to make.

This is unlike retail or manufacturing, where there is a cost of inventory or a COGS for every item sold, and the only economies are economies of scale. In radio, cover fixed costs and you can keep upwards of 80% of every dollar that comes in above that (before taxes, amortization, depreciation, impairments, and extraordinary expenses)...

What is your direct source for stating that WRFF is 18th in billing, and what year is it from?

I already told you. I gave you a link to the standard and most used industry data source, either in quarterly printed directories or the updated-daily software based service. And I said it was the most recent year available, 2012... because 2013 is not over yet.

The root source for any data on billings in almost every major market comes from the Miller Kaplan data, as reported by each station or cluster to this independent auditing firm which processes and tracks the data and shares it with participants so they have a performance metric and a market metric.

 

[davideduardo]

This thread should just be locked. Seriously.

Why? It's a good example of listener perception and passion for a kind of music contrasted with the reality that radio is a business.

Ask frequent NY board contributor about his passion for Dance and his experiences in promoting that genre as a radio format. The exchanges in which he participates are interesting and challenging and fun to read.

 

[Barry]

For years I 've been hearing the common wisdom that advertisers in the New York area have relativerly little interest in country music fans.
It will be interesting to eventually find out if that was correct, once Nash FM has been on the air for a significant period of time.

 

[atlantaboy]

Profit is the difference between billing and expenses - higher billing doesn't mean higher profits

Among music stations, it generally does. That's because, once the fixed costs are covered, the only incremental costs are sales commissions, performance license fees and such. Thus, one you cover costs, every additional added dollar costs less and less to make.

David, there is a huge difference in the amount of expense spent of advertising among various stations - Clear Channel bought hundreds of hours of TV advertising time for Power for the first 3 months after it was launched, and has not spent a penny on media advertising for Radio 105.7

Power could be ahead of Radio 105.7 in billing this quarter, but 105.7 could easily have made more profit

 

[atlantaboy]

Even more importantly, according to AllAccess, WRFF/Philadelphia was not only #1 18-34 this quarter, but #3 25-54

http://www.allaccess.com/arbitron-p...earch-director-inc-presents-exclusive-may-ppm

There is absolutely no way I'm going to believe that WRFF is not one of the most profitable stations in the Philadelphia market - either the billing is low because the advertising expenses are low, the billing figures are off in the way they were reported, you accidentally used billing figures from years ago, billing has shot up over the course of one year - I have no idea

But there is absolutely no way that WRFF ranks 18th financially, which again is at or near the bottom of all the commerical full-FM signals in Philadelphia, when it is the most popular station in the city 18-34, and the third most popular station 25-54

 

[atlantaboy]

Here are some stats about other major market Alternative stations, also from AllAccess...

KTBZ/Houston came in 6th 18-34, and 4th 25-54

A quote from AllAccess regarding DC101 in Washington:
Keep an eye on CCM+E Alternative WWDC (DC101), which posted its best number in over a year to climb from #9 into a tie at #6.

WBOS/Boston came in 3rd 18-34

If you notice, all the articles from AllAccess, that are current (from 2013, not 2012), are very optimistic about the Alternative format and its numbers - for some reason, the information you seem to be privy to is pessimistic about the format, at least one year out of date, and based on billing information when incoporates income but ignores the huge difference in advertising expenses from station to station

Between the two sources, I think I'm going to believe AllAccess

 

[reelyreal]

I've told you once, I'll tell you again. I have access to the data. HE'S NOT WRONG. HE'S NOT WRONG. HE'S NOT WRONG. HE'S NOT WRONG. HE'S NOT WRONG. HE'S NOT WRONG.

Catching on yet?

 

[davideduardo]

David, there is a huge difference in the amount of expense spent of advertising among various stations - Clear Channel bought hundreds of hours of TV advertising time for Power for the first 3 months after it was launched, and has not spent a penny on media advertising for Radio 105.7

Power could be ahead of Radio 105.7 in billing this quarter, but 105.7 could easily have made more profit

Billing does not change based on a single 28-day book. Advertisers plan campaign buys months ahead of their start, and generally use longer term multi-book averages to determine the stations to buy.

 

[davideduardo]

There is absolutely no way I'm going to believe that WRFF is not one of the most profitable stations in the Philadelphia market - either the billing is low because the advertising expenses are low, the billing figures are off in the way they were reported, you accidentally used billing figures from years ago, billing has shot up over the course of one year

Well, the fact is that it underperforms. Based on the most current 12-month figure humanly possible to have, from an industry source that uses market-based MK data.

There are lots of possible causes...

Lack of corporate support for the format.
Lack of sales department training.
Lack of fit with the cluster overall.
Better selling job and more tradition in using WMMR.
Use of stations like WIP to reach adult and young adult men.
Stereotypes about alternative that may be strong in a traditional market.

... and that's just a few.

I have no idea

On that we agree.

 

[davideduardo]

If you notice, all the articles from AllAccess, that are current (from 2013, not 2012)

There are no 2013 billing numbers as 2013 is not yet over. Hadn't you noticed that?

the information you seem to be privy to is pessimistic about the format, at least one year out of date, and based on billing information when incoporates income but ignores the huge difference in advertising expenses from station to station

I have current ratings information... much deeper than what you have. But ratings are not sales. And there are contractual reasons why I can't, for example, share the Week 1 June numbers for New York. Nor can any other subscriber.

And billing is almost always looked at for calendar years. It's the metric for station sales and evaluation, and for industry analysis in general. You are not going to get anything more granular unless you are the GM of a station in a specific market.

In any case, billing information does not, never has and can not include any expense items as "billing" means income before any expenses.

Gross billing is the general widely used metric. BCF (Broadcast Cash Flow) or EBITDA is not generally known outside a company and if provided to a potential buyer, only provided under an NDA.

Similarly, unless you are part of the upper echelons of station management, you don't know and generally can't find out the costs and bottom line BCF or "profit" from a facility.

Between the two sources, I think I'm going to believe AllAccess

AllAccess prints limited extracts of ratings data. It does not tell the sales and revenue story as different formats and different management abilities are what makes the difference in revenues. Plus, as I've said before, it may take the better part of a year for sustained ratings success can be converted into revenues (and then, only if the format and the sellers and management are the best possible).

 

[atlantaboy]

Well, the fact is that it underperforms.

No, it doesn't - it's #1 18-34 and #3 25-54, and Clear Channel made a near replica of that exact station in Atlanta - 18th in profit (if that were in fact true) is not just underperforming, it's straight out awful in a market with just about 18 full signal FMs - your whole argument implies that Clear Channel has absolutely no common sense

You don't have any data indicating the station's profits, only their straight income, regardless of their expenses, and your source is outdated - and you have an agenda, I believe which is likely tied to CBS and its interests with Now

AllAccess is a current, unbiased source, and once again, they are optimistic about all Alternative stations in the Top 10 markets (except NYC of course which stands out as the only market without one) - and their methodology is straight forward, rather than ambiguous and restricted to only a few posters in this entire forum

The idea that advertisers stereotype people who listen to Alternative music, and avoid advertising on their stations is ridiculous - again, it doesn't seem to be a problem for KROQ, the only Alternative station with publicly accessible billing in the country - and it doesn't seem to be a problem for Clear Channel, who could've easily flipped their "bottom of the market" billing stations to other formats, and certainly wouldn't have flipped a Rhythmic CHR in Atlanta to Alternative, therby replicating a bottom-of-the-market station

Your other theories as to why a top rated station could be near dead last in profit, even in the unlikely event that they're true, have nothing to do with the Alternative format, and therefore are irrelevant to this whole discussion

 

[davideduardo]

Well, the fact is that it underperforms.

No, it doesn't - it's #1 18-34 and #3 25-54,

That is ratings performance. The purpose of a commercial radio station is not to get big ratings. It is to make money.

WRFF underperforms in converting the audience they have into revenues. Period.

your whole argument implies that Clear Channel has absolutely no common sense

Lack of common sense is what made Clear put a Spanish language format on that same frequency in the past. Lack of common sense is what made Clear put on two Spanish language stations in Atlanta some time back.

But in this case, Clear has not been able to convert ratings into revenues. Period.

You don't have any data indicating the station's profits, only their straight income, regardless of their expenses, and your source is outdated

Please tell me what annual data is more current than 2012?

Nobody, outside CC management, knows what the cash flow of WRFF is. And, in fact, as part of a cluster that consolidates much of its operation (managers, office, engineering, etc) it is nearly impossible to segregate an individual station precisely. Most groups do it by allocation, anyway.

- and you have an agenda, I believe which is likely tied to CBS and its interests with Now

As I've said, I have never been involved with CBS and, in fact, they are a competitor in most markets.

AllAccess is an unbiased source, and once again, they are optimistic about all Alternative stations in the Top 10 markets (except NYC of course which stands out as the only market without one) - and their methodology is straight forward, rather than ambiguous and restricted to only a few posters in this entire forum

AllAccess has no methodology. They just report on the limited Arbitron data that is publicly released. All access is principally supported by record companies (analyze their business model), so naturally they will encourage music formats.

The idea that advertisers stereotype people who listen to Alternative music, and avoid advertising on their stations is ridiculous

Advertisers pick stations based on their delivery of audience for the specific demos of a campaign. They often see some formats as less useful, and others as better deliverers of the target. And some stations just don't sell their product well... or some clusters push more important stations more and others less.

Advertisers do stereotype audiences. So much so that the FCC had to rule against "no buy" dictates that affected minority targeted stations just two years ago. Sad, but it demonstrates that there is definitely bias, stereotyping and favoritism among format choices.