Super 1360 WNJC "The new face of AM radio"

[radiodx10]

I find it a little hysterical that Super 1360 is running bumpers claiming the're the new face of AM radio. I mean, sure, it's nice to some good music on AM radio, but they're only running audio from the right channel, and most of the day they're brokered Spanish. I really have no idea how they can keep that transmitter on.

This begs the question. If you've been keeping up on AM radio news, three AMs in Albany, NY have turned in their licenses. Across the country, we've seen more AM licenses turned in and stations gone silent than in any previous year, from what I've heard. Philly has WNWR 1540 as an example, although they're supposed to go back on in early 2019.

With AM being less and less viable with each passing day, stations like WVCH 740, WNAP 1110, WNJC 1360, stations that don't have the history and name recognition behind them like WFIL and WPHT- how much longer can they (see above) feasibly stay on?

Actually, a more interesting thing to ponder is this- how big of an audience do the smaller, less powerful AMs even have? Is there anyone who regularly tunes in to, say, WWJZ? Hell with that 50kW blowtorch, they could have regular audience in Bermuda for all I know.

 

[DXingRadio]

The brokered stations are fine as long as shows are buying airtime and making the station money. As far as who is listening, likely very few. But that's not the point.

 

[BRUSSTAR]

I really have no idea how they can keep that transmitter on.

...most of the day they're brokered Spanish.

...

 

[radiodx10]

I see your point, BRUSSTAR, but even if they're mostly brokered spanish- can that really keep them on 24/7? You can only live on brokered payments for so long...

 

[TheBigA]

You can only live on brokered payments for so long...

As long as the checks clear, and you keep expenses low. I can't think of more dependable revenue than that given the circumstances.

 

[Miguelito]

I see your point, BRUSSTAR, but even if they're mostly brokered spanish- can that really keep them on 24/7? You can only live on brokered payments for so long...

Other than established stations that already have a brand and a following, is there any other way to make money with an AM station?

 

[b-turner]

There are some things you are not understanding about brokered stations. The people and groups buying serve their communities. They usually serve an ethnic community with not a bunch of radio choices. The time time buyer runs it just like a radio station. We're talking sales people, on air folks, etc. In fact,in most cases, one can lease a station for less than the operating costs and note payment if they bought a station. Most stations brokering their time turn a 10% to 40% profit by offering the airtime only...the client has their own offices/studios in most every case. The downside is depending if you sell to one or several time buyers, you will have unsold time at some point. When that is a single client, it can mean months of zero income until you find another.

Brokered stations are often viewed as the worst of the worst of radio stations but I can tell you most clients that buy time are providing a true service to a segment of the market that has few, if any choices on the dial. Without the option to buy time, there would be nothing on the air for these folks. In size, a time buyer's audience is akin to a small town station within a city serving a population about the same size as a small town station. For many, the community they serve could never buy a station because the market they serve could not handle the debt service because the market is not big enough to produce the money needed.

And, for the AM operator, faced with an option of a viable format to compete and cover expenses finds selling to time buyers is the only way to go without gambling with huge sums of money to attempt a format. In fact, an AM operator realizes if they did try a format and they managed to build an audience and turn a profit, there would be another competitor with a better signal just hungry enough for a chance at profit to steal your format and split the audience and revenue. Once that happens, it's time to kick in another million or two to spin the format wheel and try again. When you sell your time, you have none of this outlay of cash, payroll and studio upkeep. You don't need salespeople because clients call you.

By the way, I worked an AM station that did okay with $25,000 rolling in each month from brokered time, turning about 15% profit. One of our long term clients was averaging about $80,000 a month in gross revenue serving his market of about 60,000 in a metro of several million. Our staff was a manager and a contract engineer plus a part timer. In fact, if the owner would handle the station or they had several, a dedicated manager would not even be needed. At one point the station sold to several clients and billed about $40,000. While these are not big numbers, we're talking profit here. You can bill millions and lose money. Like any business, it's about covering expenses and turning a profit.

 

[TheBigA]

Brokered stations are often viewed as the worst of the worst of radio stations

I think people who view it that way are making a subjective judgement about the programming. In other words, they're programming for themselves, rather than programming as a way to make money. If you're a professional, the first thing you learn is not to program for yourself. That's the way to lose money.

 

[radiodx10]

B-Turned, that was extremely insightful, and I thank you for it. I learned a lot! I reckon brokered radio is fairly misunderstood. I certainly have nothing against it, and in fact it's really cool to hear a bunch of different shows on a station. I guess I was only confused because I have no idea how much WNJC is selling their airtime, and knowing they're spending a lot on transmitter/ antenna renovations and studio upgrades too, from what I've heard, I had no idea how they could afford to remain on air.

 

[b-turner]

I always felt that stations that opted for brokered formats had given up and decided to get out of radio, so to speak. Then I found myself at such a station. In fact, we were struggling in our format and not able to really get over the hump to profit. Our big issue, being in a major market, was that although we had listeners, they were scattered all over the metro. The only people we could get to buy commercials were Mom and Pop small businesses with a budget of about $200 a month. We never had enough listeners in the trade area of most all advertisers we got on to produce results. So maybe 1% of advertisers would renew. Essentially we were spinning our wheels. In sales, it's a big investment in time and effort to get them to try the station. You bank on renewals to build the revenue you need. Literally it takes 5 to 8 times the effort and time to get a new client than it does to renew a client. And you need lots of clients to make it at $200 a pop per month...at minimum 150 to 175. And you need about 4 salespeople to handle that. Then there is copywriting, production and scheduling. We found it difficult to get salespeople and then to get them to stick around.They wanted bigger clients and renewing clients. I can't blame them because I did too.

Then this guy comes in to the station and asks to buy 4 hours each weekday to do a Spanish language format. We negotiated a price even though we felt it would kill off the format we were trying to monetize. We never intended to 'go brokered' but we needed cash. We took the deal and the guy kept wanting more and more hours. In a few months the format was gone and it was all programmers that were buying time. It was the first time the station turned a profit. Literally we more than doubled our revenue and as people quit, they weren't replaced. We simply didn't need the staff we once had.

We had realized that an AM daytimer in a major market simply can't take on a format and compete. Any format would have to be so 'niche' it would be very difficult to sell advertising and produce the results for advertisers that got the majority of them to regularly advertise month after month. We realized there were so many other stations in the same boat because our clients got offers from other stations frequently.

On leasing stations, there are two general scenarios: 1) you lease the time and pay all the expenses and hire the management to run your station (what we did), or 2) you lease for a tiny amount, maybe $3,000 to $6,000 a month and make the client pay all the expenses (ie: maintain a staffed office, hire an engineer, all utilities, taxes and such). We don't like option 2 because we feel it is more in line with what the FCC likes. Anyway, you bill them on those costs and we all know how chasing money goes. We even take time Sunday morning to run a weekly Public Affairs show, not allowing the client to do that.

As for rates, in my market the lowest I know of is $15,000 and the highest is $40,000 with the $40,000 including an FM translator and a 24/7 AM signal.

The last point I'll offer: when a novice in time buying calls, they talk about how many listeners they'll bring to the station. For us, we don't care. It's the programmer's problem to get the listeners. We charge for the time if that's one or a million listeners. Naturally we like programming to flow show to show and a show with plenty of listeners versus virtually none helps all our time buyers. The station views it as offering access or an opportunity at a price per hour and the number of listeners is not a factor. It's can you pay and continue to pay. If so, you got the time.

 

[TheBigA]

It's can you pay and continue to pay. If so, you got the time.

That is very important. You want the same show on every day, every week, for years. You don't want to have to find new shows every month. For the client, longevity builds audience.

 

[b-turner]

That is exactly right. You want every client to stick around not only because it makes the job easier, it builds the station listener base and awareness. I always say my job as not selling them but a source of information to bolster sales, deliver listeners and generally be their #1 fan.

My job was to be their guy in the background on their road to success. I'd spend most of my day helping with advertising proposals, commercial ideas and ways to involve listeners with my programmers. It was actually fun to learn the various nuances of various cultures and be a source of ideas when the client hit a roadblock. I was no expert, just a fresh set of eyes looking at things.

And if anyone wonders what radio salespeople do, this is it. The sale is just the first part. The relationship and work follows and continues. I'd even try to help those that simply called to price us and selected another station. In one instance that help came back to haunt me 5 years later when a potential client remembered I tried to help them. They were with us 6 years and our biggest client at that time buying the bulk of our broadcast day.