The Brokered/Ethnic model: why does it work?

[icybluelake]

I'm not sure why I really care, but maybe I have too much spare time on my hands. I guess it's that I certainly understand that AM has been dying or dead for years, but still lament the days when it was a lot more vibrant.

How is it that so many AM stations can resort to brokered or brokered/ethnic programming when they conclude it's their best option at viability? Just how viable is it if nearly no one is listening? Or is that an illusion? When I look at ratings, these stations never make an appearance at even 0.1%. I guess my question is, why does it even work?

Is it that ratings don't really matter when someone out there is willing to pay X amount of dollars to program a chunk of the day's programming?

I'm wondering this as I look at WSNR 620, a station with a signal that I understand is a bit problematic, but still reasonably strong to cover a good share of the tri-state region, yet I've come to see it as just a nuisance. I count 3 to 5 stations that fall into this category in NYC, and I realize there are even more in other large markets.

 

[nd2023]

I wonder why, for example, 87.7 has programming for 4 different ethnicities, and the leasees are making enough money to keep their programming on. The lease is not cheap, and the station no longer gets any ratings. It had a 1.0 share and a million cume as Pulse, but the advertising revenue was just a little over a million a year. I find it hard to believe that all the ethnic programming combined could bill over a million a year.

 

[TimeIsTight]

The ratings don't matter because any advertisers on the brokered programs know that they are trying to reach a small and very specific segment of the potential radio audience, usually members of a specific ethnic group, and very often people who speak a specific language other than English.

Many of these sponsors of brokered shows are small businesses that wouldn't have the money or sophistication to buy radio spots by the ratings if they wanted to. They measure the effectiveness of their dollars spent on advertising by how much their business increases, and they know what radio programs their customers and others in their community listen to.

The business model for the AM stations is to make broadcasting available to small ethnic communities that might not be big enough to support a full time station. For many of these people who don't understand English all that well, listening to a local radio program about their country of origin or ethnic community is destination radio. They will tune into a specific frequency at a specific time just to hear it, even if it is late at night.

As AM has been doing a slow popularity fade for the general population of listeners in the NYC area, the large and varied influx of immigrant population has provided a new audience, and a new market for stations that would have a hard time competing with FM or 50-kw AM stations for a rated audience.

It is a situation that could change as technology changes and the immigrants have more access to podcasts or internet streams aimed at them and their smart phones or wifi radios, or the situation could change if immigration slows down, and the children of current immigrants grow up speaking perfect English.

The stations themselves can be viable since they keep all costs to a minimum, and require only a small staff. Still its more like a survival business, not a business you expect to grow strongly in the years ahead. These AM stations are likely declining assets and will lose value over the long term until the real estate they are on is more valuable for use as something other than a radio station, and then those stations will go dark.

 

[MickeyD]

The ratings don't matter because any advertisers on the brokered programs know that they are trying to reach a small and very specific segment of the potential radio audience, usually members of a specific ethnic group, and very often people who speak a specific language other than English.

Many of these sponsors of brokered shows are small businesses that wouldn't have the money or sophistication to buy radio spots by the ratings if they wanted to. They measure the effectiveness of their dollars spent on advertising by how much their business increases, and they know what radio programs their customers and others in their community listen to.

The business model for the AM stations is to make broadcasting available to small ethnic communities that might not be big enough to support a full time station. For many of these people who don't understand English all that well, listening to a local radio program about their country of origin or ethnic community is destination radio. They will tune into a specific frequency at a specific time just to hear it, even if it is late at night.

As AM has been doing a slow popularity fade for the general population of listeners in the NYC area, the large and varied influx of immigrant population has provided a new audience, and a new market for stations that would have a hard time competing with FM or 50-kw AM stations for a rated audience.

It is a situation that could change as technology changes and the immigrants have more access to podcasts or internet streams aimed at them and their smart phones or wifi radios, or the situation could change if immigration slows down, and the children of current immigrants grow up speaking perfect English.

The stations themselves can be viable since they keep all costs to a minimum, and require only a small staff. Still its more like a survival business, not a business you expect to grow strongly in the years ahead. These AM stations are likely declining assets and will lose value over the long term until the real estate they are on is more valuable for use as something other than a radio station, and then those stations will go dark.

Or they could just stream radio from their mother land.

 

[max88]

it will all change when they can stream stations from their motherland in their cars

 

[BabyDJ]

For many in the target groups of these brokered shows, radio is still a primary source of news and information. They are usually older immigrants who don't use computers or cell phones to get news and the TV services available to them may not carry the specific information they are looking for.

Brokered and subcarrier broadcasting can be a lifeline.

 

[Gregg]

I had some work done on my apartment and I left a couple of radios out, telling the foreman (the only one who spoke some English) that the workers could use them.

Both radios were tuned to AM 1480, which broadcasts a mix of news, talk and pop music in Mandarin Chinese. I heard commercials from major banks, cell phone companies, insurance companies and airlines, even though WZRC 1480 never makes the ratings. I don't know Mandarin but I could recognize the brand names. (The call letters are still left over from when the station was co-owned by Infinity along with WXRK and it broadcast a syndicated hard rock format known as Z-Rock.)

New York has, in addition to this Mandarin outlet, stations broadcasting in Cantonese, Korean and two broadcasting in Russian (as well as the latest addition, 1430 broadcasting "The Voice of Russia" from Moscow in English 24/7). I'm sure they are all quite profitable.




Gregg
[email protected]

 

[davideduardo]

it will all change when they can stream stations from their motherland in their cars

Most immigrants don't want to hear stations from their homeland. They want to hear the music and content they like but from a source in their new place of residence.

A study was done in El Paso some years ago to find out why the Cd. Juárez Spanish language stations did not do anywhere nearly as well as the El Paso Spanish language stations. The answer was that listeners did not want to hear stations that had ads for stuff they couldn't buy and news about a country that did not offer enough opportunity to make them want to stay.

In other words, you can build it but they won't come.

 

[davideduardo]

I wonder why, for example, 87.7 has programming for 4 different ethnicities, and the leasees are making enough money to keep their programming on. The lease is not cheap, and the station no longer gets any ratings. It had a 1.0 share and a million cume as Pulse, but the advertising revenue was just a little over a million a year. I find it hard to believe that all the ethnic programming combined could bill over a million a year.

Pulse had to produce programming, pay salaries, put sales people on the street as well as paying the rent.

The ethnic programmers have lower operations costs, and likely run a lot more commercial minutes an hour than Pulse could.

The licensee gets more certain income streams from four sources. It does not matter how much billing is. The real issue is the licensee is getting its payments, and the brokers are likely making good money... neither of which was happening with Pulse.

 

[icybluelake]

Thanks everybody, great insights and good discussion.

 

[max88]

David E can you name the 4 sources?

 

[davideduardo]

David E can you name the 4 sources?

No idea. A prior post said that there were at least four different brokers in different languages, if I understood it correctly.

 

[nd2023]

There's Russian, Korean, Indian, and American (Indie Darkroom) on 87.7.