The Declining state of radio and your opinion why...

[Radio_bored-Op]

im a little late to the party, and didnt read ALL 11 pages,
but agree w/ u - its crappy when u goto a
"fund raiser function" and the ipod is
'playin the tunes' and some , usually larger gentleman
turns on the mic and says:
"..now, we are - can every one hear me, we are here
for the right (hey gus can u turn off the music), I am
trying to talk ( LAUGHS very loudly) , okay while we are here..."

then u look across the room, and people are filling out their checkbooks...
-

as far as the state of radio:
simply because of the the radio is the same COMPONENT it
was when you first fell in love with it -

when in 1948, there was a NEW station SIGNING on in the
greater Buffalo Area, and that was EXCITING ...
20 years AFTER THAT, you were born, and shortly always said,
radio is what I want to do as a career...
the 80s, come and go as well as the 90s, and the cycle starts over...

with other Technology's there has been a more (lack of a word) _ kind of path -
invention of the tv, then its colorized, then its bigger and better, then
its smaller, then its interactive, and now choices are limitless.

Computer: its TOO BIG, then avail.domestically, then second u buy it,
its worthless (sucks 4u,but that means expansion), then the internet,
then its smaller, mobile, etc
-
CAR: mode of transport, then a status symbol, [need a diff.word besides then],
later in life its new and shiny, again and again....

Radio:
there are the "same" 15 channels, as alotted per FCC regs.
there is listening online, and there is "theatre", talk,music, etc
BUT its not like your radio is __________ an ipod, or anything but
what it is : a radio... okay, xm/sirius has made it a little more exciting
but thats not a radio improving ; but an improvement to a radio
(like putting a boat on the end of your car), car is the same but now
more fun cuz ur tuggin a boat

 

[TheBigA]

The city's population dropped by 50% since 1980. What's your source? So Buf and Roc are not Top 50 markets anymore - it's doesn't mean both cities are fading away. Why is Albany the hotspot in upstate NY? Source please.

The US Census.

Believe what you want to believe.

 

[SirRoxalot]

Albany is the bright spot in NY outside of NYC. Why? Because Joe Bruno, who's now serving jail time, sucked billions out of the state economy and directed it toward redevelopment in the Albany area. And, Albany is the capitol of NY state. I haven't noticed state government getting any smaller - which has a lot to do why the population is shrinking in the rest of the state.

With all that said, WNY is a victim of a shrinking manufacturing base as companies move into non-union southern states, or out of the country. What's left is a pretty stable environment, and a pretty robust infrastructure. Data centers are starting to like the idea of cutting air conditioning costs dramatically through a combination of cooler air and abundant cold, fresh water. Add a well educated populace, and we've seen growth in that area, with a lot more potential growth. That's just one sector that's doing OK.

In spite of it all, radio revenue has been a lot more stable here than in most markets. Buffalo and Rochester may not be growth markets, but they're still consistent money-makers.

 

[cee]

In spite of it all, radio revenue has been a lot more stable here than in most markets. Buffalo and Rochester may not be growth markets, but they're still consistent money-makers.

Rox - thanks for your input on "Jailbird Joe." And yes Buff-Roch are consistent money makers. If I may add one thing. I remember in the 2000 census that while Buffalo lost more population...Rochester held steady(actually added a few people...not many). The reason I mentioned the improving job creation scene in Buff-Roch in my previous post is that obviously economic stability is a big determining factor on population in an area. I have lived in both Buffalo and Rochester and there's not much difference except Buffalo(as Rox wrote) took a heavy manufacturing hit. Remember when Bethlehem Steel closed down in the early 80s? People are not leaving Buffalo because it's a craphole(as many non Buffalo people reading this may assume). Both towns, despite the harsh winters, are quite livable. Rochester treads water better, population wise, because even in hard times the economy seems to always be better. But I am very cautiously optimistic and very bullish on Buffalo and Rochester and while it's highly doubtful they'll ever return to "boom town" status, I am hopeful they will have stable economies and continue to be good money makers. I don't think the population decline will level out in due time.

 

[Florentino]

Simple: Consistently the most interesting conversation on this entire site. Plus I spent a short stretch of time in Upstate NY a long time ago. Never been back.

I couldn't agree more. There are some very intelligent and impassioned conversations on this board.

 

[listener-in]

A few points about Western NY. It's fashionable in certain quarters to bemoan the loss of population and blame it on taxes. Taxes are but a small part of the composite that determines the expense and quality of life in an area and I think WNY has just about bottomed out because it has much more going for it than against it. Property is reasonably priced compared with many areas and, perhaps for that reason, it is also more stable. You wouldn't believe the cost of modest houses in some of the communities surrounding Detroit - yes, Detroit. Winters notwithstanding, the climate is relatively benign and if the climate is really changing, as the best available studies indicate, it will become more benign relative to the states of the south and southwest; and before long, they will be casting envious eyes on the plentiful water up north, if they aren't already. Without glossing over some undoubted problem areas, the educational and literacy level is high (you get what you pay for), which is reflected in the quality of debate that attracts BigA to this board.

What it boils down to is that before long you'll be seeing the exodus of population and business reversed, and if radio stems its decline anywhere it will be well placed to do it in WNY. Of course, radio would help itself if it could free itself from the stifling control of corporate management.

Someone cast doubts on whether BigA works in radio. So what whether he/she does or not? I don't and I never have, but my habit helps support radio. Maybe if listening were a two-way street, your industry might have fared a bit better. That's my two cents.

 

[TheBigA]

Of course, radio would help itself if it could free itself from the stifling control of corporate management.

Thanks for the comments about me. This one sentence, admittedly taken out of context, was the one that caught my eye.

How do you suggest this could happen, and why do you think it would make an improvement?

It seems to me that for the most part, most Buffalo radio stations have been operating under corporate management for 70 years. Good ones and bad ones. Perhaps your point is more about absentee landlords vs. the former Buffalo-based corporations that ran radio.

 

[SirRoxalot]

It's a simple fact that a local corporation returns the income to the local economy. That's good for everybody in the area. When a corporation comes in and sucks the profit out so they can reinvest it in another locale, it hurts the local economy. Absentee landlords don't see how their decisions affect people on a day-to-day basis, and too often don't understand how company-wide decisions impact different markets in different ways.

The people who are supposed to relay that message to corporate - GMs and Business Managers - are much more interested in hanging onto their jobs than they are in fighting for the people that work directly for them. Corporate doesn't want to pushback from "underlings". There are way too many adherents of the "Jean Luc Picard School of Management" who simply issue orders and say "make it so".

 

[TheBigA]

It's a simple fact that a local corporation returns the income to the local economy. That's good for everybody in the area. When a corporation comes in and sucks the profit out so they can reinvest it in another locale, it hurts the local economy. Absentee landlords don't see how their decisions affect people on a day-to-day basis, and too often don't understand how company-wide decisions impact different markets in different ways.

I understand that, and it was something that was debated in the 1930s when NBC was looking to buy radio stations in California. The decision was made that as long as the company hired local people to run the station, then it didn't matter where the ownership was. This became the guiding decision for all MSOs as they were called (multi-station operators). It was a pretty accepted system of radio ownership in the 50s and 60s. Gordon McLendon made a lot of money that way. What was a guy from Texas doing running a radio station in San Francisco?

This entire country is run with absentee landlords. Do you think Sears owns the Sears tower in Chicago? They tell me it's not called the Sears Tower any more. My Toyota was built in the USA. Guess where the profits from it go. I run it using BP gas. Where do the profits go? I could go on for days here. We have become a nation of absentee landlords, because no one wants to own things. On another board, we were discussing the thought of allowing US broadcasting to be owned by foreign companies. It wouldn't take much to make that happen. In an effort to prevent concentration of media ownership, we've banned the most qualified local media company from ever owning radio, and that's the local newspaper. Stupidest decision ever made.

 

[therealjm12]

Absentee landlords in the broadcasting biz was given a huge push when the 7/7/7 ownership was abolished in the 90's. While I certainly agree times change and the way business is done have changed, it just seems ridiculous by any standards, that companies like Clear Channel (etc.) can own upwards of 8 radio stations in a medium market like Rochester. 4 or 5 stations in a large markets like N.Y.C or L.A. would make good business sense. The lack of ownership limitations is the reason why we are discussing the declining state of radio here. Not the lack of talent. The talent is there, mostly sitting on the beach. The greed is there. Mostly held by the mega media companies that bought up every station they could, just to monopolize the business and freeze the little guy out. Now they are in deep financial difficulties and laying off more talent, rather than selling off their properties to pay off their debts. That's the declining state of radio.

Where is Teddy Roosevelt (a great Republican) and the anti-trust laws when we need them?

 

[listener-in]

Perhaps your point is more about absentee landlords vs. the former Buffalo-based corporations that ran radio.

Exactly - I should have been more explicit. I'm a bit careless about using the term "corporate" when what I have in mind is the megacorporations that, like their counterparts in the rest of the economy, care just enough about their product to satisfy their stockholders, which means as little loyalty to their communities and their customers as they can get away with.

 

[TheBigA]

Absentee landlords in the broadcasting biz was given a huge push when the 7/7/7 ownership was abolished in the 90's.

But as I said, it had its beginnings in the 1930s with NBC. And it really exploded in the 1950s and early 60s when radio was at a low point. 7-7-7 meant that there were 6 stations that where owned by absentee landlords. That grew to 12-12-12, which meant you had 11 stations with absentee landlords. The reality is that when the majority of your stations are outside the home market, what difference does it make if its 6, 11, or 780? They're all treated the same. Unless you have a rule where stations must be owned locally, then it really doesn't matter. However, if that rule existed, you'd have to shut down more than half of the current stations, especially in smaller markets, and we'd be back to where we were before WW2.

My view is that Docket 80-90 was the game changer, coupled with the growth of FM, not the change in ownership limits. The minute you had 12 stations in a market that once had 5, quality was going to suffer. It meant that the market share of every owner was cut in half. Stations that once enjoyed 15 or 20 share books were now getting 7. That meant a huge drop in income. Smaller stations couldn't absorb that kind of loss. And if you only had an AM in a market, while the audience was moving to FM, you were in trouble. When you consider all of the pre-1996 changes, from the FM explosion, to the newspaper cross-ownership ban, to Docket 80-90, they all contributed to the terrible state of radio in the early 90s, which led to the 96 Act. It was the only solution to the hole the FCC had created. But there was no way one could enforce 7-7-7 or 12-12-12 after Docket 80-90.

 

[TheBigA]

I'm a bit careless about using the term "corporate" when what I have in mind is the megacorporations that, like their counterparts in the rest of the economy, care just enough about their product to satisfy their stockholders, which means as little loyalty to their communities and their customers as they can get away with.

That's the trade-off between jobs and entrepeneurship. Today, the goal is increasing the number of jobs. But adding more greeters at Wal Mart or another shift to McDonalds isn't going to make a big difference in the local economy. But having a few people like Bob Rich establish a big business in a town can be a game changer. Look at how Wal Mart changed Arkansas. How Apple changed Cupertino. That's what you want.

The fact is that we've become a country of stockholders. More than half of the population own stock, either through mutual funds or various retirement plans. With banks paying less than 1% interest, it's the only way for anyone to get ahead. So while a lot of people agree with you in principle, their attitude changes when they look at their retirement statement every month. The other big change is that we became a country of lawsuits and lawyers. That led to the at-will employee. That means you agree to indentured servitude. Once again, it's about creating jobs at the expense of employee rights.

It's been a long slow process to get where we are. It didn't just happen recently. One law didn't cause it. It's been a series of things. And we all had opportunities to step up and say "no." But we didn't, and that led those with an organized agenda move in. That, in a nutshell, is how we got here.

 

[Element9]

I think you got part of that right, A. The Docket 80-90s did in fact dilute the radio soup. But few 80-90s gave the big 50 kw'ers much of a run. As I see it, the FCC established Docket 80-90s to give the local broadcasters a voice, but as it turned out, many of those 80-90s got crushed by the larger broadcasters who had bigger signals and more money. After the Telecom Act of 96, the floodgates were opened and the big guys bought out the little guys, who were only too glad to pick up a few million for an 80-90 that didn't really make them as rich as they expected. Then, as we have seen, the big broadcasters had their own issues with the 80-90s they snatched. Many, even with power increases from 3kw to 6kw, didn't make a dent. I see the same thing happening these days with translators.

Rochester is a unique market, where locally owned low power stations like WDKX consistently draws good ratings. As I recall, WDKX is not an 80-90. It was allocated before Docket 80-90 was policy. According to an assessment made by a reputable engineering firm, the FCC allocated the Rochester, NY market more Docket 80-90s than any other market its size. That was an exception. Few markets went from 5 to 12 FMs due to the addition of Docket 80-90s.

 

[TheBigA]

the FCC established Docket 80-90s to give the local broadcasters a voice, but as it turned out, many of those 80-90s got crushed by the larger broadcasters who had bigger signals and more money.

Yet there's this mythology that before 1996, all of radio was owned by moms & pops. The fact is there always have been big powerful radio companies, since 1922. And there always have been outside owners who used radio to promote their main business, whether it was electronics, newspapers, insurance, or anything else they could find. What happened in the 1980s is that a lot of those companies got out of radio, leaving the industry to be owned by radio-only companies. THAT was a big mistake, because radio alone couldn't make it through down economies. That's the real problem, not the number of stations a company owns. Owning a large number of stations is simply a replacement for the old network radio system of the 30s and 40s. They called that the golden age of radio.

Few markets went from 5 to 12 FMs due to the addition of Docket 80-90s.

My count comes by adding the FMs, that went from no audience to players, combined with Docket 80-90. A typical medium market went from 3 serious AM stations to 12 or more AM & FM in a short period of time. Talk about sticker shock!

 

[SirRoxalot]

The real problem is that the consolidators seriously overpaid for stations after 96. They thought that they could grab those Docket 80-90s and move them to a place where they'd reach large or major markets, and become part of a cluster that would be able to force rates up for advertisers. The people who sold walked away in many cases with enough in their pockets that they could live off the interest and have more cash coming in than the stations generated.

The other part - which we're seeing Clear Channel & others rolling out now - is that the consolidators thought that they could seriously cut costs by hubbing and syndication. What they missed in that equation is that radio is primarily a LOCAL business. The smaller markets that they abandoned either couldn't or wouldn't by spots on stations that had been snatched out from under them. The rimshots became small players in larger markets, serving niche formats or as flankers for "big" stations. In many cases, revenue actually dropped from what it was when owned by independents, and the cost-cutting didn't offset the revenue drops. That's how Citadel and others ended up in bankruptcy.

Now, syndication is infesting ever larger markets, reducing local content. We'll see if advertisers buy the "we're bringing in better programming" line that Clear Channel and Cumu-less are spouting. What's even sillier is that they're cutting sales experienced sales people, or losing them to competitors who don't constantly revise commission rates downward, and add onerous software and reporting systems.

 

[TheBigA]

The real problem is that the consolidators seriously overpaid for stations after 96.

They paid what the market demanded. Hindsight is 20-20. The cost of borrowing then was much higher than it is now. Radio is a cash flow business, so what they paid was the cost of admission, nothing more.

The other part - which we're seeing Clear Channel & others rolling out now - is that the consolidators thought that they could seriously cut costs by hubbing and syndication. What they missed in that equation is that radio is primarily a LOCAL business.

But that has changed because local business is primarily owned by national chains. The only thing that local about it is the regionalization of copy.

That's how Citadel and others ended up in bankruptcy.

The companies that went bankrupt are the ones that bought stations just before the advertising crash. The only exception I know of is Wilks.

 

[cee]

They paid what the market demanded. Hindsight is 20-20. The cost of borrowing then was much higher than it is now. Radio is a cash flow business, so what they paid was the cost of admission, nothing more.

That's because the industry bribed congress into deregulating the industry(you can own as many stations as can get your hands on). This essentially ruined radio. But if you look the bigger picture, the U.S. Government is for sale because we live in a plutocracy. Does it matter to some congressman if radio nobodies can't make a meager living in their choice of a profession anymore? No. To quote Randy Newman, "it's money that matters...in the USA."

But that has changed because local business is primarily owned by national chains. The only thing that local about it is the regionalization of copy.

I mostly hear national spots when they're net spots. I hear mostly local advertisers here. Car dealers, for one thing. Wegmans is not a national advertiser nor is Tops.

 

[TheBigA]

That's because the industry bribed congress into deregulating the industry

Proof please.

 

[Element9]

the FCC established Docket 80-90s to give the local broadcasters a voice, but as it turned out, many of those 80-90s got crushed by the larger broadcasters who had bigger signals and more money.

Yet there's this mythology that before 1996, all of radio was owned by moms & pops. The fact is there always have been big powerful radio companies, since 1922. And there always have been outside owners who used radio to promote their main business, whether it was electronics, newspapers, insurance, or anything else they could find. What happened in the 1980s is that a lot of those companies got out of radio, leaving the industry to be owned by radio-only companies. THAT was a big mistake, because radio alone couldn't make it through down economies. That's the real problem, not the number of stations a company owns. Owning a large number of stations is simply a replacement for the old network radio system of the 30s and 40s. They called that the golden age of radio.

Any discussion of "networking" (during the 30s and 40s, the golden age of radio, through the 60s and 70s, the heated era of Top 40 and emergence of Album Rock on FM) requires us to make a distinction between owning a large number of stations during the era of 7-7-7 and today's environment. There is a vast difference between being connected to ABC, CBS, NBC (Red and/or Blue), AP and Mutual and today's market conditions, in which companies like the C's and E's own a thousand properties and market caps can reach combinations of eight. If this distinction is not made, it's an "apples to oranges" comparison.

I concur with your statement that radio stations, in many cases, were owned by companies that had other, sometimes related interests, such as electronics, metal working, insurance, auto dealerships, trucking and newspapers. But I believe these cross ownerships provided a healthy, sustaining synergy. Before 1996, there was, in my educated and reality-based estimation, much more diversity and flexibility because well-managed, disciplined stations owned by small and medium size groups and independents made money, offered more diverse programming and most important as it relates to this discussion and thread, created job opportunities on the air, in engineering and sales. This is not to say that there were no dives, toilets and flea bag operators. There were. It was the case then as it is now. These days, the hustlers and scam artists wear better suits. Socks optional.

Today, the preponderance of radio job opportunities lie in sales. The attrition rate is significantly higher as people who never sold radio and don't understand how it's used by advertisers and listeners are given far less direction and guidance. They eventually wash out. The benefits (commissions) are diminishing because of centralization. When I was on the street years ago, local-direct commission was 15%. Today, local-direct has been pared to 12% in a good shop and down to 10% in some not-so-good shops. A good radio salesman is better off selling furniture and white line, or working the phones at Geico.

Few markets went from 5 to 12 FMs due to the addition of Docket 80-90s.

My count comes by adding the FMs, that went from no audience to players, combined with Docket 80-90. A typical medium market went from 3 serious AM stations to 12 or more AM & FM in a short period of time. Talk about sticker shock!

Clarified and now understood, but you should have made that distinction.