Re: Electric Kool-Aid Acid Test
No, as I recall, the NAB did a study via one of the accounting firms where the individual selected stations were "blind" to the recepients of the report. Again, from recollection, a statistical sample of markets and facilities was used, and it showed, just as the decades and decades of FCC Financial Reports did, that half of stations were not profitable.
It's amusing that nearly every station I have worked with in the US was bought because it was not profitable and was sold. I did or participated in turn-arounds in places as diverse as San Juan, Miami, LA, Dallas, and Birmingham. And everyplace I worked, from the 70's through today had its group of perpeturally unprofitable stations and the occasional format-mistake bleeder... like Pirate Radio in LA or Party in Miami.
Radio is one of those businesses that, up till very, very recently, was a magnet for fools and their money. We know that 75% to 80% of new non-franchise restaurants go broke within 3 years, and 90% of night clubs do, as well. Radio fits right in there.
Stations that are not profitable go on with loans or mortgages on the home of hte owner, and finally get sold or foreclosed on. Some go dark.
In small markets, an owner operator can and often does take all the profits out as a salary to avoid double taxation, but that situation applies more likely in Blythe, CA or Lake city, FL than in larger markets. And sure, you get to trade out a car and vacations and furniture, but it comes at the price of being tied to a station that makes nothing on its capital investment, and where a lightening strike on the tower or a tornado can set you back a decade in building equity.
As I said, many fools thougt radio was a good business only to find that, if not well run, they were significant bleeders. The increase in equity value seldom replaces the lost potential of the same money well invested earning a decent annual rate. Keep in mind that a station bought in 1970 for $1 million and sold in 1980 for $2 million represents a loss, not a profit... lost income from the capital, and a loss due to the value of money declining over 10 years.
No, Yahoo was down way before Google. And Yahoo is principally a portal, not a search engine with tentacles. Yahoo was off because the total tech market was off just as the entire market is off today. Market forces frequently have little to do with the underlying companies, and the best can often fall with the worst.
The good people in radio know that we are in content delivery, not the juke box, industry. However, radio is not being killed and, for a fact, revenues rose last year and will rise this year... slowly. What willhappen is that the marginal staitons or operators will not have content to put through other channels and they will lose more money. Those with content will survive as content companies.
Not my experience or anyone I know.
WiMax is a subscriber financed proposition, with paid content... like your cellular phone. Radio is advertiser financed, and free to the user. DH expands content options, with the audience being "kept" by the stations. Not the same.
Property values are affected as much by the economy as anything else. The furror to build clusters is over, bringing prices down some, too. But remember, most of consolidation was paid for by equity exchanges and mergers, not cash.
SirRoxalot said:
No, as I recall, the NAB did a study via one of the accounting firms where the individual selected stations were "blind" to the recepients of the report. Again, from recollection, a statistical sample of markets and facilities was used, and it showed, just as the decades and decades of FCC Financial Reports did, that half of stations were not profitable.
It's amusing that nearly every station I have worked with in the US was bought because it was not profitable and was sold. I did or participated in turn-arounds in places as diverse as San Juan, Miami, LA, Dallas, and Birmingham. And everyplace I worked, from the 70's through today had its group of perpeturally unprofitable stations and the occasional format-mistake bleeder... like Pirate Radio in LA or Party in Miami.
Radio is one of those businesses that, up till very, very recently, was a magnet for fools and their money. We know that 75% to 80% of new non-franchise restaurants go broke within 3 years, and 90% of night clubs do, as well. Radio fits right in there.
Stations that are not profitable go on with loans or mortgages on the home of hte owner, and finally get sold or foreclosed on. Some go dark.
In small markets, an owner operator can and often does take all the profits out as a salary to avoid double taxation, but that situation applies more likely in Blythe, CA or Lake city, FL than in larger markets. And sure, you get to trade out a car and vacations and furniture, but it comes at the price of being tied to a station that makes nothing on its capital investment, and where a lightening strike on the tower or a tornado can set you back a decade in building equity.
As I said, many fools thougt radio was a good business only to find that, if not well run, they were significant bleeders. The increase in equity value seldom replaces the lost potential of the same money well invested earning a decent annual rate. Keep in mind that a station bought in 1970 for $1 million and sold in 1980 for $2 million represents a loss, not a profit... lost income from the capital, and a loss due to the value of money declining over 10 years.
No, Yahoo was down way before Google. And Yahoo is principally a portal, not a search engine with tentacles. Yahoo was off because the total tech market was off just as the entire market is off today. Market forces frequently have little to do with the underlying companies, and the best can often fall with the worst.
The good people in radio know that we are in content delivery, not the juke box, industry. However, radio is not being killed and, for a fact, revenues rose last year and will rise this year... slowly. What willhappen is that the marginal staitons or operators will not have content to put through other channels and they will lose more money. Those with content will survive as content companies.
Not my experience or anyone I know.
WiMax is a subscriber financed proposition, with paid content... like your cellular phone. Radio is advertiser financed, and free to the user. DH expands content options, with the audience being "kept" by the stations. Not the same.
Property values are affected as much by the economy as anything else. The furror to build clusters is over, bringing prices down some, too. But remember, most of consolidation was paid for by equity exchanges and mergers, not cash.