Wake Up KDKA!

[Boss Radio]

Boss, Boss, Boss....
Put your chin in my hands, and let's examine the reality of radio.
First off, if you work in radio, it is to your advantage to have as many possible places to work or to place the programming you create. Let's not reduce the alternatives. Consolidation already did that, and it hurt.
Second, radio is not a zero sum game. A lot of 'BossJocks' look only at share, cause that's how they are trained to measure their competetiveness. Real broadcasters look at numbers. Fewer stations might allow a higher share for any individual show, but the economy buys listeners. The better the quality or quantity of those listeners, the more valuable they are.
Third, the station is just a conduit, a pipeline, a means of distribution. The cheaper it is to distribute your product, the more profitable it can be. Just 'cause Braddock's station isn't used to its' highest potential doesn't mean it never will be. I challenged you to do the things that would make a station like that live up to a higher potential and you accused me of sarcasm.
Think of the Manongehela River. It ran low, then it flooded. It wasn't worth anything to anyone, until John and Pat McCloskey learned to navigate it. Once they built up trade, it was improved with locks and dams. It became the conduit for coal, limestone and iron ore. That allowed Braddock, Homestead, Point Perry and some other little river towns to become the greatest creators of wealth in the country, for many decades. That's what made Pittsburgh. The conventional wisdom of the era was that the trains would shut down river trade. The trusts bought up the railroads and jacked up the rates, but the river still runs. And it can be cheaper to ship by river than by rail. Lets not blow up the dams, OK?

Congratulations. That makes no sense whatsoever.

 

[Boss Radio]

You said: "HD radio, satellite, MP3, Internet, Wi-Fi and even your cellphone are all now in play."

You're on to something, Snaf... but I contend radio has the inside track. Cellphone minutes cost. Broadband internet costs. Satellite costs. Over-the air radio is free.

The built-in antenna on your TV delivers "free" TV. It doesn't deliver ESPN, CNN, HBO and all the other things people really want, so they willingly pay for cable and satellite service.

 

[grantchester]

You wrote: Congratulations. That makes no sense whatsoever.

My daddy warned me not to argue with an idiot, cause he'll drag you down to his level and beat you with experience....

you wrote: The built-in antenna on your TV delivers "free" TV. It doesn't deliver ESPN, CNN, HBO and all the other things people really want, so they willingly pay for cable and satellite service.

Obviously you are not a broadcaster. You can't grasp the fundamentals or the economics of the industry. My argument is that 1550-am and other underutilized AM stations can be viable, given creative programming, savvy marketing, and affordable cost. If bad info-mercials have to be aired to support that, so be it.

I don't want ESPN, HBO or CNN. I won't pay for cable or satellite. I have better things to spend my money on. (I did enjoy watching a movie last night that I bought on VHS for 99 cents. Thanks for the tip.) I support free mass media. I believe free, over the airwaves mass media has an intrinsic value to our community. I am sorry you can't see that value.

There is a place for premium media, be it DVD, CD, WIFI, Cell-phone, or whatever. The lowest cost has the advantage. Radio is not going away.

 

[Boss Radio]

Who said radio is going away? How does that relate to the rivers and the railroads and the distant howl of the wolf?

If you wake up tomorrow morning and it's 1962 again, I agree that 1550 AM has a fighting chance. In the meantime, I see a lot of kids wearing iPods and they don't seem to care that they can get good ol' AM radio for $200 less.

 

[grantchester]

You said 1550 SHOULD go away. God love those kids and their I-pods, what are they going to do when the RIAA makes them pay for all the music they want?
By then they'll wish for a better CONDUIT... a better way of transporting their desired programming. A way that allows them to afford to indulge their tastes.
Just like the riverboat didn't go away after the railroad, the truck and the air-freighter came along, AM radio won't go away just cuz some BOSSRADIO dude doesn't understand the economics of the industry.

 

[Boss Radio]

Yep, tugboats and downloads and the lonely midnight train whistle.

They're all making wrong-end-of-the-dial AM radio stations America's smartest investment.

 

[kenhawk1160]

Don't laugh, there are already industrial countries where AM radio is a distant memory.

Ah, true! But there are others where it has in fact, proliferated. Mainly it's because the stations are government-controlled and well, I don't think I need to elaborate on the disadvantages of a centrally-planned economy and its ramifications on society as a whole, let alone radio.

 

[kenhawk1160]

Real broadcasters look at numbers. Fewer stations might allow a higher share for any individual show, but the economy buys listeners. The better the quality or quantity of those listeners, the more valuable they are.

Grant, this is the same argument that I've used for small market radio all these years. Ratings don't mean anything in small market if the advertisers who support you aren't buying your product. Here's an example. There's this one station in SW PA, an AM standalone, that switched to an all country music format in 1990, much of it classic country. Arbitron numbers went through the roof. They became the most listened to station in the county. BUT...they couldn't maintain their advertisers because many of them didn't like country music. When the reps came in and said "But we're the number one station in town!" That meant nothing. It looked good to the agencies, but do you honestly believe that they were going to shovel more ad money into a low-powered AM at the higher end of the dial in a non-rated market? Of course not. Everyone knows that local stations survive on local revenue. No one can survive on agency dollars alone. So, this station ended up being sold two years later at a massive loss.

The ugly truth is, you program the station towards your advertisers first, the listeners second. It sounds harsh, but it's reality.

 

[grantchester]

Good point, Hawk. The key is to know who you are serving, and where the money is. Once upon a time, I sold ads for a major market station that had no ratings. I met all my goals for the few months I did it. I found programs that worked for the sponsors. I sold the Baptist Church live broadcast to a funeral home. I sold an auto repair shop time for a 'car-talk' program. We hired a retired radio legend, and I sold his live personal appearances at a restaurant.
The fundamentals are the same now as in the '70s: define a group and serve their needs. If your programming is compelling enough, and your promotions are efficient, you can make money on even the lamest, high end of the dial, low powered directional daytimer. The difference now is, with pod-casts, internet radio, cell phone delivery and such, thedynamic has changed from "Push" to "Pull". At one time a 13-Q could play the a song and make it a hit. Now the user is in charge. The audience 'pulls' the content, instead of having it pushed on them.

 

[Radio_Realist]

The built-in antenna on your TV delivers "free" TV. It doesn't deliver ESPN, CNN, HBO and all the other things people really want, so they willingly pay for cable and satellite service.

You overlook the fact that for a long time, people paid willingly for cable before there were any "cable networks". CATV, or Community Antenna Television Service, was originally created to simply provide good reception to people who couldn't receive a decent "free" TV picture with their antennas. Once cable TV became commonplace for providing good reception, then entrepeneurs began coming up with "cable networks" to exploit the opportunity cable presented.

Don't be surprised to see XM and Sirius change their model to providing "basic" satelite for almost nothing, with individual audio networks available a la carte or in packages. Don't be surprised to see XM and Sirius both offering identical programming packages, the same way that DirectTV and DishNet do for television. And don't be surprised to see local radio jumping onto XM and Sirius the same way local television channels are now available on DishNet and DirectTV.

 

[kenhawk1160]

At one time a 13-Q could play the a song and make it a hit. Now the user is in charge. The audience 'pulls' the content, instead of having it pushed on them.

I think that has more to do with the demographic. The more fickle crowd is at the lower end of the 25-54 demographic. I say the top end is not as apt to do that.

 

[kenhawk1160]

And don't be surprised to see local radio jumping onto XM and Sirius the same way local television channels are now available on DishNet and DirectTV.

Fortunately, there are enough regs in place to keep local radio safe on the terrestrial band. XM and Sirius have already begun their lobbying to Congress for permission to carry local news content and programming that has kept traditional radio alive all of these years. The technology is there...it can be done. If it's allowed to happen, that could be the last nail in the coffin for terrestrial radio. On the brighter side, I don't see XM or Sirius lowering subscription rates for their service. The churn rate for satellite radio is much higher for digital cable and satellite tv.

 

[Radio_Realist]

Fortunately, there are enough regs in place to keep local radio safe on the terrestrial band.

What regulations the government puts into place, the government can change.

Your response indicates that you didn't fully grasp what I described. I'm suggesting that stations like KDKA, WDVE, and others would be carried on XM and/or Sirius the way that KDKA-TV and WTAE-TV are carried on DishNet and DirectTV. I predict we'll see the natural progression of voice-tracking, listening to radio stations on the internet, syndication, and cookie cutter formats like Jack, Bob, etc. lead to national radio network programming. Instead of listening to a local "Bob" franchise station, people would listen to the national "Bob" network on their choice of satelite recievers or local radio stations.

XM and Sirius will lower their rates for "basic" service, but will increase their charges for various networks, just as TV cable companies charge one low rate for basic cable, with higher priced tiers for extra and/or premium channels.

 

[kenhawk1160]

What regulations the government puts into place, the government can change. Your response indicates that you didn't fully grasp what I described. I'm suggesting that stations like KDKA, WDVE, and others would be carried on XM and/or Sirius the way that KDKA-TV and WTAE-TV are carried on DishNet and DirectTV. I predict we'll see the natural progression of voice-tracking, listening to radio stations on the internet, syndication, and cookie cutter formats like Jack, Bob, etc. lead to national radio network programming. Instead of listening to a local "Bob" franchise station, people would listen to the national "Bob" network on their choice of satelite recievers or local radio stations. XM and Sirius will lower their rates for "basic" service, but will increase their charges for various networks, just as TV cable companies charge one low rate for basic cable, with higher priced tiers for extra and/or premium channels.

Yes, Realist...I am aware that the government giveth, as well as taketh. I don't believe we'll see XM and Sirius move towards what you can get on terrestrial radio, as you're describing. I can see a Bob or Jack format maybe, but I don't see rate and program tiering. I think once the churn rate drops, maybe that can be explored, but now I don't see that happening.

 

[Johnny Morgan]

Instead of listening to a local "Bob" franchise station, people would listen to the national "Bob" network on their choice of satelite recievers or local radio stations.

WOMP-FM, Wheeling, WV is already running the satellite-fed "Jack". And, as we know, 107.1 is running the sat-fed "Sam" format.

 

[Radio_Realist]

I think once the churn rate drops, maybe that can be explored, but now I don't see that happening.

I admit that predicting the future is an inexact science. And I agree that stabilizing the churn rate must happen before the next steps I predict could happen. However, I see moving to a tiered rate structure with special programming offered for extra money, and with premium radio channels offered independently of the carriers, the way HBO, Showtime, and the rest are offered on all statelite cable TV systems as being something that both XM and Sirius can do in order to stablize their churn rates.

If the folks running XM and Sirius look at DishNet and DirectTV as models for success (and why wouldn't they?), I'm confident that they would start to copy the things that the satelite TV companies have success with.

 

[kenhawk1160]

If the folks running XM and Sirius look at DishNet and DirectTV as models for success (and why wouldn't they?), I'm confident that they would start to copy the things that the satelite TV companies have success with.

That'll be interesting. I'm curious to see if a customer would pay more for premium service tier offered by XM or Sirius. It's a real possibility. I can see a lot of over the road truck drivers and those who spend a great deal of time in their cars doing this.

 

[garnet]

i was in meetings two years ago where it was brought up that, eventually, we would all be on sat., and "off the air" would be like...well, "off the air" tv now...maybe it was just a "re-assure us" meeting, but, i see it, completely...sure you can listen to kiss-fm in l.a....but wouldn't you rather listen to your own local "kiss-fm"?...well, just tune into it...

 

[kenhawk1160]

i was in meetings two years ago where it was brought up that, eventually, we would all be on sat., and "off the air" would be like...well, "off the air" tv now...maybe it was just a "re-assure us" meeting, but, i see it, completely...sure you can listen to kiss-fm in l.a....but wouldn't you rather listen to your own local "kiss-fm"?...well, just tune into it...

To quote Merv Griffin, once a radio station owner himself..."Stay Tuned".