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What's up with WWKB?
- Thread starter Bill Yuhnke
- Start date
Why does this matter to me?
The environment changes.
At one point, some years ago, I was in charge of sales at a market-leading FM operation. We had raised rates from around $12 to over $200 in about 3 years, and found that either no local direct account could afford us or they wanted so much service that there was no profit. So I closed the local sales department entirely.
We had fewer sellers, but considerably better average spot rates and higher billing. This, today, is not a one-size-fits-all business.
It used to be you bought a station determined what audience wasn't being served, where the format hole was and if it was a sellable format the station went with it. There was variety and originality especially with the smaller broadcaster who could live on a bit of a smaller piece of the pie. By serving the listener, they delivered listeners to advertisers.
When the big groups came in and were allowed to buy multiple stations they said oh we can combine staffs and reduce overhead. Then they started protecting their flank allowing one of their stations to flounder so the other could flourish. Fewer choices for the listener.
Let the stations fight it out and be creative to earn those rating points and the quality of all of them will improve. Instead the rich cats at the top of the food chain rake in millions even when corporate goes chapter 11. I'm not talking about Audacy here but another well known overextended big operator.
Stations already operating with a small fraction of the staffs they once had thanks to satellite and automated programming. Overworked talented engineers left in droves as they saw their staffs reduced and duties increased with the addition of IT added to their list of duties. It has gotten to the point it's easier to find someone who can do IT and studio work than it is to find an engineer who really knows and understands RF.
Here is an idea for Audacy. turn KB into a broadcasting school and charge the kids to be on it and learn how to do radio. There has got to be some money in that....unless you think the kids might take listeners away from WBEN! Oh and you can still have the sports betting stuff on line which is as someone said where they are promoting it anyway!
When the big groups came in and were allowed to buy multiple stations they said oh we can combine staffs and reduce overhead. Then they started protecting their flank allowing one of their stations to flounder so the other could flourish. Fewer choices for the listener.
Let the stations fight it out and be creative to earn those rating points and the quality of all of them will improve. Instead the rich cats at the top of the food chain rake in millions even when corporate goes chapter 11. I'm not talking about Audacy here but another well known overextended big operator.
Stations already operating with a small fraction of the staffs they once had thanks to satellite and automated programming. Overworked talented engineers left in droves as they saw their staffs reduced and duties increased with the addition of IT added to their list of duties. It has gotten to the point it's easier to find someone who can do IT and studio work than it is to find an engineer who really knows and understands RF.
Here is an idea for Audacy. turn KB into a broadcasting school and charge the kids to be on it and learn how to do radio. There has got to be some money in that....unless you think the kids might take listeners away from WBEN! Oh and you can still have the sports betting stuff on line which is as someone said where they are promoting it anyway!
All that I have seen is the exact opposite. The larger groups tended to have the full complement of 5 FMs, and most markets have two or three larger groups and a few smaller clusters.
All can't be #1. All can't be in the top 5. Or even top 10. So station groups pick formats that, together, will be salable as a package. For a particular buy or client there might be 3 perfect stations... one in the top 5, another around 10th and one 14th. But sold as a package, they are a "must buy" for advertisers.
We end up with secondary and even tertiary format that could not live along, but are good contributors to a cluster.
Back when I owned a bunch of stations in a single market, I had several market leaders in specific demos, and several that were niche formats. We packaged them so that even the niche ones sold well and all were profitable. But several could not have existed on their own without the contributions of the cluster leaders paying for management, top engineering, good equipment, proper legal advice, a strong presence at the agencies and the like.
Lack of good sales people means a decline in revenue. A decline in revenue means a decline in the station value. A decline in station value means a decline in stock value. A decline in stock value means a decline in stock price, and eventually bankruptcy. Unless you think that driving a company into bankruptcy is good for anybody except a few fat cats at the top who have platinum parachutes it SHOULD matter to you.
That model certainly won't work in a market the size of Buffalo or Rochester. Markets this size can't live on national business alone. Somewhere around 75% of the revenue comes from local direct. National, digital, and non-traditional revenue can't replace that.
Radio does face a problem with spot loads. It's going to be necessary to push rates up on the OTA signal to reduce clutter. As online listening grows radio will need to get innovative with localizing advertising using geofencing and other techniques to improve revenue from streaming. Right now, most stations either simply stream the main signal and replace some national spots with PSAs and "add-on" giveaways. If they have the technical wherewithal to follow the cable TV model they can present different commercials to different geographical locations making avails affordable for smaller buyers. Five zones, each sold at 25% of the cost of an all-market commercial, can increase revenue while allowing smaller advertisers to buy into their portion of the market. As online listening grows so does that opportunity.
Audacy may have problems on Wall Street, but they don't have revenue problems in Buffalo.
Station values are declining regardless of revenue. Station values have declined by a factor that has far exceeded the decline of radio revenues. So that statement is false. Radio has been a declining business for over 30 years. That's why CBS got out of it. That's why ABC and NBC got out of it.
I don't own any radio stock. I got out of it a long time ago. So I don't care. There are many ways to quickly solve a low stock price, including sell the company to someone else. That's what Sirius did when their stock was selling at 2 cents. John Malone solved all their problems. They could also do a ten to one reverse split. Poof! Problem solved. Bankruptcy is not inevitable.
Most radio companies have already pushed up rates. They can't increase rates enough to cut down on spot loads. To do that would require a 30% - 40% rate increase to make a noticeable difference, and no business can do that. They need to find an alternative revenue stream. Move revenue from radio, which is declining, to a growth area. That's what Audacy is trying to do. This isn't a short term solution. This is long ball. Ten years to replace on air revenue with online.
The "big groups" came into Buffalo before you were born. The Buffalo Evening News played games with ownership rules to own two AMs at a time when they could only own one. Reducing overhead is the goal of any business, regardless of what it is. At one time, radio stations hired live musicians to play music. It was cheaper to play records. So they fired the musicians. Radio stations once did original live drama and comedy on the radio. It was cheaper to play records. So they fired all the actors. The pattern of cost cutting in radio goes back to the 1930s. Listening to the radio is based on cutting costs. People would rather listen to free music on the radio than pay for it. Everyone is trying to save money. Radio is not a government make-work program. It's private enterprise.
Audacy has already solved the KB problem. You don't happen to like their solution. But it's the solution they've chosen.
I'm not the problem anyway since I'm out of market and I believe you are too. Evidently the people in Buffalo don't like the solution. The 0.1 shows it!
You keep using Nielsen as though it means something. The success or failure of a national format isn't measured by Nielsen.
The only thing Audacy needs to do to make money with BetQL is put it on the air. That's what they're doing.
Audacy uses its other Buffalo stations to play the Nielsen game, and they're doing just fine.
They replaced the person in my seat, but they did not replace my clients. To this day, I have those clients, and now control the advertising they buy on Audacy, and every other radio and tv station.
There is such a thing called “relationships “ . They can’t be replaced.
It is not a good sign at all when any company starts losing key producers. They are not “ replaceable”
I said "agency business" and not "national business".
The market at the time was ranked #31 by SRDS. We did no local direct business, 95% local agency business (about 120 agencies in tota l) and 5% national via our rep firm. So a bit bigger than Buffalo, but not that much.
This will only work if groups of stations all combine... generally large owners or groups of smaller ones... to sell packages of many stations, probably by format and demos, nationally and regionally. No national or regional advertiser is going to buy, in this case, a single Buffalo station for its out of market listening. But if you combine 200 AC station, for example, you can create a package.
If you are suggesting local streaming in a single MSA, divided into zones, this will only be salable if the online audience is big enough to make a difference. At present, the streams are tiny and if subdivided, will not even be measurable. But groups of multiple stations in a package could present a viable offering.
Spot loads are determined by the cost per point or CPM that advertisers will pay. They don't care if you have fewer spots... they just want the desirable CPP in the market and you can't charge more because you have fewer spots per hour.
Prior to the changes made in the early 40's, owners could have 2 AMs in a market. Today's KABC and KFI were owned by Earle C. Anthony. Arno Bulova had two AMs in New York City. Like those two, there were a number of two-station owners across the country. The FCC changed things as part of the break-up of NBC Red and Blue (not that kind of "red" and "blue") into NBC and ABC.
Not really. Until the autocratic head of the musician's union (AFM) lost power in the later 40's, most stations in markets even as small as Chatanooga had to have a percentage of live studio musicians.
See more about James Caesar Petrillo and the AFM at https://worldradiohistory.com/Petrillo.htm
That only happened when, after the TV freeze was lifted in the early 50's, almost all evening audiences (and the artists who had done radio) listeners became viewers and network radio crashed... although they all kept trying for more than a decade to keep the idea alive in different ways.
But live drama on radio was a network thing, and TV killed the radio start... and the radio networks.
Remember, right before WW II, there were just 800 US radio stations. Most medium to large markets like Kalamazoo or Phoenix or Salt Lake City or Wichita had just a couple of radio stations, affiliated with the networks. Even a top 10 market like Cleveland just had four: a Red, a Blue, a CBS and a Mutual network station.
At that time, nearly all stations were part of a network and the few independents were either in very big cities or rural locations that got their network shows from nearby larger cities.
People made nasty jokes about Emmis' all-sports station in NYC when it went on. Lots of "a bar without the beer" comments. Smulyen was called a crazy person. Today, all sports is one of radio's most profitable formats. Sports betting is an annex to the main building, but should be very profitable.
That was part of it, but artists and record labels also sued radio stations to prevent them from playing recorded music. Major labels specified on the records "Not For Broadcast" in order to dissuade airplay. They felt airplay hurt record sales. The most famous case was brought by band leader Paul Whiteman & RCA against radio station WNEW:
Paul Whiteman: Radio Performance Rights Advocate
This guest post is written by Katherine M. Leo, a 2018-2019 Paul Whiteman Collection Fellow. Learn about the Fellowship and find out how to apply here. We often think of Paul Whiteman (1890-1967) in his public persona as the beloved “King of Jazz.” The Paul Whiteman Collection at Williams...
library.williams.edu
The inside story was that Whiteman was doing a live radio show for NBC Saturday nights. WNEW counter-programmed by playing Whiteman's records at the same time. The court ruled in favor of WNEW. That led to the very popular "Make Believe Ballroom" that ran on WNEW for many years.
Remember that Mutual had four producing stations, and those stations each had theaters where they originated their drama. So yes the programming was fed on a network, but originated from specific stations. That was different from NBC and CBS, which originated its programming from its own studios. (except for outside productions, such as the Opry). Also, radio drama continued on network radio until the mid-80s. NPR originated a very popular radio version of Star Wars, produced by KUSC.
And that, in part, was why BMI was organized. https://worldradiohistory.com/Archive-All-Music/BMI-Magazine/BMI-20-Years-1940-1960.pdf
And, in that era, stations that wanted to fill in between network and local talk shows with music could buy "music libraries" on disk to play. Those were unknown songs by unknown artists that could be played rights-free.
But Mutual was almost a cooperative, controlled by the organizing stations. But Red, Blue and CBS originated shows in NY, Chicago, Detroit, San Francisco and LA, in a number of cases to have access to talent in each location.
But the commercial networks, meaning ABC, NBC, CBS and Mutual were pretty much dead for scripted drama by the mid to late 50's, with some news and talk shows enduring well into the 60's. Some sports and things like The Breakfast Club ran through 1968, to the disgust of most stations that had to carry it.
BMI was organized because ASCAP was using its monopoly to screw radio for publishing royalties. Sort of a different issue.
Part of the reason was the scripted drama shows were owned by the advertisers. They owned the content and took it to TV. That left a huge financial hole for radio...a hole that was ultimately filled by local DJs playing recorded music.
Didn't CBS Radio have a late-night mystery/suspense drama series at least into the '70s?
Absolutely. Hi Brown continued the CBS Mystery Theater until 1982. This was concurrent with NPR's Star Wars series.
Mutual Radio also had Zero Hour with Rod Serling
But BMI, where the "B" stands for "Broadcast" came out of the high fees and the restrictions that ASCAP was imposing. While both groups were representing the composers and authors, the much more radio-focused BMI made folks in all aspects of the industry aware that radio would fight back.
There was an intermediary step there. After WW II, hundreds of new stations were authorized, doubling the AM count by 1950 and stretching it to 3,500 by 1960. By 1960, there were still 750 FMs still on the air, too. All of those 3,400 stations that did not exist in 1940 had to have programming and music formats, a creation of the early 50's, was the answer.
The networks tried to continue with evening drama and entertainment shows, but the many that were not owned by the advertisers, known as "sustaining" shows, were losing artists and talent to TV. Many if not most of the network affiliates tried to become "entertainment" stations and a few, like WOR, WGN and KMPC did it with success but most were sold by traditional owners to "new radio" entrepreneurs like John Kluge and companies like Storz and McLendon or were transformed by non-network owners like Westinghouse and Storer.
Good example: The Cleveland Plain Dealer sold WHK radio in 1958 to Kluge who took it to Top 40 and #1 ratings. However, Herman L. Vail, the Chairman of the Board of Forest City Publishing, owner of the Plain Dealer, told me more than once that they got out of radio because, as an entertainment medium, it was dead.
But the stations that stuck with their pre-TV owners for the most part tried to find a traditional block programming solution to the changing world of radio.
As a sidebar, one of the groups that was most benefited by the change in radio in the 50's (and particularly by the huge increase in stations) was the African American community. All over America, an unserved audience suddenly had hundreds of new stations programming music and news with them in mind.
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