There is a really good book on those bygone days - "Border Radio: Quacks, Yodelers, Pitchmen, Psychics, and Other Amazing Broadcasters of the American Airwaves" by Gene Fowler. I don't know if it's still in print, but if you can find a used copy, it makes for some really entertaining reading.
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Why Does Cumulus Prefer Indianapolis Over New York?
- Thread starter Barry
- Start date
There is a really good book on those bygone days - "Border Radio: Quacks, Yodelers, Pitchmen, Psychics, and Other Amazing Broadcasters of the American Airwaves" by Gene Fowler. I don't know if it's still in print, but if you can find a used copy, it makes for some really entertaining reading.
You can find many copies very cheap on Abe Books (the used book division of Amazon).
Read the book with a bit of skepticism. Some of the stories about border radio were not well documented to begin with, and it is hard to distinguish urban legend from what really happened.
It sounds like Cumulus and others are implying that radio stations are declining investments and aren't even worth fixing. These station sales are yielding dimes on the dollar, yet the companies are willing to take the losses rather than invest in fixing properties in major markets. They'll keep what's already working, but it's either too expensive or outside their limited expertise to fix major market assets. That sounds like a recipe for failure in an already contracting market, but also an opportunity for someone who knows how to invest in fixing and operating stations in the current climate. In other words, Cumulus and probably iHeart are simply going to bleed money out of what they have, and make no effort to expand their horizons in radio. What sane investor is going to buy into that?
Implying? How about CBS? How about ABC? These are media companies with a lot more heritage in radio who simply got out of the business. Take a look at all the media companies that don't own any radio stations. How do you "fix" something you don't actually own? Radio companies don't own these stations, they are licensees. So there are lots of things they'd fix if they could, but government regulations prevent them from fixing them. Not everything is about programming. So we'll see how these new owners will "fix" radio. The only radio companies that have a future are those who are investing in things beyond towers and transmitters. If your only revenue steam is on-air advertising, and the audience hates hearing commercials, what do you do? How do you "fix" that?
Since Cumulus has no other presence on FM in New York, Cumulus would be just as willing to sell WPLJ to an investor who would keep a secular format on the air. All they had to do was pony up more cash than EMF.
But, as you say, what sane investor is going to buy into that? The only buyers who would truly make sense are those who already have a cluster in NYC which is below Commission limits, and wads of cash available.
Entercom will be at the FCC cap with WNSH, iHeart is at the cap (and also bankrupt), Emmis has been selling stations of its own in the last couple of years. Which leaves ... basically no one.
Where are all the rich NY rock & rollers? In LA, Stevie Wonder owns a great radio station. No such operator in NY. You'd think a group could come together, such as Springsteen, BonJovi, Little Steven, and Billy Joel. All multi millionaires with deep pockets who still make millions from songwriting royalties. You'd think there's a deal to be made. Run it as a non-commercial vanity project. But they'd rather work with Sirius.
Again, blame being put on station owners for changes in the economic model of the US.
Retail is a fractured environment. Brick and mortar is yielding to e-commerce. In all markets, local retailers have been reduced or crushed by big box stores.
There is less local advertising money available. And more of it goes to new media.
None of this is the fault of or within the control of radio station operators, whether mom and pop stations in small markets or big consolidated groups.
Stations that can will put content on streams and in podcasts. Bigger companies can find big talent and use them on many stations as well as online and on demand.
In the meantime, the over the air portion of this formula has to continue to finance the new media parts, which are not profitable and which have serious issues regarding potential profitability. That means trimming costs in proportion to the ad revenue that is available.
All true, David. I have to believe those in management of BIG corporate radio were privy to the impending market changes, just as much as retailers. Perhaps the shift to ordering online and shipping to your front door has happened a bit faster than many expected. Like I have said, I am on both sides of this - retail and radio - 100% small business and you just have to learn to shift away from what everyone else is doing and create a different model. Sometimes that works. Sometimes it does not. The key is low overhead, maintaining cash flow and never confining your business to the one formula-mindset. You know this, so I am not disagreeing with you. I contend that radio has not picked the right formulas. Rather, it is staying on a particularly narrow path of what it has done for decades and hoped that listeners and advertisers would stay the course. In fact, in many ways, it has actually shaved the very things that made it unique and local to save money in the short term, which has hurt revenues in the long term. I also agree on your analysis of new media, but the hard part is, where is the profit and where will it be in the next five years for radio companies online business? Stealing the revenues from terr radio is literally stealing from yourself. It is what it is, but already, it is a path of a lot of effort for a little return.
Currently, in my retail business side, we are getting hit hard by major market changes. So my summer plan is to keep with what works and brings in revenue on a loyal and steady stream and then create an entirely new online shopping experience to attract a younger buyer and create as much of a monopoly on the concept as I possibly can. It is already seeing results in limited testing. What is radio testing and doing (legit question) to up the game and keep folks on all sides of the equation engaged? EMF has gone a different and more successful route. I admit, I am surprised by it's growth. I also wonder when it will play out in the next decade or so as it's demographic also changes. But, for now, it's certainly not competing with iHeart or Cumulus to loose more money.
There's a bit of a contradiction in what you're saying. On the one hand, you say they're "staying on a narrow path," and on the other, you say they "shaved the very things that made it unique." Which is it?
In many ways, it took away the local feel and connection by voice tracking and formatting on a national one-size-fits all basis. Some of that has changed. In some cases, staff and strong local voices were replaced with canned programming and the cost savings, while it makes sense on paper in the short term, never reflect(ed) the bigger picture of revenue and listenership lost over time. Narrow path, while not exactly the best wording might better be changed to "played it too safe." Radio is the one entity that probably, should not have been so safe. Again, all this has a flip side. Look at local TV newscasts vs. CNN, MSNBC, Fox. There is only so much you can do to keep an audience and not spend a fortune you don't have trying. So, I know you have to make smart decisions based on what you have to work with.
You may remember, Big A, a discussion we had on here a few years ago about grocery retail. If I recall, you mentioned that Whole Foods was one of those "regional or smaller" chains. You were correct. Compared to Walmart, Kroger, even perhaps, Dollar General, it is and was a fairly small company that had picked a format and niche that was somewhat limited due to being more expensive, more upscale and concentrating more on organic and healthy items than Coca-Cola and Bud Light. Our discussion was a good one. Fun banter. Whole Foods managed to basically save itself by taking a really questionable foot print and attaching itself to a monster. It is these large and small "out of the box" magic tricks that can make radio continue to grow and prosper. It doesn't have to be swallowed up by an Amazon-sized business. Of course the FCC would not let that happen, probably. Or it can go the route of K-mart or Sears. Some days, I think that is the direction. I would say more of a Target-plan would work. Target has certainly had it's ups and downs, but it's till mostly around. Truth be told, probably more of a Trader Joe's approach would fit. Wild and whacky, yet precise and focused in it's own way. Again, these are highly generalized and not intended to be precise. I think you know me well enough to know, BigA, that in a sense I am more of an advertiser on a radio station than in the radio business. If it can work for my retail business to be on radio, then it can work for hundreds of other local businesses fighting a similar fight.
I guess I should be saying look at other retail businesses and embrace the ones that have manage to evolve, grow and stay ahead of the online tidal wave. Radio is just another "retail" business. How do you draw in the customers you must have to make it. On that note, back to work for me. Talk to you after regular business hours (midnight or later when I get to break away from all the day's work and play on this board)....back to work.
You may remember, Big A, a discussion we had on here a few years ago about grocery retail. If I recall, you mentioned that Whole Foods was one of those "regional or smaller" chains. You were correct. Compared to Walmart, Kroger, even perhaps, Dollar General, it is and was a fairly small company that had picked a format and niche that was somewhat limited due to being more expensive, more upscale and concentrating more on organic and healthy items than Coca-Cola and Bud Light. Our discussion was a good one. Fun banter. Whole Foods managed to basically save itself by taking a really questionable foot print and attaching itself to a monster. It is these large and small "out of the box" magic tricks that can make radio continue to grow and prosper. It doesn't have to be swallowed up by an Amazon-sized business. Of course the FCC would not let that happen, probably. Or it can go the route of K-mart or Sears. Some days, I think that is the direction. I would say more of a Target-plan would work. Target has certainly had it's ups and downs, but it's till mostly around. Truth be told, probably more of a Trader Joe's approach would fit. Wild and whacky, yet precise and focused in it's own way. Again, these are highly generalized and not intended to be precise. I think you know me well enough to know, BigA, that in a sense I am more of an advertiser on a radio station than in the radio business. If it can work for my retail business to be on radio, then it can work for hundreds of other local businesses fighting a similar fight.
I guess I should be saying look at other retail businesses and embrace the ones that have manage to evolve, grow and stay ahead of the online tidal wave. Radio is just another "retail" business. How do you draw in the customers you must have to make it. On that note, back to work for me. Talk to you after regular business hours (midnight or later when I get to break away from all the day's work and play on this board)....back to work.
Really? Do you know Bud Walters? Is that what he's doing?
I'm not sure one can make a generalization about radio.
I do know Bud Walters. Quite well. Let's see: 102.5 The Game is a fairly expensive operation to run. Decent revenues. Signal paid for. 102.9 The Buzz. A mix of music and some VT and live air talent, natl morning show. Paid for and has, on avg a 3.0 share with his largest signal. Some spotty issues in major population areas. Then there is 93.3. Good city grade signal with no suburbian penetartion. All canned. One-ish share. Paid for. Finally he has a deal with a guy who has taken 102.1's signal over in a rather unique LMA-like agreement and put on The Ville, an oldies-based Urban format. So, yes. Even ole Bud, who has NO DEBT and runs a lean operation has four well-tailored stations that, say what you will, are as diverse as you will EVER find from one owner. I agree - there is NO WAY to ever apply one of my sentences or comments to everything. And that is the way radio has to be in 2019. There is no magic formula. But there is NO excuse for all these losses either. Find a way to make it or get our of the way of someone else who will break it wide open
I think that's what Cumulus is doing with all these former ABC stations. They're selling them or trading them to new owners who may have a different approach. I think you'll see the same thing once iHeart exits bankruptcy. Although their success rate in major markets is pretty good right now.
However, I also believe that just having a unique product doesn't ensure success. Radio had a unique role 30 years ago because they could act as intermediaries between stars and fans. That role doesn't exist any more, thanks to social media. The local DJ has no advantage over the Taylor Swift fan. They both get their information from the same place. So the local DJ has to find a new act.
There's a question here. Which came first, the cost-cutting or the revenue drops?
In many cases, there's nothing you can do about falling revenue. If your business becomes passe, the money will leave. Sometimes quickly, sometimes slowly.
You are focusing on the platform. Nautel and Gates make transmitter and ERI and Shiveley make antennas and so on... radio is not in the transmitter and tower business. We are in the content business.
When interstate highways bypassed towns, many travel related businesses had the choice of moving to new locations by freeway exits or dying. If they moved, they still did whatever they always did... sell gas, provide food and lodging... but the location changed because people preferred limited access highways.
The AM and FM bands are the Route 66 of media. They are no longer as interesting, and traffic is declining. Those of us who create content have to make it available to users of the new systems.
The obstacle in radio today is the high cost of licensing for digital content. It is hard to impossible to make money with the current regulations, and OTA radio has to pay for the moving costs until some manner of accommodation appears.
So it's not stealing revenue from AM and FM to move it to new media. It is changing the delivery platform to suit users who are making choices that don't favor over the air radio on AM and FM. Pandora is radio, so is Sirius XM. To the user, real time audio without pictures is all "radio"... but stations concerned about the value of their FCC licenses don't see that they now have a depleting resource, like an oil well. You can not save something consumers increasingly do not want or need.
The obvious solution is to offer compelling content that is not duplicated online. Local examples include WFAN, with its passionate coverage of local sports, the all news stations, and perhaps the hip-hop stations, which have lots of personality. I believe those continue to do quite well.
In contrast, services such as Pandora, and Spotify can offer much more interesting and niched music choices than the many bland music stations.
Only because they have infinite stations, and people pay subscription fees for that privilege. Broadcast radio is limited by physics and by advertiser interest. You're comparing two completely different systems. There's no way broadcast can offer hundreds of niched music choices and stay in business. For the people who like mass appeal music, there is no need for Pandora.
And why, exactly, can't WFAN online be just as effective as when it is on AM and FM.
Remember, too, that WFAN and its sister stations WCBS (AM) and WINS are about the most costly stations in the country to run. They must have huge audiences in order for advertisers to pay large commercial rates. If you split every mass appeal format into subsets and niche offerings, the cost far exceeds the revenue potential.
And again, AM and FM are platforms. Radio today has to be platform-neutral, delivering content in whatever way consumers want to get it. But there are only three ways to pay for content: advertiser support, listener subscriptions, or government subsidies (meaning "taxes"). At some point, when you fragment into too many niches, what you have is on-demand content delivery and that is the realm of Spotify and friends and you have to pay for that.
Again, we may all really be saying similar things, but I do ask you this, David. How many chat boards are you or BigA on, along with this board and maybe "one other" radio-themed board? You both have logged nearly 70,000 responses over the years. Radio still covers a large percentage of ears each week. Even with so many other platforms, devices and new technologies vying for the same ears and eyes. Yes, we all are a different breed to be on this radio board. But, I am going to bet you two don't spend hours discussing Spotify, Sirius or Pandoras sound, music selection or channel options on some chat board designed for them.
Radio simply captures "us" in a more user-friendly way. As connected as the world is in 2019, there are many lonely people who still feel something warm and fuzzy with radio. I don't think Pandora gives off the same vibe, despite having much more music. So, I contend as long as radio can still capture the hearts of listeners and they still attempt to tune in despite the "hardships" of turning on the radio or fighting through scanning through countless towns radio stations and all the limited signals, radio has a good chance of being viable and profitable. It doesn't mean the content has to be some off the wall niche format. Far from it. But, IF radio continues to try to sound as lifeless as Sirius or Pandora, well, then why waste the time going through the hardships. Just listen to whatever on your phone. And no matter how insanely great a station and their talent may be, a ton of people simply will never listen, no matter what. Especially true more and more with the youth of today.
As for other ways to reach consumers, David, again, I don't disagree with you that it is highly necessary that radio stations give listeners other options to compete against other platforms. I just try to stay on the topic of actual radio. And radio is indeed, I agree with you, a content business, even if the content is designed to attract advertisers first and listeners second. Most listeners just know they turn on a button and hit a switch and there is music or talk. I doubt 1% of them even know a brand of transmitter or antenna, but a large percentage of those over 22 sure can identify a handful of radio stations in their market. And as for your analogy of businesses moving to a new location when the bypass arrives, you and I don't disagree. I will say that even though there is a new bypass in town, the proper thing for a radio station to do is keep their name out there on the new bypass and make sure your signal covers the bypass. I also get the Route 66 analogy. 100%. Yes, again, we do not disagree. I just don't see many people on this board wanting to discuss websites, hundreds of XM channels or the latest greatest non-radio listening creation.
Good question. It depends on the individual radio station. I am sure there are probably many examples of radio stations that changed formats, cut staff and in some way improved what they were doing on air and revenues increased, while they managed to cut expenses. Certainly, no two radio stations are identical, even EMF's. What you cannot do, and I don't think you suggested this, is just give up with out trying to increase revenues, listenership and give up. Cause if you do, there would be no radio station. So then someone else would try to make it work. Oddly, 99% of the time there is someone perfectly willing to take over someone else failure. I have don't that many times. My success rate is probably 90%. I misjudged the market on a few commercial businesses and had to run like hell. Key there, was deal with it and don't look back. It cost me a fair amount of money, but in the scheme of things, it was a small price to pay compared to the business wins.
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