Why Stations Like Talk Radio

[job]

David Hinckley's column in today's NY Daily News provides an interesting explanation of why radio stations like talk radio (among other formats) even as they drop once popular formats (like oldies).

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Radio owners measure success less by listenership than by ad revenue, and if a big audience doesn't translate to big ad dollars, the format may be expendable.

That harsh truth is reflected in a new national survey by Miller Kaplan (MK) on radio's 2005 "Power Ratios" - how various formats convert listeners into ad dollars.

A "power ratio" of 1.0 means a format breaks even. It has, say, 5% of the audience and makes 5% of the revenue.

Below a 1.0 is not good. Adult standards, for instance, have 2.45% of the audience in the MK survey, but only 1.08% of the ad dollars, for a dismal "power ratio" of 0.44.

In other words, a station programming adult standards might well see a chance to make more money somewhere else.

Conversely, all-news stations do extremely well, as anyone who hears the number of ads on WCBS-AM or WINS has probably figured. News formats have a "power ratio" of 1.99, meaning they have almost twice the percentage of ad revenue as they do of listeners.

http://www.nydailynews.com/entertainment/ent_radio/story/401463p-340065c.html

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Here are Miller Kaplan's published Power Ratios for talk formats:

News 1.99
Sports 1.44
News/Talk 1.29
Talk 1.16


Urban music formats are all below 1.0. Urban Talk (like Radio One) is not reported as a separate format but it would be interesting to see how well it does. Religion is also not reported but Christian Music and Gospel formats also do poorly (bad news for Salem). Also too bad they don't break out conservative talk and liberal talk. Might settle a lot of arguements around here.

Interesting that All News does so well and there are so few all news stations. It's too bad AP News Radio dropped their all news service. You'd think with this kind of Power Ratio, more stations would be interested in the format.

 

[tbetz]

> Radio owners measure success less by listenership than by ad
> revenue, and if a big audience doesn't translate to big ad
> dollars, the format may be expendable.
>
> That harsh truth is reflected in a new national survey by
> Miller Kaplan (MK) on radio's 2005 "Power Ratios" - how
> various formats convert listeners into ad dollars.

You can find the full table of Power Ratios at http://www.millerkaplan.com/Summary05/Summary05.htm.

News/Talk shows up with 1.29, Talk alone with 1.16.<P ID="signature">______________
also known as tombetz.</P>

 

[ajhenderson]

> > Radio owners measure success less by listenership than by
> ad
> > revenue, and if a big audience doesn't translate to big ad
>
> > dollars, the format may be expendable.
> >
> > That harsh truth is reflected in a new national survey by
> > Miller Kaplan (MK) on radio's 2005 "Power Ratios" - how
> > various formats convert listeners into ad dollars.
>
> You can find the full table of Power Ratios at
> http://www.millerkaplan.com/Summary05/Summary05.htm.
>
> News/Talk shows up with 1.29, Talk alone with 1.16.

All news makes sense when you control the clock and AP isn't eating up half your avails.

 

[Joseph_Gallant]

More than half of the program schedules of most talk stations are syndicated, and can usually be obtained by the stations in exchange for barter spots. In fact, many talk stations are 24/7 syndicated birdfeed.

This means that talk radio not only has a high "power ratio", but with so many talk stations mostly or even entirely syndicated programming, the format has the potential to make a lot of money since overhead of stations that are all-or-mostly-syndicated programming is low.

It's interesting to see how the relatively-new "Jack"-type format gets a 1.13 in "power ratios". With "Jack"-type stations usually jockless, a "power ratio" at that level should lead to enough increased revenue for that format that will flow right to the profit column, due to the low overhead.

 

[radioboy]

Re: News/Talk

> >
> Interesting that All News does so well and there are so few
> all news stations. It's too bad AP News Radio dropped their
> all news service. You'd think with this kind of Power
> Ratio, more stations would be interested in the format.
>

One reason whu you don't is that a News/Talk with a serious local presence takes more overhead to operate.

Back in the mid-1970s, an AM daytimer in our market flipped from country to News-Talk. An FM country had started up and had taken away a larhe percentage of their country audience.

They hired a number of news people and attempted to be all news. The daytimer
factor, along with only 500 watts pre-sunrise, didn't help. Less than six months into the format, it bankrupted and went silent, only to come back six months later with news owners and a Christian format.

But, then, that's just this market. It didn't support all-CNN-headline news on a different station either.

<P ID="signature">______________
WJJD The Country Giant Revisited streams at
http://www.live365.com/stations/alanmccall</P>