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Why would an AM station on a local frequency...

As to the government doing programming, just look at the decades it took the BBC to recognize rock 'n' roll... it was not until the earlier 70's... and only after the pirate stations "took over" youth audiences... that the Bebe really gave full attention to that era's pop music.
Even then BBC Radio 1 was not nearly as popular as Caroline and Radio Luxembourg.
 
Over 70% of all owner operated new restaurants fail in the first year or two. Should the government run restaurants, too?

Note that while restaurants also limited resources, the available frequencies for radio stations are much more limited than the available resources for restaurants. That said, I do remember being told by one of my business school professors back in the day that approximately 90 to 95% of *all* new businesses are no longer there after ten years.

Note that the FCC no longer requires annual financials. That ended along with the 3.year renewals and other excessive regulations about 40 years ago. But the industry and interested parties have studied this regularly. At present, I'd guess that the figure is over two-thirds of all station in the break even or loss category.
Whether or not the FCC kept track of the financial abilities of radio station owners (and I think that, at least for statistical purposes, that was a very intelligent thing for the agency to do), the fact remains that with, or without government assistance, over half of the radio stations in this country haven't been profitable, at least since the 1960's (according to your own words) when checking on these things began.

I don't see the government has propped up radio at all. In fact, some rulings, like Docket 80-90, have made things vastly worse for the industry.
I would say that the government has attempted to save medium wave broadcasting. However, given the expectations of those much younger than you or me (I'm 63 years and counting now), those attempts are falling flat on their face. If it's any comfort, most of the rest of the planet had (sadly, from my perspective) pretty much abandoned the medium wave frequencies quite a while back.

As to the government doing programming, just look at the decades it took the BBC to recognize rock 'n' roll... it was not until the earlier 70's... and only after the pirate stations "took over" youth audiences... that the Bebe really gave full attention to that era's pop music.

Actually, the BBC recognized R&R earlier (the network kept its own record charts throughout the 1950s and 1960s after all) but it didn't, for several reasons, offer any all top 40 programmed stations to its network until the early 1970s. And that, as you said, was the result of the popularity of both the pirates and, at least in the southern part of the UK, Radio Luxembourg.

All of that said, I did not state government programming in my response; rather I used the term "non-profit" programming which could range from public radio to community stations run by non-government organizations to religious outlets. The chance for all of that has long passed but I continue to wonder aloud what the fate of U.S. radio might have been if we had taken, to quote the late M. Scott Peck, "the road less traveled."
 
All of that said, I did not state government programming in my response; rather I used the term "non-profit" programming which could range from public radio to community stations run by non-government organizations to religious outlets. The chance for all of that has long passed but I continue to wonder aloud what the fate of U.S. radio might have been if we had taken, to quote the late M. Scott Peck, "the road less traveled."
We have to consider a societal factor when think about "non-profit" radio operations. For a variety of reasons, the United States and a couple of similarly founded nations has a deep culture of private support for public institutions.

My father was on the founding board of the Cleveland Symphony, and when he taught me business basics (I had a brokerage account at age 9!) he emphasized the need to support civic organizations. He mentioned that, unlike most nations in Europe, "our" symphony orchestras were predominantly privately funded by individuals and corporations. His point is that the private sector has a duty or obligation to give back in ways that create the arts.

Most other nations I've been in for work, ranging from Spain to Pakistan to Bolivia and Colombia, don't have as deep (I have used that term twice now, quite on purpose) a culture of the civic duty to "share the wealth" and contribute to worthy causes.

Perú, for example, has no equivalent of the St. Jude Children's Hospital. There is deeper Church (meaning THE Church in those nations) does some of that, as do a few evangelical Christian faiths. But the dept of public support, even through their churches, is vastly more shallow.

So, even if there were incentives to do public radio offerings neither ad supported nor government financed, it's very unlikely that we would find the funding for a listener supported country or urban or regional Mexican format. Heck, the non-commercial sector has trouble in all but a few markets even doing formats like alternative rock, and even ones like jazz and classical have tough fund raising duties to remain viable in most markets where there is even a station of those types.

What we are getting is a huge variety of paid options for music streaming, many of which are listener customizable. And a million or two talk based podcasts.

The listener is, today, vastly more likely to pay for a streamed service where they have total control over the content and / or a greater variety of programmed "formats". They are not likely to make a monthly contribution to a "community station" for a format that may not be anywhere near as close to what they personally like.

A good example of "failure to support" was the more pop leaning Air1 from the K-Love people. They found that the younger target audience, even if they were "into religion", did not support a program concept aimed at them.
 
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The three closest AM stations to me were on 1240, 1280 & 1460, all small towns. (Another on 840 was a daytimer.) I'd have to say, they were all useless at night outside their own zip code. I'd actually never been able to copy 1280 & 1460 later in the evening through all the garbage. Only because I was an absolute glutton for punishment (and I really liked the format) did I manage 1240. When they were live and local, I always wondered if the guy on the late shift had an audience you could count on your hands.
 
The three closest AM stations to me were on 1240, 1280 & 1460, all small towns. (Another on 840 was a daytimer.) I'd have to say, they were all useless at night outside their own zip code. I'd actually never been able to copy 1280 & 1460 later in the evening through all the garbage. Only because I was an absolute glutton for punishment (and I really liked the format) did I manage 1240. When they were live and local, I always wondered if the guy on the late shift had an audience you could count on your hands.
I think your “count on your hands” theory is valid.

I only worked at one radio station, back in the 80s, overnights for the Larry King show and 30 minutes of music.

The guy training me noticed I sounded a bit “dee-jay-ish.” He told me to imagine I was talking to just one person.

That got easier the night that one person called because I forgot to share the temperature.
 


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