Then again, their pay scale and costs are different from yours too. I imagine there are several morning guys in Seattle who make more than your entire payroll.
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Will internet radio become the choice of listeners in our lifetime?
- Thread starter joshzz
- Start date
Then again, their pay scale and costs are different from yours too. I imagine there are several morning guys in Seattle who make more than your entire payroll.
As I said earlier, just about every concert I go to these days is hosted by a local radio DJ. He intros the headliner, the station is broadcasting from the parking lot, and the station has signage all over the venue. That's now in 2013. And I travel to other markets to see shows.
We are wrestling with the definition, or the multiple definitions of: COMMUNITY.
What you describe is a station connecting with it's audience.... no PART of it's audience: that part which is willing and able to devote time and money to attend a music concert. The limits COMMUNITY to "the existing loyal audience".
I think of radio CONNECTING with CUMMUNITY to also include establish some kind of contact with people who never heard of your radio station and establishing CONNECTION with people who have wants and needs you never heard of.
I realize that is something of an old-fashioned view. But it is a view that the broadcast COMMUNITY has to consider and evaluate. It used to work. What part of it will still work, and what part of the old fashioned view in out of date and will just have to be abandoned.
What you describe is a station connecting with it's audience.... no PART of it's audience: that part which is willing and able to devote time and money to attend a music concert. The limits COMMUNITY to "the existing loyal audience".
I think of radio CONNECTING with CUMMUNITY to also include establish some kind of contact with people who never heard of your radio station and establishing CONNECTION with people who have wants and needs you never heard of.
I realize that is something of an old-fashioned view. But it is a view that the broadcast COMMUNITY has to consider and evaluate. It used to work. What part of it will still work, and what part of the old fashioned view in out of date and will just have to be abandoned.
Yes, that's true. But I was referring to percentages "We spend a much higher percentage of our operating revenues on live local talent than any major market station".
It is my belief that small market stations in many cases are more connected than major market stations, and that major market stations used to be connected, but tend not to be anymore because of the large radio groups that are doing the same thing as the small markets have to do to stay in business, but THEY do it because they can get away with it. So you find Cumulus and Clear Channel and Townsquare and others voice-tracking multiple O & O stations, providing "Premium Choice" and similar national programs to their stations, etc.
This thread started with the question: Will internet radio become the choice of listeners in our lifetime?
To that, I say not likely, as long as local radio stations do their best within their financial means to provide local content. The stations offering only national network programming, or jukeboxes, and out-sourced news services will not do as well. The internet, however, will always have it's own challenges, such as the availability of thousands of "radio stations", whether they be streams of terrestrial stations or internet-only stations.
One thing about local radio, it's still free. You can say the internet is free, but not really. You're going to pay for it in your car, one way or another.
To date, despite so many means of delivering entertainment and information, including 200+ channels of television, MSNBC Fox, etc, XM and Sirius, and XM/Sirius, smart phones, Wi-Fi, CD players, cassettes, and even 8-tracks, terrestrial radio remains a leader in reaching every community in a very efficient manner, and local advertisers are continuing to use terrestrial radio. I believe that terrestrial radio has more lives than a cat...
G
Groove1670
Guest
Until signal improves. Internet radio will be secondary in very small markets. Sometimes I can't get a phone call to connect in our market.
BTW: AT&T is the only carrier in our market.
Tried listening in the car.... Buffering, buffering, buffering.
Since we are in such a small market. I don't worry too much.
The scary and sad part. With all the choices in the future. Driving is going to become more dangerous. I see the car companies somehow locking the dashboard dial (Pandora/GPS etc.) after you put the car in drive.
BTW: AT&T is the only carrier in our market.
Tried listening in the car.... Buffering, buffering, buffering.
Since we are in such a small market. I don't worry too much.
The scary and sad part. With all the choices in the future. Driving is going to become more dangerous. I see the car companies somehow locking the dashboard dial (Pandora/GPS etc.) after you put the car in drive.
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My problem with that particular piece of conventional wisdom is that I can't reconcile it with my actual experience. I've been retired for a few years but I can remember seeing small to medium size markets where the Top 3-5 rated morning shows were syndicated and the local shows were far behind. When Kidd Kraddick died recently, my social media feeds were flooded with posts from friends all over the country who evidently were passionate listeners to his show. The idea is appealing that listeners want local programming but the only people I've ever heard that from are radio insiders.
I think it is foolish to think the internet won't become the main source of listening in our lifetime. Any service can deliver music. Local content like news, weather, information will not make a difference. They have apps for that. Sports content might be a broadcast radio holdout for a while. But even ESPN has seen the light and is greatly expanding their digital strategy going directly to listeners. With the expansion of dashboard integration and smartphone penetration, I would look for internet radio to become the dominant form of radio within 10 years. Especially with companies like Apple and the major labels throwing their resources behind it.
I think the only way stick prices will drop, is if advertisers start to abandon terrestrial radio on mass. It could happen sooner rather than later, as technology advances, and bandwidth becomes easier to access.
I think the only way stick prices will drop, is if advertisers start to abandon terrestrial radio on mass. It could happen sooner rather than later, as technology advances, and bandwidth becomes easier to access.
As I posted earlier on this very thread, that particular radio station price was 11% less than it was when it last changed hands just a couple of years ago. Are you saying that was an anomaly? I don't keep up with radio station prices regularly but I was under the impression that radio station prices had already been decreasing. Am I wrong?
Did you read through the contracts they filed with the FCC? Did the exact same property transfer both times. Sometimes a seller will keep a tower site or a studio building or some equipment. If the seller had added a bunch of stuff since buying and then sold for 11% less, then you have a significant loss.
I've been a little busy to track down sales contracts and rely on articles such as this one. http://www.allaccess.com/net-news/a...-for-emf-merlin-wwiq-philadelphia-deal-20-25-
"EDUCATIONAL MEDIA FOUNDATION is paying $20.25 million to MERLIN MEDIA for Talk WWIQ (IQ 106.9)/CAMDEN-PHILADELPHIA, according to the contract attached to paperwork filed with the FCC. MERLIN paid $22.5 million for the station in DECEMBER 2011."
Absent evidence to the contrary, I suspect station values have in fact fallen in recent years which is to be expected given the lackluster revenue picture.
Above and beyond broadcasting, I also enjoy following the commentary and observations and predictions about the economy as a whole. On any given day you will find reputable professors, government officials, columnists and authors making observations and predictions that conflict with one another. So I try to look "under the canvass" and see what drives each one, who is talking short term, who is talking long term, and who is just plain blowing-smoke and is either too dumb or too partisan to even know it.
My personal prejudice is that you are correct. My internal logic tells me that the broadcasting industry got into a fever pitch in the last 20 years and we still have some venture capitals rolling the dice and over paying, and sometimes we have kitchen-table entrepreneurs who also do that.
Sometimes when you see a station transfer involving a religious group you can find one or both of the following: (1) someone made a disastrous purchase and is having a bit of a fire sale. (2) someone is sympathetic to or a supporter of the religious group and is making an indirect donation by reducing the price. Thus our efforts to put dots on a graph become distorted.
I once asked a broker about a strange transaction near my home geography. Reply: "Oh, the buyer is a 'stalking horse' for XYZ corporation. He bought the station for too much, filed an application to move it, XYZ then was able to move one of THEIR stations and then 'stalking horse' begged for a new change that was less costly and FCC granted it. Then I pull up the FCC records and see that 'stalking horse' indeed had a handful of buy-sell-relocate-repower transactions. The assumption is that buried somewhere in one of those transactions, some seemingly non-nonsensical transaction made 'stalking horse' financially whole again.... maybe with a bonus amount for his troubles.
Hey, this isn't some game invented since 1996 by modern day venture-capitalist whiz kids with super-charged spread sheets. I remember reading years ago a article where someone outlined the transactions of the LBJ empire (in the name of Lady Bird Johnson) going back to the 1940s. Am I saying they did some illegal? No. But they are the picture that illustrates the dictionary when you look up: "Shrewd and Aggressive".
My personal prejudice is that you are correct. My internal logic tells me that the broadcasting industry got into a fever pitch in the last 20 years and we still have some venture capitals rolling the dice and over paying, and sometimes we have kitchen-table entrepreneurs who also do that.
Sometimes when you see a station transfer involving a religious group you can find one or both of the following: (1) someone made a disastrous purchase and is having a bit of a fire sale. (2) someone is sympathetic to or a supporter of the religious group and is making an indirect donation by reducing the price. Thus our efforts to put dots on a graph become distorted.
I once asked a broker about a strange transaction near my home geography. Reply: "Oh, the buyer is a 'stalking horse' for XYZ corporation. He bought the station for too much, filed an application to move it, XYZ then was able to move one of THEIR stations and then 'stalking horse' begged for a new change that was less costly and FCC granted it. Then I pull up the FCC records and see that 'stalking horse' indeed had a handful of buy-sell-relocate-repower transactions. The assumption is that buried somewhere in one of those transactions, some seemingly non-nonsensical transaction made 'stalking horse' financially whole again.... maybe with a bonus amount for his troubles.
Hey, this isn't some game invented since 1996 by modern day venture-capitalist whiz kids with super-charged spread sheets. I remember reading years ago a article where someone outlined the transactions of the LBJ empire (in the name of Lady Bird Johnson) going back to the 1940s. Am I saying they did some illegal? No. But they are the picture that illustrates the dictionary when you look up: "Shrewd and Aggressive".
Someone, if they aren't doing so already, might track station transactions in detail to uncover the underlying trend of station prices, net of real estate and equipment. As you suggest, the people with the most detailed information have motives that make them less than objective. Ask a realtor about the trend in home sales and prices and it's always "great" and "now is the time to buy". I've never met a real estate pro who didn't dismiss Zillow as useless but a mortgage broker laughed at that saying "they all use it to some degree". I know the Zillow "zestimates" are very rough but the aggregated transaction prices and information is gold.
Not that many years ago I wondered why anyone bought into declining businesses. Then I realized that as long as a business is throwing off cash, it has a value, even if the cash flow is diminishing. It's just a matter of price. Ignoring, for a moment, items including future capital expenses, assets that can be sold and tax consequences, a business is worth the present value of its future cash flow. So what are radio stations worth? I don't know because I can't project future cash flow. I am fairly sure the long-term trajectory is downward but I don't know how long it takes to play out. For that reason, I'm not a buyer.
Not that many years ago I wondered why anyone bought into declining businesses. Then I realized that as long as a business is throwing off cash, it has a value, even if the cash flow is diminishing. It's just a matter of price. Ignoring, for a moment, items including future capital expenses, assets that can be sold and tax consequences, a business is worth the present value of its future cash flow. So what are radio stations worth? I don't know because I can't project future cash flow. I am fairly sure the long-term trajectory is downward but I don't know how long it takes to play out. For that reason, I'm not a buyer.
In our youthful years, we are taught that "The Brass Ring" (you know.... on the merry-go-round in fables) goes to those who are willing to risk, and those who are tough enough and resourceful enough to win the battle, no matter how improbable the odds. That has become a big, big factor in the American life style!
When computers arrived, I was fascinated and gravitated to them when I could. They were always secondary in my life. Thank goodness, I never was able to get attached to a permanent, full time job in computers. And that would have been like getting back into radio!!! The computer world is segmented, and each segment has a short, short life-cycle that makes radio look like long-term stability.
But back in the late 1980s someone showed me how to build a spreadsheet in which you could insert a business enterprise and play "What If?" Now whether you like or dislike Mitt Romney, he is the current face of corporate America that learned to use computer modeling to figure all the potentials: If we bought this business, what are the probabilities it will be wildly successful, and the probabilities it will be a dismal, embarrassing failure? What if interest rates go up, what if they go down? What if advertising volume goes up, what if it goes down? I'm not suggesting that Mitt Romney sat around a keyboard looking like a computer gamer, but he had a lot of well-scrubbed young folks in the back room going at it like addicted gamers.
There was a station I wanted to buy about 10 years ago. When I inquired, I needed smelling salts to regain my composure over the price they were asking. They eventually got 80% of what they asked. My little spread-sheet forecaster indicated I should offer 21% of what they were asking so obviously I walked away. I must clear my calendar and travel to the little town and make the coffee shop circuit, seek out a few local observers and take a tour of the station and see how it is they are still hanging on.
Either I made some bad observations and calculations.... or some "moneybags" investor now knows just what a bad decision smells like. The truth is probably somewhere between the two extremes.
I'm sure they exist. I just never worked for a broadcaster who had good mechanical number-grinding abilities, but I did work for some with great hunches and intuition.
When computers arrived, I was fascinated and gravitated to them when I could. They were always secondary in my life. Thank goodness, I never was able to get attached to a permanent, full time job in computers. And that would have been like getting back into radio!!! The computer world is segmented, and each segment has a short, short life-cycle that makes radio look like long-term stability.
But back in the late 1980s someone showed me how to build a spreadsheet in which you could insert a business enterprise and play "What If?" Now whether you like or dislike Mitt Romney, he is the current face of corporate America that learned to use computer modeling to figure all the potentials: If we bought this business, what are the probabilities it will be wildly successful, and the probabilities it will be a dismal, embarrassing failure? What if interest rates go up, what if they go down? What if advertising volume goes up, what if it goes down? I'm not suggesting that Mitt Romney sat around a keyboard looking like a computer gamer, but he had a lot of well-scrubbed young folks in the back room going at it like addicted gamers.
There was a station I wanted to buy about 10 years ago. When I inquired, I needed smelling salts to regain my composure over the price they were asking. They eventually got 80% of what they asked. My little spread-sheet forecaster indicated I should offer 21% of what they were asking so obviously I walked away. I must clear my calendar and travel to the little town and make the coffee shop circuit, seek out a few local observers and take a tour of the station and see how it is they are still hanging on.
Either I made some bad observations and calculations.... or some "moneybags" investor now knows just what a bad decision smells like. The truth is probably somewhere between the two extremes.
I'm sure they exist. I just never worked for a broadcaster who had good mechanical number-grinding abilities, but I did work for some with great hunches and intuition.
I'll have to think about that. Under the circumstances I don't know that it would be appropriate to be very public with the info. In some ways, the non-disclosure I signed back then colors what I could reveal, even though there is a new owner.
When I finally realized the deal was impossible and the broker was apparently living in some kind of make believe world, I stopped by the town and the station early one morning on my way to visit another broadcaster and took a series of photographs and then arranged them in a side-splitting-with-laughter sequence. I don't understand why....
but there has never been a phone conversation or e-mail exchange between me and that broker since them. And I suspect we will keep it that way.
When I finally realized the deal was impossible and the broker was apparently living in some kind of make believe world, I stopped by the town and the station early one morning on my way to visit another broadcaster and took a series of photographs and then arranged them in a side-splitting-with-laughter sequence. I don't understand why....
but there has never been a phone conversation or e-mail exchange between me and that broker since them. And I suspect we will keep it that way.I bought a house once where I literally laid awake at night thinking: "I owe HOW much money?" But of course, prices without context don't mean much. It will seem high to us if it's more than we ever paid for anything before, but the house, like a lot of radio stations, was a sound investment in the 1990's. And like radio stations, not so good in the recent years.
I worked for small broadcasters and they had to be good with numbers because they all bought with borrowed money and it's pretty hard to line up investment capital with nothing but hunches. They want to see a business plan. Oh, you need intuitive leaps too, or you wouldn't be able to fill in the unknowable variables in that business plan. Future interest rates, future inflation and projected sales and other items require intuitive leaps.
Sam Zell says that when he bought The Tribune Company, he built in a cushion figuring 6% sales declines. Too bad sales actually cratered by 30%. He lost $300 million dollars of his own money. It was his intuition, not his number-crunching abilities that cost him.
If you compare today to 2002-2007 prices have definately decreased, both if you look at it as a multiple of cash flow, or per person in the 60 dBu or 5 mV/m basis. People were paying crazy prices, and when people do that for anything, radio, internet stock or houses, it will eventually fall back into a 'normal' level.
Prices for AM "sticks" stations being priced on a per person in the 5 mV/m are going down,, not as fast as you might think, but they are going down, these are stations being bought for the signal, not the business/listeners they have.
Prices for stations that are strong stations with strong cash flow (AM or FM), aren't what they were in the 'crazy' period, but they seem to be coming back.
I haven't done an analysis on FM 'sticks' lately, so I couldn't tell you regarding them,,but if I had to bet, the price per person in the 60 dBu for FM's is probable going up slowly
andy
Prices for AM "sticks" stations being priced on a per person in the 5 mV/m are going down,, not as fast as you might think, but they are going down, these are stations being bought for the signal, not the business/listeners they have.
Prices for stations that are strong stations with strong cash flow (AM or FM), aren't what they were in the 'crazy' period, but they seem to be coming back.
I haven't done an analysis on FM 'sticks' lately, so I couldn't tell you regarding them,,but if I had to bet, the price per person in the 60 dBu for FM's is probable going up slowly
andy
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