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"A" and ratings (was and for me) is not a option in many small markets across America. The connection with your Crowd, Clients, and Community is very important.
CCC - Patent pending ;D
Many medium markets have dropped or don't subscribe to "A" because the ROI or value isn't there. Those stations are doing just fine.
Top 40 Heritage 104.1 KRBE Houston doesn't subscribe to Arbitron, and they are still running and advertising. You will probably see more of this in the coming years from not just community small town AM's but full powered Commercial FM powerhouses.
Top 40 Heritage 104.1 KRBE Houston doesn't subscribe to Arbitron, and they are still running and advertising. You will probably see more of this in the coming years from not just community small town AM's but full powered Commercial FM powerhouses.
In my market only four stations currently subscribe to Arbitron, and they are all part of the same cluster. So far, the rest of the 20 or so stations that usually show up are still selling spots. The public 12+ numbers are pretty much meaningless anyway. For instance, a local NCE station usually hovers in the 3-4 range, but doesn't even show up in the public numbers since Arbitron chooses not to list NCE's. Still they are a very successful station.
In my market only four stations currently subscribe to Arbitron, and they are all part of the same cluster. So far, the rest of the 20 or so stations that usually show up are still selling spots. The public 12+ numbers are pretty much meaningless anyway. For instance, a local NCE station usually hovers in the 3-4 range, but doesn't even show up in the public numbers since Arbitron chooses not to list NCE's. Still they are a very successful station.
Local direct is not as ratings driven, if at all. So having Arbitron is a less useful tool the smaller the market gets.
Agencies get the full data anyway. So if they want to buy, they will ask for rates. The station can't negotiate, though, as they don't know the numbers so they can't see CPP against the agency buy specs.
The real danger is having so few subscribers that Arbitron cancels the market. That may not affect local direct business, but it puts another club in the hands of agencies... one they will use to beat stations over the head with.
I was in a market that is now ranked in the top 15 when there were no ratings for two years. Billings in the market dropped 50%, and agencies were literally saying, "I'll pay $20 a spot, take it or leave it" because there was no metric. There is a danger in not having a book at all...
Billings in the market dropped 50%, and agencies were literally saying, "I'll pay $20 a spot, take it or leave it" because there was no metric. There is a danger in not having a book at all...
I agree. At some point, a customer wants to know what they're buying. The seller needs to base the price on something. Sure it ultimately comes down to what the market will bear, and what an advertiser will pay. But in a marketplace where you have alternatives (as in, other ways to advertise a product or service), you need some cold hard facts along with the community presence.
Maybe the message is Arbitron needs a serious price adjustment for smaller markets. When we were a NCE station, we could access the ratings through Radio Research Consortium. The results were delayed about two weeks from the initial release date, but that was OK. The price was reasonable, and everyone likes to get a good report card.
Now that we've switched to being a commercial station, the cost has skyrocketed beyond anything that is affordable to us. Since our sales are 100% local, it just doesn't make sense to invest the kind of money they want. I suspect that a lot of smaller stations would subscribe if the price were something they could reasonably afford.
Another reason you may see an exodus of Arbitron subscribers is that many national ad agencies as of late are very much, cherry picking only the top two or three stations in many major markets. Your format may be great and you have lots of listeners and callers but it may never make the top three due to lack of coverage or just the fact there are too many stations in the market. Why bother throwing money in the toilet when it can be used to hire another sales person or more talent?
Another reason you may see an exodus of Arbitron subscribers is that many national ad agencies as of late are very much, cherry picking only the top two or three stations in many major markets. Your format may be great and you have lots of listeners and callers but it may never make the top three due to lack of coverage or just the fact there are too many stations in the market. Why bother throwing money in the toilet when it can be used to hire another sales person or more talent?
Transactional business comes from national, regional and local agencies, as well as direct buyers with a dedicated ad department.
Nobody buys "two or three deep." They may buy "Men 21-44" 3 or 4 deep, or "Hispanic English Dominant females 25-49" three deep (in the major Hispanic metros).
Buys cover such a gamut of demo specs that stations that may be seemingly low in 12+ may be second or third in a frequently used buying demo. WFAN in NY, a perrenial #15 in 12+, is one of the highest market billers due to its good male sales demos.
Stations with defective signals or formats that don't depend on much agency business have traditionally not been ratings subscribers. It's always been a "return on investment" decision based on whether being able to sell with ratings produces enough incremental revenue to justify the added cost.
Okay. Here's a question then. I am trying to get into an am station here locally and take the bartered satellite programming off it and put on music. The station has no local advertising, no local presence. People in the town dont even know it exists. And the owner wants $400K. A little too much dont ya think. Any ideas on what the station should really sell for? Music by the way can make it on am and be fun...real fun.
The first thing. AM station. Who owns the tower site. If it is leased and you need to move in the future. You have big troubles ahead, if the landlord decides to sell.
Okay. Here's a question then. I am trying to get into an am station here locally and take the bartered satellite programming off it and put on music. The station has no local advertising, no local presence.
You need to give a little more information regarding the station in order for me to offer any advice. What size population does the station reach? Is the tower owned (someone also mentioned this - very important)? What is power of station? Position on dial (stations on lower end such as 560, 610 etc., reach much further than stations on end of dial such as 1400)? Does it have night-time power and is it same as daytime? Is the area growing in pop and industry? Are there other "very local" area stations serving the market?.. If so how many AM and FM? How do you propose to connect with community (other station owners will help you with this so its best to be receptive to modifying your ideas)? Are you willing to work a lot of hours (radio is a lot of fun if you love it like I do, but it's going to take a lot of you time)? Provide these answers and we'll have a good handle of how to proceed. Also just as a special note- someone can ask$ 400 k for a station but you can always put in a much lower counter offer, if the station has good value.
Okay. Here's a question then. I am trying to get into an am station here locally and take the bartered satellite programming off it and put on music. The station has no local advertising, no local presence. People in the town dont even know it exists. And the owner wants $400K. A little too much dont ya think. Any ideas on what the station should really sell for? Music by the way can make it on am and be fun...real fun.
It is at 1400 and the population of the surrounding areas is maybe 20,000. I Started in small town radio and ya have to work the community and be there for them and give them something to listen to and this area has plenty of things going on monthly to get into and promote the station and the community. This guy is playing hardball and as I previously mentioned, he does no local programming and no local spots. One would think the "in the public interest" would mean something to the FCC here. THe 400k includes bldg and prop but as far as I know, the tower is on leased land. I dont care to have the bldg and property...don't need it. I appreciate all the replies, I really do.
"The tower is on leased land" is turning into problems for a lot of AM stations. You will need to find an alternative, in case this tower site is lost in the future.
The 1400 is probably licensed for 1,000 watts day and night. I once worked for a similar size station
on 1450 that had music primarily, but had local high school sports and I believe carried Auburn football on weekends in season. I wasn't involved in anything but on-air then, but we were always paid on time and the facility was nice. No one was getting rich, but they were making a living.
And they owned a separate tower site in addition to the studio building (which was a converted
brick house.)
Just to set the record straight: I'm the original poster to this thread who asked about music on an AM and I'm not the poster who asked about buying an AM for $ 400,000.00.
In response to that poster, I would say the AM with no revenue and in a small market is waaay overpriced at $400k unless the building is worth that much.
A media broker once told me that small market AMs are usually worth about what they bill annually. If it's not billing at all, find out the value of the real estate and the value of the used radio station equipment and offer that much (or less).
BTW, check out the current asking prices for small market AM's on a website like radiotvdeals.com -- usually between about $ 50,000 to $ 150,000 these days.
It is at 1400 and the population of the surrounding areas is maybe 20,000. I Started in small town radio and ya have to work the community and be there for them and give them something to listen to and this area has plenty of things going on monthly to get into and promote the station and the community. This guy is playing hardball and as I previously mentioned, he does no local programming and no local spots. One would think the "in the public interest" would mean something to the FCC here. THe 400k includes bldg and prop but as far as I know, the tower is on leased land. I dont care to have the bldg and property...don't need it. I appreciate all the replies, I really do.
If the guy has no local programming and no local spots, he is doing zero business. Any spots you hear are barter and provided by the program supplier. The only exception to this that I can think of is if he leasing the station to some third party and he is getting revenue from them which imo is unlikely. The seller is dreaming if he thinks he's going to get anything close to $400,000. Not even half of that.
As Josh mentioned earlier, make a counter offer at a very low price taking into consideration you don't want the "building and property". If he is really wanting to sell, he will come back with his own counter offer, and the haggling will begin. I don't see how this seller can be playing hardball if he is really interested in selling. You are the buyer and believe it or not, you are in control. Remember, nothing is worth any more than a legitimate buyer is willing to pay on a given day. Don't appear to be too eager.
You need to determine the status of the transmitter site and if it is leased, get all the details on the lease and find out who the lessor is. If the licensee is the owner of the transmitter site find out why he doesn't want to include the land in the deal. It may be because the property is worth quite a bit of $$$$ and he's wanting to make as much on the license and the land as possible. You can't really blame anyone for attempting to make as much as they can, that's just good business. Remember, an AM license with no real estate, revenue, heritage or goodwill ain't worth much in 2012. And don't get blinded by the "potential". Your family and employee(s) can't live on potential. Keep in mind all the good advice everyone has given you and good luck.
Not owning the tower site can be a problem. Is this an AM tower that has no other tenants on the tower? Does the owner of the station own the tower site (someone else asked this)? What is the general value of the buildings/property included in the sale? This will help me give you a better assessment as to what the value of the station is.
Also, how old is the tower and what condition is it in? Is there rust on the tower?
There are many medium market AM's facing the loss of tower sites. Since most were leased between 75 and 50 years ago many are at term and the land owners want them off to develop the property. Examples are all over the country where 50 years ago the leased land was in deep suburban areas and now that growth has pushed into those areas the value of the dirt often exceeds the value of the radio station by many multiples. I know from experience a 5K/1K AM station that sold for multiple millions in the 80's, sold for as little as $200K because of loss of tower site lease. This was in a market with a metro population of between 400 and 500 thousand!
That said...
$400K can with a little searching get you an Class A FM (6kw ERP @ 100m HAAT) in a market size you described with a population of 20K and higher. A class A FM at a minimum will have the coverage area of an AM on 1400 running 1,000w. Your ROI chances are definitely better even though you will most likely have tower rent to pay as well as people costs, studio space, and equipment repair.
There are not many AM properties even in medium markets and even some major market worth 400K these days and that is sad to say as I spent many enjoyable years listening to, programming, operating, and engineering AM radio.
There are RARE exceptions, stations that are run as a paying labor of love can make just enough to pay expenses IF the expenses are kept LOW. That involves using as few people as possible to run the place who will devote many 12 - 18 hours a day for the love of it...
