Hmmm...my chief engineer would disagree. There are several factors, including tower location, that make AM more expensive than FM to operate. As for the demographic, my studies indicate that the over 55 demo is the one that complains the most about advertising. So you have to run fewer spots to satisfy them. That means your cost is higher. Plus they want you to hire legendary DJs! Not cheap.
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Where Oldies Music Still Lives
- Thread starter Dr Wayne
- Start date
Hmmm...my chief engineer would disagree. There are several factors, including tower location, that make AM more expensive than FM to operate. As for the demographic, my studies indicate that the over 55 demo is the one that complains the most about advertising. So you have to run fewer spots to satisfy them. That means your cost is higher. Plus they want you to hire legendary DJs! Not cheap.
I suspect WKCE is small town radio where sales is direct to business owners. For many business owners, if you insert local information, they will support a station regardless of format (unless it is very offensive). More than anything it is seeing the business owners regularly and getting involved in the community. Oddly, people will actually listen to something that they might find marginal (in other words not their preferred music) in order to get the information they want, especially in smaller communities. It is the on the street presence, local information and being a part of the community that will be the bigger factors in spelling success for WKCE.
I'd say AM is more costly to run versus FM, but if you are an engineer, that does lower the monthly expenses a good deal.
I'd say AM is more costly to run versus FM, but if you are an engineer, that does lower the monthly expenses a good deal.
K
K.M. Richards
Guest
Sir, you ignore the reason we cite most often as the cause of AM's downward slide.
AM signals have been subjected to increasing and varied sources of electrical interference over the past few decades. The big sticks, like KFI and KNX here in L.A., fight it off with their 50kw signals ... but a "lonely little 1kw daytime AM", as you put it, has no counterattack. The audiences went to FM precisely for the reason Major Armstrong invented it (and the refrain from the Steely Dan song) ... no static at all.
The talk formats took over AM because the listeners would no longer put up with the static from music programming on AM. You have overthought this part of your argument and presented it as if there was no reason other than corporate strategies for the migration to FM. The listeners decided this and the station owners had to follow their lead.
Admittedly, I do not know how much interference WKCE has to its signal. I do know that it puts a barely usable signal over Knoxville because it is outside that city's limits. That makes me think there is more static than music to people who would try to listen.
There is only so long a listener will put up with a static-filled signal, regardless of content. Aside from a few diehards, the vast majority will try it out ... maybe listen a few times ... then wander off to find something that doesn't give them a headache every time they tune in.
Rather than try to answer the statements that followed about programming, the station's history of format changes, etc., I will only say that even though "retro is cool" (you don't have to convince me ... look at what I program as my showcase format as a consultant) you're going to have a difficult time getting enough listeners, regardless of demographic spread, to generate a lot of sales. And you're still going to be top-heavy on 55+, so don't expect the agencies to buy into your arguments. You don't have to agree with me, but I've been down this road before.
I'd like to know why your all-news format failed. Obviously you didn't generate enough revenue to cover the higher costs of doing an all-local version of that format in a market of your size ... but why did those businesses you approached turn you down?
I have no doubt you'll give it all you have. I simply doubt that's going to be enough to overcome the handicaps you're starting with.
WKCE is a small town daytimer. They share the frequency with KMOX. They will never be permitted to broadcast at night .... unless they acquire an FM translator (hint).
I won't be one to shoot this guy down. I wish him the best as he builds his listener base.
There are quite a few small town AM stations which are doing nicely by attracting the older demographics .... the same old folks who own some of the businesses in the town.
WMPX-AM in Midland, MI is one of them. Their sister (mostly simulcast) station, WMRX-FM does not put a good signal into the Midland downtown area. Many of the businesses listen to the AM station (with their tower only a couple of miles from downtown Midland).
I won't be one to shoot this guy down. I wish him the best as he builds his listener base.
There are quite a few small town AM stations which are doing nicely by attracting the older demographics .... the same old folks who own some of the businesses in the town.
WMPX-AM in Midland, MI is one of them. Their sister (mostly simulcast) station, WMRX-FM does not put a good signal into the Midland downtown area. Many of the businesses listen to the AM station (with their tower only a couple of miles from downtown Midland).
There are a good deal of successful AM stations, especially in small markets, that might skew a bit too old for attention from advertising agencies but then again, these stations never relied on agency dollars and any they got were client directed (ie: one client learned he had no local advertising for his store, so he demanded it and the folks in New York City made the buy or the new manager at a clothing store who learned he had no local advertising but his bonus was based on his district that included major city locations with lots of advertising. The ad agency placed its first buy there, something they didn't do for towns with stand alone stores). The locally owned business is bread and butter. There might be plenty of farm/Ag revenue and you can bet high school sports will be a factor. When a station does it right, they can actually be an AM that is a market leader or at least on par with the FMs in small market radio. Granted, many tend to be full service.
However they usually have heritage in their favor, and I don't think that's the case here.
You make it seem that AM went down without a fight. In 1967, FM had only a few percent of all listening. It took 10 years for FM to achieve parity, and another decade to achieve 70% of all listening. AM stations put up an admirable fight, but eventually lost due to several irreversible factors.
First is signal. There are no FM daytimers that sign on in the middle of morning drive and off in PM drive in the winter. There are no stations that cut power at sunset, going severely directional and missing big parts of their markets. And, while in the top 100 markets there are less than 150 AMs that cover 80% of the population day and night there are well over 1000 FMs that give full or nearly full market coverage 24/7.
Add in the fact that markets continue to grow outwards while noise limits have increased and the useful population coverage of an AM is constantly being reduced by urban sprawl and increasing noise.
Of course, AM does not sound as good as FM and never did. On today's radios, it sounds worse than ever.
When you look at major AMs from the 60's you see that some adapted and others never could (or only did so for a while). WGN moved from music in an MOR format to all talk, but now has few listeners under 55. KHJ and KFRC held the fort for the first decade, and then went through various shorter-lived formats and now are all religious. WLS and WABC transitioned to talk when their well executed music formats could not stand up to the FM versions of Top 40 (despite mighty efforts to hold on); today they are suffering from the slow death of the talk format.
Similar things happened in every market. The AM operators saw competitors, in most cases with better signals and in every case with better sound, come on the scene. They tried to hold on but eventually every music station targeting the sales demos failed. Then we got "Music of Your Life" and classic oldies and those gradually died as listeners aged beyond the point that they were of interest even to local advertisers.
In the case of your station, the barely useful signal area covers less than 37,000 persons (5 mV/m). To get results for advertisers you have to get a large percentage of that small potential audience. But with a format that self-limits to over-65 year old listeners, that is a challenge.
And anyone under 60 pretty much grew up on FM. They wsill not come back to a place they never were.
The under-65 crowd may listen a moment or two out of curiosity, but the idea of "music older than I am" in the pop genres appealing to a significant number of people has been often proven wrong. The afore-mentioned "Music of Your Life" proved that in market after market.
In a limited coverage area, you will have to sell cheap. WIVK delivers nearly 20,000 AQH persons in morning drive. What do they charge? If you deliver even 250 average persons in your small coverage area, what can you charge? Can you make money on that?
While you will obviously not get the agency buys, will local direct in your coverage area support a niche format station? Local accounts judge you by results. When the only new customers are older seniors, and they prove to be frugal and conservative consumers, will they buy and renew?
That seems like a loose-loose situation for radio. Not only do stations not get ratings credit for out of market internet listeners, those listeners aren't contributing to the ratings of stations in their own markets.
K
K.M. Richards
Guest
You just stated perfectly the argument in favor of a station geofencing its stream. Obviously, you get it.
It may have even been more than that. Not only the issue with the flips, each flip was immediately followed by months of silence. They did run oldies on co-owned 1180 for awhile. I would estimate WKCE has spent a grand total of 2 months on the air in the last 2 years.
With all due respect, I live in Knoxville and commute to Sevierville, and I wish the new owner of WKCE well, but I have my doubts. I've tried to like this station, despite the poor coverage, but the largely unfamiliar ("everything that's round and doesn't have pepperoni") approach playlist, with even more unfamiliar classic country thrown in, may please a handful or oldies geeks and record collectors, but how many of them live in Seymour and South Knoxville? Even if you had full market coverage, from experience I can tell you what you get is a bunch of very vocal geeks who tell you you're wonderful, and everyone else keeps listening to the FM classic hits. The classic country assumes that everyone within the signal grew up in East Tennessee and watched Cas Walker---this city has a HUGE amount of transplants. Practically everyone I know in this market is a transplant from somewhere. Knoxville ceased being an AM market when WNOX's news/talk moved to FM. If it were up to me I'd closely model WDJO in Cincinnati. Even that would be a crapshoot-but if they're serious about anything but an expensive hobby, they're going to have to be a lot more familiar. I know the oldies geeks on this board won't like hearing that, but it's reality. This is a worse situation than when I worked at WULM in Springfield, OH.
Then, the sales challenges will be formidable. Assuming you basically have a chance of selling businesses near the tower (Seymour), there aren't that many other than independent auto shops, a couple of restaurants, and insurance agencies. Not even a big car dealer in that part of town. Everything else is chain...Kroger likely isn't going to buy in. There isn't even an ability to sell high school sports on a daytimer (though both 1120 and sister 1180 have been known to stay on well after sunset). 1180 eeks out a living with a brokered sports talk format (the hosts lease time). There really are only 2 full market AMs in town, 620 (religious) and 990 (sports but simulcast on FM).
Then, the sales challenges will be formidable. Assuming you basically have a chance of selling businesses near the tower (Seymour), there aren't that many other than independent auto shops, a couple of restaurants, and insurance agencies. Not even a big car dealer in that part of town. Everything else is chain...Kroger likely isn't going to buy in. There isn't even an ability to sell high school sports on a daytimer (though both 1120 and sister 1180 have been known to stay on well after sunset). 1180 eeks out a living with a brokered sports talk format (the hosts lease time). There really are only 2 full market AMs in town, 620 (religious) and 990 (sports but simulcast on FM).
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I would certainly have to agree with your assessment. The smaller the coverage area the more mass appeal you must be. If you can get 10,000 of of a million you might be okay but needing 10,000 out of 50,000 means you had better be doing something lots of folks really like.
Adding to this, this area of the country has always had fairly low spot rates. Some AM stations have to resort to the dollar a spot rate and try to sell frequency to make it.
The key is always to keep operating costs very lean and use the ol' computer to run things as much as possible.
Adding to this, this area of the country has always had fairly low spot rates. Some AM stations have to resort to the dollar a spot rate and try to sell frequency to make it.
The key is always to keep operating costs very lean and use the ol' computer to run things as much as possible.
I remember long ago going to a manager's meeting for Mooney Broadcasting. That year, we met at WKGN. Of course, the studios were on the outskirts of town, and at night you could not hear the station at the studios!
Lower power AM stations do not do well in that low-conductivity area.[/SIZE][/FONT]
I had not thought of ground conductivity but you are correct. Being in radio, I listen to every station I can when I travel, searching out unique stations and formatics. I recall visiting Nashville when my folks lived there. I knew a few AM operators in the adjacent counties. Indeed a 1kw was pretty noisy at 20 miles and 500 watter at 15 miles, so much static the average person wouldn't listen. And those I knew barely kept the lights on 15 years ago. One station made about $2,500 a month (Southern Gospel) while another averaged $3,500 to $4,000. The most successful billed about $5,000. The later two were classic country. Spot rates were low too: $3 at two stations while one station sold a $375 package for 5 thirties a day, 7 days a week. In each case it was a one or two person staff and a computer. If the operators of the Southern Gospel station didn't have the station in their home, I doubt they'd survive.
I'm sure a small town AM will not bill much considering the noise level, poor conductivity and a crowded radio dial. I don't think AM radio is dead but very challenged in more ways than one.
I'm sure a small town AM will not bill much considering the noise level, poor conductivity and a crowded radio dial. I don't think AM radio is dead but very challenged in more ways than one.
It would seem that the issues of wattage, noise level, conductivity, crowed radio dial, etc will be pretty much irrelevant with internet streaming. I listen to WKCE on the net, in stereo, and it sounds awesome. Radio just has to find a way to include ALL internet listeners in the ratings. Think eBay and Amazon.com.
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landtuna
Walk of Fame Participant
Question for the forum professionals: IF (a big IF) WKCE could gain enough Internet listeners nationally, in the correct demo, would there be an interest by agencies in buying national ads?
I realize their "Midcentury Music" might not draw the preferred 18-x demo but what number might make it profitable enough to keep the lights on?
The real issue is the online stream is not picking up the listeners in mass numbers nor the local listeners that will respond to the advertising. While online listening as a whole is significant, the percentage of radio listeners choosing the stream over the actual radio is still minimal to nil. I guess the issue is people do not think radio listening when they think internet or the bandwidth they use monthly on their mobile device is paid for by the recipient.
The other negative factor for stations is every online listener costs them money, not just royalties (ASCAP/BMI/SESAC plus Sound Exchange) but they have to pay for the listener that tunes in. Nobody has really figured out how to make that pay for itself. In fact, if radio listening went to mostly online, the current method of monetizing the radio listener would fall way short of the cost per listener online. So much so, we might be talking having to double the commercial load to pay for it, assuming the businesses would pay.
Radio, for the most part, is not the huge cash cow everyone thinks it is. We tend to think the 1% or less that make the big bucks but for every one that is rolling in cash there are easily 100 more struggling or barely making it. I analyzed a market, a small one. Of the $700,000 in retail sales in the county, radio revenue was only 1.75 million split among 6 full power stations and at least 5 other stations in the next county (since they sold in the county on a regular basis, although marginally). A station pulling about 3.5% of the market grossed about $10,000 a month, to cite an example. Consider they're on a leased tower site pumping 7,000+ watts into their multi-bay antenna system, paying for office space, electric, etc., you can quickly determine they are grossly overworked and underpaid. If you were to take half those listening hours to internet and even if they geofenced, they'd hit an artery of red ink with no possibility of affording a splint to curb the loss.
There is another factor that seemingly cheap owner wants you to know: that huge investment to build, then that period of a couple of years or so when there wasn't the revenue to make breakeven, has to be paid back. While they might be pulling what looks like a tidy profit is probably all going to pay back the initial costs to get where they are, maybe for years and years. When it costs you a million or two to win the station at auction, build and run it for a couple of years until it pays for itself, you can understand what I am saying. And note, a couple of years is quite optimistic, assuming you got things just right the first time and really could win battles against better established competitors.
Sure, online is not that expensive, but downright cheap to start, but what does that get you and how long until you quit paying out more than you bring in? Looking at the current situation, I cannot see a path to even breakeven, much less return the start up costs. How do you promote and build an audience? And how much of that audience can you monetize? If you're in Florida, that Seattle listener just costs you money. In fact that listener in Key West does nothing for you when you are trying to monetize things in Panama Beach. Sure, you can link up for ads on your site and such but I think most will tell you the dollars that produces barely put a dent in your operating costs.
I'm intrigued by eBay and Amazon mentioned in your post. Are you citing a couple of ideas that work online and that radio must sell product on a worldwide venue online? Since radio folks like myself are pretty clueless of how to reach the threshold of costs for online radio, there must be something I am missing. I'd gladly explore any idea or line of thinking. Because we don't have the answer just means someone hasn't figured it out. We know listeners do not want to pay to listen, perhaps because radio is free listening or they think they're already paying to listen via their provider.
The other negative factor for stations is every online listener costs them money, not just royalties (ASCAP/BMI/SESAC plus Sound Exchange) but they have to pay for the listener that tunes in. Nobody has really figured out how to make that pay for itself. In fact, if radio listening went to mostly online, the current method of monetizing the radio listener would fall way short of the cost per listener online. So much so, we might be talking having to double the commercial load to pay for it, assuming the businesses would pay.
Radio, for the most part, is not the huge cash cow everyone thinks it is. We tend to think the 1% or less that make the big bucks but for every one that is rolling in cash there are easily 100 more struggling or barely making it. I analyzed a market, a small one. Of the $700,000 in retail sales in the county, radio revenue was only 1.75 million split among 6 full power stations and at least 5 other stations in the next county (since they sold in the county on a regular basis, although marginally). A station pulling about 3.5% of the market grossed about $10,000 a month, to cite an example. Consider they're on a leased tower site pumping 7,000+ watts into their multi-bay antenna system, paying for office space, electric, etc., you can quickly determine they are grossly overworked and underpaid. If you were to take half those listening hours to internet and even if they geofenced, they'd hit an artery of red ink with no possibility of affording a splint to curb the loss.
There is another factor that seemingly cheap owner wants you to know: that huge investment to build, then that period of a couple of years or so when there wasn't the revenue to make breakeven, has to be paid back. While they might be pulling what looks like a tidy profit is probably all going to pay back the initial costs to get where they are, maybe for years and years. When it costs you a million or two to win the station at auction, build and run it for a couple of years until it pays for itself, you can understand what I am saying. And note, a couple of years is quite optimistic, assuming you got things just right the first time and really could win battles against better established competitors.
Sure, online is not that expensive, but downright cheap to start, but what does that get you and how long until you quit paying out more than you bring in? Looking at the current situation, I cannot see a path to even breakeven, much less return the start up costs. How do you promote and build an audience? And how much of that audience can you monetize? If you're in Florida, that Seattle listener just costs you money. In fact that listener in Key West does nothing for you when you are trying to monetize things in Panama Beach. Sure, you can link up for ads on your site and such but I think most will tell you the dollars that produces barely put a dent in your operating costs.
I'm intrigued by eBay and Amazon mentioned in your post. Are you citing a couple of ideas that work online and that radio must sell product on a worldwide venue online? Since radio folks like myself are pretty clueless of how to reach the threshold of costs for online radio, there must be something I am missing. I'd gladly explore any idea or line of thinking. Because we don't have the answer just means someone hasn't figured it out. We know listeners do not want to pay to listen, perhaps because radio is free listening or they think they're already paying to listen via their provider.
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CTListener
Walk of Fame Participant
Can you imagine if your monthly bill from your ISP had royalty payments for every piece of streamed music you listened to over that month added to the basic fee + taxes? Yikes!
Radio ratings are local, and they register what local people listen to. If they listen to an out of town station or stream, that listening will be reported if it meets the Minimum Reporting Standards... which turns out to be about a 0.1 share of listening or a 0.01 rating.
National radio is bought for less expensive delivery of millions, not of a few thousand. Agencies can't spend time auditing and verifying anything other than the very big delivery systems... Premiere, Westwood, Sirius/XM, Pandora. They won't get a payback buying tiny streaming stations with a few hundred listeners and no market share.
Here's something to consider: The biggest streamers don't make enough from advertising to make a profit. The rules are stacked against them.
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