Interesting idea for AM Radio

http://radioink.com/2017/08/03/pres...x+Its+Ratings?&utm_campaign=Monday+-+08/07/17

The problem is - who would listen to MONO music? And the ship has sailed on C-Quam and AM HD. Sure, there are a few nutjobs who think music should be in mono only, but they tend to be younger Beatles fans.

I'm sort of surprised to see Curt Krafft's articles grace the pages of Radio Ink. It is a very well written article but is not based in reality. At least not in any place but a small station in a small town with an ample 60+ population. I suppose if you have an odd situation with a very large 60+ population in a market it could work regardless of town size but likely not with air personalities and such. Today the ad dollars are spent in just too many places (stations, cable, print, online, etc.). There are many more options for advertisers today and the return on investment is there in these options.

The many arguments repeated time and time again will pop up: things like the cost to convert a 50+ listener's buying habits via radio. The reality that in rated markets ad agencies aren't buying that demographic when it comes to radio. Then, in a competitive market (all you need is one hungry station) that other struggling station will try to grab what you built either splitting your audience but almost always stealing ad dollars away from you in a quantity that is just enough to have you spilling red ink. Needless to say, you have to feel your way in the format with no other successful stations to look to for the pathway to success.

I really suspect Mr. Krafft has ever been behind the desk in the GM's office and was made responsible by the owner for making the station a financial success. If his job was on the line would he opt for this, assuming the owner had deep pockets and agreed to lay out the cash?

I disagree that only seniors would listen to AM radio. It might be the oldest demographics tune to the AM dial and thus, this is why AM radio is what it is. But if what you offered on the AM station didn't target the older demographics, you had a market exclusive and you had the budget to promote it among the niche audience you chose, I'd say you have a chance, albeit unproven and without a successful model to follow. You'd still have another struggling AM trying to steal what you built and if you got successful enough, perhaps an FM competitor looking for a format change.

In the comment section a fellow I know stated facts about how the bigger the playlist, the less successful you are. He mentioned to me a LPFM that opted for the big playlist had lots of people tuning in but had TSLs of under 5 minutes (time spent listening = TSL). In other words they'd hear a song they liked but they hated the next song enough to go to another station. Programming is by consensus: find songs everybody likes and always be playing them when they tune in your station. Then keep playing them so the listener sticks around. The wider your playlist the better your chances the next song will be liked by only a few of those listeners that liked the last song. Some argue it's the same old tired, worn out and overplayed songs. Sadly for you, it works. And if you think you're sick of hearing the song, imagine the poor DJ that has to sound happy about it playing again. You can bet that jock has played the tune 20 times for each time you heard it on the station.

Finally AM is really suffering. Of the stations I have inside knowledge of, the AM station takes in about $1 for every $10 the FM station brings in and most of those dollars came because the AM had an FM where the FM client was offered the same schedule on the AM for such a low price they simply couldn't say no. And, interestingly, those AM stations weren't 100% syndicated or a computer in a closet but had local news, weather and such and truly identified with the community. In other words, they're trying.

I leave you with three realities:
1) to change radio, you have to change the listener first.
2) to get the advertiser you have to change the advertising industry first
3) to keep a job in radio, you have to make money. It's really hard to reach those listeners after the power company cut the electricity because the bill wasn't paid.
Only by changing those realities first can you proceed successfully with your idea that will change the AM dial's fate. That is if the noise level on AM does not destroy all of this.

Its entirely possible to do in small to medium markets where local ad dollars are king. Basically, jut be local. Be the local voice and people will listen almost regardless of what the actual music format is. Country, Oldies, Classic Hits, Classic Country, all work well on AM with a local presence. Another benefit of smaller markets, not as much competition or FM choices.

LibertyNT said:

Its entirely possible to do in small to medium markets where local ad dollars are king. Basically, jut be local. Be the local voice and people will listen almost regardless of what the actual music format is. Country, Oldies, Classic Hits, Classic Country, all work well on AM with a local presence. Another benefit of smaller markets, not as much competition or FM choices.

Click to expand...

Here is a great example http://ksam1017.com/ Not the classic country KSAM, but KHVL "The Hits". A 15 year old fan of the station, who lives in Huntsville, first told me about it. It might have taken me a long time to find a graveyarder like that from far West Houston if she hadn't spoken up. Apparently some of the kids at her high school were really into it. The signal is weak but does well in far West Houston / Cypress. It is at least as strong as KONO with KEYH nulled out.

Yes, about the only place you can get away with an oldies format is in a small unrated market. But even that is the hard road when easier paths can be had. What worked years ago no longer does: when you have the cable company, newspapers, shoppers, websites, regional FMs and many more radio stations in general, plus direct mail all going after the small town businesses, you wind up with far fewer dollars that you would have 10 or 20 years ago and far fewer businesses on the air. You are forgetting advertisers buy to get reach. They generally do not buy niche programming. They want the masses. Oldies is no longer the masses. Sure there might be plenty of folks 60+ with lots of disposable income but converting a 60+ buyer takes normally way too much money to do via radio. So, if you own a business, would you rather spend $20 to gain a customer or spend $20 to gain 2 customers?

I know of two AMs doing oldies. One bills $4,000 a month. The other bills about $5,000 a month. Both are automated except for a live morning show. The later had been live, but was losing money and the listeners didn't care for the green minimum wage jocks that didn't know the music. Both have local news. In both cases other stations on the dial beat them in revenue and listeners by several multiples. Like KHVL, the $4,000 a month station makes it because of the FM counterpart and the owner's choice to program for this audience. If KHVL had to survive without the FM and the combo buy, I doubt they'd be doing the format. In fact, they might just go away.

You guys have to remember it is no cakewalk to pay the bills. You have employees, taxes (think of the property taxes when the county considers EACH tower as equal to a cell phone tower and zones that acreage as commercial), federal fees (spectrum use fees, renewals and annual filings), electric power and other utilities at commercial rates, building upkeep, maintenance on equipment and paying music licensing fees. Now add the base salary for salespeople plus commission, matching social security contribution, workman's comp and such that you pay regardless of any claims. When you have all of that facing you every month why on earth would you want to make your path to the dollars to do so as difficult and costly to obtain than almost any other option? Because you love it? If so, if you have the cash, take this on. You can lease or buy a station but I think your optimistic view might change rather suddenly. As for me, I grew up with 60s and 70s music mostly. I'd choose that personally but I'm running a station and it has to run like a business in the most efficient and best path to revenue and an oldies format just ain't it, even if you could find an owner willing to do what you want.

Here's a biggie: to do what the article proposes, you'd easily be talking about $60,000 to $75,000 a month to do it on a tight budget. Considering the advertising universe out there, even with great salespeople and perfect execution of the format on a great signal it would easily take 2 years or more to even get close to breakeven with a huge marketing push on day one. I would guess 2 to 3 million invested to reach breakeven. And then, the overage just to pay back the initial investment would take decades because this format is never going to be a top contender. And if you do achieve that sort of success (as in making a profit at all) I can guarantee you a competitor will revert to your format splintering your audience and the advertising pie. I guarantee that pie of listeners and ad dollars is not big enough to carve out two slices.

I am not trying to be cruel here. I'm talking from the perspective of being in the business of managing a radio station. I'm talking logic and reality of radio from that perspective. You might bring up this or that station and I'll say so what. There is always the odd duck out there. Not all of them are financially sound either. It's like saying everybody's wanting to be driving a 1955 Chevy pickup but you look around and they're not, then you tell me of one or two folks of hundreds of millions that are. I'm in the position of being responsible to my owner for paying the bills every day I am at work. I can tell you you're making a choice to hike Mount Everest instead of walking across a flat prairie. One is hard and nearly impossible, the other isn't as difficult.