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Thread: Can Small Town Radio Still Work?

  1. #1

    Can Small Town Radio Still Work?

    (Moving this topic over from "How were AM Clear Channels Assigned?")

    CAN small town radio still work? Sure. That is, sure, assuming that the same basic financial necessities are there that made it work 20, 40, 60 years ago.

    Can it work if the licensee has no working capital? No, ya gotta have SOME money--the exact amount varies depending on the business plan. There are no magic wands. No Money Trees.

    Can it work if the only potential advertiser within the station's coverage contour is the General Store at the corner of Big Sky Road & Lonesome Pine Lane? Probably not--unless the licensee can borrow the "membership" concept from pubcasting and get the listeners to support the station (see WVMR-AM in Frost, WV--really)!

    But if the licensee is capitalized well enough to operate at a reasonable approximation of normalcy, and if there are enough (other) businesses/organizations and/or people in the "marketplace" to provide continuing revenue... yeah!

    Is operating a small town station underneath a "big city umbrella" different from operating WVMR/Frost? Damn right it is. Good thing is you may have access to thousands (or tens of thousands) of potential advertisers; the bad thing is that you may have 40 Major League competitors to compete with.

    But let's play with that daunting scenario for a moment. Let's say that you have Big Family Money backing you (you're one of Warren Buffet's sons) and you're savvy enough to hire an air staff as-good-or-better than the big city stations... you research your community thoroughly to determine their "wants & needs" (relating to radio)... and you therefore provide a programming format well-matched to the community, including a top-notch local news & information service... and you invest heavily & steadily in promoting the living hell out of that radio station.

    You'll do just fine.

    Cut corners, cut some more, cut some more, cut some more... and maybe not so fine.

    Best Scenario? An independent, self-sufficient community apart from a larger metropolitan area with only a handful of media outlets and just a few existing radio competitors. A non-rated market where direct selling wins the day and common sense positioning allows advertisers to see your station's value.

    But most of those got snapped up in the fifities.

    Given the plethora of variables that goes into all of this, perhaps the best one can do is look for a reasonable compromise. And if you can't be Warren Buffet's son, and you can't win Powerball, be a very prudent spender.

  2. #2

    Re: Can Small Town Radio Still Work?

    I wouldn't bother investing in local radio in any area that didn't include at least one small-to-medium size city in the coverage area. I just don't think many small (less than 30,000 population) markets can support their own radio stations anymore. I'm talking strictly rural areas such as central Nebraska, western Kansas, west Texas, or most of Utah, Arizona, & Nevada.

    With a few exceptions such as local high school or college sports, and a couple of news & farm reports daily, most programming would have to be off the bird (Rush, Hannity, & ESPN Radio on AM, a satellite-fed music format on FM). There just isn't enough of an advertiser base in these areas to support local radio in areas where the biggest retailer and the biggest non-farm employer are one and the same: Wal-Mart.

    A semi-satellite of a larger station owned by a bigger regional station owner might be profitable, the only local programming being sports with the play-calling being part-timers or students working for minimum wage as quasi-interns. But as a stand-alone, no way.
    We have to save the Earth! It's the only planet with football and beer.

  3. #3

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    Re: Can Small Town Radio Still Work?

    Thanks for kicking off this new thread. Let's have some fun.... and let's see if we can generate some new thinking. Maybe some creativity can take place right before our eyes.

    In your last paragraph you took a whole new turn off into la-la-land. Remember, we are in the board's area called "Radio Pros" as in professionals (We can make a living doing this?) and the subtopic is what... "The BUSINESS of Radio"). What the old joke they tell in every business. How do you make a small fortune in the used car business? Start with a large fortune.

    But let's play with that daunting scenario for a moment. Let's say that you have Big Family Money backing you (you're one of Warren Buffet's sons) and you're savvy enough to hire an air staff as-good-or-better than the big city stations... you research your community thoroughly to determine their "wants & needs" (relating to radio)... and you therefore provide a programming format well-matched to the community, including a top-notch local news & information service... and you invest heavily & steadily in promoting the living hell out of that radio station.
    If you start with a lot of family money or the winnings of the lottery and you try to do all the things they do in the big city because it looks like fun or because it is the traditional thing to do, that's not a business, that's a hobby.

    I am going to try to limit my participation in this thread to the following scenario: You are in a town because it is your home town, or maybe you met your wife while you were in college and ended up in her home town. For a few years you found some way to make a living. School teacher? Retail store manager? Soon you had your own enterprise of some kind. Building homes? Bought the hamburger shop across from the high school. Became an agent for State Farm Insurance. Now you actually have some money in the bank. (You and your wife think of it as savings that will eventually help put the 7-year child through college. You have some equity in your home.

    You discover the current owner of the radio station discovered he has a cancer or other illness and wants to get his affairs in order. You can buy it. You have to negotiate a deal that the seller can live with... after all his earning days are about over and he wants every cent the fair market will pay to him for his business. As the buyer you must struggle not to pay an amount you cannot justify from a business point of view.

    When it comes to programming and a new audio processor to improve the sound and doing research about what programming would work best in your community.... you have limited resources... limited by what your market can and will support if you do your job right.

    This "ain't no hobby" for the next few years. Do it wrong and your 7-year old will NOT be in the college you planned on, and the mortgage company to take your house.

    In my own case if I quit "talking and writing" to actually put some money at risk we are talking about someone who could just hang it up and hope there is enough retirement money to last as long as I do. Or I could go find the "cute little community" and try out some of my theories and dreams. If the bank ends up owning my house, that is serious. I don't have time to go a start all over again!

    So let the talk begin. WHAT are we going to do with our dinky little radio station out in small town America?
    Life is too short to waste time dancing with ugly posts

  4. #4

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    Re: Can Small Town Radio Still Work?

    Keith, you bring the reality, the sober doubts to this conversation that we must deal with. I am not going to present my responses on how we might get around some of those obstacles until some other people have had a chance to jump in here, and I get some of my work and chores done. That would be like tonight, or tomorrow morning.

    Also, you are viewing the reality of radio in the less densely populated areas of the west and the plains. Obviously radio in the "rust belt" of Wisconsin, Illinois, Michigan, Indiana, Ohio and Pennsylvania presents rural community that work very different than Kansas or Wyoming. The mountain areas of West Virginia, Kentucky, North Carolina and Georgia are a different rural reality than mountain communities in the Rockies.

    We can probably exchange ideas on how you evaluate a market for it's financial strength to produce local advertising dollars, where ever that market might be.

    Looking forward to the conversation.

    Later.
    Life is too short to waste time dancing with ugly posts

  5. #5

    Re: Can Small Town Radio Still Work?

    Quote Originally Posted by Goat Rodeo Cowboy
    I am going to try to limit my participation in this thread to the following scenario: You are in a town because it is your home town, or maybe you met your wife while you were in college and ended up in her home town. For a few years you found some way to make a living. School teacher? Retail store manager? Soon you had your own enterprise of some kind. Building homes? Bought the hamburger shop across from the high school. Became an agent for State Farm Insurance. Now you actually have some money in the bank. (You and your wife think of it as savings that will eventually help put the 7-year child through college. You have some equity in your home.

    You discover the current owner of the radio station discovered he has a cancer or other illness and wants to get his affairs in order. You can buy it. You have to negotiate a deal that the seller can live with... after all his earning days are about over and he wants every cent the fair market will pay to him for his business. As the buyer you must struggle not to pay an amount you cannot justify from a business point of view.

    When it comes to programming and a new audio processor to improve the sound and doing research about what programming would work best in your community.... you have limited resources... limited by what your market can and will support if you do your job right.

    This "ain't no hobby" for the next few years. Do it wrong and your 7-year old will NOT be in the college you planned on, and the mortgage company to take your house.

    In my own case if I quit "talking and writing" to actually put some money at risk we are talking about someone who could just hang it up and hope there is enough retirement money to last as long as I do. Or I could go find the "cute little community" and try out some of my theories and dreams. If the bank ends up owning my house, that is serious. I don't have time to go a start all over again!

    So let the talk begin. WHAT are we going to do with our dinky little radio station out in small town America?
    Okay, I'll get serious, too. No Warren Buffet money. But let's define terms a little more precisely.

    GRC, in the previous thread that inspired this one, you had tossed Kirksville, MO & LaCrosse, WI into the same "small town" bag.

    Kirksville is a town of 16,000 in a county of 30,000 with a retail sales base of $368 million.

    LaCrosse is a city of 50,000 in a metro of 130,000 with a retail sales base of $2.5 billion.

    Using the standard multiplier of 0.35 percent of retail sales to estimate radio ad revenue, Kirksville is a $1,288,000 radio market and LaCrosse is a $8,750,000 radio market.

    Kirksville has 3 commercial radio stations all owned by the same licensee (excluding a religious FM on a commercial frequency).

    LaCrosse has 23 commercial stations owned by 3 clusters and a half-dozen stadalones.

    LaCrosse is an Arbitron-rated market; Kirksville is a non-rated market.

    VERY, very, very different scenarios. Which one is closer to the kind of hypothetical "small market" situation that we're considering here?

    I vote for Kirksville as our "model." For conversation's sake, perhaps we could use that circumstance but assume that we're eyeing is a standalone Class A FM across town from the cluster.

    Or is there a better way to approach this?

  6. #6
    ratingsgeek
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    Re: Can Small Town Radio Still Work?

    Quote Originally Posted by KeithE4
    I wouldn't bother investing in local radio in any area that didn't include at least one small-to-medium size city in the coverage area. I just don't think many small (less than 30,000 population) markets can support their own radio stations anymore. I'm talking strictly rural areas such as central Nebraska, western Kansas, west Texas, or most of Utah, Arizona, & Nevada.

    With a few exceptions such as local high school or college sports, and a couple of news & farm reports daily, most programming would have to be off the bird (Rush, Hannity, & ESPN Radio on AM, a satellite-fed music format on FM). There just isn't enough of an advertiser base in these areas to support local radio in areas where the biggest retailer and the biggest non-farm employer are one and the same: Wal-Mart.

    A semi-satellite of a larger station owned by a bigger regional station owner might be profitable, the only local programming being sports with the play-calling being part-timers or students working for minimum wage as quasi-interns. But as a stand-alone, no way.
    I operate a string of 5 small town stations in towns of 6,000 to 8,000 and in counties ranging from 35,000 to 85,000.

    We have live, local, full-service morning shows on all of the stations & either live or locally voice tracked jocks in mid-day and afternoons. Yes, we use either network or automation during evenings & overnights, but being live & reflective of what's going on in the towns/communities we serve is--I believe--critical to our success. Yes, we do cover local high school sports, too, and broadcast from the county fair & all the festivals & parades. We broadcast fire calls & lost dogs & cats and talk all day about VFW Spaghetti Suppers and American Legion Pancake Breakfasts and heart walks & cancer walks & MS walks and PTA meetings. Most importantly, we bring those people holding those events into the studio to talk about it on the air. Some will say you can do this using a satellite service, but it's very hard to do without sounding canned.

    For mid-day & afternoons we use part-time voice trackers as much as possible, and share voices among the stations.

    And we don't kid ourselves about the level of talent who will work for what we pay & who willingly live in these very small towns. There is no risk that any of these folks will ever hit the air in Los Angeles or New York. But they're good enough for small town radio.

    Having live human beings, including one person dedicated to news, is more expensive. But not prohibitively so. And it does provide the personal interaction necessary to allow us to position ourselves with local retailers as an important place to advertise. They listen, and their friends listen, and their uncles & aunts & nephews listen. We don't need ratings to prove that we have an audience.

    We've seen lots of broadcasters try to do it the other way and dry up & blow away.

    It does mean that you (or whoever owns it) won't realize phenomenal profits. But if you plan carefully and spend wisely, you can be steadily & modestly profitable.

    And maybe that's the big choice: Is "modestly profitable" good enough for you?

  7. #7

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    Re: Can Small Town Radio Still Work?

    redneckriviera wrote-

    Kirksville has 3 commercial radio stations all owned by the same licensee (excluding a religious FM on a commercial frequency).

    LaCrosse has 23 commercial stations owned by 3 clusters and a half-dozen stadalones.

    LaCrosse is an Arbitron-rated market; Kirksville is a non-rated market.
    With multiple people around the table carrying on side-conversations, I indeed blew it on LaCrosse. If we are picking some markets to do something kin to "Fantasy Football" then LaCrosse does not belong with those others. I was looking for towns/markets that demonstrate that not every little burg is made of of people whose ego insists on being tied to some nearby more glamorous city.

    I spend a week in LaCrosse 17 years ago make sales calls (not advertising) and I had a mental picture of the size of the town. I think I saw it smaller then than it really was and it has probably grown during those years.

    To me, Kirksville may be at the upper edge of what I am picturing when I talk about really small markets but I have no reason to veto it.

    Our "new friend" ratingsgeek appears to be a real player in the business where as I am a used-to-be looking at the possibility of getting back in one more time. I'm going to say some really stupid things now and then because I am not fully up to speed. On the other hand, I am not tied to the traditions of today to the point that I can't play "what if" with a bit more freedom than people who are putting real bullets in their weapons every day.

    Because of my limited resources I have focused on markets smaller than Kirksville so when it comes to brainstorming for creative ways to generate something worth listening to at costs that an anemic budget can fund, I throw some strange stuff up on the wall now and then to see if looks like it will stick.

    Al right. yak-yak-yak. Here is my beginning premise. This is my touchstone for freedom as I test out ideas:

    Think back to the 60s and 70s. Detroit saw the invasion of dinky little cars coming first from Europe and then big time from Japan and they saw that Americans were interested in buying some little cars. All Detroit could do was just make big cars small. And they didn't work well.

    Then there was this bit of heresy called the VW Beetle with the engine in the back. Chevy tried it with the Corvair. Over a period of something like 20 to 25 years the industry understood that (1) the engine needs to be at the same end of a small car where the drive wheels are. (2) The back end was not the place: put the engine back up front and make the front wheels do the traction. (3) Formula does not work all that well for big Lincolns, Cadillacs, BMW 700 series, etc.

    I think of metro radio markets and most rated markets as traditional radio with, in car talk, the engine up front and the drive wheels in the back.

    For four years now I have been kicking tires on some real markets, and writing up a business plan for each venture, even when I knew the deal was dead before the plan was on paper.

    For me, the beginning of conversation is: If you acquire a station if a town of 5,000 to 10,000 people (county of maybe 25 to 60 thousand) what would a radio station look like if fit the concept of "a little car with the engine up front and the drive wheels up front"?
    Life is too short to waste time dancing with ugly posts

  8. #8

    Re: Can Small Town Radio Still Work?

    One thing I would try (and maybe go belly-up at):
    I've worked in a small market where it takes a decent radio to pull in anything but the single (commercial) station licensed to the community.

    Why not run "block" programming? Classic Rock mornings, AC for Midday & PM Drive, Country Evening, and a mix of all of the above overnight.
    Maybe pick up Lia for the evening show and Bob & Tom for mornings? Definitely local on PM Drive.

    My guess is you pick up a lot in "total persons", and probably don't lose much TSL. No sports, at least to start with.

    It works for non-comm stations, why not try it on a podunk commercial station?
    "Its music what makes a radio station, and at Live FM, we play the last music around."
    After receiving that copy, I quit the VO industry.

  9. #9

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    Re: Can Small Town Radio Still Work?

    PTboardop wrote-

    Why not run "block" programming? Classic Rock mornings, AC for Midday & PM Drive, Country Evening, and a mix of all of the above overnight.
    Maybe pick up Lia for the evening show and Bob & Tom for mornings?
    In my part of the country I see some small market stations doing blocks or something pretty close to it. In an "isolated" market how you package up you music choices may be a minor decision compared to some others. What I will react to is your suggestion about Bob & Tom.

    What's the biggest driving force in politics in the nation in the last 12 years or more? FAMILY VALUES married to the Neo-con element of the Republican party.

    By the same token, that Sunday morning block of selling half hours to the rural churches can be as much as 20 to 25 of your gross income in some markets but that, too, can be an image killer for your station.

    In small isolated markets, there is no anonymity. People know a large portion of the people they run into in the hardware store, the super market and that other facility that is still very operational in small towns: the church. I lived in Indianapolis for years and years. I watched and listened as Bob and Tom came into being. They are talented. They are funny. But if you put Bob and Tom on your small town station, you may have a town full of people who will never admit to one another that secretly they DO listen to Bob and Tom. You cannot offend the family values crowd that abruptly in the small town without paying a pretty big price in your effort to be a significant institution in your community.
    Life is too short to waste time dancing with ugly posts

  10. #10

    Re: Can Small Town Radio Still Work?

    Depending on how many signals serve your town, block--or at least wide variety--programming can work, especially if there are only one or two audible signals.

    I'm from Nebraska and know how few radio options they have up in Valentine, for instance. I looked it up on radio-locator.com. One local AM; an FM from the Rosebud Indian Reservation; and a couple of translators (one religious & one country station--from over in godforsaken Gordon, Nebraska). Anyway, that's a good example of a town where block--or at least wide variety--programming would work.

    "Wide variety" isn't really all that weird. Today's "Hot AC" format borrows from rock, CHR, country & softer AC and it works! Same for the newer "Jack" (Adult Hits) format. From Daughtry & Nickelback to Carrie Underwood & Keith Urban to Rhiana & Akon to James Blunt & Michael Bouble (sp?).

    Bob & Tom? No, not in a small town. As GRC notes, the risk of ticking off conservative business types could cost the station dearly. But, maybe more importantly, the absence of a live morning act (as ratingsgeek says) could be a deathblow. Mornings are radio's "prime time," so you want to use that time to make the greatest impact: local, local, local, local, local!!!!

    In a very small town--with a very small pool of advertiser money--there is very little margin for error.


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