AM Radio No Longer Has Time On Its Side

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AM radio, the senior broadcast band, no longer has the luxury of time to correct its problems, if those problems can be corrected at all.

This week there’s an assembly of “radio people” in Atlanta.  The annual NAB/RAB Fall Radio Show, where station owners get to have free drinks on the vendors gathered trying to sell them something, engineers get to see the latest cool new gadgets and the National Association of Broadcasters (NAB), the Washington, D.C. lobbying arm of broadcasters, can get some press about all the great things the industry is doing.  All well and good.

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It’s now been two years since a Federal Communication Commission (FCC) chairwoman got the crowd at the 2013 Fall Radio Show cheering about what the FCC was going to do to save AM radio. What’s been done?  Predictably, NOTHING.

While I disagreed with many of the ideas the FCC was proposing back then, you should be more outraged at their inaction.  Even with our current “do-nothing” and “retire with a big pension representative government,” there is no excuse for the harm the FCC is now causing AM radio.

Two years is an eternity in today’s ever changing technological world.

Here’s something you may not realize.  The iPhone, the device that changed the way you communicate, document your life with pictures and keeps you entertained and connected through social media apps was introduced in 2007, just 8 years ago.  Technology changes fast and waits for no one, especially the FCC and broadcasters with little focus or desire to save a technology created over a century ago.  History shows “amplitude modulation” was not originally thought of for voice or music. It was meant to transmit morse code, where fidelity didn’t matter and today’s data may be its future.

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The problems with today’s AM radio weren’t created overnight.  Its demise started decades ago when the FCC allowed more and more stations, full-time and daytime, high and low power, non-directional and directional to be crammed onto the dial.  Today, additional interference from modern lighting, computers, smartphones and other things, creates an interference filled AM broadcast band.  If listeners want the “limited programming” available on AM, like conservative talk shows, sports, religion and brokered programming, they can find a better and more convenient way to hear it, like streaming over an iPhone.

AM’s problems are interference and limited programming choice, the core issues facing AM radio today.

So what can be done about interference?  In 2013, the FCC issued a “Notice of Proposed Rule Making” (NPRM).  Pretty much everything it proposed then, which they have done nothing to advance since, will take a lot of time, something AM radio no longer has.

The FCC’s proposed 2013 fixes were:

  • Modifying AM antenna standards
  • Wider implementation of modulation dependent carrier level control technologies
  • Eliminating the “ratchet rule”
  • Modifying daytime and nighttime coverage standards for existing AM stations

Most, if not all of the above, will cause more interference and/or signal distortion on the AM band.

The final proposed fix was allowing AM licensees an exclusive filing window for FM translators, which I previously said won’t help AM radio “because the translators are on FM.”  All joking aside, allowing more stations to be jammed onto the FM band is nothing more than the “AM-ization” of FM and will cause more interference and decreased signal coverage for existing FM stations. Revitalizing the AM band by allowing licensees a low powered FM translator frequency is not “revitalization.”  It’s a white flag surrender with the FCC and broadcast industry giving up on the AM radio.

And could that be the ultimate goal?  Freeing up the valuable AM spectrum space to be auctioned off for other uses, like wireless data?

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Current FCC Chairman Thomas Wheeler, a former lobbyist for the cable and wireless industry, has come out saying the FCC would finally move forward with AM revitalization, but without the AM-only filing window for FM translators because he doesn’t think there are enough translator frequencies for the AM licensees wanting one.  Plus, it may not be fair for AM station owners to have an exclusive filing window, excluding others groups who may also want an FM translator frequency.  And there are others in the FCC that have said there may already be too many FM translator stations.  Ya think?

AM has precious little time left. The FCC must move on the things it can control and fix quickly. Number one on the agenda must be cleaning up the interference on the AM band caused by too many stations and that starts with taking back the licenses of hundreds of low powered stations, leaving the band to higher powered and viable AM stations.  The surviving AM stations could then increase power and adjust patterns allowing for expanded coverage over the entire areas they are licensed to serve.

I’m guessing, however, I’ll be writing another article in 2017 saying the FCC has still done little, if anything, to save AM radio.

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Idea? “Local” Morning News from Another City. Brilliant!

I’m sure you’ve read the media trades where consultants and experts say listeners, viewers and readers want authenticity, they want “real.” The unbelievable claims of being “the best” or “the most” doesn’t cut it with media savvy consumers anymore.

But, radio? It just keeps on keeping on, ignoring consumer needs, wants and demands and continues to piss on listeners and call it a gentle spring shower.

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You probably missed this one because it happened in Baton Rouge, Louisiana and Biloxi, Mississippi, two small cities where people know their neighbors, know the people in their communities and like to see the people they listen to on the radio at their local Albertson’s.

Baton Rouge sits over an hour from New Orleans.  The Big Easy is known for its Creole culture, Baton Rouge not so much.  Overlooking the New Orleans Saints and crawfish, Baton Rouge people are just that, from Baton Rouge – 80 miles to the west – concerned and focused with their area. It’s the state capitol too, so news tends to happens there.

The same can be said for Biloxi, home to a lot of sand and numerous casinos. Biloxi is 146 miles from Baton Rouge and 90 miles to the east of New Orleans. Lots of people go there to lay on the beaches, look at the gulf water and its deep blue color and gamble. With plenty of visitors, the locals who live there year round are a pride filled people wanting to keep their culture and heritage alive with media people they trust because those radio personalities also have something at stake in keeping a thriving community going.

WJBO-AM broadcasts Baton Rouge’s Morning News each weekday morning. WBUV-FM in Biloxi broadcasts Biloxi’s Morning News each weekday morning.
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This is where the drops of pee start hitting listener’s heads.

You’d guess those locally named and branded programs come from those cities. But, you’d be wrong. Baton Rouge and Biloxi’s “morning news” come from New Orleans. The same show is actually broadcast on three stations, including WRNO-FM in the Big Easy.

According to Bob Murphy, iHeart Media’s Senior Vice President of Programming for Baton Rouge and New Orleans and CRF (chief regional facilitator) of bad ideas, the format change” was a business decision.”

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The ultimate bad idea.

The format change? Bob fired Kevin Meeks and Karen Henderson, who were doing Baton Rouge’s Morning News in Baton Rouge, a show name that remains today, just with a new host, a guy named Gerry V who’s in New Orleans.  Then, since he was warmed up, Bob gave a copy of the home game to Steve Taylor and Mike Mankiewicz who were on Biloxi’s “Gulf Coast Mornings.”  Those two guys can now can get up a little later and listen to Biloxi’s Morning News!

The business decision? Translation – “Cut the budget!”

The four people who were fired couldn’t have been making more than $200,000 combined. For a company $21 billion in debt, that works out to .00095% of what the banker is owed. So I assume the money was repurposed elsewhere in the company.

Little investment or effort is being put into news/talk formats by iHeart Media or any of the big consolidators across the country. The audience continues to age and sales is left selling commercials for nutraceuticals that help the angry old men left listening with their prostate problems so they can pee. Consolidators think the geezers won’t notice their “morning news” is coming from a city over an hour away by car. And besides their hearing is going too.

“Murphy,” parroting what he is being told to say and doing his best to stay on his required talking points, says the new show featuring Gerry V. will be more regionally focused, but will have news, weather and traffic teams at each station expand their focus and delve into local news topics of the day.

Seriously, who writes this meaningless drivel?

Expanded local news, traffic and weather from local people in those cities sounds like a great idea, except both WJBO-AM and WBUV-FM laid off whatever news and traffic departments they had years ago and those so-called information elements also come from places like New Orleans or other regional news and traffic hubs. How do I know this? Let’s just say I “know” someone who was in those meetings.

All the stations mentioned are owned by Clear Channel Media + Entertainment iHeart Media, a company not investing much into news/talk stations these days.

News/Talk radio has taken an interesting path. At a time when social media has made communication more personal, authentic and has disrupted all traditional media like never before, radio has gone in the other direction, less personal and less relevant. And with decisions like these, the news/talk format in many cities is dying by what the Chinese call “lingchi” – death by a thousand cuts.

I’m not against syndicated or networked radio programming and I’m sure Gerry V is a great guy, doing his best to relate to his new cities. I’m just saying be “real” with the listeners.

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Ooops. Just felt a few drops.

There’s “Excitement” Over Limbaugh’s New Stations

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I’m so “excited” I think I made poopie.

A number of people seem to be “excited” about Rush Limbaugh’s new radio homes in Indianapolis and Boston.  I just don’t believe Rush is.

In Indianapolis, the heritage news/talk radio station is WIBC.  Most radio geeks, me included, remember the bigger than life top-of-the-hour ID voiced by Chuck Riley.

“Radio Indiana. (sfx) W-I-B-C Indianapolis.”  

When you heard that, you knew it was an important radio station.

In Boston, WRKO has been around since the early 1920’s.  Its call letters back then were WNAC and it was one of the 16 original charter stations of the CBS Radio Network.  After changing its call letters to WRKO in 1967, the station today is remembered as a 50,000 watt New England Top 40 powerhouse. It’s been in the news/talk format since 1981.

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“Remain calm. All is well.  Be ‘excited’ like us.”

Weeks ago, each station told Rush Limbaugh he was no longer wanted on their stations.  Predictably, Limbaugh’s syndicator, attempting to save face, sent out corporate approved narrative to the radio industry press.  It was their best Kevin Bacon impression to date.  Everything is great with Rush’s show and “exciting” news about Rush’s new stations is on the way.  The word “exciting” was used.

Premiere Networks then sat back with “excited” anticipation waiting for the telephone to ring.  And they waited.  And then waited some more.  How could stations in Boston and Indianapolis not be as “excited” as they were?

Being pro-active – after all, they’re on the hook to Limbaugh for a $400 million contract – Premiere Networks started calling around, asking stations to pick up his show.  Boston and Indianapolis are big markets and you can bet Limbaugh’s lucrative contract has a “market clearance clause” guaranteeing radio stations in those markets.  Having no stations in markets #10 and #39 is not a option.

But, it appears no one wanted “America’s Anchorman.”  In Boston, Mary Catherine Remmer, the co-owner of Daly XXL Communications, the soon to be new owners of WMEX-AM, the station many predicted would take his show, said in the Boston Globe“He’s been offered to us four times, and we’ve said no.”

WMEX-AM, a station with 50,000 watts at 1510khz, is Nielsen PPM ranked somewhere around 38th place in certain demos and it seems even they’re not desperate enough to yell “Mega Dittos,” due to the program’s high costs in rights fees, required barter commercial inventory, poor ratings performance and advertisers who deem Rush’s show “toxic.”  I explained this in a previous blog.

Luckily for El-Rushbo, his syndicator is owned by a company that owns a lot of radio stations too. Some with good signals and some with bad signals.  Surely, two stations with good signals could be found so Rush’s brand of outdated conservative talk could be heard by his shrinking group of Ditto-Heads.

But, none were found.

So two company stations got the call and were told to “take one for the team.”  Smart local management, of course, doesn’t want to deal with the show’s expense, low ratings and demographically mismatched talk programming on their stations.  “Suck it up,” Clear Channel Media + Entertainment iHeart Media senior management said from their lair in lower Manhattan.  Anyone with a radio clue knows cramming Rush Limbaugh’s show and sports programming on the same station is a horrible idea, but if get that call in a local market you simply smile and facilitate the “exciting” news.

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The only circle that matters is the red one.

In Indianapolis, part of the “exciting” news is Rush is going to be put on an FM translator.  W248AW.  I can hear the top-of-the-hour ID now.  “Radio Broad Ripple.  W-2-4-8-A-W.  Fishers.”  This low power translator on 97.5 FM is to simulcast WNDE-AM, another station with a dubious signal broadcasting mostly Fox Sports Radio programming.  This sports network caters to a 18-44 year old guy and is not very successful at it either since in the last Nielsen PPM WNDE-AM has a 0.5 share (6+) and a weekly cume of only 34,100 people.  Rush will be heard between Dan Patrick talking sports and local guys Query and Schultz talking about how Brady and Belicheck are cheaters.  Judging from the latest ratings on his new station, Rush should be able to sit all his Indianapolis listeners in just a few sections of seats at Lucas Oil Field.

“Excited” iHeart Media Market President Rick Green said, “Rush continues to be national radio’s dominate (sic) talk personality. We’re ‘excited’ about the opportunity to have Rush join the iHeart Media team on 97.5FM and 1260AM.”

Rick was so “excited” he listed the weak signaled FM translator first and misspelled dominant!  Who can blame him for his “excitement?”

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It’s the red line that matters.

In Boston, the “exciting” news is the Clear Channel Media + Entertainment iHeart Media station licensed to suburban Everett, Massachusetts will be Rush’s new home.  Starting on June 29th, the current Spanish language “Mia 1430” and its 0.6 share (6+) will be called “Talk 1430.”

“Excited” iHeartMedia Boston Market President Alan Chartrand said, “We are ‘excited’ to bring this powerful lineup of talk show hosts to our cluster here in Boston.  We are confident that the biggest names in the talk radio format will serve our listeners and advertisers well.”

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As with Indianapolis, little strategic thought went into programming this station, since Rush and companion conserva-talk shows will fill part of the day and Fox Sports Radio will fill the rest.  Judging by the new “Talk 1430” logo, I’m guessing there wasn’t much thought given to that either.  Can you see the difference in the “Talk 1430” logo and the logo of the failed “Talk 1200?”

All “excited” joking aside, if you make your living as a news/talk program director or local talk host and wonder what the future holds, what does it say when arguably the talk format’s biggest star is being sent to “Radio Siberia” by his own company in another two markets?

Mr. Limbaugh, sir.  If we hang a long wire out the window may be we can hear the station.

“Mr. Limbaugh, sir.  I regret to inform you the signals of your new stations in Boston and Indianapolis suck.”

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The Business of Being Rush Limbaugh

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After news broke about the Rush Limbaugh Show getting kicked to the curb by WRKO-AM in Boston, Nielsen radio market #10, I received about a dozen emails asking when I was going to comment.  So, here goes.

First, understand the “business of business is business” and the “business of money is money.”  And it’s money not a station’s Nielsen ratings that will ultimately determine your success or failure as a personality.  For most of us, revenue and ratings are connected.  But, that’s not true for everyone.

After Rush Limbaugh stepped over the line with his Sandra Fluke comments a few years ago, his mistake being an old man verbally abusing a young woman, which in our society is never acceptable, liberal bloggers and media sites made note of the dozens and dozens of advertisers who canceled advertising in his show.  Somewhat true, in an indirect way.  But the real story, almost always left out by liberal bloggers, is most of the advertisers who supposedly canceled never advertised in his show. His show has always been filled with non-traditional, non-mainstream advertisers, advertisers who buy into the Rush Limbaugh brand to focus on his niche ditto head audience.  And there’s nothing wrong with this because many ditto heads are affluent.  Many have the bucks to buy gold coins in event the economy goes to crap because of Obama and besides they want to “take our country back.” No one is really sure who took the country or where it’s gone, but they want it back!  I saw the hand-painted bed sheet hanging from a bridge in Northern Kentucky a few weeks ago.  I know they’re serious.

Limbaugh’s Sandra Fluke comments were the cause, indirectly, of the Wall Street Journal Radio Network being shuttered.  Because of no placement demands from advertisers, commercials from other radio networks could not be broadcast locally during Limbaugh’s show and some of those other radio networks, like the Wall Street Journal Radio Network, lost – in the weeks immediately after his Fluke comments – almost 40% of its revenue.  I am told Fox News Radio lost about the same.

Today, talk radio stations are considered “toxic” or “non-toxic.”  If a station broadcasts Limbaugh or other shows like Sean Hannity and Glenn Beck they are deemed “toxic.”  If a station does not broadcast those conservative talk shows they are considered “non-toxic.”  National advertisers buy, via radio networks and agencies, mostly “non-toxic” stations.  When I first heard about this “toxic” and “non-toxic” nonsense I thought it was a joke.  But, it wasn’t.  And since most news/talk stations broadcast Limbaugh, Hannity, Beck and other programs like Michael Savage’s The Savage Nation, there are few “non-toxic” news/talk stations for advertisers to buy and that’s not good for the format.

Following so far?

But, Limbaugh’s business model, in comparison to most other syndicated talk shows, is somewhat unique and this is where those beating the drum about advertisers canceling commercials on liberal blogs are missing the point.

The Rush Limbaugh Show is fee based, meaning stations pay the show’s syndicator, Premiere Networks, a rights fee based on market size, plus provide barter commercial time to broadcast the program.  Limbaugh’s show reserves at least 5 minutes of barter commercial time each hour with stations agreeing to broadcast those network commercials sold by the syndicator.

Mr. Limbaugh, sir.  I regret to inform you Indianapolis and Boston no longer desire your services.  May be if we deflate some footballs people will listen?

Mr. Limbaugh, sir. I regret to inform you Indianapolis and Boston no longer desire your services. Maybe if we deflate some footballs people will listen?

Boston’s WRKO-AM is paying around $500,000 each year in rights fees.  They also provide approximately 3900 barter commercial minutes annually, which if valued at just $150 per :60 seconds is another $585,000 in cash they’re giving up.  And there’s the Rush Limbaugh Morning Update, which tacks on another 780 minutes annually for another $117,000 in commercial time.  All in Limbaugh’s show is costing WRKO-AM around $1.2 million dollars annually.  Now consider all those advertisers, nationally and locally in the Boston market, that have no placement demands because his show is considered “toxic” and you quickly discover the financial reason WRKO-AM is declaring, “No Mas!  No Mas!”

There was a time when Limbaugh’s show could make or break a news/talk station.  There were short-sighted stations that foolishly called themselves “Rush Radio.”  There was a time when paying Limbaugh’s huge rights fee was the cost of doing business in the news/talk format.  But, no more.  Not with terrestrial AM radio, its declining revenue environment and his declining ratings.

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Minneapolis pays around $300,000.  Tampa pays approximately $250,000 in rights fees.  WIBC-FM, which also announced they were canceling his program is paying around $150,000 in cash to broadcast his show.  He’s got around 600 radio stations.  Do the math.  Much of the business of the Rush Limbaugh Show is not in advertising revenue from commercials, but in rights fees.

WRKO-AM is owned by Entercom and WIBC-FM is owned by Emmis.

Clear Channel Media + Entertainment iHeart Media produces the Rush Limbaugh Show through its radio network, Premiere Networks.  It requires most of its company owned news/talk stations to broadcast the show, pay the rights fee and give up barter commercials.  See how the show is less dependent on commercials for survival and more dependent on guaranteed rights fees?  There’s little chance Rush’s poor ratings today or tomorrow will change anything, because the money flows from its stations to the network to Limbaugh through a process called (corporate speak) “vertical integration.” Production and distribution is in one tidy package and distribution is all but assured.

Two more markets have canceled Rush and while we’re told “exciting news” on new radio homes is forthcoming, nothing is being said and weeks have gone by for an Indianapolis station to volunteer.

I was quoted in the New York Daily News this week.  The article from David Hinckley talks about Limbaugh’s $400 million contract being up in 2016.  Hinckley opines in his article, “Given Limbaugh’s prominence, his next deal could say a lot about both his status and the state of conservative talk radio.”

While his paycheck may be smaller in the coming years, as long as co-owned stations are forced to pay his rights fee, ditto heads will be happy to know he’ll be around for a while…unless he too yells, “No Mas.  No Mas.”

Next:  Why isn’t Limbaugh considered an A-List talent at Clear Channel Media + Entertainment iHeart Media?

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Radio’s PPM “Voltair is not fair!” Or is it?

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I’ve been reading a lot about the Telos/25-7 Systems’ Voltair “black box” that some claim gives an unfair advantage to radio stations trying to game Nielsen’s PPM methodology.  The box allegedly increases the chances the embedded PPM “watermark” on a station’s signal will be detected on a panelist’s meter.

Is the Voltair unfair?  I guess if your station won’t spring for the $15,000 price it is.  In pre-sales, prior to the recent National Association of Broadcaster (NAB) convention, Telos/25-7 Systems charged companies, like Clear Channel Media + Entertainment iHeart Media, just $12,000 a box.  So I guess that’s not fair if you’re planning on buying one today.

Here’s the deal when it comes to radio ratings, PPM or diary.  The ratings winners have always been the ones that understand the ratings game, its rules and exploited those rules to their benefit.  I didn’t say cheat.  I’m talking about exploiting existing rules – like New England Patriots’ coach Bill Belicheck “exploits” the rules.

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When Cincinnati was in the pre-currency days of the PPM, the (then) Arbitron folks made a visit to the station.  They wanted to know what we were doing differently at 700WLW.  Visiting was a data guy, an executive I never heard of and our sales representative.  Armed with a power point presentation complete with cool and colorful graphs, the conversation finally got down to business in the darkened conference room.

“Darryl, what are you doing differently?”

“Huh?”

“You’re doing something different, what is it?”

“I dunno.  We transitioned to PPM formatics about a year ago.”

“That’s not it.  We shouldn’t tell you this.  But, in comparison to your peers, KDKA, KMOX, WJR, each of which are showing declines diary to PPM, WLW is going up!  What are you doing?”

“We target a 41-year old guy.”

“That’s it!  The PPM plays to an employed audience.”

“An employed audience?  Huh?  You mean the unemployment rate?”

“No.  Employed audience is our way of saying a younger audience.”

Annually, at the old Radio & Records talk radio get together, I was one of the 8 people that dragged themselves out of bed and attended the early Saturday morning Arbitron PPM presentation soaking up advice from the late Bob Michaels.  Others?  They were sleeping off a Friday night hang over.

Here’s my point.  Those that play the ratings game correctly – and it is a game – are rewarded.  Those who do not play the game are penalized.  The rules are there for everyone to read, understand and use to strategize.  If your station won’t spend the money for a Voltair box, a box that may help “assist” technical weaknesses and flaws in the Nielsen PPM methodology, flaws Nielsen will never admit to, you’re not playing the game as allowed by the established rules.

Whether it’s Voltair or the next black box to come along, the brutally honest truth is radio has NEVER been fair.  It’s always been an industry of haves and have nots.  Some stations have powerful signals, while others do not.  Some stations have the money and pay for better talent, while others do not. Some stations have long established brands in their markets, while others change format every few years.

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  • Is it fair some stations have budgets to buy TV commercials or billboards while others don’t? Outside advertising of a radio station will skew ratings, right?
  • Is it fair some stations or companies have budgets to give away large sums of cash or great prizes, while others don’t?  Paying people (through contests) to listen to a radio station will skew ratings, right?
  • Is it fair some stations and companies have better access to artists and can leverage their size, Clear Channel Media + Entertainment iHeart Media comes to mind, to gain access to hot musical acts? Having access to artists can expose a station to more listeners, resulting in higher ratings, right?
  • Is it fair some AM stations on the lower end of the band have 50,000 watts where their powerful and dense signals can be easily received?  No one, to my knowledge, has ever accused the Federal Communications Commission (F.C.C.) of being unfair by licensing weaker signaled stations on either the AM or FM band, right?
  • Is it fair some AM’s are 50,000 watts, while others are only 5,000 or 1000 watts?  Jeez.  My hair dryer is 1875 watts.
  • FM stations have varying powers and antenna heights.  Is that fair?
  • Is it fair some AM stations have to reduce power and/or change patterns at night, silencing them in huge areas of their markets?
  • Is it fair that an FM signal can penetrate a building with relative ease, while AM signals struggle to?

Unfair competition is what radio is about.  It has always been this way.

As radio programmers, talent and managers, it’s your job to learn the game and play the game – by its rules – to gain an unfair advantage in a unfair industry with unfair competition.

Buying Voltair is like your station hiring a rack mounted “Bill Belicheck.”

Is Voltair fair?  You bet.

 

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AM Radio Put on Death Row with IHM Tower Sale – Something No One is Talking About

Mark Twain, the legendary American writer and humorist said, “Buy land, they’re not making anymore.”

History has shown the wealthiest in the world today and throughout history gained significant wealth by acquiring land. The world’s royalty have wealth because of large land holdings.  Many commoners today and in history gained and held their wealth through buying land.

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“It sure must take a lot of time to mow 6.6 billion acres!”

Queen Elizabeth, through her monarchy, owns 6.6 billion acres of land in various countries such as Great Britain, Canada and the Falkland Islands, over which England bombed some sheep farmers for a few weeks in a 1982 war.  Commoners include Cincinnati’s Ted Turner, the founder of CNN.  He owns about 2 million acres in Georgia, Montana and in Argentina.

Twain was right.  Land is a way to gain and maintain wealth.  No more is being made.

In the 20th century when the passenger railroads were becoming obsolete, their businesses evaporating, what they were eventually left with was land – a lot of land.  Land that was ultimately liquidated when railroad companies like Penn Central finally dissolved in the 1970’s.  As late as 2006, land once owned by Penn Central was still being sold off and today there are still leases being paid on its former rights and properties, some leases which may exist until 2032.

A few years ago I made a comment on a blog explaining the worth of many radio stations being its land. While AM radio station owners may cry poverty at the annual N.A.B. or National Association of Broadcasters Convention, many have vast land holdings.

Since that blog was published, Cumulus Broadcasting decided to sell the land its legendary KABC and KLOS in Los Angeles occupy, because the land is more valuable than the business of those two radio stations…combined.  They’re doing the same with WMAL-AM in Washington, selling off its suburban AM tower site.  Once the bulldozers roll, expect a nice new subdivision where the towers once stood.

Last fall Clear Channel Media + Entertainment iHeartMedia announced they were going to sell 411 of their tower sites and lease them back.  The company owns about 850 radio stations.  Many of their FM stations share or lease tower sites from others.

So let me ask a simple question, a question never addressed in the industry trades.  What type of radio stations have a lot of valuable land?  AM or FM?  If you answered AM, you would be correct.  In fact the only worth to many AM stations today is the land their towers sit on, because many have no revenues.

Few listeners + Little revenue = Little worth (except for the land).

In Cincinnati, for example, the Clear Channel Media + Entertainment iHeartMedia AM tower sites have approximately 230 acres of land.  One of the four AM tower sites is already leased, or their land holdings here would be much more.  Now multiply that acreage number out across 150 markets.  This (or any) radio company owns a lot of real estate or at least used to.

Read this, understand it and don’t deny what is happening around you, especially if you work for an AM radio station.  Radio companies are pulling the final dollars of equity out of their AM stations and are getting out of the AM broadcasting business.

Mr. Limbaugh, sir.  The radio company that pays you is not in the process of selling their tower site land.  Can we broadcast without a tower?

“Mr. Limbaugh, sir. The radio company that pays you is now in the process of selling their tower sites. Can we broadcast on AM radio without a tower?”

Last Friday it was announced, through an SEC filing, Clear Channel Media + Entertainment iHeartMedia, sold the first grouping of 367 tower sites and got a check for $369 million from a company called Vertical Bridge Holdings.  Clear Channel Media + Entertainment iHeartMedia will lease back, for 15 years, the tower sites for $20.8 million a year, lose tower rent revenues of $10.7 million a year, but then save $3.3 million a year in operating costs.

Let’s do the math on the 367 tower sites sale:

$20.8 million x 15 years = $312,000,000

plus…

$10.7 million x 15 years = $160,500,000

less…

$3.3 million x 15 years = $49,500,000

equals…

$423 million in costs over 15 years v. a $369 million one-time payment.

15 years from today it will be 2030.  Clear Channel Media + Entertainment iHeartMedia won’t exist in its current form.  By selling off these tower sites, many AM tower sites (something no one is mentioning), some AM stations are being put on death row.

The F.C.C. can talk all they want about “AM revitalization.”  It won’t matter now.  The dollar speaks and the dollar rules.  If a radio station is no longer worth anything, will a company, any company, invest in its product?  Technically? Developing content? With personnel?  If there’s high risk in getting a return on their investment to ultimately increase a station’s overall value, the answer is no.

Let’s say you want to buy a radio station that has little revenues to speak of.  If you don’t get its tower site, is the radio station worth anything?  WSAI-AM in Cincinnati, for example. It’s a 5000 watt station at 1360khz.  It has little real billing because it’s sold in forced combination with other cluster stations. It has little real expense because it’s a full-time affiliate of Fox Sports Radio.  Without its approximately 90 acre tower site, its land, is the station really worth anything? No.  Would a company dump the bartered (no cash fee) programming from Fox Sports Radio and invest in developing content?  No. That would make no business sense – too much risk for too little reward without its real estate.

In its story on the tower sale, the radio industry trade publication Inside Radio, which is owned by Clear Channel Media + Entertainment iHeartMedia, said, “Listeners and employees won’t notice any difference…”  Employees always pay for any added costs.  It’s an immutable law in today’s media.

The one-time payment of $369 million is equal to less than 2% of the over $20 billion debt Clear Channel Media + Entertainment iHeartMedia owes.  It’s been reported the money will be used for “general corporate purposes,” probably to pay the interest on its bonds.  Its COO/CFO Richard Bressler said in Inside Radio his team is “constantly looking” at buying and selling opportunities, including the sale of non-core assets.

If a tower site is considered a non-core asset, what then is a core asset?

 

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Net Neutrality – What It Means to You

The following is a repost of a column I recently wrote for the Cincinnati USA Regional Chamber 

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Net Neutrality

You’re to think of the recent “net neutrality” ruling as freedom through regulation. The Federal Communications Commission, or FCC, a government regulatory agency regulated and regulators, as you know, will regulate.

Yes. Freedom through regulation is an oxymoron.

The FCC recently ruled 3-2, along political party lines, ISP’s, or Internet service providers, like AT&T, Time Warner, Comcast or Verizon, cannot block Internet traffic, slow it down or charge content companies like Netflix or Hulu for faster access to its customers. All legal content and web traffic must be treated equally.

“The Internet is simply too important to allow broadband providers to be the ones making the rules,” said FCC Chairman Tom Wheeler, appointed to his job by President Barack Obama. The President is a supporter of the FCC’s recent decision.

The ISP’s are generally against net neutrality, arguing large content companies, like Netflix, should pay for the high levels of bandwidth they use. The large content companies, like Amazon or Yahoo, enjoy things just the way they are and support net neutrality.

As with most things, it’s the details where it gets confusing.

With its ruling, the FCC, decided to “fix” something few consider broken, with regulations that take hundreds and hundreds of pages to explain just eight pages of rules!  Don’t believe me?  CLICK HERE to read it (if you dare).

FCC Chairman Tom Wheeler - "This Net Neutrality bill is this big."

FCC Chairman Tom Wheeler – “These Net Neutrality rules are this big.”

To make their decision the FCC went back to the Communication Act of 1934 (you read that correctly – 1934) and under the 81-year old law’s Title II, categorizes ISP’s as a “common-carrier” utility, just like the electric, gas or telephone companies you do business with. A common-carrier offers its services to the general public under license or authority provided by a regulatory body, in this case the FCC. The regulatory body has usually been granted ministerial authority by the legislation that created it. The Communications Act of 1934 created the FCC. The regulatory body, or FCC, may create, interpret, and enforce its regulations upon the common-carrier with independence and finality, as long as it acts within the bounds of the enabling legislation.

The ruling allows the FCC to impose a “general conduct” or “catch-all” provision too, giving the FCC the authority over anything it deems unreasonable on the Internet. If you’re a lawyer you know the word “reasonable” in any agreement or law opens its meaning up to debate and litigation.

The FCC ruling gives the agency new found power, as it allows the FCC to regulate not only your ISP provider, but also the Internet services you enjoy. Does this now allow the FCC to police the content you get from websites and determine if it’s “reasonable” or not? Time will be the judge of this.

Apple’s co-founder Steve Wozniak likes the FCC ruling saying the decision goes “a lot further than net neutrality. Title II regulation means oversight of bad behavior.” He said, “Such oversight should not be confused with meddling or controlling.”

Wozniak laments, “The Internet was so beautiful when it first came out. It seems hard to recall those times, given the proliferation of grime that populates it now.”

What about technologies not even thought about yet? Billionaire Mark Cuban, who made his money by selling his Broadcast.com to Yahoo for almost $6 billion in 1999, disagrees with Wozniak and the FCC’s decision saying, “Bottom line is that the future of the Internet is not watching movies. It’s apps we haven’t seen yet, and I prefer not to have the FCC as a consideration in their future. There is no way to account for how future FCC commissioners deal with these issues. They could approach it 180 degrees differently with every commission overhaul.”

Cruz_Obama

The final FCC vote was 3-2, split along party lines. Republican Texas Senator Ted Cruz calls the ruling “Obamacare for the Internet,” saying the “revolutionary power” of the Internet owes its development to the lack of government regulation.

The other side saw Democratic President Obama calling on the FCC to develop “the strongest possible rules” in order to protect consumers from ISP’s and their efforts to control online speeds.

So what does this all mean for you?

Very little in the short term.

  • The FCC’s net neutrality decision will be challenged in court; some saying it will eventually go to the U.S. Supreme Court. Part of the FCC’s reasoning in its decision are examples of ISP’s having it “in” for companies like Netflix, in one instance Comcast, which owns NBC Universal, allegedly slowing down Netflix streaming to its customers, even though evidence may show the problems were actually caused by Netflix.
  • As challenges are brought to trial, the winners will be lawyers who are laying in wait to cash in on years of legal fees. FCC Commissioner Mike O’Rielly said, “If you’re looking for a lucrative business, you should be a telecom lawyer.”
  • And what about your ISP? The new “common-carrier” designation by the FCC means your Internet service is now subject to state and local fees, like the taxes you now pay on your electric or telephone bills. The FCC’s new net neutrality regulations mean you will pay more for your Internet service. Dissenting FCC Commissioner Ajit Pai said, “More new taxes are coming. It’s just a matter of when.” Pai feels Title II regulations explicitly opens the door to billions of dollars in new fees and taxes on broadband by subjecting them to telephone style taxes under the Universal Service Fund. Pai is a former attorney for Verizon.

The lesson here: regulators will always regulate and you will always pay.

 

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700WLW’s Jim Scott Says Goodbye

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Days before Jim Scott announced his retirement my telephone rang.  On the other end of the telephone was that friendly and commanding voice.  “Darryl!  It’s Jim Scott!”  That’s the way his calls always began.  He called to tell me he was retiring and wanted me to know before I found out through others.  We spoke for about 10 minutes or so.  After finishing the call, I sat quietly for a moment and I’ll admit I choked up.

This was the end of another era in Cincinnati’s rich broadcast history.  Jim Scott, like Gary Burbank before him, leaving 700WLW and ending their decades in radio.  Decades of informing, entertaining and being the best radio companions.

Cities like Cincinnati are extremely provincial.  Neighborhoods are strong.  Some say our communities are closed to outsiders.  Some of that maybe true.  But, if you stick it out, once you belong, you will find the closest of friendships.  Our little area of the Midwest is a very special place.

Now imagine that close friendship with over 2 million people.  That’s how many people Jim Scott considers his friends – the entire market.  I’m guessing that’s how many people might consider Jim a friend too.

As the radio story goes, when Jim first arrived in Cincinnati from WKBW in Buffalo, he made it a point to introduce himself to everyone.  And I mean everyone.  He’d finish his morning show on WSAI and then head to Cincinnati’s Fountain Square where he’d hand flowers to women and ask them to listen to him.  Other days, Jim would literally knock on doors, going house to house, neighborhood to neighborhood, introducing himself and asking those that answered if they would listen.  That was decades ago and he never stopped.

Years ago, at a wedding reception at Cincinnati’s beautiful art deco Union Terminal, I was standing with a small group of people, including Rich Walburg, my programming partner in crime at 700WLW. Another in the group noticed Jim going table to table introducing himself.  The fellow said, “Is that Jim Scott?  I want to meet him.”  Rich in his driest delivery replied, “Stay here.  He’ll make his way over.”  He eventually did and Jim introduced himself.

Jim has a way to make everyone feel special and he really is interested in how you’re doing.  He has a deep compassion for people.

He’s a radio personality who understands his on-air role, the importance of being an active member of the community and the value of his personal brand in the market.  He treasures his relationship with listeners and advertisers.  He knows ratings must come with revenue.

Jim is actively involved with many of our community’s service organizations and charities, because he knows how important it is to give back. Being involved in community service is normally the job of a radio station’s Market Manager.  That wasn’t the case at 700WLW.  I joked over the years, we had no idea what he did.  We just knew at night he was representing the station at a fundraiser and the next morning he was on the air at 5am.

What I respect the most about Jim is his competitiveness.  For most of his years in Cincinnati his morning show has been dominant.  But, there was this one time that Jim’s show fell to #2 with people between the ages of 25-54, the so-called money demo. He lost by one-tenth of a point, I believe to the Bob & Tom show.

This may have been the only time I saw Jim mad.  Well maybe not mad…aggravated.  I tried explaining the difference fell within the statistical error of the ratings and not to worry.  It didn’t help.  Later that day, after he left, I wrote him a note and slipped it under his office door.  It said, “We’ll get the bastards next time.”  It became our running joke.

A number of years later, Jim was on vacation, in Ireland, golfing with his son.  One early afternoon my telephone rang.  “Darryl!  It’s Jim Scott!”  Unsure if he was still out of the country I asked, “Where are you?”  He told me Ireland.  The ratings were coming out that day.  So he called from across the Atlantic Ocean to ask me one question, “Did we get the bastards?”  And then he laughed.

Year after year, decade after decade, Jim gave himself to his radio audience, everyone of them considered dear friends.  He was there during good times and bad.  Sunny skies or snow.  Jim Scott is a radio personality to study and learn from.  There will never be another like him.

He’s knows radio.  He understands his place in the market.  Never abuses his power or notoriety. Keenly knows the importance of ratings, the advertiser and revenue.  He’s a competitive personality and a radio icon that has survived and flourished ratings book after ratings book because of his ability to adapt and learn from an ever changing marketplace and audience.

Jim Scott, a Cincinnati radio legend, will be remembered along with people like Powel Crosley, Bob Braun, Ruth Lyons, Gary Burbank, Bob Trumpy and Randy Michaels.

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Let me ask and answer that question one final time.

Jim.  Did you get the bastards?

Yes.  Yes you did.  

Be very proud…and sleep in!

Rush Limbaugh’s Fall Into Oblivion

In reality I’m a humble sort and “not that kind of guy.”  So…

images

Today’s talk radio, as we know it, is fast fading into the sunset because of a format stuck with 1990’s rhetoric, each day addressing topics few care about.  A constant right-wing political drumbeat that no longer resonates.  A format where its practitioners can’t define the word entertainment.  A format attracting fewer people, men or women, under 65.  A format fewer advertisers are interested in buying because of its aging audience.

Don’t believe the propaganda.  There isn’t a 747 on a tarmac full of advertisers waiting to buy into shows like Rush Limbaugh’s.

And I’m a Republican saying this. It hurts me deeply to witness how talk radio has been taken over by those driven by agenda and not understanding their job descriptions – get listeners, get ratings and make money.

The end times are here for today’s talk radio and there’s no going back.

end-times-title

For years people have asked me, when does it end?  I’ve always said, the last syndicated talk show to go down will be Rush Limbaugh’s.  He was first “in brand.”  If you’ve ever read a Reis and Trout book you know first “in” brand wins. I will add first “in” also means last “out.”

"Sir.  Now word is The Big 89, WLS in Chicago will no longer broadcast your show because few are listening.  The empire is crumbling."

“Sir. Word now is The Big 89, WLS in Chicago no longer desires to broadcast your show because fewer people are listening. The empire is crumbling.  Should we retire to the underground bunker?”

Premiere Networks and its owner Clear Channel Media + Entertainment iHeart Media has crammed down Limbaugh, Sean Hannity and Glenn Beck on its talk stations, not allowing local stations to make needed changes to their programming, changes that could provide some hope of staying relevant.  It was a great business model…in the 20th century!  In business speak it’s called “vertical integration.” The company produces the product and then uses its distribution arm, its radio stations, to broadcast the shows.  Guaranteed clearance, plus in Limbaugh’s case and some of Hannity’s stations, the local stations have to pay a “rights fee” in addition to the barter commercial inventory they broadcast from the network.  There was no negotiation whether to broadcast the show or what fee was to be paid. Here’s the number you pay was the only conversation during the budget process.  This, as you can imagine, affected cash flow and coupled with the increasing demands for talk stations to generate more profit, it forced local stations to lay-off other talk hosts, producers and gut news departments. Talented people left the radio business and the death spiral for talk radio began.  It began years ago.

All was good until the world changed and the aging, pissed off Baby Boomers (I’m one of those too – Baby Boomer – not pissed off) were no longer relevant.  Extreme political ideas no longer resonated with listeners as generational power shifted from Boomers to Gen X’ers and now Millennials, groups that have a more centrist belief in regards to many social issues.  They’re mostly OK with Hispanics, lesbians, smoking pot and women using birth control.  Many are even OK with the first African American President.

Did talk radio reflect these changes?  No.  Do good radio stations reflect the lives of their target audiences?  Yes.

I told many in management, talk hosts, producers and programmers, talk radio must change, speak with and relate to these emerging audiences to survive.  Did they listen?  No.  John Hogan, then CEO of Clear Channel flew me to New York City once and asked me how long talk radio had.  I said, “4 years.” That was in 2012.

Now, right on schedule, the end times for Rush Limbaugh begins as he has lost or may have lost his longtime homes in the top 3 Nielsen radio markets.  And if you’re not making it in those markets, it’s lights out.

New York City – GONE

Los Angeles – GONE

Chicago – GOING?  GOING?

  • New York City (Market #1) – Limbaugh and Hannity switch to Clear Channel Media + Entertainment’s i Heart Media’s WOR in January 2014.  One year later in the January 2015 PPM, WOR has shown little, if any, growth and records a 1.2 share (6+). There are 23 stations that rank higher than it, including their former home at WABC.
  • Los Angeles (Market #2) – Limbaugh is now heard on KEIB, switching in January 2014 from longtime home KFI.  One year later, in the January 2015 PPM, KEIB can’t even break a 1 share and records a 0.8 share (6+) with 33 stations ranking above it.
  • Chicago (Market #3)Robert Feder, Chicago’s most connected and respected media critic reports Cumulus, owners of the legendary WLS, are yelling “No Mas!  We can’t pay the electric bill!” They’re looking to dump Limbaugh by the end of March.  WLS, with Limbaugh, scores a 1.1 share (6+) and are looking up at 26 stations above them. And you know what they say about not being the lead dog.  Persons 25-54?  Embarrassingly, the station’s 50,000 watts can’t even break a 1 share.  After Feder’s blog went public this morning, a Cumulus spokesperson said, “This is not at all accurate.  Any report to the contrary is false.”  Additionally, Al Peterson’s NTS MediaOnline is quoting Cumulus EVP/Content John Dickey saying, “It’s a manufactured story.”  “It’s worse than a rumor”  And that Rush Limbaugh will be on WLS “until he tells us he doesn’t want to be.”

The Chicago rumors come as no surprise to me, as three different Cumulus executives have told me on different occasions they wish they could get rid of Limbaugh’s show and they can’t sell it.

I’m guessing the deal to move Limbaugh’s show to another station, like WIND-AM to save face, hasn’t been finalized yet.  We’ll see how this plays out.

Limbaugh

“WHAT?  Now Chicago wants out?”

 

 

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Talk Radio – Becoming the Weekend Laxative for Octogenarians

I’m in my mid 50’s and I used to laugh when people said it sucks getting old.  It does!  Stiffies aren’t as stiff.  You’re up 5 and 6 times a night to pee.  And “regular” is no longer “regular,” if you know what I mean.

Spending time in the privacy of the privy gives one time to really think.

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Taking the term “laptop” to the next level.

What would you say if a sports team, let’s says a football team, had to spot its opponent 29 points before each game?  I’m not talking about a betting line at a Las Vegas sports book.  I’m talking about the actual game!

The NFL, for example, thinking Tom Brady and Bill Belicheck are so good that it’s not fair.  So, before playing the Seattle Seahawks in the Super Bowl this year, the Seahawks started with 29 points on the scoreboard, playing the game normally, having the opportunity to score more and the Patriots having to play catch up to beat them.

That’s what’s happening to news/talk radio, being driven by corporate demands of more and more revenue as ratings decline.  Corporate radio refuses to make the needed programming adjustments to address changing demographics, changes in culture or even changes in politics. Just maintain status quo and keep throwing out “red meat” political talk to keep the remaining 65-plus, angry white male listeners happy and let the format fade into the sunset.

It doesn’t have to be this way.

There are 168 hours each week, 48 of those hours are on weekends.  Or put another way 28.6% of each week’s broadcast hours are on weekends, those 29 spotted points I mentioned above.  Most news/talk stations ignore Saturdays and Sundays, literally chasing people away with programming few want to hear and driven by the reality they can no longer sell the mostly syndicated, extreme right wing programming they broadcast weekdays.

How do they ignore Saturdays and Sundays?

  1. Crappy brokered programming.
  2. Replays of the old syndicated content (the stuff fewer are listening to during the week, now available on the weekend for your enjoyment).  Dated shows?  Irrelevant content?  “Then don’t listen!”  I guess people are following directions.
  3. News?  Weather?  Traffic?  That stuff only happens during the week, not weekends!  It can wait until Monday.
  4. Production mistakes and just bad production that ignores Nielsen PPM and diary fundamentals.

48 hours of mostly unlistenable programming.

I feel for local morning hosts, probably the only local personalities left at a news/talk station, trying to jump start their stations at 5am on Monday morning, hoping to attract people chased away over the weekend with their unique blend of political babble of how Obama is ruining us now that “everyone has Obamacare.”  I actually heard that this week from a local host who must be a closet Brian Williams’ fan.  That certainly comes as a surprise to me with United Healthcare insurance.  I didn’t know they changed the company name to “United Obamacare.”

So what are the real issues here?

"I can't get no.  Satisfaction."

“I can’t get no. Satisfaction.”

Are programmers that unskilled, untrained and stupid to believe a brokered program to cleanse one’s colon is going to gather an audience?  I hope not.  But, they’re not making the decision.  It’s the corporate programmers, most of whom have never programmed a news/talk station.  Go ahead.  Ask any of them if you can handle the truth.  You have to laugh when these brokered shows or the “suggestion” of sold brokered hours are forced down on the PD of a news/talk station, but rarely crammed down on any other format?  Why is that?  The audience of a Classic Hits station is close in age to a news/talk audience (at least it used to be)?  People listening to The Rolling Stones get constipated too!  Even The Rolling Stones gets constipated!

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In defense of the account executives burdened to sell the news/talk format of today, the majority of these stations consist of a local weekday morning show and then 21 hours of syndicated programming mostly spewing the same political narratives hour after hour.  Fewer advertisers are wanting in on shows like Rush Limbaugh, Sean Hannity and Glenn Beck due to their aging, angry audiences and extreme opinions.  I actually heard Hannity say last week the “economy is in shambles.”  What?  How can you say that with a straight face “Mr. 1%?”  To pay the electric bill, stations are forced to sell blocks of paid programs on weekends.  Of course, many of these shows do provide a solution to help an angry 65-year old white male stay…how shall I say….”regular.”

fbjam

Glad I went before I left.

News?  Weather?  Traffic?  In the opinion of many corporate programmers and local programmers, news, weather and traffic stops in a listener’s life at 6pm on Friday and resumes Monday morning at 5am.  I guess I imagined the 6-inches of heavy, wet snow in my driveway last Saturday morning.  Or the Sunday morning a few months ago when I was stuck in traffic in Jackson, Mississippi and wondered why I barely moved for 90 minutes.  News?  The audience can wait for that until Monday morning.  Immediacy, the core of what makes radio so great, is an imposition to most news/talk stations of today, even though news, weather and traffic are the gateway elements into the format – the metaphorical door people walk through to be exposed to the talk product.

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Guess they changed the name of George’s show.

Weekends are made to relax, anyway.  No need to pay attention to a radio station or even a station’s website.  I’m guessing the average news/talk PD doesn’t turn his station on weekends or even looks at his station’s website.  Production elements?  No need.  In diary markets, call letter mentions?  Why bother.  Angry and constipated Grandpa doesn’t need to relax anyway.  He needs to strain and bare down.

48 hours of dated and irrelevant programming.  28.6% of each week’s broadcast time is ignored.

I just heard WLS-AM in Chicago canceled a syndicated weekend show to air more brokered shows.  I guess their 1.1 share (6+) via its 50,000 watts isn’t yet low enough.  And there’s WNEW-FM in Washington, the “all news” station, rumored to be adding brokered shows.

"Sir.  Just as Darryl Parks predicted, after your move to the AM station in Pittsburgh, you're fewer people are listening to you.  Have you thought about discussing laxatives?"

“Sir. Just as Darryl Parks predicted, after your move to the AM station in Pittsburgh, fewer people are listening to you. Have you thought about discussing laxatives?”

Then I remembered there was this Clear Channel Media + Entertainment iHeart Media talk station in Pittsburgh that sent Rush Limbaugh and his other 1% buddies into Siberia on WJAS-AM and turned country!  I’ll bet the next time I’m in Pittsburgh and can’t “go” I can still turn on WPGB-FM, now known as Big 104.7, and hear how to get some relief.  They had to keep those colon cleansing shows through the format switch from news/talk to country.

But alas, no.  Amazingly, the music they play during the week is the same music they play on the weekends.  They actually want their country listeners to listen 7 days a week, not 5…constipated or not.

What is one to do if they can’t have a bowel movement in Pittsburgh?  Drive to Erie?

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“I owe my regularity to talk radio!”

Corporate radio has given up on news and talk.  But, Grandpa is lucky.  At least corporate radio recognizes the format’s unique niche to be “the” weekend laxative station, providing Pappaw the relief he needs.

I guess you can say news/talk radio broadcasts in Grandpa’s interest, convenience and necessity.

 

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