Whither (wither) am radio? "cut-costs-at-all costs companies will not survive"

"The choice is between the immediate satisfaction of making the bottom line look better for investors today and thinking five years down the road. Most companies in the United States, unfortunately, choose the former option." ~~ Chris Core, former DC AM radio talk host

In February, conservative radio talk host Chris Core, arguably the best local political talk radio show in the Washington DC area was let go from a 33 year run at WMAL. Citadel's cuts included Core, the news director, the national sales manager, and the on-air staff of a sister station. Effective immediately.

He writes eloquently about the end of his terrestrial radio career in a The Washington Post Sunday piece that might be an obituary for the AM dial.

His observations shed some light on the future of KOMO if they lose the Mariners' contract in July; puts the cutbacks at KIRO, KVI (and across the dial) into grim perspective; and should serve as a cautionary tale to KUOW, and Seattle pubic radio.

The business model for radio, like all other media today, has changed and become more competitive over the years. Just as cable diluted the television market, the rise of FM and eventually satellite radio has increased listeners' choices. Add the Internet to the mix, and radio stations have to either evolve from their traditional ways or wither. WMAL made some costly choices over the years.

WMAL was the top-rated station in the DC market in the 1970's when Core was began his career. "It was a full-service station at its peak," he writes. One show had a 25 share of the market --that's a one-fourth of the DC area population -- unheard of numbers today with the broad competition for earballs.

Thirty-three years later, the WMAL morning show attracts a 3.6 share and the top-rated station in the market only gets a 9.1. "Double-digit shares are a thing of the past. Still, for the three decades I was at WMAL, I saw a steady decline in audience."

Part of the problem, he says, was signal. WMAL had risen to #1 on the strength of its local personaltites  and its great AM signal, heard clearly all over the Washington metro area. But, he says, "FM radio at that time was merely an afterthought. Not knowing what to do with it, WTOP sold its FM signal ...  to Howard University for exactly $1. WMAL-FM ... filled [its FM] air time with recorded jazz programs." 

As in so many markets including Seattle/Tacoma's, the DC area kept growing. Broadcasters had to come up with a way to get their signals to the suburbs exurbs. FM, with more power, clearer transmission, stereo broadcasting, could do it. By 1980, Washington was the number one FM market in the country. 

WMAL was already in trouble in 1980, but it didn't know it yet. It plugged along on its formula of homegrown personalities and being all things to all people, but all people weren't listening to a single station anymore. Seeing its declining market share, WMAL added radio's hottest property, conservative talk show host Rush Limbaugh, to its lineup in the late 1980s. The result was twofold: Limbaugh eventually wound up with the highest ratings on the station (still true today) and his show labeled WMAL a right-wing radio station instead of an objective source for news and information.

A competitor added a an all-news FM station with a stronger signal and WMAL never recovered.

By the turn of the century, the only AM radio stations to show up consistently in the ratings were WMAL, WTOP and WTEM. Most Washingtonians turned on the FM dial. In some cities, AM radio still flourishes: San Francisco (KGO), Chicago (WGN) and Los Angeles (KFI). That's mostly because those stations made the decision to stay local. WMAL went the other way. Limbaugh was followed first by "Dr. Laura" Schlessinger, then Sean Hannity and Mark Levin. All these shows both helped and hurt. They attracted a good audience, but they made WMAL less special and much less local. You can hear two-thirds of WMAL's current programming anywhere in the United States.

When the station got priced out of their signature Redskins broadcasting, it was another blow:

"The rub is that the team attracted a huge audience and raised the profile of the station that carried them. People who listened to the Skins on Sunday still had their radios tuned to 630 when they woke up on Monday morning. That kind of carry-over can jump-start a whole week of broadcasting.

Remembering KIRO's problems after losing the Mariners, and the dreary predictions for KOMO/KVI if Fisher loses them this year, that scenario sounds depressingly familiar.

But Core writes that the sports station who got the Skins thought they could afford them as a loss-leader to get audience.  Eventuall, they had to give them up because they were too costly. "Today," he writes, "team owner Dan Snyder has to put the games on stations he himself owns because the rights are too expensive for others to justify."

(Maybe the Mariners could buy KOMO...)

We can't imagine that Fisher will have the fortitude or the suck with their Wall Street investors to spend any dough to pull their mini radio cluster out of the muck of syndicated tripe and so-so ratings. Chief Financial Officer Joseph Lovejoy told the P-I's Bill Virgin recently that Fisher isn't interested in AM stations, but has no plans to divest its local radio stations (KOMO, KVI, KPLZ-FM). Using the modifiers of weasels, he added disturbingly, "We're not actively pursuing radio, and we're not actively divesting radio."

Seattle is not unique, as we can see. A tiny bright spot is KIRO who has, while cutting local talent, at least made some investment into TBTL (m-f, 7-10) an innovative local show that targets a new demographic.

Seattle's love for public radio has hastened the shriveling of AM issues-talk radio; but as the competition falls away, public radio should not become complacent and self-assured.

They also rely on the low overhead of syndicated NPR programming, and could fall prey to some of the same depersonalization that's separated commercial stations from their communities. In the comfort of its commanding popularity with a Boomer listenership, we fear programmers on KUOW, KXOT, and to some extent KPLU are myopically lulled in a stasis that ignores local connection, not to mention the sobering demographics of radio's future.

Comments

[abob]

When losers like Chris Core get fired they blame everybody and everything else in the world but themselves. Radio networks are desperate to hire on-air talent with the ability to attract ratings and revenue. There is no one such broadcaster who does not have a job. Chris Core is unemployed because he got old, he sucked and he got no ratings. End of story.

[abob]

When losers like Chris Core get fired they blame everybody and everything else in the world but themselves. Radio networks are desperate to hire on-air talent with the ability to attract ratings and revenue. There is no one such broadcaster who does not have a job. Chris Core is unemployed because he got old, he sucked and he got no ratings. End of story.

[abob]

When losers like Chris Core get fired they blame everybody and everything else in the world but themselves. Radio networks are desperate to hire on-air talent with the ability to attract ratings and revenue. There is no one such broadcaster who does not have a job. Chris Core is unemployed because he got old, he sucked and he got no ratings. End of story.

[AuthenticAndrew]

Your assumption that his fate is all on him is now better than his assertion that it's the changing of the times.

[Wild Bill]

UH, perhaps it's that we're in an economic downward spiral? I know that in my business over the last year we have scaled back and made severe cuts, and our suppliers and customers have too. The big question is how far and deep these cuts and layoffs will go. The owners of our company don't see any improvement until maybe 2010. The failure of the ratings firms in their mandate, creating the subprime junk "bonds," that were sold as solid investments, combined with runaway (peak?) oil prices is unwinding in a deep slow motion fashion. In many aeras, there is a serious sense that an unwinding of the very system is at hand (a Depression). So, the AM talk radio biz is also experiencing these conditions, operating in the same economic landscape that everyone else does, and the reason is the collapse of The Mediium? I would think that the reason for cuts is falling ad revenue, whic is not being picked up by anybody on the FM or cable side, as these Media businesses are also cutting and scaling back as the flow of bucks and the exploding inflation hits us all, even scared AM radio. So an old vet is given a bronze parachute, like it isn't happening in every other field. BY THE WAY, tbtl is radio healers, spreading their loves to the lands. tbtl is the Obama of seattle Talk radio! tbtl is the AM Messiahs!

[Patient of Job]

If you read the piece, Chris Core bitched about nothing. He had fine ratings, but unfortunately for him, he was paid like a man who has been at one on-air job for 33 years.
Michael and Core are right about the financial prospects of AM radio, it's an old technology with an old audience owned by Wall street companies milking it for all they're worth which ain't much.they are already throwing away the husks of what were once strong carriers. A renaissance with an injection of cash is needed, but we don't see one on the horizon. Welcome to the new media world!

[SeattleJew]

Mike

We have had this discussion before.

The hand ringing over radio makes no sense without an accompanying discussion of the finances.

Given that AM broadcasting is done routinely in very poor third world countries, how much can the capital costs be?

Operating costs would also seem to be fairly low given that much of the process is automated.

[blathering michael]

All I do, Steve is discuss the finances of the radio business. Before you jump on my shit, please read what I write... You're right, the overhead is low, especially if the station is automated and the content is brought down from a satellite... That's the problem, Steve. Large investors have bought the little (and big) local stations, and have turned them into little robot stations (KPTK, KTTH, KKOL, WMAL...) that lay everyone off, have no local content, and are killing them. The medium needs ideas and innovation, but the Wall Streeters put nothing back into these stations. It's shortsighted, but what do they care? They are already divesting. KIRO is an exception, but barely. We're watching what happens to Fisher's stations and it doesn't look good. The radio heyday is over, and this is why...

[AuthenticAndrew]

Did deregulation cause this to happen or greater competition among audio mediums? Either way I think it's inevitable that local talent will become too expensive in proprtion to the share of ears any given radio can have. KIRO is floating but their turnover rate is rather high. Allen Prell bought a house? LOLZ!

[AuthenticAndrew]

Did deregulation cause this to happen or greater competition among audio mediums? Either way I think it's inevitable that local talent will become too expensive in proprtion to the share of ears any given radio can have. KIRO is floating but their turnover rate is rather high. Allen Prell bought a house? LOLZ!

[PugetSound]

Look, I agree that the reliance upon syndicated shows albeit a Rush or Stephanie Miller brings a core audience at a cost: less special and much less local. It's the McDonalds Franchise ie a Big Mac that taste the same no matter the location if you will instead of the local joint such as a Red Mill Inn over on Phinney Ridge when you get the jones for a burger/rings meal.
Moreover, when you have had the chance to experience a 'Red Mill Inn' such as KGO Radio -live/local host driven- you understand the difference in quality.
A lot of these hosts may continue on with their own shows on the internet. It will be interesting to see if they can make that business model work.

[DT]

Young people today don't listen to the radio. They listen to their N3P players and have Myface pages and they surf the internets. The song should be changed from Video Killed the Radio Star to Bloggers Killed the Radio Host.

[joanie hussein]

Since everybody has diagnosed the ailment, I'll give my two cents worth:

Wall Street and short-sighted profiteering; deregulation.

The big loser: democracy

Oh, and tell me a time when young people weren't listening to rock and roll or its equivalent musically?

Older folks diversify their listening when other things become important. Why keep trying for a niche that basically wants one thing: Comedy Central and/or music.

[AuthenticAndrew]

Oh my God, liberal for life joanie actualy thinks the decline in business must be due to a lack of regulation! She has yet to provide any statistics or numbers showing a cause and effect but surely they will be forthcoming.

[joanie hussein]

Why are you such a dumbsh** Andrew?

Use your brain. Think for a change.

There are lies; big lies; and statistics.

C'mon, think globally. Besides, I'm older than you and I know better. Remember?