Solutions to AM Radio’s Problems: Here’s How the Industry Can Revive AM and Make it a Viable Force Again

| September 3, 2014

By Bill Brady
Futures & Options, Inc.
President/CEO


bradybill
JUPITER, FL — There is nothing fundamentally wrong with AM radio.

AM stations that offer quality programming that effectively serve listener’s needs are doing just fine.  There is no problem at WLW, WTMJ, KNBR, the CBS all news stations and many other well-programmed AM stations.

There is a problem at the many stations which have “run up the white flag” and surrendered to paid programming, wall-to-wall syndication, religion, or my personal favorite…drumroll please…the irresistible opportunity to become the fifth sports station in their market.

The two biggest issues for AM radio today are the commitment level of corporate owners, and the congealed nature of the syndication marketplace.

That’s commitment as in “no commitment” to AM radio.  Cuz it will cost money to fix their AM stations.  It’s simply cheaper to let them rot away when those stations, in many cases, are not exactly profit centers.

That’s because they don’t have many — sometimes any — viable programming options.  Music isn’t much of an option.  Nobody looks for music on AM anymore because of lousy car radios, and the FCC’s 80-90 docket which filled the FM band with additional stations that became homes for marginal music formats which once were on AM.

So, AM operators turn to the syndication marketplace and what do they find?  Complete and utter dysfunction.  A slew of conservative talk shows, the stillborn liberal effort and no fewer than five sports talk networks.  If the sports and heritage news/talk positions are already taken in your market, you’re dead.  There’s nothing to build with.  It’s no wonder AM owners give up.

How does the industry work its way out of AM’s current predicament?

Radio networks must seize the moment:  This is a tremendous opportunity for networks and syndicators.  Given the economics of AM radio, attractive new programming options must be developed on a national platform.  There has to be effective local integration, but, these concepts are simply unaffordable to program 24/7 on a local level other than in the top 10 markets, and today’s radio companies are too penurious to open their wallets for new concepts even in the biggest markets.

There are many flavors of talk:  There’s more to talk than conservative politics.  Talk is like music.  It has many different categories.  Develop concepts for women 25-54.  Hint:  Check out daytime TV which does talk programming for women.  In the mid-90s, Dr. Laura, at the height of her popularity, demonstrated that this concept works.  How about adults 25-54 who don’t like political talk?  Hint: Try New Jersey 101.5, easily one of the most successful news/talk stations in the country for a very long time.  Model an AM format after a highly successful FM station—what a concept!  Self-help shows like Bruce Williams, the Dolans, Dave Ramsey and Clark Howard have historically been effective and the concept should have a larger place in today’s talk format — especially at night after news/talk stations have beaten the dead horse of conservative politics to death all day.  What about the 18-34 demo?  Elvis Duran has been doing a talk/entertainment show on Z100, New York for years.  Why should the entertainment stop at the end of morning drive?  You could re-task material from talk/entertainment FM morning shows around the country and cobble together an 18-34 talk/entertainment syndication product for the rest of the day.  Would they listen to it on AM?  To steal a phrase, “If you build it, they will come.”  Why don’t 18-34s listen to AM?  Because other than sports talk or play-by-play, there’s nothing on AM they want to listen to.  It’s not because they are allergic to amplitude modulation.

Build a national all news brand:  The CBS all news format is one of the best things about radio.  The product is great, the qualitative is off the charts, all news stations don’t have those controversial programming problems with advertisers that all-talk stations do — and all news stations are big revenue producers.

There have been previous attempts at all news syndication — NBC’s N.I.S. experiment in the 70s and the Associated Press attempt in the 90s — but it is time to do it again, and to get it right this time.

A new model for network/station partnership and talent compensation:  In launching these 24/7 concepts, networks and syndicators should build a new model where they share revenue with local stations for affiliate support (marketing, format execution).  The local station gives up more inventory than in a typical barter arrangement, but you give them a stipend in return.  It’s a lubricant that would go a long way toward building a strong affiliate base which ultimately would make the product more successful.  Talent cannot expect Stern and Limbaugh money.  Compensation should be reasonable reflecting the start-up nature of these concepts with a generous upside based on ratings, revenue and affiliate growth.

A resuscitated AM band is very much in our interest as broadcasters.  We cannot afford to let the AM band deteriorate into a wasteland of brokered time, religious and foreign language programming.  Some stations can serve those specialized audiences, but AM radio must again become a “mass appeal” medium.  Networks and syndicators have a big role to play in AM radio’s resurgence — and a responsibility to do it.  They must recognize news and talk are slow build formats and make the commitment to be in it for the long haul.

Successful AM radio stations which provide value to their local communities are a large part of the foundation the radio industry must re-build to increase our collective viability in the multi-platform future.  Let’s get started.  Who will be the first mover?

 tbugk3

Bill Brady is President/CEO of Futures & Options, Inc., a media investment, ownership and consulting firm based in South Florida.  His background includes management positions with Clear Channel, Citadel, Comcast and the Miami Herald.   He can be reached at 561-529-2598 or at wjbrady1@aol.com.

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