Eric F. Richards wrote:
"David Eduardo" wrote:

Fewer and fewer each year.
There are 13,500 radio stations in the US and some 3,500 owners. Most are
small.

1) Your statement doesn't address the trend towards fewer and fewer
stations each year. How many owners were there 10 years ago? 20
years ago?



There are stations going dark every year, because even with multiple
ownership, they still can't produce numbers to justify their expense.
Personally, I think that if the bean counters got out of the way, there
would be a somewhat different landscape, but that's not where Radio is
today.

Decisions are made based on a stock price and profitability. Long
gone are the days when a station that scored a 15% percent margin was
considered a super performer. When I left CBS, Chicago, one station in
the group was recording a 72% profit margin. That was unheard of when I
started. 20% was off the charts then. Common ownership, and some union
decertification has made higher numbers possible. Salaries aren't what
they were, except for the anchor names, expenses are squeezed until the
staff runs blue. With profits like these, common ownership, and the
ability to get banks involved (where they wouldn't touch Radio before)
mom and pop shops are being swallowed up by investor groups, media
companies, and corporations looking to diversify. The Florians owned
WNIB/WNIZ in Zion. They were a pair of successful commercial classical
music stations in Chicago metro. And they routinely waxed WFMT in the
book. They were determined to stick it out. No debt, the stations were
low stress, very profitable, and had strong followings. Bonneville
offered them 12 figures for the pair. They said 'no.' Bonneville came
back at them. And kept coming back each time they declined the offer.
Eventually, they relented. And took not much less than a half a billion
dollars for the pair of stations.

With that kind of lucre, you're not going to find many single
station owners willing to hold out for long. Especially since
many stand alone stations are nowhere near as profitable as the Florian's.

Single owners are down. They do still exist, though. But usually in
smaller markets, and nearly always with signals not desireable by
heavier investors.

The number of stations, however, is still quite high. And some will
be going dark because there are just too many of them for them all to be
profitable. And in the US radio is and always has been about the money.

13,500 is a LOT of signals.






2) 3500 is much less than half of 13,500, implying that the majority
of owners own more than one station. "Most" are small? NO.



Small stations are not defined by their ownership, but by the
installation, their coverage, their staff and the total investment in
the property. Most stations are small stations. You don't find $50
million stations in Watseka, Illinois. And even here in Chicago, there
are only a few "large" stations. Many of them coming in from the collar
counties. Even WROK/ZOK in Rockford are considered 'smaller' stations.

Most of them are small.

And with a handful of groups accounting for more than half the
stations on the air, what's left are smaller groups of stations by
smaller companies.

The industry may be influenced by CCU and CBS, but it's not owned by
them. The largest company owns less than 11% of the properties. The
next, a fraction of that. Everything else is smaller by definition.

Now, you're right, that things are dramatically different than they
were 15 years ago. And that diversity of ownership, and the fierce
competition for ratings in a single format are largely over. Formats are
structured more strategically, to protect producing properties, or
garner saleable numbers collectively, instead of going head to head and
pouring hundreds of kilobucks into bludgeoning a single competitor into
a stupor. Today, it's done much more scientifically. And I think the
results are less exciting, often less interesting. That's why I don't
listen near as much as I once did. But then, I'm not being served by the
media, either. I don't fall into any of the desireable demo- and
psychographic grid spaces. So, what I think is largely of no interest to
Radio.

It's cold. But unless I can show Radio how to make more money than
they're making by doing something different than they're making now
doing what they're doing...it is what it is.





I deal in the Census, proprietary data and talking with listeners. Market
research is simply speaking, one by one, with real listeners. Your
contentions are simply stuff you blow out of your butt.

Tell it to the WSJ.



WSJ is in the business of serving investors. Not in the business of
encouraging creativity, or manufacturing innovative products. They serve
investors. And investors are interested only by dividends. WSJ serves
that interest, nothing else.

Wall Street getting involved in Media took the focus OFF of the
things that are important to you and me (such that they are,
anyway...those things had been in decline for two decades anyway), and
put them squarely on the minutiae of maximizing profits. Which reduced
Radio and Radio content to a commodity. Wonder Bread with a ground
plane. Content retooled and revised until it's devoid of surprises, but
that sells. And that's what investors want: Products that sell, and sell
with INEXPENSIVE production. So, profits can skyrocket. And the numbers
create a demand for other investors. It can, and has been, argued that
investors insure the future of radio stations. And as businesses, this
is true. But it doesn't do anything for content. And content can be
contrived to sell, at low cost, virtually in perpetuity. Unless there is
a public revolt, it will continue to be so. Because, beleive me, if
there were a demand for something done differently, CCU and the other
media companies would be lining up to get it done.

But there is no such demand. Only bitching from guys like you and
me...and those of us here dissatisfied by the current state of Radio. If
you want to change things, then create a movement. Make some noise. But
you have to show them how to make more money by doing something
differently than they're making by doing what they're doing.

Complaining in a USENET newsgroup is not likely to make a big
difference. Because there's no easy money in it.




Don't try to tell a statistician about the infallibility of
statistics. You have improper assumptions about your listener market,
your station reach, and how to measure the power of that reach. You
don't even consider much of your listener base to even exist. You,
sir, are full of ****.



That's really unnecessary, Eric. And beneath you. What's difficult to
get through to people who haven't gotten to spend time behind the
curtain is that the assumptions are not made by Radio, but by the people
paying the freight: Advertisers, mostly, and, at least today, the
investors. Radio is the facilitator, not the driver. Advertisers are the
drivers. And most advertisters of any size, are driven by advertising
agencies who created the models you find so offensive. Agencies, seeking
to insure that they got the most bang for their buck, how to get the
most qualified impressions for each dollar spent with zero waste. Not
how to get the most impressions....or how to spend the least dollars,
but now NOT to spend a single dollar on a wasted impression.

For that you look at what's under the bell curve. The mean plus one
standard deviation, if that. And you do that for each of the parameters
under consideration, including geographic coverage by signal strength.
Then you take the intersection of all these subsets and that's the
target. The EASIEST, most cost efficient way of producing numbers.
Strictly commodity thinking.

Does this orphan real listeners? Yes. Are there numbers of them? Yes.
Do they matter? No, because expressed as a percentage of the defined
target, they're statically insignificant, AND they are more likely to be
wasted impressions.

It's cold. But this is how the agencies actually spend money. And
advertisers call the shots. Radio would rather say, "look we've got a
signal from Mackinaw to Bloomington, with a population of 9 million.
$5000 a spot." Advertisers aren't going to buy $5000 spots beaming out
over 100 miles of water, or in towns were the signal strength is lower
than the spark noise of the neighbor's lawn mower. Not because there are
NO listeners there. But because those listeners arent' under the bell
curve. There are too few of them to be measured and targeted
efficiently. Now, those listeners MAY be otherwise targetable. But for
them, there are other media. Like the local stations in Bloomington. But
when negotiating with Chicago stations, that topic doesn't come up. And
stations in Chicago aren't interested in hearing that they can't get
$5000 a spot. So the advertisers work up these models. The ratings
companies deliver the figures, the ratings interpretation companies
package the numbers and the sale profiles and the agencies work up a
cost per point, or a cost per thousand figure. That's the figure they
buy the stations for. With all the non questionable or statistically
insignificant listeners excluded from the buy. Those listeners are
picked up on other buys....local buys....but not from the single station
with the big fringe.


And again, it's not radio stations that create these models. It's
advertisers. Do radio stations adopt them? Sure they do. There's money
in it. But they don't create them. They get them from resources serving
the people with the money. Radio works these models based on the
assumptions as defined by advertisers for their own sales pitch, but the
don't sell what the advertisers don't want to buy. And the cold truth is
that they orphan listeners every day, because those listeners are of no
interest to the advertisers. The advertisers who tell the radio stations
what they're interested in.


Put that directly: Reach is not defined by the Radio Stations. Reach
is defined by the Advertisers, by what they're interested in.
Advertisers TELL Radio what Advertisers want to buy, and how the Radio
station's reach works for them. It does NOT come from Radio stations.


So, while I don't really have any use for consultancies in Radio,
what David does is show the Radio Station how to maximize it's
profitability. So the station may serve it's investors/stockholders.
What assumptions are made come from Advertisers. Not radio stations.
And certainly not consultants.


What's highly misunderstood is that Radio stations somehow create
programming to serve the public. This is only showbiz. The purpose,
especially after Telecom 96, is to create programming that will hold an
audience between advertisements. It's the advertisers' needs that the
offending assumptions are made to meet. Not the listeners.

Radio has two audiences....one is the listeners, the other is the
advertisers. The purpose of the radio station is to sell the listeners
to the advertisers and present the advertisers to the listeners. To that
end, only the advertisers needs matter. And the advertisers call the
shots. It's not the Radio stations that determine who are the important
listeners. It's the Advertisers. So to serve the listeners the
Advertisers find important, Radio looks only at those listeners. Instead
of all listeners.

I"m not defending it. But it is what it is.

Anything else is showbiz. And King Kong is never really more than 3'6".