Future of AM radio

It is clear to me that radio is changing, in some ways it is changing for the better, in many ways it is changing for the worse.  In spite of many bad business decisions made by over priced MBAs, large consolidated radio groups seem to be hanging on, if only by their finger nails.  It is very likely that the investment banks, who have the most to loose, are not interested in seeing their loans written off in a bankruptcy proceeding.  As we all know, the consolidators that paid multiples of 15 to 16 times cash flow for stations, way over extended themselves.  There is no hope that values will ever return to those levels, so the banks are now in the radio business.

Sure, the banks are not the owners of record, and the FCC never would consent to transfer all those licenses to so many investment banks. However, they are calling the shots, making “suggestions” on how best to run things.  Offering perhaps a 1/4 percent reduction in an interest rate if the expenses can be reduced below a certain level.  Unfortunately, for the communities like Ellenville, NY, their local radio station means nothing to the banker living in Manhattan.  It is a number, and more than likely, a negative number on a spreadsheet.  It means nothing to the group owner in San Antonio, other than some miscellaneous real estate assets.  Same can be said for all the radio stations in the Hudson Valley if not the entire country.

Why is this important?  I mean, who really cares?  The apparent answer is no one seems to care.  Local news, or what used to be local news such as town board meetings, high school sports scores, police blotter, and all of the many other small town things do not get the hearing they used to.  Town boards; well if no one shows up for the meeting to pass the new zoning laws, so be it.  School boards; sure, raise the taxes, most home owners will just pay the new higher amount and not say anything.  It is for the children, after all.  Seems that the local constabulary is spending more time at the Dunkin Donuts than out walking around checking doors?  Thats the way it goes.  With the demise of local newspapers, detailed in a previous post, who is keeping an eye on things? Who lets the community know when something doesn’t pass the smell test?

Receiver tuned to local AM station playing good sounding music
Receiver tuned to local AM station playing good sounding music

A small AM radio station can be made profitable, just not at the margins expected by the big boys.  There is a niche for perhaps 1 KW or 5 KW non-directional station with it’s own real estate that is not in too bad shape can be turned into a community radio station.  Those type stations are fairly low maintenance, most have some type of PSRA and PSSA to keep them on at least during drive times if they are daytimers.  Others have minimal amounts of night time power.  Almost all of them cover their city of license, even with small night time powers.

I have been looking into good quality AM radio receivers and there are a few out there which are not too expensive.  Most GM car radios and older Chrysler radios have good AM radios.  A group formed to promote AM radio, ensure that auto makers install radios that are at least as good as their older versions, work with manufactures to make better small table top receivers and such would go a long way to improving the unjustly bad reputation that AM broadcasting has received.  Further, working with the ARRL (amateur radio) to reduce and keep noise levels from things like BPL and other noise making technologies that do not comply with current FCC regulations would also help.  It is true that our environment has become electrically noisier, one might not be able to listen to the 50 KW clear channel station 500 miles away, but the local station should come in well enough to enjoy, especially if the programming is good.

FM radio is becoming over crowed with translators, adjacent channel HD radio interference, LPFMs and whatever else can be shoe horned into the band.  The quality of FM is set to decline precipitiously in the next few years.  It seems that with the right combination of good local programming, good receivers and radio station owners/operators that are not looking to get listed on the NASDAQ, small AM stations could survive, if not thrive on the business that the big stations turn away.

There are a number, a small number, of stations already doing this.  As long as there is free local news and free quality programming, people will listen, no matter what band it is being broadcast on.  Free trumps paid any time, any day.

AM radio

When I was a young lad, still impressionable I might add, I would listen to the big AM powerhouses at night with my little transistor radio.  I have eluded to this in previous posts.  I have also written an article for Radio World in which I suggest turning AM transmitter off on overnight hours to save money, with certain caveats.  I still listen to AM radio quite often.  I have a Kenwood R-2000 MF/HF receiver which, while not the best technical receiver, is the best sounding AM receiver I have ever heard.  It’s wide AM IF bandwidth is 6.5 kHz, which seems to work very well with the high end pre-emphasis curves most good AM processors employ.  Music, especially oldies, which were recorded in AM’s hay day sound spectacular.  There is no other AM radio that sounds as good as this unit.   Right now, the sun has just set and I am listening to WFED 1500 KHz in Washington DC.    They are airing a VOA program called “Issues in the News.”  It’s real red meat radio.  We are 250 air miles from the transmitter site.

I think there is a place for AM stations, not just merely being satellite repeaters, but making a meaningful contribution to their communities of license.  Unfortunately, I am one of the few that thinks so.  For as long as I have been in radio, AM has been declining.  It is a matter of economics, most GM’s would tell me.  That being said, the two three letter calls signs that I worked at were consistently in the top four in the rating book.  Clearly, live local programming was the key to this success.

The notion that they sound bad may or may not be true.  An AM station that has a properly tuned and matched antenna can sound very good.  Using a good receiver, one that has good fidelity, good selection and sensitivity can also increase listening pleasure.  Unfortunately, most  all AM radios being sold today have an IF bandwidth that is only slightly better than a telephone around 2-3 kHz.  This is because… I don’t know.  Originally receiver manufactures began limiting bandwidth to reduce interference.  NRSC-2 was supposed to limit interference by reducing out of bandwidth splatter.  Apparently the manufactures didn’t get the word.

Who knows, as the FM band gets filled with shit (interference from adjacent channel IBOC, translators shoe horned in, LPFM’s on third adjacent channels) AM radio might be viable again.

Once the money men got a hold of the broadcasting industry, everything was geared toward making money.  Not that making money is wrong, it is certainly good to make a profit, however, with the margins on the FM stations, usually between 25-50%, AM stations were relegated to second place because their margins were much less than that.   Even so, many AM stations were initially profitable during the consolidation and still had some ratings.  Not so any more.  AM stations also require more maintenance, because of directional antennas and all that is associated with those systems.  What a banker or an accountant sees when he looks at an AM radio station is a money pit.  And, if the station has been run into the ground, it is a money pit.

Still, a small AM at a fire sale price might be fun to rehab.  Launch some type of community radio format, put AM radio back were it was 30 years ago, solidly in the community.  It might be fun.