Kurt Hanson: Gift Horse

Many RAIN readers were working in broadcast radio back in the days of rigorous ownership caps — e.g., when a radio broadcaster could own only seven AMs and seven FMs. (And I don’t mean per market, as younger RAIN readers might think, but nationally!)

It was an exciting and intense time to be in radio: If you could own only fourteen radio stations in the entire U.S., you cared very much about all fourteen of them.

Now, think back to that era (or try to envision it if you weren’t there) — roughly, say, the late ’70s — and imagine if someone had offered you the opportunity to own a broadcast signal with complete national coverage! This would be an opportunity that wouldn’t require a multi-billion-dollar investment in satellites … or really too much in the way of fixed start-up costs at all.

Even more, imagine that you were in fact not limited to one signal but could actually have multiple streams of programming, and on each of those streams you could serve different spots to different listeners based on their location, demographic, or other criteria.

Better yet, consumers wouldn’t have to buy new devices (which was the impediment that slowed the growth of FM for decades). In fact, this new potential station would be available on over a billion devices in the U.S. alone (and even more devices globally, if you thought those listeners were worth anything to you).

Think of the possibilities:

• You could use this new signal to get enter markets other than the seven in which you have FCC licenses.
• You could create a completely personalizable version of one or more of your local radio stations, distributed nationally.
• You could own, say, a classical music radio station that covered all of America.
• Your classical (for example) station could even have separate signals for pop classical, serious music, opera, pop crossover, and more.
• You could even create create a national, multichannel brand with *lots* of different genres, aimed at a specific age group, gender, or race/ethnicity.

I believe if you were one of the broadcasters of that era, you would have smiled from ear to ear and jumped at this amazing opportunity!

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Well, of course, thirty years later, this opportunity became available thanks to the advent of Internet-delivered radio — available first on PCs but subsequently becoming as mobile as AM/FM radio, as it became available on hundreds of millions of mobile phones.

But was it embraced?  To quote the great ’70s-era comic, John Belushi: “Noooooooo!”  But, seriously, except for being used for simulcasts (much as FM was originally used by AM broadcasters in the ’50s and ’60s), it hasn’t been.

In today’s era, in which most medium- and large-market broadcasters own dozens or even hundreds of stations, broadcasters are, generally speaking, too busy running those operations to be thinking about new opportunities — especially those that require (A) learning some new skills and (B) operating under somewhat different business models (e.g., lower fixed costs but higher variable costs).

Internet-delivered radio is, in other words, a gift horse — what would have been considered in the ’70s to be an amazing, golden-maned gift horse — that, to date, many or most AM/FM broadcasters have not even taken the time to seriously look in the mouth of. Much less try to ride.