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AM Radio: A Troubled Industry

April 10, 1988

LAS VEGAS, Nev. (AP) _ These are troubled times for AM radio.

Consider that only three of every 10 radio listeners tune in to the AM band, and that 1987 local and national advertising sales were about $2 billion for AM stations compared with $4.9 billion for FM.

And consider that 85 percent of AM stations held steady or dropped in value in the last three years and that three out of four large-city stations and about half of those in smaller markets make no money.

Indeed, the best price fetched by an AM station sold last year was $20 million for WNBC in New York, the country’s biggest media market. That was far exceeded by KVIL, a Dallas FM station that changed hands for $82 million.

″It’s going to be an irreversible trend if we don’t move to find out how it can be turned around soon,″ Bill Moyes, chairman of The Research Group in Seattle, said in an interview at the National Association of Broadcasters annual convention here. The four-day conference started Saturday.

A number of stations have accepted the challenge and are experimenting with formats that target specialized audiences:

-WFAN in New York City broadcasts sports interviews, commentaries, analysis and play-by-play of games 24 hours a day, updating scores every 15 minutes.

-KPAL in Little Rock, Ark., won a Peabody Award last week for its daily mixture of music, information, trivia quizzes and call-in features aimed at children ages 5-12.

-WNN in Pompano Beach, Fla., calls its format ″all motivation,″ featuring taped excerpts of talks by well-known self-improvement and inspirational authors. Its logo is ″we’re up when you need to be.″

-KMNY in Los Angeles airs financial news around the clock, with reports on stock and commodities markets and the latest mergers and acquisitions.

Though traditional AM stations still thrive in some rural areas lacking FM competition and in some big cities, the AM audience generally has eroded steadily for the past two decades as the higher fidelity FM band has grown in popularity.

Just 15 years ago, nearly three-quarters of the radio audience was listening to AM. In big cities across the country, the No. 1 stations were AM and they were playing music.

But in the late 1960s, FM - then the low-budget stepchild where people turned mostly for classical music - began testing new musical formats from ″easy listening″ to rock. With its deeper tone and richer sound, it soon found an audience.

FM has captured a whole generation of young people who hardly know what AM is. FM now is the band most people tune in when they want to listen to music. AM has become the band for news, talk and information, since the spoken voice sounds about the same on AM as FM.

″Music, for all intents and purposes, has all but abandoned the AM spectrum,″ said David Parnigoni, senior vice president of radio for the National Association of Broadcasters.

″People identify AM with news and information and talk and a lot of younger people don’t listen to that,″ he said. ″As the population gets older, you’re seeing fewer people who want to listen to AM.″

Nostalgia formats that play big band music - most of which was recorded in mono and appeals to the older audience - are generally the only successful music-based formats on AM radio these days.

Programming is only one of AM radio’s problems, though. The band is plagued by technological troubles as well, and the industry is working on improving the quality of the AM signal.

Many in the industry say the Federal Communications Commission missed an opportunity to give the band a boost five years ago when it declined to set a single standard for AM stereo transmission. The FCC said the market should decide.

Today, only about 10 percent to 15 percent of the stations have adopted one of the two remaining AM stereo systems still fighting for a piece of the market - Motorola Inc.’s C-Quam system, the most popular so far, and one by Kahn Communications Inc.

Another technical problem is interference, which worsened as more stations were crowded into the AM band. There are now 4,912 stations on the AM band and 4,058 on the FM band, but the technical nature of the two differ, making interference a bigger problem for the AM stations.

Some in the industry worry an FCC proposal to expand the AM band to include the frequencies from 1605 to 1705 will increase competition in an already fragile industry.

Despite the problems, however, AM radio broadcasting never seems to lack for people willing to risk a new idea for keeping a station on the air, said James Duncan Jr., publisher of Duncan’s Radio Market Guide.

″There are always folks out there willing to take a shot,″ he said.


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