Tag Archives: AM

The Birth of Radio in America

Early Radio ListeningWhen World War I ended, it didn’t go unnoticed what a powerful role radio communication had played in the outcome. Led by the General Electric Company, the Radio Corporation of America (RCA) was formed in October of 1919. With guidance from the federal government, RCA brought together GE, Westinghouse, and AT&T to develop the radio broadcasting industry in the United States.

In the early 1920s, no one knew what radio might become. RCA would be the entity to coordinate the manufacturing and sales of all radio receivers. They held all the patents from GE, Westinghouse and AT&T and it was RCA that would authorize others to use these patents to produce radio receivers, as well as collect and distribute the royalties to the patent owners. GE, Westinghouse and AT&T could manufacture equipment for their own use, as well as build and operate their own radio stations.

The Interstate Commerce Commission

Initially, the regulation of radio broadcasting fell under the jurisdiction of the Interstate Commerce Commission (ICC). In 1920, interest in broadcasting ranged from amateurs to experimenters and businesses. Some talked, some played music, and some began broadcasting news of local interest and weather reports. In an effort to bring some order to what had become a chaotic broadcasting environment, the ICC decided to place amateur broadcasters into the less desirable air space, below 200-meters, as well as restrict the type of broadcasting they could air. Amateur broadcasters had to agree that their radio stations could no longer air weather or market reports, music concerts, entertainment, speeches, news or other similar information. The ICC would begin to issue a new broadcast license on the 360-meter band for radio broadcasters that would be licensed to provide such services. All the members of RCA, including RCA itself, would begin to build radio stations. Westinghouse would be the first to establish one of these new radio stations, with their own inhouse amateur radio enthusiast Dr. Frank Conrad, and what became KDKA in Pittsburgh on November 2, 1920. Westinghouse followed this station with WBZ in Springfield, Massachusetts and WJZ in Newark, New Jersey.

However, Westinghouse management quickly realized that merely providing a superior broadcast service, which would create demand by the public to buy the new radio receivers they manufactured, would be futile if their broadcasts were harassed and interrupted by uncontrolled amateurs disrupting their ability to be heard.

Quality vs. Quantity

The ICC now had a new problem on its hands. Broadcasters interfering with other broadcasters, and what kind of culture should America’s new, growing middle class, be hearing through their radio sets? Since the decision had been made to not have radio be government controlled in the United States, broadcasters said they needed the government to regulate radio in order to help establish order and control.

Westinghouse proposed a solution to the ICC, to create two classes of commercial radio service.

Broadcasters on the current 360-meter band would become Class A broadcasters and a new service on the 400-meter band would be reserved for Class B broadcasters.

In order to qualify as a Class B broadcaster and receive higher power authority (500 to 1,000 watts), the licensee would need to never play phonograph records on the air, or any other kind of recorded material. Class B broadcasters would only air live talent and performances. Such a requirement would insure the public was receiving radio entertainment that was unique and original and not available on any other radio station.

The new license would also mean that only wealthier and more established organizations would be able to afford to operate radio stations under these new conditions.

Westinghouse’s concept, having government and business working together, was a way to “improve” radio broadcasting through restricting it to “responsible” parties without stepping on anyone’s First Amendment rights as to what a radio broadcast should consist of.

The Radio Act of 1927

This act laid the foundation for what radio broadcasting in America would be for the next several decades. The first being that radio broadcasting would not be open to everyone, but restricted based on quality. The feeling being that Americans would be better served by a few quality broadcast radio stations, rather than a plethora of mediocre ones. The new act also introduced the hard to define concept of “operating in the public interest.”

Radio, unlike newspapers or the movies, was to become a government regulated medium, with decisions about quality and public interest being made through an alliance of government and private interests.

And it was with the Radio Act of 1927, that America decided that radio broadcasting would be a commercial medium operated in private hands. Radio would support itself through the selling of advertising.

Today’s Radio Marketplace

From June 1927, when 705 commercial radio stations were on-the-air in America (all on the AM band and most with transmitter power of under 1,000-watts) to June 2019, we now have 25,819 radio stations (21,209 FM / 4,610 AM) with transmitter power up to 100,000-watts on the FM band and 50,000-watts on the AM band.

The concept of quality over quantity is certainly no longer the guiding principle.

The Ad Pie

As I read about how radio revenues are doing, I’m struck that both public and private radio broadcasting companies are reporting that local advertising revenue is dismal for Q2. However, major radio stations that enjoy eating from the national trough, saw this category of advertising as their only bright spot for radio ad revenue.

While digital revenue is hoped to be a new area to grow advertising revenues for radio broadcasters, the reality is that Facebook, Google and Amazon are already gobbling up about 90% of those dollars, so how fertile is this area for broadcast radio?

Reading comments being made about radio advertising conditions, I was struck by what Beth Neuhoff, CEO of Neuhoff Communications had to say when Radio Ink asked her, “what are local advertisers saying about the economy?” She responded by saying: “Local advertisers seem less focused on the economy and more concerned about over-saturation of the competitive landscape.”

It’s something that I believe the radio industry should be just as concerned about when it comes to OTA (over the air) broadcasting.

Gone are the days when putting another broadcast station on-the-air is a license to print money. People who aren’t use to quality, always will chase quantity.

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Dream Along With Me…………………. (My Plan to Save AM Radio)

26I’ve been reading all the opinions about the FCC’s proposal to change the rules regarding America’s 77 Class A (formerly known as clear channel) licensed radio stations. Supposedly, all being done to “revitalize” the AM broadcast band. Like giving AM radio stations an FM translator does nothing to revitalize AM radio listening, neither – in my honest opinion – does this bright idea either.

The FCC’s plan is to allow AM radio stations to retain their daytime power at night, politically correct though it may be the laws of physics play by no such rules. And we don’t have to wonder about the consequences, because to some extent this type of thing has already been initiated with 1,000/250 licensed stations maintaining a full 1,000 watts day and night, and it didn’t work.

First, I don’t have a dog in this fight. So what I’m about to say is not to benefit one side or another. These are my own opinions.

My first GM job was running a daytime 1,000 watt radio station with no pre-sunrise or post-sunset authorization. We signed on with local sunrise (7:15am in the winter) and signed off at local sunset (4:15pm in the winter). I was at my desk before my radio station went on the air about half the year and I remember writing commercial copy for an advertiser I’d sold that day as my radio station was playing the Star Bangle Banner to sign-off for the day.

When that carrier was turned off, WBT from Charlotte, NC would come booming in.

I know the pain of being a small radio operator.

Today, such a radio station has probably obtained a 250-watt FM translator and has its programming appearing on local FM radios in addition to their AM signal. Ever listen to any of these radio stations? I have, when I take road trips. I’m listening to their AM signal but they only identify themselves by their FM dial position.

The History of Clear Channel Signal Radio Stations

The clear channel signal designation goes back to the Radio Act of 1927 and the creation of the Federal Radio Commission (FRC). The FRC immediately went about creating a number of national “clear channel” AM radio stations that would be superior in quality broadcast content and with enough power to be heard over an entire region. Their signal would be on a frequency that would have no competition. Lower power AM radio stations would be relegated to a complex system of frequency sharing.

The FRC was later replaced by the Communications Act of 1934 and the establishment of the Federal Communications Commission (FCC). The FCC was put in place to be the “cops” of the people’s airwaves and protect those airwaves from being misused or interfered with in any way.

Less Is More

The FRC operated under the belief that it would be better for America to have fewer radio stations of higher quality than lots of radio stations that were mediocre.

The FCC, mainly through deregulation, has lost that mission. For broadcasters it meant less oversight – which they didn’t mind – but it also meant that the FCC wasn’t looking out for their interests when it came to policing things that might interfere with the AM broadcast band. You see the FCC regulates (or not) those things that now are the bane of AM radio. Things that, like Mother Nature’s lightning, interfere with AM radio signals – light bulbs, power lines, computers etc.

I Grew Up On AM Radio

By the way, it was lightning’s interference with AM radio that was the impetus for Edwin Howard Armstrong to invent frequency modulation or FM radio. FM is how the audio gets to your TV set.

It was AM radio that I grew up on. It was AM radio that attracted me to a radio career that spanned over forty years. And I believe that AM radio should be preserved, because it is low tech and is the signal most likely to be around after some event that takes out everything digital – which today is just about everything.

However, I also ran a news/talk AM radio station once that people depended on in emergencies and that was the problem. They didn’t think about it any other time. So I’m very aware that to be viable, a radio station needs to program something that people want/need even when there’s no emergency affecting their lives.

How To Save AM Radio

So here’s my “bright idea” to save AM radio. Eliminate Class B, C and D AM radio stations, sign these signals off and let them make their current FM translators their whole radio station. First, they will be able to liquidate the land their AM antenna farm sits on and at the same time reduce their operational costs. They already are identifying by their FM translator’s dial position and local residents have most likely made the switch.

For America’s Class A (formerly known as clear channel class stations), I proposed a HUGE power increase, like to 250,000, 500,000, 750,000 or a million watts for these current 77 stations. I would also propose a study be done of AM radio stations, not currently licensed as Class A being reviewed for such a designation, but with a power of say only 50,000 or 100,000 watts to deal with specific geographies and locations of America.

I’m Not a Radio Engineer (But I’ve Stayed at a Holiday Inn)

There’s simply no way to put the “noise genie” back in the bottle that causes AM radio such grief. My hope would be (and you radio engineers feel free to weigh in here and set me straight) is that by removing a lot of the AM radio clutter caused by other AM radio stations and increasing the power of the few remaining stations, we might cause these stations to be really listenable in more (most?) situations.

I would also regulate these new high power radio stations in the same way that the FRC proposed when they established them. These would be stations that would create original programming. They would be operated by entities that would operate in the public interest, convenience and necessity. They would be a low tech backup in a high tech world. They would have the scarcity of competition that should make them economically viable because of their attractiveness to advertisers. They would tie the country together in the event of a disaster. If a local dominant AM radio station was taken out by a disaster, the other high power stations, not similarly affected would be able to be heard and assist the affected area.

This situation happened years ago in Kentucky when floods put Louisville under water and Nashville’s 650AM-WSM stepped in to provide residents with the information they needed.

AM radio that provides solid information and yes, even entertainment, would get listeners. But even more importantly, it would provide America with a life-line in times of emergencies that digital communications has been shown to fail.

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What if…

I had the opportunity to sit in on a webinar on “The Creative Economy” that is considered to be the direction the future of business is headed in compared to the traditional business methods of the past. What is meant by the term “The Creative Economy?” It’s one where business revolves around the customer versus the past where the customer revolved around the business.

The Creative Economy also breaks from tradition in the sense that it means the goal of a company is no longer about making money for the stakeholders but about delighting customers. But, you ask, isn’t “maximizing shareholder value” the mantra of Wall Street? Good question. Listen to what these CEOs have to say about that mantra:

            Jack Welch former CEO of GE: “the dumbest idea in the world”

            Vinci Group Chairman/CEO Xavier Hulliard: “totally idiotic”

            Paul Polman, CEO of Unilever: (has denounced) “the cult of shareholder value”

            Marc Benioff, CEO of Salesforce declared this still-pervasive business theory “wrong”

I guess it’s quickly losing favor with those who should know.

The Internet and “The Cloud” are enabling “The Creative Economy.”

Which brings me back to my initial question, “What if…”. What if radio stations were supposed to be small operations? What if the radio industry wasn’t meant to scale?

When I entered the radio business, companies were limited in the total number of radio stations they could own; in the entire USA. It was known as the 7-7-7 rule. A single company could own not more than 7 AM, 7 FM and 7 TV stations in all of America.

What this created was competition between owners of radio stations in a market. Each station was a team of people working as hard as they could to win the audience in that market. The focus was all about the listener or the viewer. Win the most listeners/viewers and advertisers would soon follow to showcase their wares on that radio or TV station’s airwaves.

Hearing “The Creative Economy” described on this webinar was like radio déjà vu.

In 1996, President William Jefferson Clinton signed the Telcom Act of 1996 into law. That was the moment that the “land rush” for broadcast properties began and Wall Street became heavily invested in the radio industry. Wall Street would bring its “maximize shareholder value” mantra to broadcasting.

This point was really brought home to me in 1999 when my stations were sold to a large radio consolidator. The head of this “big box” radio operator told us that we needed to “sell, sell, sell” that it was all about making money for the company and “maximizing shareholder value.”

This “pump up the troops” speech left me cold. I was brought up in a radio world that was about operating “in the public interest, convenience and/or necessity.” I was brought up in a world where if we treated the members of our team well, our team focused on delighting the listener, the advertisers would flock to our station and the owners would be rewarded for doing everything right. That view of life served me well my entire radio career.

Needless to say, I opted not to remain with this new company.

However, I would find myself playing “musical chairs” going forward as it was getting impossible to not be working for a company that hadn’t adopted this modus operandi.

Steve Denning, who writes for Forbes, lead this webinar and pointed out that economics was driving the change for companies worldwide. He told us that no company is doing it all right. Companies like Apple, Amazon, Google and Salesforce are moving in the right direction. In fact, Tim Cook is better at navigating the change to this style of management than Steve Jobs ever was and it no doubt is contributing to Apple being the most valuable company in the world. To give you an example of what it means to focus on the customer first, consider Tim Cook telling an investor in Apple this:

“If you want me to do things only for ROI reasons, you should get out of this stock.”

That was kind of radio world I grew up in. We always tried to do the right thing for our employees, our listeners, our advertisers and the money would follow.

I’m encouraged that radio people who sold out when Wall Street was buying, are now getting back into the radio business with that same ethic, spirit and sense of innovation that seduced me into a four decade long radio career. They understand the concept of “The Creative Economy” because that’s how they built their radio companies the first time around. They also understand that today, radio is more of a concept of operation than a method of delivery.

I’m excited to be working with the next generation of radio broadcasters at my university knowing that radio’s future has never been brighter.

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