Is This The Breakout Year For FM Talk?

Pioneers are the people with arrows in their backs. Talk radio pioneer Walter Sabo told me more than 15 years ago that FM talk would become a hot format, but it was a tough sell. He suffered a lot of criticism and resistance because companies that owned big talk stations didn't want to cannibalize their successful AMs. After all, AM had been dead for years until it was born again with talk radio. Sabo's vision from back then has yet to come to full fruition -- but it may be just around the corner. Here's why:

There is a 50-50 chance radio will lose the performance fee issue this year or next and will have to pay some percentage of revenues to record labels. With the current state of radio, taking dollars off the top line may be economically impractical, especially if the rates are as far out of line as some anticipate. Music radio could become a shadow of its former self, and we may see a proliferation of FM-based talk formats. Though there will likely be multiple traditional talk outlets doing politics, I believe a new breed of FM talkers will succeed by offering variations on talk lifestyle formats with younger demographic targets.

Because many believe they see this coming, there will be companies, perhaps those with less successful music stations, that will want to establish a beachhead now, before everyone comes to the realization that music formats will be less profitable.

The generation that grew up with music on FM is now favoring talk programming, and the generation behind them is entering the age when talk becomes more interesting. Younger, hipper FM-talk presentations like "real radio" and new variations for younger audiences will be embraced in every market. And with PPM results showing how much listenership National Public Radio is taking, it's clear that a large chunk of all listening is talk-based. Commercial radio will begin to engage strategies to take those audiences away from NPR.

According to BIA, in 16 of the 20 top U.S. radio markets, lower-ranked AM talk formats generated more revenue than higher-ranked FM music formats. Meanwhile, Arbitron says the combined spoken-word formats -- news, talk, sports --  add up to the most most-listened-to format in the country, comprising 17.5 percent of radio listening.

But 80 percent of all radio listening takes place on FM. So imagine what could happen to talk stations on FM. If the total of all the talk in your market is a combined 10 share or less, there is an average of seven points to be gained by an FM talker.

Of course, the talk format has more available inventory before it's not considered annoying. Music stations may find they need to reduce inventory in order to compete. And in almost all markets where an FM talker competes with an AM talker, the FM is outperforming the AM. Typically, there are multiple choices for similar music formats, which further dilutes opportunity. But FM talk takes over in most of its markets rapidly, often within one or two rating periods.

For those of you who fear that putting on an FM talk station could cannibalize your AM talker, the evidence is to the contrary, especially if you're doing a talk format designed for FM. For instance, when Walter Sabo launched WTKS, it took no audience from traditional AM talker WDBO and shared no cume. Most of its cume is shared with the alternative rocker in the market and with WOCL and, formerly, with  WMMO. The same held true at NJ 101.5, which shared audience with classic rocker WAXQ-FM.

If I were a betting man, I'd bet that spoken word, which saved AM radio, may in fact be the format that soars on FM in every market. New iterations of talk will emerge as this soon-to-occur phenomenon takes radio by storm. Can you say "opportunity"?

Eric Rhoads

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Comments

[Lenny]

What happens when smaller labels don't go with the major labels bailout and they start sending out music with a sticker that says "royalty free music"?

[randi]

I agree 100%. FM talk will be the format of the future. what happens to AM, though?

[Brutus Pechovnik]

MOre rightwing nuts spouting Anti-American rants and republican talking points. I can't wait.

[Dustin Carlson]

Yea that’s why Free FM is still around.

Talk doesn't work unless it is news or politically driven. Considering the current state of the conservative/republican message, unless you have Hannity and Rush you won't perform with a Talk format, AM or FM.

As far as expanding talk beyond News or Politics, it didn't work. CBS tried it and has flipped most of those frequencies back to a music format. People don't just sit around the radio and listen anymore. It’s a multi-task medium, meaning you listen while you're doing something else. You can't multi-task and listen to talk attentively. Nobody is going to sit around a radio and listen to "real-radio" give me a break. Not when we have that in every other VISUAL format already.

We may need to adjust our business model if the performance royalty tax is enacted. But it won't be the death of music radio. Maybe we should start and industry-wide campaign to encourage our listeners to write their representatives to oppose the royalty tax. We have the extra inventory right now.

I think the writer of this article has a talk agenda. I encourage him to look at the larger picture and realize that FM isn't the future of Talk. Streaming is. Streaming already has performance royalty fees and it is the fastest growing radio medium right now, most stations being music driven.

[Brandon Rowe]

My words exactly Dustin. I couldn't agree more.

The talk format has the potential to be a ratings and billing success IF you have the talent, Hannity and Rush. Without them, it will be incredibly hard to have a successful run, regardless of AM or FM.

[Liz Wilde]

As an FM talker since 1991, I have been waiting for the pendulum to swing back in this direction for well over a decade. Pioneering P.D. Ron Valeri let the reins go on me several years pre- O and A... I enjoyed a wonderful career in FM talk during the Sabo/CBS/Evergreen pioneer era of this genre, then had to still be relevent during the automated, no soul, homogenization Clear Channel/Capstar cyber jock era. I am certain now, supported by insight from the likes Eric B. and other pioneers in the genre, that there is indeed hope for me yet, baby! My last FM talk show was performed in mid 2006, and I yearn for the opportunity to create this special brand of radio for lizteners again..We the people are starving for more than Fergie on hot rotation, with some hammy kid ramping it up shouting where tonight's big bash with dollar well drinks is....I have had it! Now if I could just find the right platform...hmmmm.

[Gavin G.]

FM Talk will be a failure - Name one nationwide FM personality that has become a national star since Howard Stern? Exactly, none. The only talk personalities that work are the political pundits. But right wing nuts and NPR dorks probably will do better on AM, that is where their core audience is- dweebs, rednecks, smarty-pants and others with no life- they all tend to listen to endless talk, probably to make up for the friends they lack in real life.

This whole thing is a hoax and is being pushed by ideologues on the far right and left of the political spectrum. These people have nothing better to do than write sorry a*s articles like the one above to make people think this will actually happen and work.

As an avid (FM MUSIC) radio listener, I worry that if these mindless morons succeed, I and probably millions of others will tune out and just stream music from our iphones, ipods or the internet. Why would the radio industry do this to itself when it already has the max listeners for people like Rush and Hannity? They already get big ratings on AM- why change a "good thing" Do they really think they will pick up listeners on FM??? They won't, instead thousands of current FM listeners will tune out because they miss their music and some of the AM dweebs wont follow them over. Even if they succeeded, there are only two political hosts that could get ratings on FM- what are you going to do with the rest of the time??? Its the most idiotic idea I've heard of in a long time. Who is running these radio companies- the former CEO of AIG? Wake up guys, before its too late...

[Ed T.]

Let's not forget the upswing of Internet Radio. Talk is cheap if it cannot reach a larger than life audience. We have been pounding away at Internet Radio since 2000, and the talkshows are by far the best return for the air / internet time. For my money I vote Internet Radio, and let AM and FM realize it is the 21st century, and to be in the black, they need to keep up with the times. Oh and btw - I have been in and out of AM / FM since the 1900's...1978 was my start year. I have seen it all, and at 50, I am doing what it takes to keep the music and word going. Not just in my neighborhood, but around the globe. Sometimes the truth hurts. I wish them well.

[Kevin W.]

I have worked in the talk format my entire life, in a top10 market. FM Talk will fail. NO TALK LISTENER CARES ABOUT FIDELITY. They care about content. The person who wrote this article has a talk agenda. I will put my entire nest egg on the line that 90% of FM Talk will be a failure. The other 10% will have talent that includes Hannity and Limbaugh and it of course will succeed. Anyone who thinks it will work with the talent is trying to make something work so they do not LOSE THEIR JOB. An earlier poster made an extremely valid point about Free FM being a failure. I will say that Free FM was not your typical talk format. BUT it was talk and it was on FM and it failed in 10+ different markets. If it was something the audience wanted, dont you think it would have worked in atleast 1 market????? Think about it.

[Kyle]

talk is talk, am or fm. its about the talent. if you have it, you'll be familiar with winning. if you dont, youll be familiar with losing.