Is AM Radio Still Relevant?
     

WASHINGTON The golden age of AM radio it's not. From clear-channel powerhouses to small rural stations that still feature a grain report, the news for owners on the U.S. AM radio band is fairly grim.

The economic recession has exerted a severe financial toll on many AM licensees, in a few cases forcing owners to take the drastic step of turning their stations off when they can't pay their bills and leading others to trim staff to minimum levels.

The once-dominant method of broadcasting is struggling to remain viable in the 21st century, in the eyes of many observers.

This article is the first in a series exploring whether the AM band is still relevant, its challenges, how its business models are changing and what might happen to it.

The challenges facing AM do not mean efforts to improve stations have ceased. Shown are copper radials and ATU cabinet at a new site for KGLB, Glencoe, Minn., west of Minneapolis. Hatfield & Dawson's Tom Gorton tuned up the station on 1310 kHz using 'moment method' computer modeling, as newly allowed under the rules. Photo by Tom Gorton
Stations on the FM band, certainly, also face obstacles. But commercial FMs generally are seen as the most lucrative broadcast holdings; further, their owners hope to benefit from efforts to put FM in cell phones and other portable media devices.

Meanwhile, experts say, AM stations likely will continue to face severe roadblocks regardless of an economic recovery.

Even the Federal Communications Commission acknowledges that many licensees are in a battle for survival.

When it recently adopted a rulemaking to allow AM broadcasters to use fill-in FM translators, the commission stated in its report that "the combination of higher-fidelity alternatives to AM radio and increased interference to AM radio have caused an erosion of the AM radio audience and loss of young listeners to other programming outlets.

"The story of AM radio over the last 50 years has been a transition from being a dominant form of radio entertainment for all ages to being almost non-existent to the youngest demographic groups," the commission stated.

'Disturbing'

The latest quarterly data available from the FCC showed that there were 4,786 AM stations in the United States at the end of 2008. There were almost exactly the same number a decade ago and the totals have varied little in the interim.

An FCC database that lists stations that have been dark for more than two months shows that the number of silent AM stations has hovered near 80 since the beginning of 2009. A March story in Radio World indicated that the pace of stations powering down had appeared to increase last fall through the beginning of this year (radioworld.com, keyword "Are More Stations Going Silent?").

Other broad statistics suggest the pressure on AMs.

Rebuilding the WMVP array in Chicago. The 50 kW station on 1000 kHz is owned by ESPN, part of Disney. It had three 500-foot self-supporting towers in a line; Glen Clark & Associates redesigned the array as a 'dog-leg' of guyed towers to help fill nulls. Photos by Glen Clark & Associates
Until 1978, AM claimed more than half of all hours spent listening to radio, according to FCC data. Recent figures show that AM's share of listening hours has dropped to 17 percent, in part because of fundamental problems of channel congestion, interference and low fidelity.

But perhaps most disturbing is the drop in AM listenership among youth, the FCC said.

Among persons 12–24, AM accounts for only 4 percent of radio listening. Among persons ages 25–34, AM listening rises to only 9 percent.

And these figures only measure decline in listening relative to FM; they do not address the perception of flight from radio to other media among young people.

Data from BIA Financial Network show overall downward pressure on revenue at AM stations. Annual revenue for commercial AMs in rated markets was about $2.9 billion in 2004 but dropped 14.1 percent to approximately $2.4 billion for 2008.

"The majority of that revenue is for your legacy AMs and AM powerhouses," said Mark Fratrik, vice president of BIAfn. "It's harder to determine what is happening at many of the small markets."

FM revenue over that five-year period also fell, though only by 11.1 percent, from approximately $10.5 billion to $9.4 billion.

Several AM station owners acknowledged — in public comments filed in the FCC's FM translators proceeding — that their competitive edge has been dulled significantly.

"The economics of our current operation are critical and have been for some time," wrote Roy Henderson, licensee of KNUZ(AM) in Bellville, Texas. "It is essential that relief and a more level playing field competitively be permitted at this crucial time."

John Giannettino, licensee of KCPS(AM) in Burlington, Iowa, wrote, "AM radio needs every advantage to just survive and the small step (of allowing FM translators) is the very least you could afford us."

Opinions vary about the future of AM broadcasting in the United States, but most agree that technical and operating challenges will continue and further station attrition is likely.

Rebuilding the WMVP array in Chicago. The 50 kW station on 1000 kHz is owned by ESPN, part of Disney. It had three 500-foot self-supporting towers in a line; Glen Clark & Associates redesigned the array as a 'dog-leg' of guyed towers to help fill nulls. Photos by Glen Clark & Associates
Several prominent consulting broadcast engineers say they expect "zero-growth mode" for AM broadcasters for the foreseeable future.

Lack of capital

"I do not expect AM to bounce back," said Glen Clark, president of Glen Clark & Associates, who remains active in radio consulting. "It had a great run over more than 80 years, but I think AM is basically done. It's already getting to the point where people are just turning off their stations."

Clark said it appears many AM operators are doing their best simply to maintain facilities due to a lack of capital funds.

"The drop in value of some of these AM stations is stunning. If the market continues to drop, more people will take their towers down and sell the real estate to developers. AM arrays take up a lot of acreage."

Station broker Glenn Serafin, president of Serafin Bros. Inc., told Radio World that the very limited availability of credit combined with a reduction in ad revenues has combined to cause a severe reduction in AM radio station values.

"The deal market for all stations is the worst we have ever seen it," Serafin said. "There is some activity on the AM side only because prices are cheap, but borrowing remains difficult to near impossible."

Fratrik of BIA said there's so little activity in the AM transactions market that it's hard to quantify a drop in values. AMs that are sold are usually parts of clusters, making it hard to determine if values for the AMs are up or down, he said.

Ben Dawson, managing partner of Hatfield & Dawson Consulting Engineers, said he would not be surprised to see "quite a bit AM attrition" over the next decade.

"However, I think there will still be some successful stations if they have substantial coverage and reasonable signals," he said.

MMTC and Others Hope to Rescue AM Radio
Several groups are pitching the Federal Communications Commission with ideas for repurposing TV Channels 5 and 6 following the DTV conversion.

The Minority Media & Telecommunications Council proposes the establishment of an AM transition Federal Advisory Committee to make recommendations for the use of those channels. The group wants the FCC to expand the FM band downward and give current AM licensees the opportunity to move to the FM band.

The MMTC also seeks the elimination of the nighttime coverage rule for AM licensees.

Its plan contains elements similar to ones proposed a year ago by a group of prominent consulting broadcast engineers. The Broadcast Maximization Committee proposed a long-term migration plan for most AM broadcasters to move to an expanded FM band, which would include frequencies 76.1 to 87.7 MHz in the FM Expanded Band, dubbed "EXB."

In addition, the BMC proposed that the commission relocate LPFMs to the EXB while allowing clear-channel AMs to remain on the AM band.

"We believe with a new chairman in place at the FCC we will see significant movement on this issue," said Jack Mullaney, president of Mullaney Engineering Inc. and a founding member of the Broadcast Maximization Committee.

The FCC amended its rules to allow AM-FM cross-service translating in hopes of helping financially strapped AM broadcasters. And since late 2008 the commission has allowed AM broadcasters to verify the performance of their AM directional antennas by modern computerized methods known as method of moments computer modeling.

The commission in 1997 expanded the AM dial from 1610 kHz to 1700 kHz in hopes of easing band congestion.

— Randy J. Stine

AM broadcasters tell Dawson they are in survival mode and are spending money only on necessary projects.

"In fact, we only have one project in the active status for a substantial facility improvement simply to improve coverage. All of the other projects we are doing involve some motivating factor."

Dawson said he expects to see the FCC explore more cross-service options for struggling AMs similar to what is going on in Canada, where many AM stations have been moving to the FM band.

AM exclusion

The exclusion of AM from discussions about adding broadcast radio reception to cellular phones has been obvious, said Stan Salek, senior engineer at Hammett & Edison Inc. He said this reflects the technical challenge of incorporating a practical AM receiving antenna into such devices.

"The headphone cord itself works well as an FM antenna (for those applications). I've also noticed new armband portable IBOC receivers in stores that lack AM reception," Salek said.

At least one consulting broadcast engineer thinks the FCC or Congress should step in and mandate that AM be included in small devices.

"There should be a requirement that any radio device made today for distribution in the U.S. must include both an AM and FM receiver," said Jack Mullaney, president of Mullaney Engineering Inc.

But despite the equipment snubs, AM broadcasting will remain a viable industry in some form, according to believers.

"This is not the first time people have claimed AM is dead or dying," Salek said.

The National Association of Broadcasters doesn't buy the argument that AM radio is being left behind, said Dennis Wharton, NAB executive vice president of communications.

"These are difficult times, no doubt. But let's not forget the tens of millions of Americans listening to AM radio everyday," Wharton said.

Though AM is almost non-existent to the youngest demographic groups, NAB believes AM-FM cross-service translating as well as HD Radio, which will provide broadcasters a chance to improve their sound quality, will help the band, Wharton said.

He blamed most of AM's difficulties on the slumping ad market, calling it "the worst advertising recession since the Great Depression."

Coming up in this series: What successful owners say, the future of AM HD Radio and trends in AM formatting.


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Comment List:

Go to videoamstereo.com and see what you only could here on am radio. not TV but video enhanced AM radio. the marriage of SLOW SCAN and ISB-STEREO AM RADIO(video am stereo) VIDEOAMSTEREO.COM
By videoamstereo on 9/22/2009
If you want to hear AM done correctly try KMZQ AM 670 out of Las Vegas.. No crap, just good stuff to listen to.
By Ron Payne on 9/8/2009
So the solution is to go digital. Of course - why didn't I think of that? Let's trash existing AM radio and digitize it to save it. How pathetic.
By rfburns on 10/3/2009
They chopping my posts, sorry. Yes, I think that the old cb band should be used for those who want to learn broading, engineering, and about AM first hand with their own station. It would benefit the public more than the incumbent spectrum users. Class D citizens radio service usage has ped off to nearly nothing. There is no reason why some broading can't coexist with the few remaining users.
By Jimmy on 11/2/2009
I think that as a way of allowing low power broading and interesting people in amplitude modulation, engineering, and radio broading we need to have some spectrum where people can play. Hear me out before you comment on this one. I think that the class D citizens radio service should allow broading. It is not used very much like it used to be. It uses amplitude modulation. The spectrum is being wasted with it's current users and lack of users. The allocation from 26.965 to 27.405 is a place where people should be able to setup a station and try their hand at broading. There needs to be some restrictions. There isn't enough channels to allow everyone to broad 24/7. I recommend that some sort of reasonably easy to obtain license be required and a test be given to insure compliance with the rules. Power should be restricted to approximately 25 watts. The mode of broad can be either single sideband supressed carrier or both sidebands and full carrier. Normal AM as we know it. Stations should be coordinated to minimize interference. Antenna height should not have a fixed limit. I suggest that 10 of the 40 class D frequencies in the beginning be used for broading. After that channels above and below the class D citizens radio service can be used as well as more of the class D channels. Due to the low power and the fact that the 26-28 mHz band is the lawless part of the radio spectrum. When the MUF has risen above 27 mHz and it becomes a world wide band, I do not see any interference issues with any other radio services. Stations broading in this band will find that they will suffer interference during band openings but what can you do? At least they have a place to setup their broad station and learn their trade as well as provide a service to the community. Another advantage to this plan is that there are a lot of receivers out there that people can use. Old CB radios, short w
By Jimmy on 11/2/2009
Let's look at AM radio's advantages. Medium wave is a good place to be for nighttime regional coverage. On my way home I tuned across the medium wave BC band and was listening to WINS, WABC, and Bloomberg from NYC. I also listened to the Spirit of New England for a minute or two as well. All of those stations were very strong in southern New Hampshire and had good audio quality for AM. So, at night you get good distance if you're a station that is being protected out to 750 miles. The problem that plagues AM is still the audio quality. Listening to Bloomberg the audio quality was good but you still had to deal with selective fading because the signal was skywave. Selective fading is like running a notch across the passband. The signal sounds funny and can be difficult to understand for a few seconds, sounding like it's off frequency. I found the programming on Bloomberg to be interesting but I don't understand why I need to know the traffic in NYC when I'm several states away. Why do some stations merit protection and high power limits when others don't? Have we thought that issue through? I tuned into Bloomberg on my Yaesu FT1000D and unfortunately there was some interference making it unpleasant to listen too. I didn't change antennas but I found that listening to only the upper sideband part of the signal made it sound fine. I was tempted to use the sub receiver to simultaneously listen to the lower sideband and adjust them both for the same level but not tonite. Another advantage of medium wave is that because of the distance, I was hearing something in the car on most of the 10 kHz spaced channels. Lot of stuff to listen to. Narrow band AM is not a good mode for music but is good for voice. In areas where there is little choice on the FM dial, at least on AM you would still have quite a few stations to choose from at night. So, what do we do? We need an additional broad band for small local stations. While I had
By Jimmy on 11/2/2009
Interesting perspectivehard for me (born 1960s) to imagine a world without news, talk, sports, old-time radio shows, religious programs, non-English programming and other assorted formats on AM radio. I wrote a few months ago about whether radio (terrestrial in general) is still good for anything on the I STILL LOVE RADIO blog: http://istillloveradio.blogspot.com/2009/07/is-radio-still-good-for-anything.html I hadn't thought too much before about AM vs. FM, but will do so now. Thanks for writing about this great topic!
By Feliks Banel on 10/2/2009
What is irrelevant are stories like this that have little real information and exist only to push an agenda. In this case HD radio.
By Bob Ervin on 10/3/2009
We've all heard - "It's the economy, stupid". Well, in this case, "it's not the mode stupid, it's the content"
By Anonymous on 10/3/2009
Radio itself is irrelevant in the 21st Century - and becoming moreso by the day. It's just a medium owned and monopolized by corporations who use it to distribute product. I am 42 and grew up on radio. My first memories of music come from AM radio in the 70's, then moved on to FM programming that expanded my musical preferences and introduced me to some lifechanging experiences - all sitting in my bedroom. But how anyone can tollerate today's absolutely uncreative, commercial infested, dull nonsense which is propogated on almost every FM station in this country is beyond me entirely. If you want to save radio - AM or FM - abolish corporate ownership, return the stations to the communities in which they serve, and start offering locally oriented programming. Kids can download 1500 songs to an iPod and shuffle them - commercial free. Why does anyone need a radio station to do that for them? Once the Boomers are gone, radio as we know it today will be dead. Good riddence.
By Anonymous on 9/7/2009
FCC packing the band with too many stations is the problem. All stations that were not on the air at night on January 1, 1970 should be daytime only. A VHF digital band is needed so medium wave stations can move to a better band.
By Anonymous on 9/1/2009
Radio's problems are with the programming, not the tramsmission systems. Analog works just fine and DRM suffers just like IBOC.
By Anonymous on 8/31/2009
The FCC should allow "AM" stations to transmit digital only signals at least on a limited basis. The stations would find out how far the signals would go and how much audience they would gain or lose.
By Anonymous on 9/1/2009
How dare any industry impose a tax on people who want to buy something other than their service! When I buy a cell phone, I want to talk, I dont want to pay for a radio I will never use. NO, NO, NO!! Whats next? the NAB going to request the FCC incorporate an AM radio in the left shoe and an FM radio in the right when you buy a pair of shoes? GET OVER IT.
By Anonymous on 9/1/2009
All I can find on the AM dial during the typical day are farm reports, and boring talk radio crap aimed at 50+ conservative males. All the FM around here are country, classic rock from the 70's, or "Adult Hits" aimed at the 35+ audience. Now, why are you loosing young listeners? You have spent YEARS teaching them that radio is crap. It's not the technology, it's the programming. Now that they all have mp3 players, it may be too late for you to get them back. ...and IBOC is a solution to a problem that does not exists, and is now becoming a problem in itself.
By Anonymous on 8/31/2009
"Though AM is almost non-existent to the youngest demographic groups, NAB believes AM-FM cross-service translating as well as HD Radio, which will provide broaders a chance to improve their sound quality, will help the band, Wharton said." Another bullshit promotional from RW for IBOC - should have known. Hate to tell you, but FM isn't doing much better, and IBOC is causing more problems than it is attempting to solve.
By Anonymous on 8/30/2009
Nothing is as it once was. So what? It doesn't make AM irrelevant Sounds like this piece and the others to come are written to push AM HD. Most of this is total B.S. While AM has a limited audience, most are still making enough money to exist and continue to fill a consumer need. This is a ploy to bolster iBiquity Digital Corporation which is really offensive. I'm confident you'll retort by saying otherwise, but Randy J. Stine you should be ashamed of yourself. Are you paid by Clear Channel or iBiquity?
By Anonymous on 10/3/2009
If the government mandates the inclusion of an AM receiver in small devices then the makers of those devices will include a poo-poo ca-ca cheap radio that will drive listeners away from AM radio even more.
By Anonymous on 9/24/2009

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