The author is a broadcast radio consultant.
As a former commercial radio station proprietor/general manager and now broadcast radio consultant, I might shed a little light on why so many stations are not doing more local programming and how to make local radio work.
The cost of local production is generally more expensive and labor intensive (scheduling and promotions); it requires audience participation (callers and guests) and therefore greater financial support (advertising and sponsorship) from the local businesses.
When I ran my AM station, most of my programming was produced in-house. Let me say, it was a job; but it also was very rewarding and resulted in a larger interactive and enthusiastic listening audience.
Most FM stations have an easier option in that they can still survive by simply playing music, but competitive digital technologies are forever increasing so I suspect that any station that relies simply on a music format might be looking at harder times as its audience dwindles.
Many AM stations are co-owned by sister FM stations, and these AM stations are seen as difficult to sell advertising on; so what these FM operators often do is use the AM as an outlet to bonus their FM advertisers with free advertising spots.
Result: Very little effort is put into some AM stations, as it's only thrown in as a bonus to close an FM advertising contract. Thus little effort goes to produce local programming on many AM stations.
This leaves a local radio programming void in many communities across the country.
AM and even low-power FM (LPFM) operators with properly located transmitter sites and a vision can succeed by addressing local community issues inexpensively with local volunteers derived from all walks of life from within the fiber of their local communities.
I did it on a 1,000 watt day / 65 watt night commercial AM station, and had an FM competitor concerned enough to try to sway my talent to jump ship. Good relevant programming results in listeners.
Forget importing talent from out-of-town, forget all those smooth voices without substance. Make the community your radio program; then the community will listen to your station, whether AM, FM or even LPFM.
Duplicate the music programming of the high-powered FM stations with an AM or LPFM and you will likely fail as they have you beat in coverage and overall options. The smart radio operators can often succeed. A community with a local programming void creates an opportunity for a new LPFM station or other savvy operator.