AM radio can be saved with strong local content, online presence, say experts

The closure of two AM stations in Montreal last week represents a bleak future for the AM band in Canada, but industry experts say AM stations can survive by increasing their online content and refocusing on local news. On Jan. 29, Corus Entertainment shut down two of its AM radio stations, AM Info690 Montréal and AM940 Montreal's Greatest Hits. Corus said the stations were unprofitable. Both stations followed a talk radio format until 2008, when AM940 switched from an all-news format to all-music. But the change failed to save the station. “Corus was fairly patient with the all-news format,” Rod Francis, producer at CTVglobemedia’s The Team 990 in Montreal, told The Wire Report in a phone interview. “For sports radio, for example, there is always a different challenge. There are different ways for us to change within the sports radio medium. We can add broadcast rights, we can change shows around. If you are an all-news station, you report the news.” Francis said AM stations should look into expanding into the digital realm to survive. “What we have to do on the AM side is we have to make use of the tools we have available,” he said. “That means an instant connection with the audience, call-in features, web content, podcasting, posting segments online, posting debates online.” Making more content available online can also generate advertising revenue for AM stations. “For example, with our streaming, we don’t charge, but we do air commercials when you want to click into our podcast,” Francis said. “As we have noticed, the more traffic we have, the more appealing it is for sponsors.” BMO Capital Markets media analyst Tim Casey said Corus did all it could to save the stations. “In terms of talking to analysts, it’s been years, not months, that they have been trying to tinker with their portfolio stations in Quebec,” he said in a phone interview. “They just haven’t been able to crack the code there to make money. It’s not for lack of trying.” To generate profit, AM stations must produce more local content, Francis said. “My station in May of 2001. We had three hours of local programming a day. Our ratings were very clear--that just didn’t work early on,” he said. “We needed to get more local. So here we are in 2010, nine years later, and we are local from 6 a.m. until midnight. We have really evolved, and I think that has been the trend around the country. You want to stay local and you want to make that connection with the audience.” Corus was not available for an interview Monday, but in a Rue Frontenac news report Friday, Corus Québec vice president Mario Cecchini said Info690 drew 1.5 of Corus audience and AM940 drew 2.5 per cent. “AM is a lower profitability platform compared to FM,” Casey said. “It has been for 15 years. There is just less listeners there.” A Corus release last week said the company’s employees “worked to grow audience and revenues on both these stations while operating them as efficiently as possible.” Cecchini also said in last week’s release that the company puts “tremendous effort into trying to find the right format and content to grow our audience base and operate profitably, but after years of effort it is clear these AM stations are not viable.” “A talk radio format is more expensive to run than a music format because you have to pay entertaining on-air talent to provide the content,” Casey said. “And because of the lower sound quality, a lot of station formats won’t work on AM.” Casey said Canadians shouldn’t expect many more closures of AM stations. It is more likely they will migrate to the more profitable FM band as long as radio spectrum is available. Corus is returning the licences for the two AM stations to the CRTC. On Jan. 28, the CRTC denied an application from Corus-owned AM station CJOY in Guelph to switch to the FM band. The oldies music station could not make the move because of common ownership policy, which rules that one station cannot own more than two same-language stations on one frequency band in small markets. According to Statistics Canada, 15 AM radio stations closed or migrated to FM between 2007 and 2008 – the largest drop since stations began trimming resources in the early 1990s. Of the 159 Canadian AM stations on air in 2008, 58 per cent were profitable. AM stations generated 21 per cent of radio advertising revenue in 2008, down 14 per cent from 1998. But Casey suggested the more significant challenge for AM is not migration to FM and the closure of stations—it’s that new entrants are not applying for AM licences to replace them. “All anybody ever asks for now is FM stations, so the mix from AM to FM is going to continue to skew towards the FM.” The CRTC receives few applications for the AM spectrum, except in spectrum-saturated areas such as Toronto.

AM radio can be saved with strong local content, online presence, say experts

Broadcast | February 1, 2010

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