Opinion from Brad Smart

There’s a well-known saying amongst broadcast owners that brings them back to their senses whenever they’re faced with the dilemma of will they or won’t they buy a certain radio station.

That mantra goes – “You can never revive a trashed AM station.”

 But, Brisbane’s 4BH appears to be blowing up that myth and is now close to ‘walking on water.’

 Why, you ask?

Well, to fully understand this turnaround, we have to answer the question “what is a ‘trashed’ AM station?”

‘Trashed’ sure sounds harsh, but it’s a term commonly used in the industry when a station’s ratings are destroyed and it’s no longer a viable operation.

Here’s the playbook on how you trash an AM station.

Take a broadcaster who sees their AM ratings slowly dropping away and believes the format needs more than just a tweak. Suddenly, the light bulb goes on. They know what the market really wants – a format that’s completely different. This works even better if you have no real programming experience! Without finding out in advance what the audience actually wants, you then radically change your format, only to find your ratings fall off a cliff and you have no idea how to stop them. By the time it’s over, there’s no revenue and you’re just left with the power bill.

Six years ago, 4BH was trashed. Seriously trashed!

And, to make it worse, it wasn’t alone.

The newly-merged Fairfax-Macquarie Radio management team decided that they weren’t getting enough from 4BH, Magic in Melbourne and 2UE in Sydney. With these stations’ ratings dipping to lows of around threes, they believed the stations were costing them too much to run.

They decided to implement a radical change from their 60’s and 70’s Gold music formats on the Melbourne and Brisbane stations to soft talk. You may remember that new format was called ‘Talking Lifestyle.’

Before they rolled the new format out in early 2017, my alarm bells were ringing, so I warned of the likely consequences in my Radioinfo opinion piece “Magic is not a Lifestyle.” Unfortunately for Macquarie, many of my warnings at the time were right on target.

Audiences for Magic in Melbourne and 4BH in Brisbane dropped precipitously to around a 0.5 share, some of the lowest figures for Australian commercial radio stations ever.

Eventually, the penny dropped and Macquarie realised its mistake about 12 months later. But playing radio programmers was just too much fun, so, instead of admitting they were wrong and returning to a low-cost Gold music format, they compounded the problem with the introduction of Macquarie Sport.

This new format didn’t have much impact on 4BH or Magic, as there wasn’t much audience left to shed. However, it drove the only station the group still had with a reasonable market share, 2UE, into a tailspin. 2UE had escaped the initial ratings impact because Talking Lifestyle was not far removed from the station’s original talk format, so most of the audience had stayed around to sample. Macquarie Sport, though, was another issue.

By the end of this bold ‘experiment,’ Macquarie Radio was left with three trashed AMers, all with ratings of around a one share.

This was a serious situation, but it’s one that is not unique to Australia.

If you look at the United States, it’s easy to see that history is littered with the bones of trashed AM radio stations that were once glorious beacons of news and entertainment in their local communities. Mismanagement destroyed them to the point that they could never come back, especially when they were in competitive markets with FMers.

Of course, I’m not talking about every AM station.

There are still many high-functioning AM stations in the U.S. that carry top-rating Talk and Sports formats. A growing number also carries Mexican programming, which is now considered a mainstream format in some regions. Others are still operating successfully as music stations. Country music giant, WSM in Nashville, is a prime example. Clearly, these stations haven’t been ‘trashed’ and still attract substantial audiences.

However, in the U.S. there are now hundreds, if not thousands of former heritage AM stations that have been thrown on the scrapheap and are now relegated to carry niche formats, like ethnic or religious programming. The alternative facing some of these stations is to simply turn off the lights and ‘go dark.’

It’s always possible that we could see a similar situation here, but it would be on a far smaller scale. Australia has around 100 commercial AM radio stations, whereas America, at one stage, had over 4500.

But, back to 4BH.

4BH has done a phoenix. Since Survey 6 in September last year, it has risen rapidly from the ashes.

This move flies in the face of all the established industry wisdom that dead AMers are supposed to stay, well, dead.

So, how did 4BH perform this Lazarus act? It came from the stars magically aligning for ACE Radio.

I initially believed that ACE was biting off more than it could chew when, after buying 3MP in Melbourne, it then leased the three under-performing capital city AM stations from Nine Entertainment. From the outset, I assessed that if Nine had thought they could make more money by running those stations themselves, they would have hung onto them.

But, the deal was done.

ACE management drew on their experience and sensibly continued with a Gold music format, similar to the one that Nine had implemented when it finally took control of the Macquarie stations.

This was the smartest thing they could do.

Despite this, after a year of ACE operation, Magic in Melbourne and 2UE in Sydney are still swirling around the drain at the low end of the ratings hoping to get some traction. It was always going to be a tough gig.

Yet, when it came to Brisbane, ACE appears to have been ‘kissed by a fairy’ and it was all about timing.

Each day, in Melbourne and Sydney, they have to battle the dominance of Smooth FM for a share of that older audience, that once belonged to their stations. Smooth took a large slice of those disaffected Macquarie listeners who deserted them six years ago. That’s certainly not ACE’s fault, but it is their problem.

While ACE’s music is a bit older than Smooth’s, that segment of the audience, who might like some of those older songs, are now quite welded on to the quality of FM sound, and they’ll be reluctant to move across until they’re given a good reason to change.

That’s a battle that ACE has got to keep fighting on a daily basis. It’s going to be a long haul.

In Brisbane, there’s no Smooth FM on the analog dial, only on DAB+.

While Smooth Brisbane is the highest listened-to format on digital by cume, there’s still a large cohort of people who love Gold, and want to listen on analogue radio.

Then, there was 4KQ. Talk about the stars aligning!

When Craig Hutchison’s SEN bought 4KQ and changed its format to Sport, there was a whole audience of disenfranchised Gold listeners up for grabs.

This was just at the time that ACE was becoming established in Brisbane and many of those old 4KQ listeners were happy to choose AM over digital. It’s the way they were used to listening.

Suddenly, 4BH went from starting to shake off its ‘trashed’ AM status to a role model of AM revitalisation.

With a share in 2023’s Survey 1 of 8.0, which it has pretty well held for four surveys now, it shouldn’t be hard to see Brisbane turning a healthy profit and become the keystone of ACE’s metropolitan operations.

When you look at the ratings for Brisbane, you see 4BH running on a relatively low-cost music format outperforming its former sister station, 4BC, that is continuing to operate a very expensive talk format. I know which station I’d rather own!

Brisbane may have just been incredible luck for ACE Radio. But, when luck comes along, you have to be in a position to grab it with both hands, because in Radio, those wins can be few and far between.

Now ACE will have to try to replicate Brisbane’s success in Sydney and Melbourne.

That’s a tough call and it’s certainly going to be a harder grind in those bigger cities, but having turned Brisbane’s ‘trashed’ AM station around must have given ACE some much-needed confidence and some breathing space.

I believe their best, and probably only strategy will be to work on incremental increases for Magic and 2UE, while making sure they protect the gains they’ve made at 4BH. It’s going to be a juggling act.

While Magic and 2UE audiences were certainly trashed by ill-advised formats in the past, with 4BH now kicking goals, ACE has the opportunity to prove how savvy they are as broadcasters by bringing the Sydney and Melbourne stations back to their former glory.

About the Author

Brad Smart previously owned and operated the Smart Radio Network through regional Queensland.

He sold his stations to the then Macquarie Radio Network.

He has been a journalist, broadcaster and film producer for over 30 years.

Brad is available as a freelance writer, voiceover talent and consultant.

Brad’s articles and podcasts are also available through his website www.bradsmart.com.au