Regional Radio: Why is there a Bullseye on its Back?

Opinion from Brad Smart

One of the biggest gripes I see popping up on the radio forums on social media is about the way regional commercial radio operators now run their stations and the lack of announcers.
They’ve certainly become a target.
I guess most of these comments are posted by people who have had bad experiences along the way with some of those regional operators.
Many of the posts are quite vicious and vindictive, but in some cases, I’m sure the writers think they’re more than justified.
Unfortunately, like computer jobs going to India, there’s a reality that has to be faced when it comes to creative jobs in radio and a lot of those expectations are steeped in radio history.
In the early seventies, when I started at 3TR in Sale in the old fibro house in Stawell Street, announcers manned the turntables from five in the morning until midnight.
The technology of the day wouldn’t allow anything else.
Being forced into ‘live’ programming meant there were plenty of jobs for announcers, and many roles for sales people.
3TR also had technical staff, as did most regional stations, even in the smallest markets. In fact, in those days, I think it may have even been mandatory.
Throughout the seventies and eighties, regional AM radio stations were pretty much the only game in town. They completely dominated their markets with live content and could support a large staff.
Local newspapers also did well back then, but if, as an advertiser, you wanted to talk to your potential customers, there was only one place to turn – radio. That pulling power meant ‘rivers of gold’ flowed to regional operators like the Albert family, the Lamb family, Associated Broadcasters, VBN, Queensland’s Color Radio group and many others.
But, that was yesterday, and like it or not, yesterday’s gone!
In 1992, the government reformed broadcasting.
Many things had changed in the prior 70 years that radio had been on-air, and legislation simply hadn’t kept pace.
I can still remember having an old valve record player when I was growing up. Its scratchy audio fell so far short of being broadcast quality it was laughable. But, by 1992, digital technology had well and truly arrived, and compact discs had been playing in our cars and homes for at least 6 years. Even those first domestic CD players exceeded broadcast specs by such a margin, that it barely warrants discussing.
By the nineties, IBM and Apple computers were a decade old, and becoming so affordable they were making their way from office desks into the homes of ordinary people, and personal devices, like iPods and iPhones were just around the corner.
It was time for the Broadcasting Services Act to modernise Australian radio for the 21st century.
Annual technical inspections of radio stations went the way of the Do-Do. One by one techs were shown the door, until in the smaller stations, there were all gone. Technical work could be outsourced.
As a result, broadcast techs, particularly with AM experience, are as rare as hen’s teeth, because no one wants to be trained for jobs that no longer exist.
Within just a couple of years, domestic CD players began to replace turntables and even reel-to-reel tape recorders in the studios. Every station had them, but they still needed announcers to use them.
However, lurking in the shadows was the real enemy to creative employment in regional radio, and it would change history!
While some early computer automation systems had been developed in the eighties, they were built on proprietary hardware and were outrageously expensive. Only the big stations in capital cities could afford them. It was when cheap IBM-compatible computers arrived on the scene, that regional broadcasting would change the way it handled on-air programming forever. Before long, low-cost automation programs for the radio industry were freely available.
The nineties became the era of the programmer in radio – the computer programmer, that is.
Computerised traffic systems and music selectors slashed the numbers of backroom staff in radio stations like a hot knife going through butter.
For just a few hundred dollars, digital audio editing software made regional production departments more efficient and that, of course, meant fewer people. By the end of the 1990s, the internet and satellite technology had paved the way for new low-cost centralised production hubs, as well as long-form program distribution and news syndication.
Working away in the background and keeping a low profile, farsighted entrepreneurs began quietly buying up stations, forming new networks, as they gobbled up older radio networks that were resistant to change.
Today, the idea of a single commercial radio station being owned independently has all but disappeared.
Radio stations soon began to be seen as a commodity and were bought and sold for high multiples of their operating profits. Like houses in today’s property market, they now sell for a disproportionate amount of money compared to average earnings.
To be in the running for even the smallest of radio stations, you have to have access to at least a million dollars. If you want to buy a station in a quality market, you may have to part with three to ten times that amount. It’s a big hunk of change, particularly if you have to borrow it!
Repayments to banks and finance companies can be up to $10,000 per million per month. That’s well out of the reach of most of those individuals, who dare to dream of becoming an independent owner. To afford these prices, you’ll find that most buyers either have to be a public company using shareholders’ capital, or an existing industry player who’s been around for decades. These existing operators usually have stations that are already fully owned, and they use the cashflow from them to service bank debt on their new purchases.
When a high-performing regional station comes up for sale, industry buyers compete with each other for the chance to bring that station into their network. In doing so, they often push the purchase price to a level that would be almost impossible for any first-time buyer to sustain.
I think finally the day of the independent operator is gone. The radio market is becoming more concentrated. In fact, with financing, it’s cost prohibitive to run a standalone regional commercial radio station these days. Networks, with centralised management, have become the only option.
When they take on additional debt, the only way networks can make their newly acquired stations viable is to slash expenses and centralise operations. They’ll often call that ‘synergising’ – but really, it’s code for throwing surplus people under the bus.
Personnel is the biggest expense for any radio station. The more people a station owner can rid themselves of, while still maintaining a reasonable quality program to air, the better they’re placed to meet their financing obligations.
So, you might say, why do they need to continue growing?
Well, the answer to that is complex and is getting more intriguing every day. It’s all about economies of scale.
To be clear, commercial radio isn’t necessarily the ‘boogie man’ here.
Since the onset of digital technology, especially reliable access to the internet, traditional media has been facing competition worldwide, that it never thought it would have to face.
You might remember around 1999, we started to hear news filtering in from the U.S. that traditional newspaper circulation was starting to slide. Within a few years, newspapers began to shed highly experienced staff. Many of those journalists couldn’t find work in other newspapers, so they set up their own news sources in the on-line space, giving rise to websites like Huffington Post, Buzzfeed and the Daily Mail. This accelerated the problem for traditional media.
Even here in Australia during the past decade, print outlets started to lose readers week by week, until we finally arrived at the point this year, when scores of regional newspapers closed down their print editions. Hundreds of journalists and backroom staff found themselves at Centrelink.
So, what’s this got to do with regional commercial radio?
Well, there’s only one audience in each market, and the competition from different players for their attention has grown exponentially since the early 2000s.
The pressure on commercial radio hasn’t only come from digital sources, like Google, Spotify and on-line news, but from the huge growth in community stations that have been licensed to regional markets throughout the country. It seems every tiny town across regional Australia has been given its own low-powered community licence, while entire regions are now served by their high-powered cousins.
All these sources are taking revenue out of the markets that once belonged exclusively to the local commercial broadcasters. It may only be a nibble here and a nibble there, but it all adds up.
This pressure on local commercial radio has been like putting a flame under a pan of cold water to cook a lobster. By the time it realises the trouble it’s in, that lobster is in boiling water.
Some regional radio operators have been complacent. Many haven’t responded to the clear and present danger.
I’ve previously believed that holding a commercial broadcasting licence is a very different prospect from owning almost any other type of business.
To me, being entrusted with a public licence always brought with it special responsibilities to provide the best possible information and entertainment for local audiences, even if that was at the expense of profits.
However, I no longer feel quite so strongly about the issue, because regional commercial operators have seen the ground being eroded from under them. Successive governments have quite happily hacked into the viability of commercial stations by continuing to dilute every media marketplace for the past 30 years.
Sure, there’s not much any government could have done about digital technology. New technology is constantly evolving.
However, I view the ongoing obsession with licensing more and more community and narrowcast stations across the nation, as a flawed policy. A decade ago, there were more than enough community outlets for our relatively small population – but ACMA, under successive governments, has continued to issue licences.
I can understand when people complain that today’s commercial radio isn’t like it used to be. Not many things are.
Many regional markets now only operate with one announcer and that’s usually in the breakfast shift. Most other shifts are voice-tracked or networked. In some SCA markets, they’ve even done away with their local breakfast programs altogether.
It’s a big departure from the days when regional stations employed six or seven announcers, but this the price you have to pay if you want to have access to more competition.
As a radio creative looking in from the outside, it’s true that there are now fewer opportunities.
However, I don’t believe anyone should publicly spurn the decisions of today’s regional radio executives, until they’ve ‘walked a mile in their shoes.’
Each day, they face shareholders or owners pushing for greater profits to pay them back for the capital they’ve invested, or nervous bankers wanting to constantly review the network’s figures to ensure they can continue to meet their obligations.
Even regional radio is now big business, and choices have to be made. Finance, unfortunately, trumps creativity every time.
Would I like radio to go back to how it was? Sure, I’m a romantic at heart, but going back in radio is never going to happen. What’s been done, can’t be undone.
I think what people have been saying about COVID is also true for radio ‘we’re now living in a new normal.’
No point complaining, we’ve just gotta suck it up.



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 






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