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Life after Death: The Future of AM Radio

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Have you ever noticed when you talk to young radio executives about AM, you can almost see their eyes glazing over within seconds.To these guys, AM radio belongs to a bygone era.

If their benchmark is solely capital cities, then they’re probably right.

But, there’s always two sides to a story.

Without AM radio, many people, in the more remote parts this country, would be cut off from the World …. well, at least from what’s happening in their nearest community, and, that could be up to 200 kilometres away. Sure, AM’s ‘use-by date’ was definitely punched the day FM rode into town.

FM’s superior music quality always guaranteed there was going to be a serious exodus, and, eventually AM’s share of the listeners would start to dwindle. In fact, it didn’t take too long at all before FM radio started to hook a large slab of the audience; those aged up to 39. AM was left with the rest.

Back in the nineties, this all seemed like a pretty good solution, but now, AM’s audience is literally starting to die off. So, in recent years, AM broadcasters have been asking themselves - “what can we do about it?”

Right now, there’s a proposal afoot, here in Australia, to convert AM stations to FM, in markets where both stations are owned by the same broadcaster. By owning two FM stations in the one market, operators would be free to migrate away from their expensive News/Talk programming on the AM band in favor of two music formats; a lot cheaper option.

This proposed FM conversion of AM stations could work very well in areas where there’s a real concentration of listeners, such as along the coastal strip, but in really remote areas, a lot of people may find themselves waking up the next morning, without any access to commercial radio at all.

If you’re a radio person, you’ll know that FM coverage is confined, in general terms, to line of sight; that’s why they put FM transmitters on top of the tallest mountain they can find. However, there are very few, if any, high mountains in outback New South Wales, South Australia, Queensland or Western Australia.

This is country, where AM still shines, at least, for its wide area coverage.

In the United States, AM radio is also dying, and, pretty much for the same reasons as here. Responding to this problem, the FCC has recently taken a different and very interesting approach to AM. To be fair, the US problem is on a far greater scale than our’s.

They have over 3,000 local, independent AM stations dotted across small regional towns, some of which are also dying. The FCC is aware that there is no longer enough revenue to be generated from many of these small towns for local AM operators to survive, even if they dominate the audience in their coverage area.

In its appraisal, the regulator also realised that unless something radical was done to address the issue, the current FCC commissioners could be presiding over a situation where, hundreds or potentially, thousands of small AM station operators across the country could begin ‘throwing in the towel’, walking away from their businesses and ‘going dark’.No commissioner wants that on their CV!

So, late last year, the FCC devised an AM Revitalisation Program.

The US radio industry operates not just on licensed AM and FM stations, but supplements them with thousands of FM translators. Of course, we have FM translators here too, but they’re licensed specifically to a defined radio station. Not so, in the US; anyone can buy a translator at auction.

While these successful bidders can’t run their own programming on these translators, unless they’re a licensed broadcaster, they can lease them or sell them to AM or FM operators. The private trade in FM translators in the US is growing like topsy, but this profiteering has been forcing the costs up far higher than many regional broadcasters can afford.

At the end of last year, as part of this AM Revitalisation Program, the FCC announced plans for a specially-created offering of FM translators to be limited to AM broadcasters only. That special auction will be held next year, but, at that time, AM broadcasters will only be able to apply for one translator per AM station.

In the meantime, what the FCC has done is allowed AM broadcasters to acquire existing translator construction permits and transfer them back to their home service areas, under what is known as the ‘250 mile rule’. The broadcaster can even apply to establish that FM translator in their AM’s home town, if they wish.

By putting an FM in-fill service in their home town, the AMer is suddenly on an equal footing with the local FM licensees, yet they still retain their AM service for wide area coverage. This is where the US and Australian models vary, as here, if the FM conversion proposal goes ahead, ACMA wants the AM licence surrendered.

That demand has seen a number of regional broadcasters, who have recognised the necessity of AM’s wide area coverage in rural areas, refusing to apply for FM conversion. Under the new US plan, local AM broadcasters aren’t compelled to put the FM translator in their home town.

In fact, they’re free to apply to move it anywhere in their service area, that they feel will give them the best advantage. This means they can even apply to locate it closer to their service boundary, which may be near a larger town or city and enjoy some fortuitous FM coverage of a bigger audience, as long as they comply with certain FCC regulations.

One small-town AM station about 40-kilometres from the centre of Atlanta, has recently sited its translator, so that it now covers many of Atlanta’s outer suburbs, which have been progressively growing towards the once-isolated town. That translator is apparently now up and running and the station is reportedly writing revenue from the Atlanta market, where previously the station was all but ignored.

Once considered a local AM station out in the sticks, the AM Revitalisation Program has already given this station, and, no doubt, many others, the ability to provide a high quality FM signal into a larger market. The point here is, that these local AM stations were never regarded by bigger operators as a threat to their audience or revenue. Now, with the access to high-quality FM, they’re suddenly on the radar.

This may not be a genuine revitalisation of the AM band, as the FCC envisaged, but it has certainly given many of these small town broadcasters a new lease on life. I’m sure there’ll be a number of Australian broadcasters, who have been giving the consequences of this US plan more than a cursory glance.

This is probably why, in the Australian AM to FM conversion proposal, in those areas where the local AM and FM stations are owned by competitors, conversion is not even up for discussion. Despite those apparently sincere pleadings to the Minister and ACMA that AM to FM conversion is critical to better serve the audience, there’s no way that an incumbent FM broadcaster is ever going to give its AM commercial rival the same quality advantage, without one helluva legal stoush.

Never mind the audience … this is business!

I noted previously that AM radio is critical for wide area coverage in remote areas, albeit at a quality disadvantage.

So, perhaps now, in this time of imminent change to the media landscape, ACMA and their political masters should be closely examining the recent US experience, and, seriously considering whether elements of the American AM Revitalisation Plan should be embraced and implemented here.

It would seem to me plain common sense to give regional AM stations FM in-fill services in their home towns to allow the local audience to benefit from higher quality sound and less interference, yet still retain their widespread AM coverage, so as not to disenfranchise remote listeners, just because they don’t happen to live in built-up areas.

There are definitely some real merits for Australia to take the initiative and devise its own AM Revitalisation Strategy, rather than simply relying on the current ‘band-aid’ approach to these issues, in the hope that it might just get us through.

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