response 1 of 107:

Nov 24 16:19 UTC 1997

((( more late responses from Agora -- krj )))
 
#369 of 372: by Mike McNally (mcnally) on Mon, Nov 24, 1997 (02:33):
  re #361:  You're correct that they probably don't care a lot about the
  loss of a small number of vocal listeners compared to the audience they
  seem to think they'll pick up but one hopes, at least, that a lot of
  pissed off music fans could have a say when it comes time for FCC license
  renewal.

#370 of 372: by No en tu mano! (omni) on Mon, Nov 24, 1997 (10:41):
   Actually, public comment doesn't have a factor in radio station
 re-licensing. That's reserved for TV stations.

#371 of 372: by Autolycus (rogue) on Mon, Nov 24, 1997 (11:13):
 #364: They figure out number and type of listeners via a survey company,
       I believe. Kind of like Nielsen's for TV. With regards to cloning
       other successful radio stations: 20% of 1,000,000 rock listeners
       is more than 80% of 100,000 classical music listeners. Add to that
       the age of the listeners and it makes sense.
 
 #369: Vocal listeners don't buy any more of the advertisers' products than
       non-vocal listeners. Vocal listeners don't show up any more on the
       ratings than non-vocal listeners. Vocal listeners in this case are 
       simply people complaining about what has happened after the fact. 
       They have little or no leverage financially or politically. 
 
 If a classical station makes a lot of *business* sense, people should start
 one. It would be the only one around. 

response 3 of 107:

Nov 24 16:30 UTC 1997

People might *want* to start a classical music station.  According to the 
Detroit Free Press' initial article on the WQRS conversion, 
the classical station was making about $2 million a year in profit, and 
had the #12 audience share in the Detroit radio market.  (From memory, 
but I think those numbers are correct.)
 
However, if I were to get together with a few like-minded listeners and 
open a classical radio station, men with guns would come to shut me down...

response 5 of 107:

Nov 24 17:15 UTC 1997

  You don't address what I think is Ken's more significant point, which
  is that radio broadcasting is not a free market that anyone can enter
  at will and test the strength or weakness of the product they offer.
  Instead it's restricted, by the laws of physics and the regulations of
  the FCC, to a relatively small number of competitors who operate with
  the blessing of the federal government.

response 7 of 107:

Nov 24 17:53 UTC 1997

Re#6:  What mcnally said.

response 9 of 107:

Nov 24 19:40 UTC 1997

#5: And those people are motivated by greed and fear (those two evil words
    again) and will do whatever is most profitable for them, including 
    selling their station to people who want to broadcast classical music.
    Look -- if the station was making $2 million a year, you can buy a
    station for, say, $5 million, spend another million on miscellaneous
    stuff and have a return on investment of 33% a year, assuming no
    debt. That is a huge return. If you leverage the deal with debt, you 
    can increase your ROI even more. You don't have to start one from 
    scratch.

    Just because the bandwidth is regulated it does not mean it is not a 
    free market. There are barriers to entry but they are not overwhelming.
    A plant to manufacture memory chips costs over $1 billion. The cost of
    developing the next Intel chip is going to be about $10 billion. Those
    are severe barriers to entry.
 
    PS: I don't think WQRS was making $2 million a year in net profits.

#8: The question is not "whether or not I can make money with a classical
    music station" but "whether I can make more money with a classical
    music or rock music station?" If you can make $1 million a year with
    a classical music station and $3 million a year with a rock music
    station, which would you run? 

response 11 of 107:

Nov 24 20:05 UTC 1997

Rogue slipped in with #9.  The barriers to entry seem pretty 
overwhelming to me, given that they are completely unrelated to the 
inherent cost of operating a radio station.  Witness the recurring
issue of pirate radio stations, run out of a van somewhere.  
The inherent cost of entering the radio market is peanuts -- probably 
a few thousand dollars, if that.  But the price of that government 
license is in the millions, many orders of magnitude more.

response 13 of 107:

Nov 24 22:43 UTC 1997

we have plenty of classical radio stations in NYC...

back in Georgia in my hometown, the biggest outcry over a format switch
was when the local country station switched to a 24-hour Elvis Presley
format.  (Im not making that up...it became all Elvis and Elvis covers
all the time...on christmas they played Elvis singing christmas carols
for 24 hours!)  They stuck with the all Elvis format for two years
until the station changed ownership and went to top 40 rock.  I hear
its back to country again now though.

response 15 of 107:

Nov 24 23:06 UTC 1997

#10: I hate to state the obvious, but advertisers do see the listeners'
     only as consumers, of beer or whatever. Remember the golden rule:
     Those who have the gold make the rules. The advertisers have the gold
     in this case and they make the rules.

#11: Assuming the bandwidth for radio is limited (probably an accurate
     assumption), someone has to regulate it. Because the bandwidth is 
     limited, it is valuable to businesses. You seem to harbor some 
    bitterness towards the government for making money from the licensing
     of the bandwidth. Would you rather have anarchy on the radio waves?
     Seeking rents from this licensing is only reasonable -- as a matter
     of fact, if the government gave bandwidth away, the same liberals
     bitching about barriers to entry would be bitching about how the
     government is subsidizing corporations by giving away bandwidth -- owned
     by "everyone" -- for free (very legitimate argument). Do you have
     an idea what you are talking about?

#12: You just don't get it. If Mother Theresa were running a charity in
     Calcutta, only a fool would ask her if she's making a profit or 
     what the return on investment is. If a corporation were running a
     for-profit radio station in Detroit, only a fool would bring up the
     issue of "love of music" when talking about major decision making.
     We know what Mother Teresa's motivation is; We need not question it.
     We know what a corporation's motivation is; We need not question it.
     

response 17 of 107:

Nov 25 04:43 UTC 1997

Hmm... I work for a for-profit corporation.  I also do stuff I enjoy.  There
are probably other businesses where I could make more money, but I wouldn't
find it as interesting.  Certainly some companies do whatever they have to
do to maximize profits, regardless of whether it's what they like doing. 
Other people or companies can have different motivations, or overlapping
motivations.

I don't deny that in most businesses, as long as there is nothing harmful
about what a company is doing, they should probably allowed to do what they
want, or what will bring in the most profit.  I see radio as somewhat
different because it is a scarce resource, limited to those with government
licenses, and there is a finite amount of licenses.  It may well be that the
most money can be made by having all the radio stations havin gan almost
identical format, but in radio licensing the government should also be taking
the greater public good into account, and mandating some variety.

response 19 of 107:

Nov 25 14:42 UTC 1997

 re #9:

 > Just because the bandwidth is regulated it does not mean it is not a 
 > free market. There are barriers to entry but they are not overwhelming.

  Umm..  Sure.  I'll just get together a bunch of friends, we'll pool
  our and buy a transmitter and start broadcasting, then..  And when the
  FCC comes to shut us down because all of the broadcasting licenses in
  this area are already allotted and no more competitors are allowed to
  enter the market I'll just explain to them that Jemmie said it was OK.
  Why do I get the idea that Jemmie's idea of a "free market" is one that's
  free to operate the way he likes?

 > A plant to manufacture memory chips costs over $1 billion. The cost of
 > developing the next Intel chip is going to be about $10 billion. Those
 > are severe barriers to entry.

  Yes, and if I had $1 billion dollars I could presumably build a chip
  fabricating plant.  However, a billion dollars wouldn't guarantee me a
  radio station in Detroit unless someone else agreed to sell their license.
  If the other owners were all billionaires who wanted to keep their radio
  stations the government wouldn't let me broadcast, period.  Surely you
  can see the difference?

 re #15: 
 > Remember the golden rule: Those who have the gold make the rules.
 > The advertisers have the gold in this case and they make the rules.

  Last time I checked we were not yet *officially* living in a
  plutocracy.  According to my admittedly naive notions of government
  the public is supposed to have some say in how broadcast spectrum,
  which has been deemed to be public property (and rather valuable
  property, at that..) is put to use.  The people, or their representatives,
  make the rules.  If enough of the people believe that radio licenses
  should be allotted for reasons other than strictly financial then that
  should be the way that it's done.

response 21 of 107:

Nov 25 14:52 UTC 1997

#19: You can't operate a bar with licensing. Are bars not "free market"? 
     Is any industry that is not regulated not a "free market"? Do you know
     what a "free market" is?

     $1 billion would not guarantee you a bar. You still have to jump 
     through hoops. Again, do you know what a "free market" is?

     The people have the ultimate say in how the broadcast spectrum is
     used -- they vote with their ears and they vote with their wallets. 
     That's obviously not good enough for you because the Nanny State knows
     better, right?

(First paragraph should say, "Is any industry that is regulated not a 
 "free market"?)

response 23 of 107:

Nov 25 17:27 UTC 1997

(Digression: are you really a Chinese opera fan, rogue?  
 If so, please come write something about it for the music conference
 or the Classical music conference some time...)

I guess we'll just have to agree to disagree on what a barrier to entry
is.  Inherently, radio is a business which can be run by high school 
student, or run out of the back of a truck.  A government license which
has to be purchased for $20-$30 million seems like a huge barrier to me,
relative to the normal cost of operation.  Last I heard, liquor 
licenses were generally priced in the tens of thousands of dollars, 
which is not an amount exorbitant to the cost of operating the 
business.

When you write:  "The people have the ultimate say in how the broadcast
spectrum is used -- they vote with their ears and they vote with 
their wallets" well, I have to disagree there.  The ADVERTISERS have 
the ultimate say in how the spectrum is used, and to the advertisers,
some ears are more equal than others.
 
I am not the customer of radio.  I can't go buy the radio programming 
I want -- the closest I can get is to give money to the local 
public radio station.  

WQRS had plenty of listeners -- it was quite a profitable station.
Free market theory claims that all profitable projects will be 
done; yet here, a profitable business was destroyed and its 
listeners -- and its customers too, because WQRS had advertisers
who are unlikely to follow to the new format -- were discarded 
as worthless.  What's wrong here?

(Nothing is wrong, says Dr. Rogue Pangloss!  This is the best of 
all possible worlds!!  :)    )

So, yes, Rogue, I do believe there is a role for Nanny State to 
play in the allocation of radio, at least until the next-generation
digital radio service, which may allow many more players, comes 
into production.