THREE LONG ISLAND FM’S MOVING INTO SATELLITE RADIO-LIKE MODE Kurt Hanson – RAIN Later this week, The Morey Organization, Inc. (TMO), Long Island's largest privately owned media company, which owns three Long Island pop/rock FM stations, is relaunching them in a new approach that mimics satellite radio, which they call "FM Channel Casting."
Described on their press release as "the next generation of radio," TMO says that it "has reinvented the medium by creating the nation's ONLY completely FREE music source... and it not only surpasses traditional AM and FM broadcasting, but it rivals satellite and Internet radio as well.
Its approach involves (A) changing the branding of the stations to channel numbers (e.g., "WLIR 98.5 FM" becomes "Channel 98"), (B) eliminating DJs entirely, and (C) dropping 30 and 60-second spots in favor of sponsored hours (sold via its website) in which the sponsor gets four brief mentions per hour. TMO plans to characterize this as "commercial free."
"The advent of satellite radio has presented the industry with a bigger challenge than ever before and we as broadcasters cannot put our heads in the sand and pretend that it won't affect our medium," said John Caracciolo, President of TMO. "We cannot stop technology. We must live with it, grow with it and keep competitive with it."
The press release on the subject asks, "How is it possible to offer the listener commercial free music and offer the advertiser an on-air branding campaign simultaneously? The solution is simple: Brandcasting.
"In layman's terms, brandcasting brands your product, service or business through the medium of FM Channel Casting. An average brandcast consists of a one-hour sponsorship of [largely] uninterrupted music through four quick yet efficient messages strategically placed between songs, giving the listener what they want with a low cost proposition to the advertiser.
"Through the technology of FM Channel Casting," says Caracciolo, "I truly believe that TMO has revolutionized the industry and saved terrestrial radio. We are confident that FM Channel Casting is the wave of the future for stations throughout the country."
There is a odd but interesting logic to this move: If millions of consumers today perceive that XM's and Sirius's music channels are higher-quality products than FM stations because they're music-intensive and largely without air personalities or promotions, then why spend $500K/year or more on air personalities and promotions?
And there's a sexy angle to this from a consumer's point of view: "Hey, my FM radio all of a sudden has three satellite-radio-like channels and I'm not paying any subscription fees for them!"
It's interesting -- but it makes sense -- that it takes a firm from outside the mainstream of the radio industry to come up with a fresh approach like this.
According to an earlier press release: "The Morey Organization, Inc. is Long Island’s leading marketing, advertising and entertainment enterprise. TMO’s strength lies in its unique combination of companies. This includes 107.1 The BOX (WLIR-FM), Long Island’s New Music Alternative; Party 105.3 (WXXP-FM), Long Island's best rhythmic dance and top 40; 98.5 The BONE (WDRE-FM), World Class Rock; Strong Island Events, event production and marketing; The Long Island Press, the Island's largest weekly news and entertainment publication; Morey Creative, Inc., TMO's full-service graphic design and print agency; and Palmer’s Bar & Grill, located inside the Vanderbilt Event Center."
Note that there are some parallels between their plans to sell nothing more than mentions and Clear Channel's John Hogan reporting that some advertisers are asking for five and seven-second spots.
Two big questions to watch:
(1) Will listeners actually find the programming approach appealing? (Note that "Jack FM" formats work pretty well without air personalities.)
(2) Will TMO's "brandcasting" approach to spot load and sales department staffing bring in enough revenues to make this approach a smart business move? (The math seems challenging: Traditional stations run perhaps 12-15 units per hour at about a $10 CPM (cost per thousand impressions), or an aggregate $120-150 CPM per hour. With reduced expenses, can TMO live with, say, an aggregate $60-75 CPM per hour? Even if so, will advertisers believe that those four mentions are worth a $15-20 CPM each (when they can buy 60-second spots for $10)? Or am I overestimating TMO's revenue needs? |