Wall Street Week/Fortune

[Joseph Pappalardo]

> > OK.  Let's stick with the big numbers.
> >
> > There are lots of examples of stations that changed formats and
increased
> > their ratinsg by 70%.  In Portland, 107.5 went from country to class
rock
> > and its ratings more than doubled.
>
> Let's stick with the trend. Format changes aside, can a radio station
> double it's ratings, year after year, like satellite has?

It did when it was new.

> Because
> that's what is happening with satellite, and there's nothing to
> indicate it will stop any time soon. These people aren't joining up
> because they want to kiss off $10 a month on a grand experiment.

Keep in mind that they aren't making money at $10 a month.

Will the people be flocking to it in droves when it's $19.95 a month?

> These
> people are joining because it's a seriously competitive alternative to
> radio.

The people who are joining are doing so because they want a format or
something that they can't find on the dial right now.  i.e. Jazz, All
Comedy, Old Time Radio, etc.  Secondly, although they are coming out with
alternatives, right now it seems to be for people who spend a LOT of time in
their cars.

Lastly, XM and Sirius can't give LOCAL...Is there an alternative to WBZ on
Sattelite?  Is there a place where I can hear Howie Carr rail against Beacon
Hill, is there a place I can hear music interspersed with info about First
Night, Local Concerts, Red Sox and Patriots victory parades?   ....or the
snow that's falling outside?

> It's not going to stop, and the exodus is going to hurt radio
> in a big way in a much quicker timeframe than 5-10 years, as you said
> originally. This thing is knocking on the door right now.

Well I know you're probably not old enough to remember life without FM
radio...but when the superiority of FM came along...people didn't flock to
it in droves overnight.  It took a while for it to be commercially viable,
for the technology to make it efficient and useful without being a pain, and
you are correct, that the AM's had to innovate to survive, we now have all
(local)news, (local) sports, (local) news/talk, etc.

> > Satellite radio is built on the same principles. Low cost, high
> > quality, variety and control. People know what this is worth and will
> > pay for it.

So far, people aren't willing to pay for it.

Of all the audiophiles I know, only 1 person among my social, family and
professional circles has found the need or dsesire to have it.

>>  Radio will continue to tightly-format and demograph itself
> > to death and in the end radio station owners will still wonder what
> > they did wrong.

Well, with advertising revenues increasing beyond inflation and COL in major
markets, right now it doesn't support you're specualtion and enthusiasm.