Unexpectedly Intriguing!
March 13, 2006

There have been a number of changes in AAR's overall ratings performance as the preliminary figures for the Winter 2006 period recorded below have been finalized. Most notably, AAR's ratings at its flagship station WLIB in New York City dropped 0.8 share per average quarter hour. The four-quarter average rating for AAR in New York City is 1.1. This represents a loss of roughly 23,000 Age 12+ listeners (or 2.2% of AAR's total audience) compared to the figures recorded in the table below!

Rumors have been circulating for a little over a week now regarding whether or not Air America Radio (AAR) will be able to continue broadcasting through their flagship New York City affiliate WLIB. That potential trouble has led us to ask: "How important is being able to broadcast locally in New York City to AAR?"

To get a sense of what the potential impact of losing its voice in New York City might mean, we went mining through the publicly available radio ratings databases maintained by Arbitron and Radio & Records, looking to see how AAR's local affiliates are faring in the Top 100 radio markets in the U.S. Our goal – to get a good approximation of the size of AAR's listening audience in their largest markets.

We started with Wikipedia's list of AAR's local broadcast affiliates (with some adjustments, outlined later in this post), and looked at each affiliate's ratings performance over the four most recent survey periods (the most recent, Winter 2006, is only partially complete at this point), which provide a year's worth of ratings data. We found the average rating for each market over these survey periods, as well as the average rating for rating period for all these markets.

The ratings represent the percentage of each local market's listening population (Age 12+) over an Average Quarter Hour (AQH) time period. To estimate the potential size of AAR's audience in each of its local markets, we took the average rating for each market (treating it as a percentage) and multiplied it by that market's Age 12+ potential listening population.

We've summarized our results in the following dynamic table. You may click any of the column headings to sort the data from low to high or vice versa (by clicking the column heading again).

The ratings for Winter 2006 recorded below are Arbitron's preliminary figures for the period - you can find the final report of the Winter '06 ratings at Radio & Records as they come in!

AAR's Ratings in the Top 100 Radio Markets, SP05-WI06
Rank State City Station(s) Age 12+ Pop. SP 05 SU 05 FA 05 WI 06 Avg. Estimated Audience
1 NY New York WLIB 1190 AM 15,332,000 1.0 1.2 1.4 1.4 1.25 191,650
2 CA Los Angeles KTLK 1150 AM 10,790,100 0.8 0.9 0.7 0.8 0.80 086,321
3 IL Chicago WCPT 850 AM 07,698,300 0.4 0.7 0.8 0.7 0.65 050,039
4 CA San Francisco KQKE 960 AM 05,829,700 1.2 1.2 1.2 1.2 1.20 069,956
5 TX Dallas-Fort Worth KXEB 910 AM 04,730,200 0.5 0.0 0.0 0.0 0.13 005,913
8 DC Washington WWRC 1260 AM 04,132,800 0.4 0.0 0.5 0.4 0.33 013,432
9 MI Detroit WDTW 1310 AM 03,892,600 0.4 0.0 0.5 0.7 0.40 015,570
10 GA Atlanta WWAA 1690 AM 03,860,100 0.7 0.0 0.4 0.4 0.38 014,475
11 MA Boston WKOX 1200 AM & WXKS 1430 AM 03,841,100 0.6 0.7 0.7 0.8 0.70 026,888
12 FL Miami WINZ 940 AM 03,505,100 2.0 1.5 1.9 1.6 1.75 061,339
14 WA Seattle KPTK 1090 AM 03,204,800 1.4 2.0 2.3 2.7 2.10 067,301
15 AZ Phoenix KXXT 1010 AM 02,938,500 1.1 1.5 1.2 1.1 1.23 035,997
16 MN St. Louis Park KTNF 950 AM 02,632,400 1.0 1.2 1.1 1.1 1.10 028,956
17 CA San Diego KLSD 1360 AM 02,484,900 1.7 1.8 3.1 2.5 2.28 056,531
22 CO Denver KKZN 760 AM 02,157,700 2.0 1.9 1.8 1.4 1.78 038,299
24 OR Portland KPOJ 620 AM 01,963,400 4.5 4.4 4.1 N/A 4.33 085,081
27 CA Riverside KCAA 1050 AM 01,799,900 0.0 0.0 0.0 0.0 0.00 000,000
28 OH Cincinnati WCKY 1530 AM 01,705,200 0.8 1.3 1.3 0.9 1.08 018,331
30 TX San Antonio KTXX 103.1 FM 01,552,100 0.0 0.0 0.0 0.0 0.00 000,000
38 OH Columbus WTPG 1230 AM 01,401,300 1.0 0.9 1.1 0.9 0.98 013,663
42 TX Austin KOKE 1600 AM 01,204,800 1.1 0.7 0.8 1.2 0.95 011,446
43 NC Chapel Hill WCHL 1360 AM 01,143,700 0.0 0.0 0.9 0.6 0.38 004,289
47 LA New Orleans, Baton Rouge * WSMB 1350 AM, WYNK 1380 AM 01,608,400 1.0 1.2 0.0 0.0 0.54 008,645
49 TN Memphis WWTQ 680 AM 01,047,900 0.8 0.5 0.5 0.5 0.58 006,025
52 NY Buffalo WHLD 1270 AM 00,989,400 0.0 0.0 0.0 0.0 0.00 000,000
54 NY Rochester, NY WROC 950 AM 00,941,600 0.9 1.4 0.8 N/A 1.03 009,730
63 HI Honolulu KUMU 1500 AM 00,774,500 0.4 0.0 0.4 N/A 0.27 002,065
66 CA Fresno KFPT 790 AM 00,711,700 0.4 0.4 0.4 0.4 0.40 002,847
67 MI Grand Rapids WTKG 1230 AM 00,703,400 1.0 0.8 1.2 0.9 0.98 006,858
70 NM Albuquerque KABQ 1350 AM 00,654,200 2.4 1.6 2.2 N/A 2.07 013,520
73 OH Akron WARF 1350 AM 00,597,200 0.0 0.0 0.0 0.0 0.00 000,000
74 FL Bradenton WSRQ 1450 AM 00,591,500 1.1 N/R 1.1 N/R 1.10 006,507
76 TX El Paso KHRO 1650 AM 00,573,600 0.9 1.0 0.6 0.6 0.78 004,445
79 CA Monterey KOMY 1340 AM 00,555,100 0.4 0.0 0.4 0.6 0.35 001,943
82 MA Springfield WHNP 1600 AM & WHMP 1400 AM 00,533,700 1.8 2.6 N/A N/A 2.20 011,741
90 SC Columbia WOIC 1230 AM 00,485,400 0.9 0.9 0.9 0.5 0.80 003,883
96 WI Madison WXXM 92.1 FM 00,461,700 1.7 2.3 3.8 N/A 2.60 012,004
96 WA Spokane KPTQ 1280 AM 00,461,700 1.3 1.0 2.0 N/A 1.43 006,618

AAR's Estimated Average Audience and Ratings in the Top 100 Radio Markets
Age 12+ Population Sum SP 05 Average Rating SU 05 Average Rating FA 05 Average Rating WI 06 Average Rating Overall Average Rating Estimated Audience
99,491,700 1.0 1.0 1.1 0.8 0.96 992,308

  • N/A = Ratings Not Available at Time of Posting
  • N/R = Ratings Not Collected for Indicated Period
  • Average Ratings for each market determined by taking the average of available ratings beginning with the Spring 2005 period (SP 05) and ending with the Winter 2006 (WI 06) partial rating period as of March 10, 2006.
  • Age 12+ Listeners per Average Quarter Hour determined by converting Average Ratings for each market into a percentage and multiplying by total population of Age 12+ listeners in radio market as documented by Radio & Records.
  • Average Ratings for each reporting period were determined by finding the average of all measured ratings in that reporting period.

Crunching Numbers

Wikipedia's list of AAR's local affiliates includes 84 radio stations, of which 47 are in the top 100 U.S. radio markets. After adjusting the list of affiliates (see below), we looked at the ratings data for some 40 stations in 38 radio markets. In these markets, the total Age 12+ potential listening population is 99,491,700. AAR's average rating share of this potential audience is just under 1.0 (at 0.96) which, if taken as a percentage of the total Age 12+ population, would represent an audience of 992,308 people for an Average Quarter Hour (AQH).

AAR's New York City affiliate WLIB accounts for nearly one-fifth (19.3%) of its estimated audience in the Top 100 U.S. radio markets. AAR's next two largest audiences may be found in Los Angeles (8.7%) and Portland, OR (8.6%). Rounding out AAR's top 5 markets are San Francisco (7.0%) and Seattle (6.8%).

Interesting tidbit: If we applied a 1.0 rating share to AAR's remaining markets, we would only add somewhere between 60-70,000 more listeners to the total above!

What Losing NYC Would Mean to AAR

Money is largely made in the radio broadcast business through advertising, and advertising dollars are divvied out according to not just the size of a radio station's audience, but the demographics of who is actually tuning in. We can assume that AAR's core listening audience reflects pretty much the same demographic grouping from market to market, so the financial impact of losing a broadcast affiliate will therefore be directly proportionate to the relative size of its audience.

We therefore estimate that the reduction of AAR's total advertising revenue arising from no longer being able to broadcast on its current affiliate in New York City will be on the order of 18 to 22%. The reduction in total operating revenue may be mitigated by switching to another radio station in the New York City radio market, but the degree to which AAR may be successful in obtaining an equivalent broadcast outlet remains uncertain.

Update (14 March 2006): In the analysis above, we only looked at the primary markets for WLIB - we have additional analysis that takes a closer look at WLIB's bigger footprint.

What AAR's Management Should Do

If AAR is in the broadcast business for the purpose of making money in the broadcast business, AAR's senior leadership should focus first upon obtaining a broadcast outlet in the New York City market. Even if the only available options for broadcasting are stations that lack equivalent signal strength to reach throughout the region compared to AAR's current affiliate WLIB, the size of the NYC market and the potential advertising revenue it represents is simply too large to write off. Ratings 50% lower than what AAR produces in NYC today would still represent an audience greater in size than its next two largest markets.

Update (17 March 2006): The Radio Equalizer reports that a short-term deal has been struck that will allow AAR to remain at WLIB for "several months."

The rest of the strategy AAR must follow would be dictated by its overall business health. If AAR were generating enough revenue from its operations to overcome the network's operating expenses, AAR could easily weather the loss of its NYC affiliate (this does not appear to be the case.) Instead, AAR's operating costs appear to outweigh its operating revenue (even before the loss of its current NYC affiliate), which means that AAR's management needs to take immediate steps to bring those costs down substantially to be in line with its looming reduced level of revenue.

AAR needs to focus upon getting the biggest return in revenue for each dollar it spends to stay in business. For example, programming whose cost to produce significantly outweighs the relative amount of revenue it brings in to the network will need to be eliminated or substantially revamped.

AAR could, in the interim, continue operating as it does today, but the impact would be to significantly increase its effective cash burn rate, setting it upon a course toward bankruptcy, sooner. Even with additional cash infusions from "white knight" investors, there's little business sense it keeping a business afloat if it isn't at least operationally profitable, and it makes even less sense if its management takes no steps to make it so.

Unless, of course, AAR is continuing in the broadcast business for some purpose other than that of making money in the broadcast business. If that's the case, their troubles may only be beginning.

Previously on Political Calculations

The Future of Air America

We kicked off our series of posts analyzing Air America Radio viability as a business with this post. We really didn't think it would go much further than this!

Air America, Again

We found that AAR doesn't just have competition from the right - it has it on the left as well....

The Financing of Air America Radio

A throw-away post that let us fill space with some information on where AAR got its financing that we had come across in our previous analysis.

Time to Harvest or Divest

As AAR appeared to be running into significant turbulence, we updated our original strategic business analysis, finding that what AAR's management needed to do was to find "white knight" financing or to start making moves to significantly cut its costs.

A Top Ten Countdown

We couldn't resist applying a list a bankruptcy lawyer came up with for a failing company to AAR's known problems - lucky thing AAR has benefitted from the generosity of multi-millionaires with deep pockets.

Profiles in Semi-Obscurity

Another space-filler post where we just unloaded background information about various members of AAR's Board of Directors that we had come across in previous analysis.

And Since This Post....

A Bigger Footprint

An intrepid e-mailer let us know that AAR's flagship affiliate WLIB had a bigger footprint than just the New York City market - plus, we find that roughly half of AAR's audience is in just five cities.

Profiling a Handful of AAR's Local Affiliates

Once again, we unload information we collected in other analysis. This time, we estimate just how many local AAR affiliates there are by determining where they're not.


Adjustments Made to List of Affiliates

Wikipedia's list of 84 AAR affiliates (accessed on March 10, 2006) was not as up to date or as accurate as we might have hoped. The following adjustments were made for this analysis:

Listed Affiliates Not Carrying Sufficient (or Any) AAR Programming

We omitted any listed AAR affiliate from this analysis that carried fewer than five hours of AAR programming on weekdays (not including rebroadcasts). We did so since the ratings for these stations would most likely be the result of the station's other programming. This excludes the following stations:

We did include affiliates that broadcast just five hours of AAR programming per weekday. In the top 100 radio markets, these stations include:

Adding Affiliates Not Listed

We added former Phoenix affiliate KXXT 1010 AM (15) since it only recently stopped broadcasting AAR programming.

Affiliates Not Broadcasting AAR Programming Long Enough

We removed Sacramento affiliate KCTC 1320 AM (26) since it did not broadcast AAR programming during the Spring, Summer and Fall 2005 rating periods.

Combining Ratings for Affiliates

We combined the ratings for AAR's two affiliates in Boston (11). We also combined AAR's two affiliates that are in close proximity to each other in the Springfield, MA (82) radio market.

We've also combined the ratings for New Orleans (47) and Baton Rouge (83), this time by averaging the ratings of both cities together, while only adding the population figures. This is a special case, which we justify doing given the mass relocation of people from New Orleans to Baton Rouge following September 2005's Hurricane Katrina.

Other Notes

Ratings of Zero

Now, about those stations that have ratings equal to zero. The obvious question that might be asked about these stations is "If the ratings are zero, does that mean that nobody is listening?" The answer is that might indeed be the case, but it would be highly unlikely! Given how the ratings are measured, it's much more likely that the survey simply missed capturing an adequate number of members of the station's audience to be recorded. It's mainly an indication that substantially fewer people are tuning in compared to other stations with measurable ratings in the same survey.

It's also very likely that across the spectrum of AAR's broadcast affiliates, some affiliates are "over-represented" much as these stations are "under-represented." Both these effects should cancel each other out in the big picture, leaving a relatively small error in the size of AAR's total listening population.

Age 12+ Population

We used the Age 12+ Population since it's readily available in the publicly available databases of radio ratings. We justify using this data (as opposed to specific demographic data that measures the real audience for a radio station) since we're trying to gauge the size of a potential listening audience – as opposed to allocating advertising dollars according to who's actually listening (which is why the more detailed data is collected!)

Stations with Less than 100% AAR Programming

Using the publicly available radio databases, we can't drill down into the data enough to see how many listeners for a given station are listening to their AAR programming content. We therefore assumed that the station's overall ratings are shared by their AAR content.

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