Netflix's Choice and the Return of Louis B. Mayer

The usually reliable Edward Jay Epstein has a new column up at the Wrap detailing the transition Netflix is undergoing. Netflix currently spends around $500 million a year in postage mailing out DVDs and receiving them back. This also requires obviously, distribution centers, and along with an average price of $15 per DVD, accounts for operating profit of about 12%.

Steaming, obviously, is cheaper. No postage fees, no rate hikes in postage, instant gratification. The only problem being that Hollywood is charging premium prices for streaming rights (Netflix can simply buy DVDs from wholesalers and rent them out without costly rights fees). As Epstein notes:

The brutal reality is Netflix’s bargain days for streaming movies and television is coming to an end. As everyone else in the licensing game, Netflix will have to pay real world prices for content. Just the output deal it announced with three of the weakest studios, Paramount, LionsGate and MGM will cost it $200 million a year, a sum that exceeds its operating income last year. And if it wants the kind of output deals the other pay channels have, it will have to pay a great deal more than that.

Of course, Netflix can do something else. Create its own content. Which, in order to make money, would have to be very popular. Yes, HBO, Time-Warner Cable (HBO's Parent), Amazon, Itunes/Apple, Hulu, Google/Youtube, are all Netflix competitors, as Epstein notes. Competing on price for streaming, and on every platform: smartphones, Ipads, tablets, TV sets connected to the internet, gaming devices, and more. Netflix very likely has few illusions on this matter. But … they can create their own content.

And that can be their great competitive advantage.


Most entertainment is junk, which also loses money. Hollywood's movie system depends almost entirely on a few mega-hits: Transformers, Iron Man, and other male-oriented action movies, along with Twilight, and a few other female oriented romance movies. Stuff like "the Reader" or "the Woodsman" or "Ghost Writer" don't make money, even if they do win awards and get Hollywood's execs their next job (by catering to stars egos). Among TV series, a few mega-popular reality shows like American Idol make a lot of money (American Idol is estimated to add about $200-$300 million to Fox's bottom line). The repeat value or desire to see these on devices other than TV, live, is fairly low, however. A few other shows like NCIS, and Desperate Housewives, generate high ad dollar purchases by sponsors, and thus make money. But again, the desire by consumers to purchase these shows is fairly low.

What Netflix can do, then, is exploit the gap in broad entertainment people will pay modest amounts to view, by creating their own. Epstein, like many in and around Hollywood, over-estimates the barriers to creating original content. And the sea change a producer like Netflix which cannot survive in the Hollywood model and MUST create broadly popular entertainment across its offerings to prosper against a host of rivals. Which, amounts to a return to mass culture, and the end of niche culture and "de-massification."

Netflix is not HBO. HBO depends on keeping heads of households "happy" by offering female-skewing "edgy" content not available anywhere else. Alpha males in full a-hole glory: Tony Soprano, the folks of "Rome" and so on. HBO, of course, is available in almost all TV households but less than 30% actually pay for it. HBO gets paid if people watch their content or not. It's been very profitable, but depends on lots of excess cash among high income consumers expressing a desire to be "different." Making it vulnerable to economic downsizing and consumers being pressed into dropping the service (and cable altogether). Cable cutting, a real phenomena, is already occurring at the lower end of the income spectrum, as the cost of living inflates while income remains stagnant.

HBO depends on a large pool of high-income consumers expressing their niche content desire by paying premium prices for niche content consumption. That is not Netflix's mass consumer model. Near-premium cable folks like FX, or AMC, rely on keeping their channels as part of the basic subscription model, and thus follow HBO's model: AMC's Mad Men and Breaking Bad (Alpha male assholes appealing to women), or Nip/Tuck, Damages (Alpha female) fit that model. Mad Men famously got less than 1 million viewers per episode the first season. Yet it was considered a massive success (generating lots of publicity) and was easily renewed. Because AMC gets paid if people watch the channel or not. Again, that's not Netflix's model.

The limits of the HBO model (you cannot grow beyond the niche consumption of high end consumers) and the near-premium cable model of AMC and FX and others, come with risks of being unable to compete on price in a prolonged recession/depression. These entities depend like Hollywood movie studios and TV broadcast networks, on good times rolling not hard times a coming.

Netflix has always been different. Oriented towards mass consumer spending, not pricey niche stuff. Their play, and they are clearly edging towards it, is to create their own content. Aimed necessarily at the broad middle, and those willing to shell out modest amounts for entertainment: men. Yes, Netflix to compete will have to produce its live action competition to Call of Duty and Medal of Honor and Halo. Male skewing tales of adventure, excitement, and action-driven conflict.

Can Netflix do this? Certainly, and they must. After all, soundstages are for rent to whoever can pay. Actors, directors, writers, are all for hire. So too, are many locations outside Hollywood where tax incentives matter. USA Network has already leveraged this, with In Plain Sight shot in and around Albuquerque, New Mexico, and Burn Notice in Miami Florida. Male skewing writer/producer teams like Life's Rand Ravich/Far Shariat and 24's Joel Surnow can be hired. So too, comic creators like Jim Shooter (Valiant Universe creator) or James Robinson or Brian Michael Bendis or Micah Ian Wright. The idea being to produce not just one-off movies but serial entertainment streamed right to men who have other than video games, little competition. A price point of say, 99 cents per episode, or even free with embedded ads. So the male consumer comes back.

Clearly, just trying to make the next "Vampire Diaries" or "Parenthood" is not a way to success. No matter how many tween girls (or their moms) watch, or how many PC plaudits are earned. Netflix is interested in making money, and doesn't have a massive parent to subsidize making Hollywood players happy. Amazon, Itunes, Google/Youtube, and even Coinstar's Redbox can crush them. So whoever races to their own, vertically created, distributed, and sold content gets to replicate …

Golden Age Hollywood. Characterized by "Its A Wonderful Life" and "Yankee Doodle Dandy" and John Wayne and Humphrey Bogart. No metrosexual, "I Love You Philip Morris" stuff, or "TransAmerica." You didn't see John Wayne smooching Ward Bond, in a gay cowboy movie, or Rosalind Russell playing a trans-sexual man/woman. Everything was broadly pitched, straight to the middle, as content was owned, distributed, and revenue collected, by Hollywood's studios.

Hollywood was no less filled with hard left folks in the Golden Age. Heck, many writers and actors were outright members of the Communist Party, when it actually meant something and Stalin was alive. But the economics of the mass media, vertically integrated companies requiring mass sales not niche stuff for premium prices in one way or another meant you got Jimmy Cagney extolling the virtues of the Red, White, and Blue, not a metrosexual, stalker Superman who fights for truth, justice, and "all that stuff."

Which brings us to the heart of the matter. Can Netflix create original content for less than licensing it from other creators, that will generate more money than licensed content, in a mass medium model (i.e. not niche content at niche/expensive prices)? Very likely, yes.

TV Networks action/adventure series generally average about $3-4 million dollars per episode. The more action, and the more stunts, obviously the more expensive it is to shoot versus dialog on a soundstage (like ultra-cheap soaps). So on the upper end, excluding tax breaks, it would cost Netflix about $88 million to produce a 22 episode series. Assuming it can sell each episode for about 99 cents or so, its break-even sales volume is about 4 million sales per episode. At about 5 million sales units at that price, Netflix will make about $22 million. Assuming it can build sales to about say, 10 million purchases per episode, it would be generating $132 million per "hit" series, which would be roughly half the views per episode of shows like NCIS (averaging around 20 million viewers per episode per season, excluding repeats). With, critically, revenues rising dramatically as popularity and views per episode go up.

Why was Golden Age Hollywood so mainstream? Because the people who owned it got immediate financial rewards for being mainstream (that's the feedback mechanism of vertically integrated media companies) and punishments for going niche. Warren Buffett's right hand man, Charlie Munger, was quoted as saying:

‘Well I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes [without me] getting some surprise that pushes my limit a little farther.’ That was Charlie Munger, Berkshire Hathaway Vice-Chairman, speaking before the Harvard Law School on the psychology of human misjudgement.

Munger is resolutely focussed on the power of incentives to influence human behaviour. In his speech he recounts a number of examples where incentives have been used for both good and ill. Federal Express was one such example. It has to transport packages within its network to a central location for sorting before sending them on to their final destination. For the system to work, the sorting must be quick and efficient. The trouble was that, for a time at least, it wasn’t. The company tried all sorts of incentives without much success. Then management came up with the idea of paying their staff by the shift, instead of for the shift. In other words, when the sorting was done the staff could go home. As you can guess, along with the staff at the end of their shift, the problem vanished almost immediately.

If not Netflix, then one company not already laden with perverse Hollywood incentives, will push entertainment to a vertical model, where lavish rewards await anyone who can replicate the Golden Age of Metro Goldwyn Mayer, or Warner Brothers. Amazon, Apple's Itunes, Google/Youtube, and perhaps even growth-strapped Microsoft can be players here. Creating their own content, selling it on their own pay/ad-supported network, and collecting hefty profits.

Its far more than a transition from Netflix renting out DVDs through the mail. It is about breaking the stranglehold that Hollywood has had, strangely, in creative content production, for about 90 years. With talent mobile, and lots of money at stake, it is only a matter of time. Particularly as Hollywood's post-80's niche model collapses during hard times.

The return of Louis B. Mayer awaits.
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Game Changer

Two items in the Wall Street Journal on Wednesday, July 29, 2009 together portend a big change in the way entertainment, both movies and "serial entertainment" aka series, are produced, distributed, and watched by US and global consumers. Together they have the potential to shake up Hollywood the way Toyota and Honda did in the late 1970's and early 1980's.

First, the article in Marketplace, B3, "Price War Dividing Grocers into Winners and Losers" has big changes in consumer behavior providing ripple effects in supermarket retail. Now, 1 in 3 consumers (that's one third) buy exclusively items on sale, twice as many as 18 months ago, according to market researcher Information Resources Inc. Or, in other words, from 16.5% 18 months ago to 33% of all shoppers today are buying items only on sale. Safeway, which sought to lure shoppers with upscale stores and high-quality fresh produce, reports same-store sales declined 2%. Result? The stores have lowered prices on thousands of items and run heavy discount price promotions. Retailers with low price reputations (paging Wal-Mart) are posting strong same-store sales increases [same-store sales are sales for stores open at least a year] while others are posting losses. The change in consumer behavior is best summed up by a quote from the article:

At Supervalu, the percentage of items purchased on sale rose four percentage points in the past year and items-per-transaction declined, as cash-strapped shoppers sought out the best deals across a variety of retailers. "If the item is not on sale in our stores, it is far more likely to remain on the shelves," Mr. Herkert said.

This is an earthquake in consumer behavior, and has profound implications for the entertainment industry.


Amazon posted weaker than expected second quarter results due to a decline in sales of books, music, dvds, games, and consoles. Analysts expect a 20% decline in video game sales from June 2009 compared to June 2008. Consumers are cutting back on groceries, and on entertainment even further. People have to eat. They can play the same video game another year longer.

The entertainment industry has long ridden a wave of profitability, based on nearly fifty years of almost uninterrupted economic expansion. When recessions have come, they have been limited in duration and scope. This recession promises to be different. More wide-ranging, and longer lasting. Some economists talk of a "lost decade" as with Japan in the 1990's.

A lot of analysts have described the fractured and niche status entertainment as a function of technology. And doubtless the new technologies: FM radio, the Walkman, the VCR, cable and satellite channels, and the Ipod have contributed to fragmented entertainment and the death of mass culture. But just as important is the ability of wealthy consumers to pay premiums for niche entertainment. For example, to receive Logo, the gay channel from Direct TV, costs $55 a month as part of their package sign-up. That's $660 per year. Even if not many sign up for the package, and it's sliced up many ways per each channel in the package, that's still a considerable sum of money. But the business model rests on enough consumers having both enough cash and economic security to spend the money. Just as the Long Tail hypothesis, which states that there is a lot of money to be made selling lots of "non-hits" such as hard to find CDs or mp3 tracks, books, dvds, and so on, rests on the assumption that there will be enough consumers with both willingness to buy non-hit massively popular items, and the money to purchase them. There have been criticisms here on just how accurate the Long Tail model is (i.e. niche content makes aggregators like e-Bay or Amazon money, and perhaps content creators), but the underlying economic model of "Laissez les bons temps rouler" requires, well, good times rolling.

The fundamental attribute of consumer behavior for every good or service purchased during long-lasting recessions is scarcity. Scarcity of consumer dollars, meaning that purchasing a dvd means forgoing purchase of another. This behavior drives consumers towards known "bang for the buck" entertainment, and of course "free" or advertiser supported (or already purchased DVDs) movies and serials are better than paid ones, within acceptable quality bounds. We already see that behavior in supermarket purchasing.

The second item in the Wall Street Journal was the July 29, Personal Journal, D1 story "Video on Cellphones: the Uncut Version". The story concerns bleeding edge cellphone users with expensive setups (using the Sling Media Slingbox and software for select phones) to view satellite or cable tv on their phones. The hardware alone costs between $200 and $300, plus a monthly service charge. Sling Media claims nearly a million people have signed up for the service for the Iphone. Problems remain with this service, besides the price, including battery drain, and jitter due to network latency (best performance is seen in WiFi hotspots using Wifi instead of the cellular network). Sling Media's Iphone service is limited to WiFi hotspots for just that reason. Still, Nielsen estimates 13 million people this year and last watched video from their mobile phones.

Nielsen estimates only 18% of the nations 270 million cell phones, or 48.6 million, are capable of receiving or playing video. That's still a sizeable number. Apple's basic Iphone 3G is $100 (with a year service plan that has it's own monthly fees). Apple has shown flexibility on the low end of its Ipod and Iphone devices. Their Ipod Shuffle is $80, with 4GB. Other manufacturers like Palm and Nokia are capable of producing low cost video phones as well.

It's highly likely that some manufacturer will produce cheap, sub $100 video-capable phones. It might be Apple, it might be Nokia, it might be someone else. Perhaps even Sony. But suddenly, the phone becomes a way to play not just music, which many phones can now do, but video. Which will change the way video is viewed and distributed the way the Ipod and Itunes changed the music business.

Of course convenience will matter too. Many consumers will purchase from Amazon's mp3 downloads since they lack Digital Rights Management, making use over multiple computers and Ipods easier, but Itunes still predominates as a means to manage Ipods and media. Some estimates place Amazon at around 8% of all music downloads in 2008 while Amazon claims to be #2 behind Itunes in downloads.

Of course, video Ipods have been around since 2005, and the Archos and other players had video before that. But then the Diamond Rio and Saehan (Korea) devices came out in 1998, but did not really catch on until the first Ipod in October 2001. A lag of nearly three years, and in boom times as well. It's certain that during a recession, most of the 270 million phones will be replaced only as needed. But it's certainly probable that a basic phone with adequate video capacity could be marketed at prices even cash strapped consumers will pay, and at screen sizes that make video viewing comfortable enough. After all, CD and records and even cassette tapes have superior audio quality compared to mp3s (which samples only part of the digital audio file), and consumers like listening to mp3s on Ipods just fine over expensive stereo systems.

What cheap video phones will do, particularly coupled with a convenient service or software for transferring video to phones, is allow people to watch video entertainment whenever and wherever they want. Much like the MP3, Ipod, and Itunes did that for music. This will not happen all at once, in a "big bang" any more than the changes in the music industry happened all at once in 1998 or 2001. But it will happen.

What this means, if most people consume video entertainment, apart from live sports and other band-width hogging video streams, from a stored file on their video phone, is that distribution will no longer require huge sums of capital. To get movies into theaters, apart from major marketing efforts costing between $30-40 million, prints (or pirating friendly digital copies) must be sent to theaters. Even with digital files, this is a major pain and can require expensive courier services or leased fiber optic lines for high-speed transfer. To get a tv series into a cable or broadcast network also implies a lot of capital, not just for the series to be made but the overhead for the network.

The new Itunes-like distribution model also changes consumer behavior. One study of an un-named UK music service claimed that 80% of all music tracks sold no copies over a one year period. Most of Amazon's sales in music downloads comes from popular acts, and then just a few popular songs. The same holds true for Itunes.

Which means, given scarce consumer dollars, it's winner take all. A sale of an episode of a serial, or movie, means no sale for a competitor as consumers have to choose. The way around this of course, given quite likely the difficulty of streaming video content over even the most advanced 3G cell phone network, and the clumsiness of using WiFi hotspots, is to make content "free" but advertiser supported.

With the ads "unstrippable."

Many, many consumers have stopped listening to radio, and use their Ipods to play music. The music changed from being played over the radio, for free, to downloaded at modest prices. Particularly with compressed video files, low cost or no-cost video entertainment is probably the wave of the future. With "ads" consisting of massive product placement. Not just products or services, but companies playing a major role. Such as Federal Express in "Cast Away."

In the near future, it's not at all implausible, that consumers could download free adventures in a serial format of an investigator working for Farmer's Insurance, or a Doctor for a hospital group, or an airline pilot flying for United. The ad being part of the plot itself. Obviously in that case, the more artful and entertaining efforts will crowd out the blatantly bad ones. But nothing beats "free." Which leads to another effect, long term. Price cuts for DVDs and other forms of video entertainment (downloads). Hollywood has long tried to keep price floors on DVD and other ways of viewing movies and tv series, and it's likely that advertisers seeking to create more potent ads can undercut not just Television broadcasting (both cable and over the air) but also studio movies.

None of this will happen overnight, but it will happen. If I had to bet, I'd bet on Apple delivering a "recession beater" Iphone with a price point of around $50, with decent video capabilities, and content creators rushing to provide first cheap content for such a phone, and then "free" content with product placement as described above. Because the market for an always-around video phone plus existing Video Ipods will be irresistible.

That in turn will mean lower margins for everyone in Hollywood. Stars will still make obscene amounts of money, but the margins will be thinner, and the ability to bank on a few mega-profit movies like the Transformers series will be impacted. Since a lower margin means less vanity projects that will lose money (such as "Milk" which probably lost money with a marketing budget of around $30 million and only partial revenue from both foreign box office -- rule of thumb is half the gross revenue goes to the studio -- and similar numbers domestically outside the seventy-five percent kept by the studio in the opening weekend) can be effectively carried by the big budget films that make money. Even Hollywood, it seems, will run out of other people's money eventually.
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Failure of the Media Part Three: NBC and the End of the Brandon Tartikoff Strategy

In my post Failure of the Media Part One I discussed how demographic changes, mostly the lack of young Whites, made the youth-oriented Indie 103.1 FM a failure, compared to the older, stodgier, but more profitable AM talk radio, oriented towards an older, White male audience. In my post, Failure of the Media Part Two, I covered the sad, lingering death of the LA Times, intent on becoming the print version of NPR without the massive government subsidies. Now, I'll cover the sad decline of broadcast TV networks, with a special emphasis on the near total decline of NBC.

In all three cases, key decision makers have deluded themselves about demographic reality, and basic economics.

If Indie 103.1 failed because it was not 1983 any more, and there were not enough (White) youth, and the LA Times slowly sinks underwater because the attempt to become a print version of KCRW was doomed to be a money loser from the start, broadcast TV networks, and NBC in particular, fall from grace is far more puzzling.

Because once upon a time, the Brandon Tartikoff strategy actually worked for NBC. When Tartikoff was running it. Boiled down to it's essentials, it meant giving shows without much audience appeal that were well written, acted, and produced, several years to find an audience, and allowing some lower-rated shows (Hill Street Blues, St. Elsewhere, the first few years of Seinfeld) to stay on the schedule as long as they drew high advertising rates based on wealthy yuppie audiences. For the time, the early 1980's, this was new. But a critical component of Tartikoff's strategy was shows with broad, popular appeal. Tartikoff was instrumental in launching shows like Miami Vice, the Cosby Show, Knight Rider, and Family Ties. Not to mention the A-Team.

Now, NBC's schedule is among the lowest rated of the broadcast networks, excluding the teen-girl oriented CW. Even it's head, Ben Silverman, has given up on the idea of becoming the number one rated network. Moves such as canceling the acclaimed "Life" and moving the similarly acclaimed "Chuck" to a thirteen episode run in the Spring of 2010 were something Tartikoff would not have done. Nor would the emphasis on cheap, disposable reality shows that make money on low ratings be part of the old Tartikoff strategy. Instead, NBC is loading up on cheap, female-appealing reality shows, and running a Jay Leno hour-long talk show at 10 pm every weeknight. Only Fox still programs new shows on Saturdays, "Cops" and "America's Most Wanted." NBC abandoned Saturdays in the late 1990's after the failure of the XFL stunt (a weird cross between football and Wrestling created by WWE head Vince McMahon). CBS and ABC had stopped running new shows several years earlier.

NBC is not alone, of course, in having problems with profitability. Ratings leader CBS has shown reduced operating revenue, compared with years before, prior to the recession. Fox, ABC, and the CW are also hurting. ABC canceled the series "Samantha Who?" with star Christina Applegate, due to an inability to reduce costs. According to Deadline Hollywood Daily, half a million per episode had to be cut from the budget to get the show renewed. It's possible that CBS made a similar decision in canceling the excellent "Eleventh Hour" which got good ratings.

The reason for the move to cut costs is clear: the networks, pretty much all of them, don't believe they can get enough viewers. Probably most of the networks don't want to do the things required to gain viewers. Since it would be too uncomfortable for network executives dealing with producers. NBC's Silverman, after all, was a reality show producer himself before becoming head of NBC programming, and will surely return to that once he leaves NBC, as is true for most programming heads. [Former "Mary Tyler Moore Show" and "Hill Street Blues" producer Grant Tinker became Tartikoff's boss at NBC.] Programming heads don't like to pressure producers outside their comfort zones, knowing the places can and will be reversed some day soon. Today's programming heads and producers are relatively happy creating content that is "edgy and hip" and aimed almost exclusively at women 18-34, the female youth demographic, so desired by advertisers. It was a strategy that worked reasonably well, during boom times, but is out of touch, and dangerously so, with economic reality today.

It's useful to compare today's America, and state of television, with that of the America in the 1960's. It's true that in the 1960's, there were only three broadcast networks, as opposed to five today (Fox and CW did not exist then). But there are about 100 million more people today in the US than there were during the 1960's. In 1970, the population of the US was about 203 million. Today, America has about 306 million. This increase of about 103 million people amounts to about roughly a 50% increase from 1970 levels. The Beverly Hillbillies drew about 60 million viewers during it's peak years. Today, with 50% more people, the highest rated show on broadcast TV is "American Idol" with about 25-30 million viewers. By contrast, HBO which is available to almost every household in the US, has only a third of households subscribing, which amounts to about 8-9 million viewers for the Sopranos, and 11.9 million viewers for the finale. Only the Superbowl, with ratings of around 100 million viewers or so has accomplished keeping near pace with population increases. One would imagine, that all things being equal, shows that were popular would be posting viewers in the 90 million range (about a 50% increase from the 60 million that the Beverly Hillbillies drew). This is not so. Even during the 1980's, before Fox and the CW, and widespread cable TV, the A-Team only drew 20 million viewers at it's height. [Fox first broadcast in October, 1986]

Even during the early 1980's, viewership had declined, despite the lack of alternatives (no Fox, no CW, no UPN nor WB networks, no cable inroads). A cable show like HBO's True Blood generates only 1.4 million viewers per showing. Broadcast network executives and producers argue that viewer erosion is a function of audience fragmentation, but clearly viewers were not watching TV, by the droves (nearly 50% less compared to the late 1960's) in the 1980's, comparing say Beverly Hillbillies (60 million viewers) to the A-Team (20 million viewers). This without cable, Fox, CW, UPN/WB, and so on. Even with cable competition, the numbers don't add up, i.e. there's just not enough total viewers of stuff like True Blood to account for the "missing" viewers. Moreover, cable networks like HBO, Showtime, USA, Sci-Fi, and others run their schedules in the Summer months, precisely to avoid competition with the broadcast networks, who have re-runs or unwatchable reality shows during that time.

The missing viewers, are of course, men. The Long Tail Blog has old data from the 2004-5 controversy over the "missing" male viewers reported by Nielsen. [Changes in methodology in 2004 had a 10% decline in male viewership 18-34, which was "adjusted" back to previous viewership levels in 2005.] Nevertheless, TV is a mostly gay-female ghetto. Sitcoms can have up to 80% of their viewers female, as a quick look at shows like "Friends" or "How I Met Your Mother" would confirm.

Look for example at ABC's 2008 Fall Schedule:

Number of shows (Primetime): 16.
Number female skewing: 16.

NBC's Fall Schedule has:

Number of shows (Primetime): 18 (I'm not counting the Saturday edition of Dateline NBC).
Number of female skewing: 13 (note, the five shows that are male skewing include the two Sunday Night Football shows, the pre-game and the Sunday Night Football.)

CBS's Fall 2008 Schedule is here:

Number of shows: 22.
Number of female skewing: 21 (I'm including only NUB3RS as not female skewing, and even that might be pushing it, if you added NCIS, Without A Trace, and the Unit, you would get to 18 as female skewing. My standard for not female skewing is a "male" show like the A-Team, i.e. few female roles, not much concern for relationships, other things women viewers like to see).

Fox's Fall 2008 Schedule is here:

Number of shows: 17 (I'm counting the Saturday shows of Cops and America's Most Wanted).
Number of female skewing shows: 15.

CW's Schedule for Fall 2008 is here.

Number of shows: 10.
Number of female skewing shows: 8 (I'm counting Smallville and Supernatural as at least not female skewing shows, they are weird hold-overs from the WB days).

This gives us the following graphs:


[Click Image to enlarge]

As you can see, NBC had the most shows that were "Men Friendly" in the sense of not being female skewing (such as say, ABC's "Desperate Housewives") with five, two of those related to Sunday Night Football (the pre-game show and the game broadcast, respectively). Moreover, even shows such as "Heroes," and "Chuck," and "My Own Worst Enemy" had substantial female-friendly elements (soap-opera style relationship stuff, and so on). NBC, moreover, did not do very well with it's line-up of shows. "My Own Worst Enemy" was canceled fairly quickly, and "Life," "Chuck," and "Knight Rider" failed to catch on (though "Chuck" was renewed).



[Click Image to enlarge]

The percentages were overall, fairly dismal. Men make up approximately 50% of the population, but only NBC cracked 25% of their shows being "Male Friendly" and that was a function of the Sunday Football broadcasts. One could argue about how to classify such CBS shows as "Without A Trace," or the various CSI-en, or "Eleventh Hour," but even adding them to the male-friendly mix would not approach 50% for the network, let alone total.

What's wrong with the television networks is the lack of men. Men are the missing viewers. Even counting cable systems, we have the following female-oriented cable networks: Lifetime, Lifetime Movie Network, WE, Oxygen, Bravo, Out, HGTV, Food Network, TLC, A&E, HBO, Showtime, Fine Living, Travel Channel, and Tru. That's a total of 15. Male oriented cable networks include: History Channel, ESPN, NFL Network, National Geographic, Discovery, USA, and Spike. That's a total of 7 networks. As we can see regarding broadcast networks, ALL the current broadcast networks are oriented overwhelmingly towards women.

This emphasis on female viewers has done two things. First, it has made entertainment dull, predictable, and PC-driven. Pushing the message that say, criminals (like the ones always breaking into the house "protected" by the Brinks Home security system in the series of commercials) are mostly mid thirties White guys who look middle class:



Or the endless supply of middle aged, White guys who probably resemble the ex-husbands of the script writers (Law and Order-en family of shows is notorious for this). Instead of the depressing reality of violent crime committed by Blacks and Hispanics. The White female audience demands PC and Multiculturalism, not just because those populations are totemized as some "Magical Negro" (ala Spike's Lee's famous essay decrying the dehumanizing effects of movies such as "Legend of Bagger Vance" where Black characters have magical powers ... that they use to spiritually enlighten White protagonists). But also because women find most "beta" males tedious, as workplace competitors, and bearers of unwanted sexual attention. Thus TV gives women the wrong ideas about who are the risky ones (hint: it's not the boring mid-thirties White guys) for crime and violence, and in asserting the PC dogma, boring and predictable.

Television, after all, has advantages over movies. Longer running times allows complex story lines (about 15 and a half hours for a 22 episode season, compared to 2 hours for most movies). Television is usually dominated by writer-producers, allowing creative continuity. Lacking big budgets for Michael Bay type special effects, television relies more on character than explosions and CGI. Being free or mostly free, television can reach far more people per year than all but the biggest of movies. The actors, too, can often be more skilled, selected for the ability to make the audience like and care about the lead over years, rather than tabloid celebrity. Particularly in a recession, television should be attractive, given the ability to reach far more people with less marketing costs than a big budget movie.

If Television producers and writers were forced out of their female-pandering comfort zone, to create more male-oriented dramas and sitcoms, or at least "male-friendly" in that shows did not have many elements that turn off male viewers (primarily female views of men: "beta losers" and bad-boy winners, along with soap opera emphasis on "doomed love" relationships with bad-boy characters) the creative output would be higher, on average, because those crutches would be gone. More mature, complex, and intelligent characters would be created, with an emphasis on fun. You would also see a net improvement in the kinds of social information given. Far less "evil White guy" villains, and more accuracy in social information.

This relentless focus on female audiences to the point where some networks have no male-friendly shows on them at all (ABC) is of course driven by advertisers, who have traditionally felt that women consumers make most household purchases. As marriage is delayed, or never happens at all, and more and more women are single mothers, and divorce rates remain high, this assumption is seriously flawed. A relic more of the 1960's than today. The food magazine Cook's Illustrated ten years ago had only 17% male readership, today it is over 50%, according to the Wall Street Journal (print edition only). Anyone shopping at the Supermarket will find Dads with kids in tow, doing the shopping and decision making. The female-only strategy, which has been a long-time in coming (as seen in the huge drop-off in ratings from the 1960's to 1980's, long before cable and the internet and video games), was sustainable in good times, but clearly not in bad times. Advertising revenue is down, substantially down, from good times. The female viewership, not the male viewership, is fragmented and hotly competed over. Much hyped CW series "Gossip Girl" for example, can get 1.9 million viewers for new episodes. Meanwhile men have sports, some shows on USA and Sci-Fi network, and the History Channel. That's about it.

Attempts to be "edgy" with hip-female oriented shows such as the remake of Battlestar Galactica have not been ratings winners, for reasons original series star Dirk Benedict explained. [Read the link, it's hilarious.] Two to 1.7 million viewers is "Gossip Girl" territory. Lower even than the Dollhouse finale. [Clearly Dollhouse was renewed because execs want to be on-set for Eliza Dushku's scenes in skimpy costumes, even if the audience could care less.]

NBC's strategy of pursuing the lowest cost possible schedule, and damn the ratings, is doomed to failure. Silverman, coming from a reality producer's perspective, can't understand the fixed costs of a broadcast network, and the coming danger to Television. Broadcast networks, after all, are simply a way for content to be delivered, at the same time, to affiliate stations. The TV networks are merely the outgrowth of the original radio networks, which sought to provide national news, sports, and entertainment through the network model. Just as the LA Times started to decline long before the internet, so too has television viewership. But now the challenge in particular for NBC is worse. It's not just the recession and advertising market being down considerably. Or the brutal competition for female viewers among all the cable and broadcast networks.

The internet allows content creators to deliver serial shows either streaming on-demand, for free, or pay-per-download (the Itunes model), or indeed both. Amazon and Itunes both will gladly sign agreements for content providers, for downloads. The cost to the content producer is relatively low. Even setting up a website like Hulu (or piggybacking on that existing site, and those like it) is not that expensive, far less than say the marketing budget for the film "Sideways," and the former is a cost that can be expensed against many shows.

The future is unlikely to be in broadcast television. There was, for a while, a brief shining opportunity to put content on broadcast television (as a promotional opportunity), on the web as advertiser supported free streaming video, and pay-per-download Itunes/Amazon content, all supported by the vertically integrated mega-media corporations. But predictably, executives looked to their next jobs with content producers, and assumed the years ahead will look like the years behind. That's a dangerous assumption, in all likelihood.

Television is likely to become even more a gay-female ghetto, ala ABC, with almost no men watching it (it's clear in retrospect that execs could not wait to dump ABC's one male-skewing show, "Monday Night Football"), while challenges to the broadcast network arise from places filled with lean and hungry content creators craving access to all those under-served male consumers. Just as American TV is filled with actors from the UK and Australia, it could well be that Hollywood's TV (and movie) complex is replaced by creators from Canada, New Zealand, and Australia, eager to take a risk and make entertainment appealing to men as well as women. The technology exists, today, to provide that challenge.
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Failure of the Media Part Two: The Lingering Death of the LA Times

By all accounts the LA Times should be doing well. Absent the leverage demands of the parent company Tribune Media, the potential readership of the LA Times should be large. After all, the US Census Bureau shows 9.8 million people in Los Angeles County alone, and the Metro Area of LA (including Los Angeles, Riverside, San Bernadino, Orange, and Ventura Counties) offer no serious competitor to the LA Times. [Thanks to Google for the excellent graph at the link.] For people interested in reading about sports, entertainment, or anything else to do with the Los Angeles metropolitan area, there would seem to be no real alternative to the LA Times. It should be a perfect world, both plenty of customers, and no serious competitors. Even local blogs such as LA Observed or Mayor Sam's Sister City (the latter joking "written" by long-deceased Mayor Sam Yorty) offer no serious competition for the broad categories of sports, news, local happenings, and entertainment and few financial resources to compete in those broad categories.

Why then is the LA Times in trouble, with an ever declining readership, ever declining advertising base, ever declining staff, and morale at the paper at rock bottom? The answer is of course, demographics. Simply put, there are not enough upscale, Liberal White newspaper readers to make the LA Times profitable.


It's worth noting that the LA Times circulation peak was in 1988, with 1.1 million readers, daily. The LA Times has been declining in circulation ever since, down to 739,000 daily, as the chart below makes clear. [Data from the Wikipedia cite, see also here]


[Click Chart to Enlarge]


Yet even as the paper has been mired in one controversy over another, from the carefully timed release of sexual harassment allegations regarding then recall candidate for Governor Arnold Schwarzenegger (two days before the vote), to the suppression of the video of Barack Obama at PLO operative Rashid Khalidi's going away party and controversy over revenue sharing of an LA Times published magazine celebrating the Staples Center, population has been increasing in LA County. The increase is 14%, from 1988 to 2008, while the decrease in circulation is fully one third, at 33%.


[Click Image to Enlarge]

It's useful to recall, how under fully 14% fewer people in LA County alone, the LA Times reached it's peak circulation of 1.1 million daily. The featured Sports columnist was Jim Murray, not J. A. Adande. Batting Cleanup for Murray was the sarcastic Scot Ostler. Pat Morrison, from PBS, was not a columnist, while Jack Smith was. The newspaper, while fairly socially liberal, had a moderate to conservative political bent, was oriented towards serving it's mostly older, male readership in the things that mattered, local Sports, politics, and entertainment. The paper spent comparatively few resources on hip/trendy, but unread music columnists like Robert Hilburn, or tragically hip (but unread) movie critics like Carina Chocano. Angry Hispanic chauvinists and Liberals like Al Martinez and Steve Lopez were largely kept under wraps. Knowing that readership of the LA Times was mostly White, Male, and conservative.

This focus changed, even before Otis Chandler relinquished day-to-day control in 1995, as senior editors began to focus not on what their customers wanted, but on competing with local NPR stations they'd listen to in the drive over to work. Despite, of course, all those NPR stations being subsidized affairs that required massive fundraising efforts quarterly and relied upon being license holders of valuable broadcast frequencies, through government largesse. The success of NBC, nationally, with the Brandon Tartikoff strategy was no help either. Tartikoff's strategy, was to trade absolute number of viewers at NBC in favor of young urban professionals, the yuppies. In the go-go 1980's, the strategy worked as advertisers clamored to get in front of people with money. For the LA Times, however, this strategy was disastrous.

Because locally, Los Angeles was changing. The increase in population, as seen in my post, Radio and the Death of Indie 103.1, was mostly Hispanic/Mexican. Whites were actually a declining part of the population, and there was not enough wealth being created to drive upscale advertising. Even worse, by it's very nature, paper newspapers cannot track the type of people reading it's content (and ads). While NBC and other broadcast networks could proudly tout through the Nielsen reports, just how many women 18-34, or other coveted demographic slices, were watching the shows and ads. Advertisers with the LA Times had no way of knowing if the ads were reaching the wealthy few of Marina Del Rey, Malibu, Santa Monica, the Venice Canals, or people in Torrance, Tarzana, or Culver City, decidedly less wealthy and therefore not worth paying extra for to reach.

Meanwhile, forces were brewing that would devastate LA's economy, create White Flight, and conspire to help mortally wound the LA Times. The forces had two names: Bill Clinton, and Rodney King.

Under Bill Clinton's leadership, the LA area lost175,000 jobs at a minimum. Losses accounted for fully 45% of all high tech jobs in 1998, the near peak of the Dot-com boom. The biggest losses in that sector since the end of WWII, affecting nearly 12,000 firms in the LA basin. As shown in this WSJ article, rosy projections by Clinton and his people about changing over to entertainment from aerospace proved a mirage. High paying jobs, and the ability of those high-paying jobs to sustain a White middle class (that read newspapers like the LA Times) in a region of high housing costs, taxes, and energy costs, collapsed with Clinton's defense cuts. As others have noted, particularly Steve Sailer, LA's geography does not lend itself to living just anywhere. Weather is brutally hot (and smoggy) in low-cost areas such as Riverside, San Bernadino, and the Antelope Valley. Meanwhile job centers are located in nice to live in coastal areas, making commutes brutal. Key coastal areas that have decent climates and easy commutes are off-limits because of huge concentrations of crime-ridden non-White populations, making gentrification a joke (Watts, South Central, Bell, much of Long Beach, and East Los Angeles all fall into this category). Parents have to spend considerable sums of money to live in school districts that are merely acceptable, where their children do not face gangs or anti-education populations. All of this was sustainable as long as high-paying jobs in either the assembly line or engineering staff and large supporting structure of ancillary firms continued to exist. By 1994, that structure was gone, and families unable to afford LA's high cost of living fled elsewhere. To Texas, Arizona, Nevada, Idaho, Utah, and Colorado.

Few were inclined to stick things out, because of the impact of the Rodney King riots. The riots, and the inept, politically driven response by the LA and State leadership, lost the confidence of LA's middle class. The riots, occurring just hours after the Not-Guilty verdict in the trials of LAPD officers Koon and others, on April 29, 1992, killed 53 people and left substantial parts of the city (most of it located in Black/Hispanic South Central) in burnt out ruins. However, the beating of Reginald Denny, by a Black mob, as the LAPD and other law enforcement authorities retreated, shocked middle class Whites in the LA area. As did the televised gun battles between Korean shop owners and marauding gangs of mostly Black looters, with the law enforcement authorities absent entirely.

Here was unmistakable evidence that when it came to public safety or suppressing a mob of Black (or Hispanic, just as many if not more of the rioters and looters seen on TV were Hispanic/Mexican), the political leadership, from Republican Governors like Pete Wilson down to the LAPD Chief Darryl Gates, and Black Democratic Mayor Thomas Bradley, would choose to sacrifice public safety instead of crack down hard, on mobs of non-Whites. While expedient politically in the short run (avoiding hugely negative press coverage which was for the most part solidly pro-rioter, and predictably anti-police) this series of choices to sacrifice mostly White (and Korean) public safety in favor of avoiding criticism for shooting and mass arrests of Blacks and Mexicans, had predictable results.

Besides increases in gun ownership among Whites, those who could leave Southern California did so, for states that were noticeably more White, and committed to public safety. Loss of confidence in the entire class of leadership, Republican and Democratic alike, when it came to public safety, had the Los Angeles Basin White middle class ready to leave when economic hardship hit in the form of Clinton's defense cuts that destroyed the economic basis of the White middle class.

As a result of the White flight from the LA basin, the LA Times began to lose readership, and potential readership, year by year. All the while, more immigrants, legal and otherwise, crowded into the LA basin. However, nearly all of these immigrants were non-English speakers, and preferred their newspapers, if they read them at all, in their native languages. Further eroding the LA Times financial position. In response, the LA Times leadership, created more and more liberal coverage. Not just on the opinion pages, but in the coverage of everything from Sports, to Entertainment, to News.

Completely absent from the LA Times pages were the growing influence of the MS-13 gangs, their ability to push westward from Downtown LA into MacArthur/Westlake Park, and the flight of Blacks southward into Long Beach out of South Central and Compton as superior numbers of Mexican immigrants (and gangs) pushed them out of native turf. That many of the gang-related murders in the LA area each year were related to these struggles were never mentioned in the LA Times. Meanwhile, it was by no means unusual for LA Times movie critics like Carina Chocano to query film-makers/producers like Judd Apatow on why fat White Guys get all his jokes (Apatow responded that political correctness dictated that only Fat White Guys be funny, the subject of jokes) in PC-inquisitions. Much of the content of the LA Times resembled a PC inquisition, into the state of mind of any (White Male only of course) person who might harbor racist, or sexist, or homophobic thought (crimes).

Naturally, subscribers edged ever downward. To their current level, a third less than the 1988 peak. Now with a heavy debt load acquired by the leveraged purchase of the Tribune Company by owner Sam Zell, the LA Times seems circling the drain like the Seattle Post-Intelligencer and other newspapers that might cease publication altogether in favor of online-only limited content.

The environment for Print Newspapers is dire. Newsosaur notes that young people (and there are few of them to begin with, at least White ones, due to the birth dearth) do not like to read newspapers, and the percentage that do has declined from 40% or so in 1999, to around 30% today. This is consistent with other findings. Older (White) Americans, age 65+, read newspapers the most (above 70% in 1999, to about 65% today). While ALL groups have declined, only ages 45 and up both started and finished above 55% in reading newspapers regularly).

Even worse, ad sales slid an appalling $2.6 billion last quarter or fully 28.3%. There is not any prospect of an upturn in the economy bailing out a failed strategy of appealing to ever younger, more liberal readers, who don't read newspapers in the first place, while alienating older, more conservative readers. The collapse of the housing industry and banrkuptcy of GM and Chrysler, means that ads for houses and autos, mainstays of newspaper advertising, are largely gone. Not to be replaced or revived any time soon.

Clearly, the LA Times, and parent Tribune Company, is only a few short steps away from bankruptcy, and perhaps cessation of the print publication of the LA Times. I doubt many readers will miss them.

So what is ahead for papers like the Times?

They can probably soldier onward, zombie-like, as glorified blogs. Costs for electronic versions are astonishingly low, but there remains the problem of getting people to read their content. The LA Times certainly could have driven millions of viewers to it's website by the simple expedient of putting up the video of Barack Obama at Rashid Khalidi's going away party. That it did not speaks volumes about it's desire to present ideological purity and propaganda (news suppression) over providing content someone might actually want to read. But simply producing a glorified "professional" version of LA Observed without the style and critically, the content of that website is not going to produce profits. Merely lower levels of losses.

Newsosaur, a Silicon Valley entrepreneur, believes that his "ViewPass" will allow newspapers to charge prices content on array of mobile devices a sort of me-too operation in the way that the NFL or MLB charges for games streamed onto mobile phones and the like. I don't think that will succeed. Simply because newspapers are unable to provide anything worth reading.

Lost in all of this is the generational change of leadership in newspapers and indeed nearly all media. Old-line editors were like columnists such as Jack Smith or Jim Murray. They understood, and shared, the likes, dislikes, prejudices, virtues, and flaws of most of their readers. Because they were like their readers: older, Whiter, more conservative, middle class, and well, male. They certainly were not part of the liberal hothouse of academia and the media that exists today, advancement was through apprenticeship and demonstrating that stories generated readers (and thus money), not through "correct" ideology and gender, race, and sexual orientation membership. It would have been unthinkable in the Jim Murray era for the LA Times to employ a Sports Writer who openly had (a publicly celebrated in the LA Times pages) sex change operation. It simply would not have been tolerated, the risk of canceled subscriptions was too high, and the paper's purpose was to turn a profit, not push a social agenda (one alien to most of it's readers).

When the agenda of "celebrating" the transformation of Mike Penner to Christine Daniels takes precedence over providing an enjoyable Sports section for the morning breakfast table, newspaper management has lost all ability to connect with it's potential readers. A "ViewPass" can provide all the centrally managed mobile content that can be created, potential readers won't pay for Sports content provided by trans-gendered folk, even if said content is free.

Newsosaur is quite skeptical of the ability of the government to provide bail-out money. The losses are too deep, and the taxes required too onerous, to provide a complete Pravda model. While it's certain bailouts will be proposed, the ability to push them through in hard economic times when readers have already voted with their wallets (not to subscribe) is questionable.

It's quite likely, instead, that various bloggers, and conglomerations of bloggers, locally, will provide content, and that as newspapers like the LA Times shrink down to LA Observed / Mayor Sam's Sister City size, those bloggers or people like them will grow upwards. After all, it's all about content.




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Media Failure Part One: Radio and the Death of Indie 103.1 FM

A lot of talk in the blogosphere and in newspapers and magazines has been about the incipient failure of newspapers. The Christian Science Monitor has gone online only. The same has happened with the Seattle Post Intelligencer and other papers around the country, from Wisconsin to Tuscon. Television too, has had a rapid decline in viewers, with NBC posting the smallest ever average Prime-Time weekly audience (4.4 million viewers) outside the Summer doldrums since the dawn of Television in 1948. Clearly, all media are in trouble.

But it's in Radio that at least part of the problem, the demographic decline of young White people, is clear, and unmistakeable. Likely, no better example can be found than in LA's "Indie 103.1" short lifespan, and replacement by Spanish-language format.


Indie 103.1 began broadcasting it's Punk/Alternative mix in late December 2003, and flipped to Spanish Language radio in January 19, 2009. Over the short, five year lifespan, the radio station was featured on the Fox show "the OC" and on the MTV prank show "Punk'd." Always in competition with rival station KROQ 106.7 FM, the station nevertheless featured Punk/Alternative personalities like Steve Jones of the Sex Pistols, Joe Escalante of the Vandals, and Dickie Barrett of the Mighty, Mighty Bosstones as DJs or on-air personalities.

With a population of 17 million or thereabouts, it would seem that there would be more than enough listeners for both KROQ and Indie 103.1 to survive. After all, Los Angeles has two all-news AM stations, KFWB and KNX. Why not two Alternative/Punk stations? The answer is simple, there simply are not enough young (White) people in the LA Metro area to sustain two stations.

To get a flavor of the full list of LA Radio stations (familiar to anyone driving in and around Los Angeles), I've compiled the listings below from the sources here, here, and here. The listings below give the FM stations (note some, like KUCI 88.9. FM are clear only in limited areas, while others have strong signals). LA's mountains and valleys make reception iffy in some areas, and transmitters may operate under reduced power making geographic spread smaller than in say, flat and open Dallas. Reduced signal strength allows both KUCI and KTLW (operating out of I believe, Antelope Valley) to share the same frequency. The LA Metro area is a big market. Some stations also broadcast over the same frequency but with different call signs, but the same simulcast programs.

FM Stations:

Call Letter	Frequency	Language	Format
KKJZ	88.1FM	English	Jazz, Blues
KCSN	88.5FM	English	Classical
KUCI	88.9FM	English	College
KTLW	88.9FM	English	Christian
KXLU	88.9FM	English	College
KPCC	89.3FM	English	Public
KCRW	89.9FM	English	Public
KBPK	90.1FM	English	Adult Contemporary
KSAK	90.1FM	English	College
KPFK	90.7FM	English	Public
KUSC	91.5FM	English	Classical
KHHT	92.3FM	English	Urban Contemporary
KLIT	92.7FM	English	Adult Contemporary
KCBS	93.1FM	English	Classic Rock
KDAY	93.5FM	English	Hip Hop
KMVN	93.9 FM	Spanish	Spanish
KEBN	94.3 FM	Spanish	Spanish
KBUA	94.3 FM	Spanish	Spanish
KTWV	94.7 FM	English	Smooth Jazz
KLOS	95.5 FM	English	Classic Rock
KFSH	95.9 FM	English	Christian
KXOL	96.3 FM	Spanish	Spanish
KFXM	96.7 FM	Spanish	Spanish
KLSX	97.1 FM	English	Adult Contemporary
KLYV	97.5 FM	Spanish	Spanish
KLAX	97.9 FM	Spanish	Spanish
KYSR	98.7 FM	English	Adult Contemporary
nina	99.1 FM	Spanish	Hip Hop
KKLA	99.5 FM	English	Christian
KOLA	99.9 FM	English	Adult Contemporary
KKBT	100.3 FM	English	Hip Hop
KRTH	101.1 FM	English	Oldies
KSCA	101.9 FM	Spanish	Spanish
KJLH	102.3 FM	English	Urban Contemporary
KIIS	102.7 FM	English	Top 40
KDLE	103.1 FM	Spanish	Spanish
KDLD	103.1 FM	Spanish	Spanish
KOST	103.5 FM	English	Adult Contemporary
KRCD	103.9 FM	Spanish	Spanish
KBIG	104.3 FM	English	Adult Contemporary
KKGO	105.1 FM	English	Country
KBUE	105.5 FM	Spanish	Spanish
KOSS	105.5 FM	Spanish	Spanish
KPWR	105.9 FM	English	Hip Hop
KGMX	106.3 FM	English	Adult Contemporary
KALI	106.3 FM	Spanish	Spanish
KROQ	106.7 FM	English	Alternative
KSSE	107.1 FM	Spanish	Spanish
KLVE	107.5 FM	Spanish	Spanish
KTYS	107.9 FM	English	Hip Hop
KQVM	107.9 FM	English	Dance

The AM stations are listed below:

Call Letter	Frequency	Language	Format
KTVO	530 AM	English	News
KMBR	530 AM	English	Easy Listening
KGIL	540 AM	English	Talk
KLAC	570 AM	English	Sports
KAVL	610 AM	English	Sports
KFI	640 AM	English	Talk
KIRN	670 AM	Asian	Asian
KXTRA	690 AM	English	Talk
KSPN	710 AM	English	Sports
KBRT	740 AM	English	Christian
KABC	790 AM	English	Talk
KLAA	830 AM	English	Sports
KRLA	870 AM	English	Talk
KALI	900 AM	Spanish	Spanish
KHJ	930 AM	Spanish	Spanish
KFWB	980 AM	English	News
KTNQ	1020 AM	Spanish	Spanish
KNX	1070 AM	English	News
XEPRS	1090 AM	English	Sports
KDIS	1110 AM	English	Kids
KXTA	1150 AM	English	Talk
KXMX	1190 AM	Spanish	Spanish
KHTS	1220 AM	English	Adult Contemporary
KYPA	1230 AM	Asian	Asian
KGIL	1260 AM	English	Talk
KSUR	1260 AM	English	Oldies
KFRN	1280 AM	English	Christian
KAZN	1300 AM	Asian	Asian
KWKW	1330 AM	Spanish	Spanish
KWJL	1380 AM	English	Oldies
KLTX	1390 AM	Spanish	Spanish
KMRB	1430 AM	Asian	Asian
KTYM	1460 AM	English	Christian
KUTY	1470 AM	spanish	Spanish
KVNR	1480 AM	Asian	Asian
KSPA	1510 AM	English	Sports
KMPC	1540 AM	Asian	Asian
KBLA	1580 AM	Spanish	Spanish
KFOX	1650 AM	Asian	Asian

Immediately, two things pop out from the list. One is the predominance of Spanish-language in the FM band, a band formerly reserved for well, Anglo music, be it Rock, Classical, or Jazz. Secondly, the dominance of Spanish language and Asian language radio in Los Angeles's AM bands.

The two graphs below illustrate this:


[click Image to enlarge]


[click Image to enlarge]

Several other things stand out. As anyone who has listened to KCRW, or KKJZ knows, public radio stations are not exactly commercial free. They have frequent pledge breaks, where say, KCRW General Manager Ruth Seymour urges listeners to pledge dollars for various goodies and so on. In between music, public affairs program (such as "To the Point With Warren Olney") or news, sponsors run frequent "image building" ads touting their "responsibility." It's straight out of "Stuff White People Like" (the blog and book) or ABC's "the Goode Family."

Nevertheless, without the Public Broadcasting presence on the FM band, it would probably have more Asian and Spanish language stations in the LA area. There are at least five Public stations on the FM band in LA (KUCI, KCRW, KUSC, KKJZ, KPFK, are the ones I know). It is telling that in a metro area of 17 million people, there is only one major Classical station (KUSC-FM) and one major Jazz station (KKJZ, formerly KLON-FM, Long Beach). Both broadcasting out of universities (USC and Cal State Long Beach, respectively) as Public Broadcasting Stations.

Next, it's the nature of the successful radio stations on the AM band, that are NOT either Asian or Spanish language. There are six sports talk stations, and seven talk radio stations that are in English in the AM band (station XEPRS 1090 AM is included because South Orange County picks it up from San Diego). Those are nearly the numbers of the Spanish and Asian languages, and account for 56% of the English Language AM stations. That number rises to 65% if you throw in the two all-news stations, KNX and KFWB.

What does this tell you?

In a marketplace (AM, which is totally commercial, no Public Radio) where reaching listeners equals operating profits or losses (if your station does not reach listeners), owners choose mostly English language Sports, Talk/News, or Spanish language, or Asian language formats, with a smattering of oldies or Christian formats in English thrown in.

The LA Almanac here has some interesting data. You can see that several things are immediately apparent. First, that there are more Hispanics than Whites in LA County (unfortunately, there is no source that aggregates the multi-county areas of LA Metropolitan region, including LA, Orange, Riverside, San Bernadino, and Ventura counties). This alone drives up Spanish Language stations, and under-reporting (lots of illegal aliens not counted) could lead to substantially higher numbers of Hispanic/Mexican consumers that advertisers selling cola, candy, and other low-cost consumer goods would want to reach. There are also a substantial amount of Asians, more than Blacks in sheer numbers, accounting for Asian radio. It's likely that the amount of Asians has only increased since the 2000 Census.

But also, well just how OLD LA County is with respect to it's White population.

The graph below (aggregated ages 20-21 for sake of smoothing out age cohorts) shows WHY Indie 103.1 failed. Men and women aggregated together do not cross the 200,000 threshold until the late 20's at least. Moreover, there are few young people in the pipeline, take a look at the younger White Angelino cohorts. There's not that many of them. Even assuming that the cohort increases post college (people move to the LA Area), there still is not that many of them. Note also, the slight but decided greater numbers of men, particularly in the late twenties through thirties, over women, among LA County Whites.


[click Image to Enlarge]

Many things Indie 103.1 did during it's broadcast existence puzzled me. The emphasis on Trader Joes sponsored Morning Show Wine Tastings. The use of minor celebrities like Timothy Oliphant and David Lynch to do morning sports and weather. Looking at the demographic breakdown by age cohort, it makes perfect sense. Indie tried to grab the small amount of Yuppie Whites in their thirties and forties and FAILED. EPIC FAIL.

Yes, no doubt Satellite Radio played a part in the demise of Indie 103.1. But note that the station posted negative results in the Arbitron ratings after the recession started to hit, just when people would be looking to escape from costly Satellite Radio into free FM.

It seems there just weren't enough Alternative Yuppies to make Indie 103.1 a go against KROQ, and certainly not enough younger kids (Indie 103.1's 80's Nostalgia Wave makes retrospective sense) to drive newness and sensation seeking to the station. The stations that ARE successful are those that cater to the demographic bulge, around the thirties through the fifties, and the older population that is at least as big as the younger one. Itself a shocking change from what we conceived as "classic" America from say, the 1900's onward through the 1960's, with each generation of young people getting bigger than the cohort that went before.

Now, it gets smaller each generation.

For those traveling through Los Angeles, who wonder why LA radio is a barrage of Spanish, Asian, and not much else, the graph below shows it all:


[click Image to Enlarge]

What are the broader lessons from the failure of Indie 103.1 FM?

One: Your demographic slice your media targets must be large enough.
Two: White America is older and more conservative than the Yuppie model of "Stuff White People Like."
Three: There are not many young Whites, most young people are Hispanic.
Four: Youth-oriented media mostly fails.
Five: Betting it all on Yuppies with lots of money is a bad long-term bet, because there just isn't enough base population of Whites to generate enough Yuppies with money. A recession can kill the business.
Six: The biggest slice of Whites ages 30-59 seem to like Sports and Talk Radio, much of the latter overtly conservative.
Seven: Radio is the reverse image of Television, it's male dominated, with male personalities in Sports and Talk (and even Alternative Rock DJs during drive time). There is nothing like "the View" on AM or FM LA Radio.
Eight: Much of the Yuppie entertainment infrastructure in current radio is a Public Broadcasting anomaly. Making the Yuppie Radio presence bigger than it appears. Since most Public Broadcast stations depend on pledge drives plus NPR subsidies to operate, not ad revenues based on ratings.

But it all boils down to much of White America is older, and more conservative, than you'd think. Certainly compared to the Hispanic population, which is much, much younger.
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