Posted on 05/28/2015 6:08:43 AM PDT by raccoonradio
After news broke about the Rush Limbaugh Show getting kicked to the curb by WRKO-AM in Boston, Nielsen radio market #10, I received about a dozen emails asking when I was going to comment. So, here goes.
First, understand the “business of business is business” and the “business of money is money.” And it’s money not a station’s Nielsen ratings that will ultimately determine your success or failure as a personality. For most of us, revenue and ratings are connected. But, that’s not true for everyone.
After Rush Limbaugh stepped over the line with his Sandra Fluke comments a few years ago, his mistake being an old man verbally abusing a young woman, which in our society is never acceptable, liberal bloggers and media sites made note of the dozens and dozens of advertisers who canceled advertising in his show. Somewhat true, in an indirect way. But the real story, almost always left out by liberal bloggers, is most of the advertisers who supposedly canceled never advertised in his show. His show has always been filled with non-traditional, non-mainstream advertisers, advertisers who buy into the Rush Limbaugh brand to focus on his niche ditto head audience. And there’s nothing wrong with this because many ditto heads are affluent. Many have the bucks to buy gold coins in event the economy goes to crap because of Obama and besides they want to “take our country back.” No one is really sure who took the country or where it’s gone, but they want it back! I saw the hand-painted bed sheet hanging from a bridge in Northern Kentucky a few weeks ago. I know they’re serious.
Limbaugh’s Sandra Fluke comments were the cause, indirectly, of the Wall Street Journal Radio Network being shuttered. Because of no placement demands from advertisers, commercials from other radio networks could not be broadcast locally during Limbaugh’s show and some of those other radio networks, like the Wall Street Journal Radio Network, lost – in the weeks immediately after his Fluke comments – almost 40% of its revenue. I am told Fox News Radio lost about the same.
Today, talk radio stations are considered “toxic” or “non-toxic.” If a station broadcasts Limbaugh or other shows like Sean Hannity and Glenn Beck they are deemed “toxic.” If a station does not broadcast those conservative talk shows they are considered “non-toxic.” National advertisers buy, via radio networks and agencies, mostly “non-toxic” stations. When I first heard about this “toxic” and “non-toxic” nonsense I thought it was a joke. But, it wasn’t. And since most news/talk stations broadcast Limbaugh, Hannity, Beck and other programs like Michael Savage’s The Savage Nation, there are few “non-toxic” news/talk stations for advertisers to buy and that’s not good for the format.
Following so far?
But, Limbaugh’s business model, in comparison to most other syndicated talk shows, is somewhat unique and this is where those beating the drum about advertisers canceling commercials on liberal blogs are missing the point.
The Rush Limbaugh Show is fee based, meaning stations pay the show’s syndicator, Premiere Networks, a rights fee based on market size, plus provide barter commercial time to broadcast the program. Limbaugh’s show reserves at least 5 minutes of barter commercial time each hour with stations agreeing to broadcast those network commercials sold by the syndicator.
Mr. Limbaugh, sir. I regret to inform you Indianapolis and Boston no longer desire your services. Maybe if we deflate some footballs people will listen?
Boston’s WRKO-AM is paying around $500,000 each year in rights fees. They also provide approximately 3900 barter commercial minutes annually, which if valued at just $150 per :60 seconds is another $585,000 in cash they’re giving up. And there’s the Rush Limbaugh Morning Update, which tacks on another 780 minutes annually for another $117,000 in commercial time. All in Limbaugh’s show is costing WRKO-AM around $1.2 million dollars annually. Now consider all those advertisers, nationally and locally in the Boston market, that have no placement demands because his show is considered “toxic” and you quickly discover the financial reason WRKO-AM is declaring, “No Mas! No Mas!”
There was a time when Limbaugh’s show could make or break a news/talk station. There were short-sighted stations that foolishly called themselves “Rush Radio.” There was a time when paying Limbaugh’s huge rights fee was the cost of doing business in the news/talk format. But, no more. Not with terrestrial AM radio, its declining revenue environment and his declining ratings.
Minneapolis pays around $300,000. Tampa pays approximately $250,000 in rights fees. WIBC-FM, which also announced they were canceling his program is paying around $150,000 in cash to broadcast his show. He’s got around 600 radio stations. Do the math. Much of the business of the Rush Limbaugh Show is not in advertising revenue from commercials, but in rights fees.
WRKO-AM is owned by Entercom and WIBC-FM is owned by Emmis.
Clear Channel Media + Entertainment iHeart Media produces the Rush Limbaugh Show through its radio network, Premiere Networks. It requires most of its company owned news/talk stations to broadcast the show, pay the rights fee and give up barter commercials. See how the show is less dependent on commercials for survival and more dependent on guaranteed rights fees? There’s little chance Rush’s poor ratings today or tomorrow will change anything, because the money flows from its stations to the network to Limbaugh through a process called (corporate speak) “vertical integration.” Production and distribution is in one tidy package and distribution is all but assured.
Two more markets have canceled Rush and while we’re told “exciting news” on new radio homes is forthcoming, nothing is being said and weeks have gone by for an Indianapolis station to volunteer.
I was quoted in the New York Daily News this week. The article from David Hinckley talks about Limbaugh’s $400 million contract being up in 2016. Hinckley opines in his article, “Given Limbaugh’s prominence, his next deal could say a lot about both his status and the state of conservative talk radio.”
While his paycheck may be smaller in the coming years, as long as co-owned stations are forced to pay his rights fee, ditto heads will be happy to know he’ll be around for a while…unless he too yells, “No Mas. No Mas.”
Sounds like a Hollywood blacklist to me. Conservative talk format is "toxic". Unlike the liberal rhetoric that is heard in news, talk, infotainment, comedy, and sports in the MSM.
FR itself doesn’t have the same level of posts in threads or even number of new articles as in years past.
It isn't JUST about that, the corporations that monopolized radio (and eliminated local content/control) don't want to see their stations diminished in value by such competition.
Out of curiosity, why do you listen less these days?
Two reasons, really:
First, work schedule. There is NO WAY to get him at work - FR is barely accessible.
Second, content. If all I wanted to hear about was sports-name-dropping, I’d watch Disney/ESPN.
It wasn’t Fluke.
Anyone who believes that is delusional.
What did it was demoralization of the conservative base. Elect conservatives, and things will change. He carried so much water for these guys and he’s now getting hammered for it.
What conservatives have discovered is that no matter who you elect, you get Statism.
Even Rush doesn’t know what’s up any more. He can’t figure it out, and he sounds as frustrated as we are. He’s drifting into the ‘useful idiot’ category. He’s been had by the GOP, and now Rush is dealing with the aftermath.
The economics of radio, no doubt, are changing. What he needs to figure out is how to pivot. There are ratings to be had, because the whole country is angry right now and looking for someone on the right that actually gets it. He knows this too.
I’m sure the question in his mind is, “Do I feel like ripping it down and putting it all back up again at this point?” He doesn’t have to work another day in his life.
Problem is, he believes in what he’s selling, even though his own party isn’t buying it any more, except at election time, but not the day after.
Fluke is nobody, and nobody cares. She’s a whore, everyone knows it, and what’s worse, she’s a government subsidized whore. Nobody wants a government subsidized whore.
I started listening about 1991. He had a profound and changing effect on me. I stopped listening to him within the past year. Oh, I will tune in to see if he is doing anything interesting, but I switch stations with the commercials and rarely go back. Instead I listen to a growing radio station in our area that plays music from 1900 to about 1955. My father’s and grandmother’s music. Love it.
Limbaugh needs to punch it up. Give more info and new perspectives. Today in the car he gave an interesting perspective on a subject, then tootled off to discuss some sort of watch by apple. That part was a waste of air. I cannot abide listening to small nuggets of info between ads and what interests him.
I know a ton of millennials who would love Limbaugh if he stopped droning, educated them and gave them useful info. He would need to outreach on social media for them and not use his picture but instead, a logo. These kids are hungry for information , perspective and ideas about solutions. Not to feel helpless after another piece of how our government is screwing us.
But why would the FCC care? Crony capitalism.
The content felt like it shrank and changed. Lots and lots of time flogging iced tea and children's books. Also, it really bugged me when he started going straight from content into a live commercial for lifelock. By the time I realized it was a commercial, I felt I'd been had.
The first time I read that I thought it said his wife Jake and his dog Kathie.
“on the Internet, which is where radio is going.”
gaijin, just watch what Art Bell is up to right now for a lesson in how right you are.
Wait...Art is STILL broadcasting somewhere...?!
Where...?
What's happened as he has been putting this plan together is that some terrestrial stations have begun approaching him requesting to broadcast his internet feed, which Art is agreeing to let them do as long as they broadcast it live with no changes at all. Just the six minutes of advertising per hour.
It's fascinating to watch this develop. You may remember that Art was very early in working with the internet, and now he seems to be on a new cutting edge for broadcasting, melding radio and a live internet broadcast. Some stations carrying the talentless version of his old show must be getting very nervous.
I won't be surprised if Limbaugh doesn't do something similar down the road. He'll have even more control over his program than he does now.
I wouldn't be surprised either. I feel that he will be watching closely to see how well his old friend, Art Bell, does with his new internet stream based program.
If Art Bell does well and is successful, Rush may well follow him after his contract runs out next year and his no compete clause expires (probably six months or so after his contract ends). Rush has said at times that he is tired of dealing with frightened radio station managers on his affiliates, afraid he is too "controversial". Rush isn't too far behind Art Bell in being innovative technology wise.
Plus, Rush probably has several million 24/7 subscribers already who pay about $50/year for membership (I am a 24/7 member myself) - something Art Bell doesn't have now. If Rush was to abandon terrestrial stations and broadcast via an internet stream to subscribers, he may get over 5 million listeners/subscribers already via 24/7 memberships.
If he has 5 million 24/7 subscribers and was to add $25/year for a subscription to his new internet broadcast (making it $75/year for a enhanced 24/7 subscription), he could rake in $375 million just from subscription fees alone, not counting pocketing all advertising revenue, show merchandise and simulcast fees for now former terrestrial affiliates eager to simulcast his program.
That $375 Million+/year would be his and his alone and mark a major pay raise from the $50 Million/year he makes now. Even after taxes and expenses, he would take home much more and more importantly, have total control over his own show, brand and content. Rush probably only gets a cut of his 24/7 dues, if it is not already included in his $50 million/year contract.
Maybe Rush would get back to being the old Rush we all remember instead of the more duller version we have now if he got off terrestrial radio and went online and could say whatever he wanted to without having to worry or care about station managers/advertisers. I think Rush still enjoys his work and still wants to do it as long as he is enjoying it - otherwise I think he would have retired by now. He would enjoy it more saying what he wants and having complete control over his show, including revenues.
“I think Rush still enjoys his work and still wants to do it as long as he is enjoying it -”
I think so too. In that respect he’s just like Art Bell.
Art intended his new experiment to be solely an internet streaming affair, free in real time and by subscription for podcast, archive, etc. But he’s being approached by terrestrial stations who want to broadcast his internet stream. Apparently Art is fine with that as long as they adhere completely to what he requires from them. A very interesting turn of events that leaves Art in control.
Rush would certainly end up in the same catbird seat. There will be terrestrial stations who will want to carry his internet feed, but he will be in charge instead of the other way around. This is a fascinating new page in radio developing.
Didn’t realize Art Bell was streaming live for Free. Rush could do that as well and still make big $$$ just on the advertising - both for on air and also have adds run on his streaming website and app, plus keeping 24/7 fees as is.
I forgot that you can already listen to his show’s live stream for free via either his website or via the Rush 24/7 App, which is also free to obtain.
Yes, I believe Rush can make far more by going it alone via Internet stream and selling syndication rights to terrestrial radio stations to simulcast his show than going thru premiere broadcasting. He has time to wait and see how Art Bell’s experiment turns out before his contract with Premiere runs out next year.
Going it alone will likely bring back the old Rush, since he would no longer have to answer to corporate suits what he does on the air. I can see him broadcasting into his 70’s easily health permitting.
I never got the whole Sandra Fluke thing either. If you want to find fault with Rush, there are many more objectionable things he’s done and said. As I see it, Sandra Fluke went out of her way to get into the public eye with something controversial.(She was not a hapless person who found herself in the middle of some cause celebre.) When you do that, you have to be ready to accept the consequences. If you can’t stand the heat, stay out of the kitchen, in other words.
I too began listening to Rush in the early 90s. I don’t listen regularly any more. Typically I listen to an hour or so of reruns on weekends and that’s about enough. A lot of the show seems to be references to old shows from years ago, and other unoriginal material. I have also been frustrated with his avoidance of certain topics. In some cases, he may have been right to avoid these topics, and it wasn’t evident until later, but still. There are other topics that he probably should avoid until he gets better informed. I think earlier this month he was talking about accusations that he was “out of touch”, and making kind of a joke out of it. But the truth is, I think he may he may be out of touch, to some extent. Not that he’s the only one, of course. So are many politicians, and a lot of other famous and influential people.The childrens’ book promotions are very tiresome too.
I think the show jumped the shark in early 2000s, 10 or 15 years ago. But that means that we got about 15 really good years.
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