From the MCRFB news archives: 1974
Progressive FM Radio Reaping Millions from Recording Industry
LOS ANGELES — The record industry is spending untold millions of dollars in advertising records and recording artists on FM progressive radio and there is speculation there is even more being spent on in the AM Top 40 advertising market across the country.
One of the largest record retailing chain in California is spending $1.5 million alone in radio and television — with a large part of the tab more than likely is being shared by the record companies who are promoting more of their respective product.
The retail chain is spending that much in California and one station alone claims to be earning $140,000 of that. Tower Records, another West Coast chain, is also labeled a “big hitter” by FM progressive radio managers.
One major U.S. market radio station reports that seven record labels all have contracts each of $100,000 or more for the year.
In a general survey of FM progressive radio stations, the percent of total advertising at each station with a record company or concert promoter source range from a low 10 per cent to a high of 40 per cent. The percentage has been higher in years past. Now, with FM growing in popularity with other products, the percentage may be down, but the dollar amount is even higher.
In Detroit, one major major record company is doing $40,000 in advertising this year with WABX-FM, managed by John Detz. Only about 12 percent of his station’s business is record-oriented; “if you’re doing as much as 20 percent in a market like this, it’s because you haven’t developed other market resources.”
WABX-FM has diversified over the years; Ford is an advertiser, for example. “From the standpoint of dollars, however, record company and concert business is bigger than ever. I would have expected a cutback because of the vinyl shortage or general economic conditions, but record company dollars’ sales increase every year than the year before.”
Off the top of his head, Detz, a progressive radio veteran, feels that the top FM progressive stations so far as dollars are concerned — especially from record labels — are: WNEW-FM, New York; KMET-FM, Los Angeles; KSAN-FM, San Francisco; WABX-FM, Detroit; and WBCN-FM in Boston.
Which label is the biggest advertiser? Notes Detz: That’s hard to say. “Warner Bros. Records just had an unbelievable release… 15 big winners in it’s September release. And so they’ll be on with a lot of advertising right now. Columbia Records, on the other hand, didn’t do much in advertising because they were sort of dry.”
Though WABX-FM has diversified its sources of advertising revenues, Detz says: “We still consider record companies a very strong revenue source. Why? Because we talk to the people — our specific demographics — who buy most of the albums today.”
Record company advertising, of course, is not the total support or even half the support of an FM progressive station that could be surveyed. However, considering the gross of many stations cashing in, including WABX-FM in Detroit, the amount of money reasonably being spent by record labels is well into the millions and millions of dollars in promoting further their product. END.
(Information and news source: Billboard; October 12, 1974).
