As we've said in Rant
after Rant, many small-market operators never lost sight of the role that
radio can still play in their markets, and they're reaping the benefits
now. There's no question that operators like Frank Iorio in western
Pennsylvania and Clark Smidt in New England are feeling the pinch this
winter from the overall suffering economy - but they'll weather the storm,
because their stations are still doing what they've always done: providing
a connection to their community for their listeners.

That's a role that savvy radio operators can increasingly have to
themselves in many communities, as TV news operations contract and as
newspapers go through their own death spirals.

(There's a lesson radio can learn from the newspaper industry: so spooked
by the perceived threat of the Internet, and so beholden to the short-term
demands of Wall Street, newspapers forgot, somewhere along the way, that
they still had to give people a reason to want to keep reading - and at
this point, the habit has been broken for so many former readers, and the
product has become so watered-down in so many places, that it's all but
impossible to imagine many newspapers surviving over the next few years.)

How does radio avoid falling into a similar death spiral? The answer, for
those who care to seek it, may come from those small markets - the
Newburyports and Gloversvilles and Warrens of the radio world. Amidst the
gloom, there have been some interesting examples in recent months of how a
new model for local radio might be crafted.

Take Newburyport, for instance - at year's end, two lifelong radio people,
Pete Falconi and Carl Strube, partnered with a local investor to buy WNBP
(1450) and bring it back up the coast to once again become a true hometown
station. That combination of lifelong radio people and local money that
can see beyond the next quarterly report should sound familiar to NERW
readers - we've noted it happening in other smaller markets too, such as
in Lowell, where Clark Smidt and his local financiers are chugging along
nicely at WCAP a year after taking the keys to the station.

With station prices finally returning to earth, and with too many
talented, experienced radio people out of work and looking for something
to do, the seeds are there for many more such operations. Relatively
inexpensive local radio news operations (with, no doubt, a strong web
component) could go a long way toward filling the vacuums that will be
created in towns where local newspapers are going out of business. Who,
for instance, will follow local events, and provide a platform for local
advertisers, in Bristol or New Britain, Connecticut, where only a miracle
will keep their local papers from printing their last issues in a few
weeks?

At the same time, these local operations must begin laying the groundwork
for the next generation of radio, if there is to be a next generation of
radio. As we noted earlier in the Year in Review, there was almost no
format innovation anywhere in the region in 2008. That has to change, if
radio is to survive - and here again, the slump in station values holds
out some promise. At the inflated prices the big group owners were paying
for signals, there was no room for experimentation; the model demanded
quick increases in profit margins, and that all but demanded the kind of
super-safe, tried-and-tested radio that does fine in the short term, but
does nothing to develop the medium for the future.

(continuted on part 3)