Michael Zwerling has found a way to support his KOMY(AM) Santa Cruz, Calif., station. When advertising is scarce, he keeps the station, which offers mostly local programming, on the air with the proceeds of an infomercial on his ksco(am), which airs mostly syndicated talk shows.
It used to be that ksco was mostly local, too. "We prided ourselves on being something like 90% local," he says. But it never made any money. Zwerling funded its operations from the proceeds of his real estate business, which he no longer operates.
Zwerling stumbled upon a way to make radio pay in September 1996, when he agreed to air an infomercial for mineral supplements during ksco 's "prime time": noon weekdays. But instead of selling the airtime to the producer of Dead Doctors Don't Lie, Zwerling asked for half the show's proceeds.
The deal was so profitable that, within six months, Zwerling says, revenue from this "nontraditional" source exceeded that from on-air advertising. He bought satellite time and started selling other stations on Dead Doctors and its revenue-sharing plan. About 130 stations have signed on, and Zwerling is developing programs for other products. "When the big boys discover this concept," he predicts, "it's gonna revolutionize the radio industry."
The consolidation that has already revolutionized the industry hit Zwerling's market hard. The top 10 stations in Monterey/Salinas, Calif., are owned by five major groups (Clear Channel alone has four of the top 10; its 29%-owned Hispanic Broadcasting owns another). There is one independent left in the top 10, classical KBOQ(FM) at No. 5.
But, when purchasing then-dark komy in 1997, Zwerling resolved to keep local programming alive. He shifted ksco's local offerings to komy, which has the weaker signal. About 60% of komy's programming now is local news and talk, while ksco offers mostly syndicated talkers, including those of Rush Limbaugh and Dr. Laura Schlessinger.
komy is "a money-loser-big-time," Zwerling says. "We do it just because we want to, not because it's profitable."