When Horizon Broadcasting Group LLC formed in 1999, the Central Oregon radio landscape was fragmented. Eight owners operated 12 stations. Most of those 12 stations broadcast satellite programming from either Denver or Dallas and lacked a local edge. As a force in the Central Oregon advertising market, which included two television stations and several newspapers, the radio stations collectively ”were 10th in a three-horse race,” said Keith Shipman, president of Horizon Broadcasting Group LLC.

Now fast-forward to 2003. Horizon owns four stations in Central Oregon and has a joint sales agreement with a fifth. Its piece of Central Oregon’s advertising pie, combined with that of station owners GCC Bend LLC, Combined Communications, Inc., and individual owner Terry Cowan, has launched radio to the number one spot for advertising dollars in the region.

Shipman talked to The Bulletin about how this transition took place.

Horizon Broadcasting Group came about in 1999, and this is a product of Bill Ackerly.

Bill was the president and chief operating officer for his father’s company. He and I and a guy named Dan Walker were all running parallel paths to go out and start running small-market radio companies. And rather than the three of us work independently, we decided to come together and form a union, which became known as Horizon Broadcasting Group. The company formed officially in the fall of 1999. Our first acquisitions were here in Central Oregon and Ontario, Ore. Later, we acquired stations in Boise and Twin Falls, Idaho. We also acquired the Boise Hawks baseball team.

Why Central Oregon? Why these markets?

We looked at every market in the United States economically, demographically, from a growth perspective, from a business perspective, from a media perspective. We ranked our top 10, and we felt if we could be in Bend, Central Oregon and Boise during our existence, we would have hit a home run. These are two of the most terrific markets to be in in the western United States, and our geographic focus is the western United States from a company standpoint.

Why are they good markets? Because they’re growing?

They’re growing markets economically. We look for three things in our acquisition strategy: one, we want outstanding transmission facilities, or those which can be improved. We look for cash flow, or the opportunity to achieve cash flow on a near-term basis. And we look for growing markets, and as anyone here in Central Oregon knows, Central Oregon is one of the fastest growing areas in the western United States. Regionally, it achieved MSA (metropolitan statistical area) status with the recent census. I believe Central Oregon will be the second largest population entity in the state of Oregon in the not-too-distant future.

In terms of media markets, we rank behind Portland, Eugene and Medford, and this region is growing a heck of a lot faster than the smaller of those markets that I mentioned. I don’t see any reason why Central Oregon won’t be bigger some day. I know this doesn’t sit well with the long-timers in the marketplace, but I don’t see any reason why it won’t be bigger than Medford, Eugene and Springfield.

I think one of the key ingredients of that is a four-year institution of higher learning and having higher education present here, in addition to what we have with Central Oregon Community College.

How would you characterize the radio station landscape prior to entering to this market?

This particular market was not unlike a lot of small markets in America.

It had several radio stations owned by several owners, many of which could be characterized as ”mom and pop.” They were all doing a terrific job. When the Telecommunications Act of 1996 reached fruition, we began to see consolidation occur in this industry – radio – not unlike the banking industry or any other industry-hospitals, medical care. As a result, a market like this, which had 12 radio stations but eight owners, consolidated and added two radio stations. We now have four owners in the market and 14 radio stations – three groups, and one stand-alone FM. That’s Terry Cowan from KNLR.

Which stations does Horizon own?

We own four and we represent another through a joint-sales agreement. We own KQAK, the heritage oldies station. We own Central Oregon Smooth Jazz, 95.1, KMJZ.

We own Lazer 96.5, which is rock station KWLZ, which went on the air this summer and was formerly a country format. We own KRCO AM in Prineville, and we have a joint-sales agreement to represent The Peak, KWPK, and all local, regional and national sales and advertising.

Where are the biggest opportunities for changes or growth in the specific formats of radio stations?

With the advent of the Telecommunications Act of 1996, we’ve seen the radio industry from a programming standpoint become more fragmented. It’s more targeted at listeners, and strategically so. In the case of Horizon Broadcasting Group, we have five radio stations that we market. The formats are rock, oldies, smooth jazz, adult contemporary, which is the Peak, and classic country. We serve listeners and advertisers really from birth to death. We strategically put that cluster of radio stations together so we can target specific demographics that advertisers enjoy using to help grow their businesses. So it’s looked upon two ways: one, to strategically grow your listening audience, and two, to deliver customers for advertisers who use our vehicle to help grow their business.

Is it difficult then to break out of those specific formats and do something a little bit different?

Well, we’ve done that. Horizon Broadcasting Group launched what many would consider to be a risk format, and that’s new adult contemporary smooth jazz here in Central Oregon. It’s performed very well for us, both from a ratings standpoint and a revenue standpoint. Our company is driven by research, not unlike any other company or newspaper or business in America today. Our research showed us that the Central Oregon community would very much appreciate a new adult contemporary format with a smooth jazz edge. It’s not traditional jazz, it’s not Dizzie Gillespie. It’s 40 percent pop vocals and 60 percent modern instrumental jazz. It’s a very popular format nationwide. It has not performed really well in smaller markets nationwide, but we have bucked the trend here in Central Oregon.

Why do you think that is? Different demographics?

I think it has a lot to do with the demographic makeup of our region. I was just looking at some population profiles and statistics this morning, and 90,000, almost 100,000 new people live in Central Oregon in the last 12 years. From 1990 to 2002, we’ve seen close to 95,000 migrate into this area. They came from other areas in the country, primarily from West Coast markets from what research will show you. They enjoyed that format, whether it was the Wave in Los Angeles or smooth jazz in Sacramento or San Francisco or Seattle or Portland. So ultimately, that could be considered a risk format for many. It has performed very well for us here, and we don’t consider it a risk.

How do you balance the desire for both local content and nationally syndicated shows?

From our perspective, Horizon Broadcasting Group inherited stations that were all on satellite when we got here, programmed either from Denver or Dallas. We blew up all of the satellites and we program everything from this building on NE Fourth Street. We use highly researched music presentation. We are local, local, local – that’s our mantra. Before we got here, this cluster of radio stations did not have local news to speak of. We hired a local news director who does news on all of our stations during the morning drive. We made a real point to have our disc jockeys, our air personalities, focus on getting involved in the community through nonprofit organizations and things of that nature.

Was there anything lost when Horizon Broadcasting Group came in here and bought stations? Nationally, when we see media consolidate, there is some concern about that.

We created six local programming jobs here. Before that, it was all coming off of satellite from Denver or Dallas. In many ways, I think we have impacted the landscape positively. We’ve raised the bar, certainly for customer service to our advertisers. One of the things that consolidation has allowed radio to do in this market is take on the eight-billion-pound gorilla, which is the newspaper, from an advertising standpoint. Each of the radio groups in this market-Gross Communications, Combined Communications and Horizon Broadcasting Group-reach a cumulative audience each week that is greater than the newspaper now. Before, that was very fragmented.

I spent 25 years in broadcasting in the Seattle area, and 18 of that was in television. When I came to Central Oregon, I had one job, and that was to grow the level of awareness for radio.

How do you measure your audience?

We measure our audience through the use of twice-yearly ratings surveys. We subscribe to Eastland Resources and they’re based in Sisters, with offices in Seattle as well. That’s our report card twice a year. But we don’t sell numbers, as our customers do. We’re more focused on selling results for customers.

So what have these surveys told you about your market?

It showed us that when we got here, we were 10th in a three-horse race. What it shows us now is, we’re first in a three-horse race. We strategically acquired opportunity in Central Oregon. … As I mentioned earlier, our acquisition strategy is to look for signals that can be improved. We did that with the Prineville entities. We launched the Peak in September of 2000 on a signal 60 miles north of town and it got some buzz immediately. And then we figured out a way to re-engineer things and acquired an additional station through a joint-sales agreement and moved it into Bend. And it became the number one station in the market in 24 months.

Lisa Rosetta can be

reached at 541-617-7812 or lrosetta@bendbulletin.com.