Thursday, February 03, 2011

Radio Amway

Amway is infamous the world over as a direct-sale pyramid scheme. They are not generally known as a media company, but they once dabbled in that market. By once I mean from 1977 to 1983, the experiment lasted over a decade. More here.
It began on September 30th 1977 when Amway bought the Mutual radio Network. MBS had been founded in 1934 and by the late 1940s they were the largest radio network in America at least in terms of the raw number of members. In reality CBS and NBC were the Coke and Pepsi of radio networks. They had the lions share of the market, and most of the powerful stations. To quote Elizabeth McLeod
"Mutual shows were produced by the stations on a cooperative basis, and the stations paid the productions costs and furnished the facilities, not the network. This setup was radically different from that used by the Major Networks, so in that sense, one could call Mutual small."
 MBS kept trying to make itself into a bigger player. One of the biggest mistakes it made was in 1960 selling out to 3M. The adhesive company was a poor fit. 3M didn't damage the company but it left it directionless, and sold it to a group of mixed investors in 1966. Two of the shareholders, Mr. and Mrs. Benjamin F. Gilbert bought out the other share holders then sold MBS to Amway and turned a profit in the process.

Before this all Amway had done was underwriting and advertising. To be succinct, they had no idea what they were doing. But they certainly had gumption. About two months after the buy, they announced they were dropping landlines, and moving to satellite distributon via Western Union's Westar I.  The system went live in 1981. They were the first radio network to go to satellite.

Launched in 1973, Westar I was America's first domestic communications satellite. It was designed to operate for 7 years, but was removed from orbit in 1983 and replaced with Westar II. While the plans continued, Amway expanded MBS. They bought purchased WCFL in 1979 in 1980, Amway purchased WHN in New York and added affiliates. They peaked at 950, less than ABC, but more than NBC or CBS.  Amway may have been novices, but they were aggressive novices.

But being a novice has a downside.  Despite all these very exciting changes and expansions, Amway was taking a bath on the project. The move to satellite cost them 10 million dollars. When they dabbled in changing programming they experienced epic fail. they changed slots wrecking the ratings of highly rated show, change line ups, and tried to take shows on the road for no reason whatsoever. One of their few successes was the Larry King show on WIOD but that was probably because for the most part, they left Larry alone. For the most part, what they touched, they destroyed.

In 1984 they sold off WCFL to Statewide Broadcasting.  That same year they did a re-org and fired a number of executives and laid off over 20 Mutual staff. In September 1985 they sold the whole enchilada to Westwood One. The only thing they held back was their satellite services division and up-link facility. Amway went back to what they knew, they started making and selling satellite dishes.  But even that still had the stink of failure on it and they sold off the division was in 1989.