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Broadcast, Cable, the Internet and Beyond Chapter 4

Broadcast, Cable, the Internet and Beyond Chapter 4. Quick Facts Number of commercial AM stations in 2002: 4,825 Number of commercial FM stations in 2002: 2,140 Number of country radio stations: 2,134 Median salary of radio news anchor: $27,500 (2001)

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Broadcast, Cable, the Internet and Beyond Chapter 4

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  1. Broadcast, Cable, the Internet and BeyondChapter 4 • Quick Facts • Number of commercial AM stations in 2002: 4,825 • Number of commercial FM stations in 2002: 2,140 • Number of country radio stations: 2,134 • Median salary of radio news anchor: $27,500 (2001) • Average number of radio stations in most U.S. markets: 25 • Number of listeners in New York City: 17.8 million • Number of stations playing a polka format: 8

  2. Broadcast, Cable, the Internet and BeyondChapter 4 • Radio’s three C’s indicate the nature of the business • Competition • Consolidation • Control

  3. Broadcast, Cable, the Internet and BeyondChapter 4 • Competition • There are more radio stations than any other media • 5 times more radio than newspapers • 10 times more radio than television • There’s competition for advertising revenue within the radio market

  4. Broadcast, Cable, the Internet and BeyondChapter 4

  5. Broadcast, Cable, the Internet and BeyondChapter 4 • The Radio Station Universe • Out of the 13,000 stations • 37% are commercial AM stations • 47% are commercial FM stations • 16% are noncommercial FM stations • Radio is a locally based medium • AMs in local markets rely on local advertising • FMs frequently dominate in larger cities, combination of national spot and local advertising

  6. Broadcast, Cable, the Internet and BeyondChapter 4 • Share of the Audience • FM stations - 80% of all radio listening • The most profitable of all stations • Big FM stations in major cities • AM news/talk stations in major cities • Too early to talk about the effect of satellite radio

  7. Broadcast, Cable, the Internet and BeyondChapter 4 • Consolidation • Increasingly competitive nature of radio reflects the companies now involved in the medium • 1990s - NAB lobbied to deregulate radio • Mom and Pop stations have largely disappeared • Groups ownership restrictions were lifted • Telecommunications Act of 1996 shifted the radio landscape

  8. Broadcast, Cable, the Internet and BeyondChapter 4 • The Telecommunications Act of 1996 • Relaxed ownership standards • No limit to total number of stations a group can own • Set as a maximum that group owners could own up to 8 stations in one marketplace • Supergroups of station owners formed

  9. Broadcast, Cable, the Internet and BeyondChapter 4 • America’s 10 largest radio group owners • Rank GroupOwner Stations • 1 Clear Channel Communications 1240 • 2 Cumulus Broadcasting Inc. 257 • 3 Citadel Communications Corp 210 • 4 Infinity Broadcasting 185 • 5 Entercom 97 • 6 Cox Radio Inc. 86 • 7 Salem Communications Corp. 72 • 8 Entravision Communications Co. 68 • 9 ABC Radio Inc. 53 • 10 NextMedia Group 51 • Sources:FCC Review 2001/ Broadcasting and Cable 9-2-02

  10. Broadcast, Cable, the Internet and BeyondChapter 4 • TABLE 4.2 Largest Radio Group Owners by Revenue • Rank Group Revenue ($000) % total revenue • 1 Clear Channel $ 3,388,265 26.2% • 2 Infinity Broadcasting 2,354,350 18.2% • 3 Cox Radio Inc. 455,300 3.5% • 4 ABC Radio Inc. 435,100 3.4% • 5 Entercom 429,250 3.3% • 6 Citadel. 350,100 2.7% • Source: FCC Review 2001

  11. Broadcast, Cable, the Internet and BeyondChapter 4 • Duopoly and LMAs (leased market agreements) • FCC studies show a trend in consolidation • Top 50 markets, Clear Channel controls about 36% of all revenue • The second largest firm in revenue controls 25% of all station revenue • Four largest groups control 85% of revenues in largest markets

  12. Broadcast, Cable, the Internet and BeyondChapter 4 • Ownership Consolidation - pros and cons • Advocates of consolidation maintain that group ownership allows for economies of scale (more efficient programming/ better news coverage). • Critics of consolidation point to sameness in formats from market to market, increasing use of voice-tracking by group owners

  13. Broadcast, Cable, the Internet and BeyondChapter 4 • Control • Radio stations formats are very structured • Formats and music playlists tend to be very tightly controlled by station management • Rigorous consumer research is done by group owners

  14. Broadcast, Cable, the Internet and BeyondChapter 4 • Radio Programming Today • Most markets in the U.S. receive at least 25 radio signals • Most stations cater to ‘target audiences’ • a specific demographic segment (as opposed to a broad audience) • Citiy (geographical area) where stations are located are called ‘market’

  15. Broadcast, Cable, the Internet and BeyondChapter 4 • Radio management targets audience by: • Age • Gender • Music preference • Lifestyles

  16. Broadcast, Cable, the Internet and BeyondChapter 4 • The program strategy is known as the radio station’s ‘format’ • Successful format consistently delivers its target audience to specific advertisers • Target Audience attributes include • aggregate size • lifestyle preference • gender • income level • habits

  17. Broadcast, Cable, the Internet and BeyondChapter 4 • Top Formats AM FM TOTAL • Country 643 1491 2134 • News/Talk 1141 621 1762 • Oldies 308 508 816 • Religious 347 387 734 • Adult Contemporary 116 592 708 • Spanish 386 309 695 • Contemporary Chris. 116 564 680 • Top 40 8 496 504

  18. Broadcast, Cable, the Internet and BeyondChapter 4 • Some Popular Formats • Country - about 1 in 6 stations play this format • Contemporary - concentrates on current hits • Traditional - emphasize country western standards • News Talk and Sports • Most popular AM format • Helped by nationally syndicated personalities such as Rush Limbaugh • Adult Contemporary and Oldies • Many types of music fall into these categories • Tend to attract the audience most in demand by advertisers

  19. Broadcast, Cable, the Internet and BeyondChapter 4 • Some Popular Formats • Contemporary Hit Radio • Emphasis is on most current hit music • Music tends to be uptempo • DJs tend to be assertive and loud • Popular Ethnic Formats • Hispanic Radio • Black / Urban Contemporary

  20. Broadcast, Cable, the Internet and BeyondChapter 4 • Noncommercial Radio • About 2100 radio stations • Three types of noncommercial radio • Community stations - licensed to civic groups • College radio - sponsored by colleges and communication departments • Public radio - CPB qualified radio stations

  21. Broadcast, Cable, the Internet and BeyondChapter 4 • Satellite Radio Today • Two national satellite radio broadcasters • XM Satellite radio • Sirius Satellite radio • Both offer 100 channels of programming • Both are subscription services

  22. Broadcast, Cable, the Internet and BeyondChapter 4 • Radio Station Organization • Radio Station Departments • Operations - (a.k.a. traffic) - responsible for placing advertising on the station schedule • Program Department - overall responsibility for the station’s sound • Sales - responsible for sale of commercial time • Engineering - keeps the station on-the-air

  23. Broadcast, Cable, the Internet and BeyondChapter 4

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