Chapter 4 3 C s of Radio indicate nature of business 02 15 2012 Competition Consolidation Control COMPETITION stations Radio locally based medium More radio stations than any other type of media 15 000 full ower AMs rely on local advertising FMs dominate larger cities combo of national local advertising Most profitable stations Big FM stations in major cities AM news talk stations in major cities Satellite listening 20 million 3 of all listeners CONSOLIDATION Competitive nature of radio increased in late 80 s early 90 s lead to broadcasters looking for ways to better compete in local marketplace o Rules allowed ownership of 1 AM FM station to a market o Solution LMA arrangement that allows one station to oversee programming operation and sales of another without owning it 1990 s NAB successfully lobbied FCC to deregulate radio o changed to allow 2 AM FM per market o Mom Pop stations disappeared o Group ownership restrictions were lifted Telecommunications Act of 1996 Relaxed ownership standards NO LIMIT to total number of stations Set maximum group owners could own up to 8 stations in one a group can own marketplace Supergroups of station owners formed Duopoly LMAs Duopoly in market control of radio stations in terns of number of stations and amount of revenue in a single market by one owner LMA leased local market agreement Single Market Multiple Station Ownership Limits Pre 1970 AM FM TV Combos Effective 1970 Only AM FM Combos Pre 1992 1AM 1FM Effective 1992 2AM 2FM as long as no combination reaches 25 of market Effective 1996 Multiple radio station ownership limits for a single market determined number of stations in the market o In the largest market 45 stations no more than 8 stations with no more than 5 in same service AM or FM o 30 44 stations 7 max no more than 4 in same service o 15 29 stations 6 max no more than 4 in same service o 14 or less 5 max no more than 3 in same service National Multiple Station Limits for Broadcast Stations Pre 1985 7AM 7FM Effective 1988 12AM 12FM Effective 1992 18AM 18FM Effective 1994 20AM 20FM Effective 1996 No limit on AM or FM telec Act Ownership Consolidation Pros Cons Pros Cons o Group ownership allows for economies of scale o Better buying power for equipment o More efficient programming o Shared resources leading to better news coverage o Reduced sensitivity to community concerns o Sameness in formats from market to market CONTROL Competitive environment led to consolidation Consolidation has led to control Radio station formats very structured Formats and music playlists tightly overseen by station groups Rigorous consumer research ensures target audience is reached Programming Today Target audience attributes o Age o Gender o Income level Most purchases of products made by narrow segment of population o Lifestyle habits o Fast food vs fine dining o New cars vs previously owned o Investment vs banking Some Popular Formats Adult Contemporary Soft AC Hot AC AC Oldies o Announce style tends to be pleasant non aggressive guy next door approach individual personality tends to be subdued o Demographic Women 25 64 Strong middle upper income homemakers very much in demand by advertisers b c they keep household running Contemporary Hit Radio CHR o Emphasis on most current hits o Music that doesn t fit into the description up tempo avoided o Fast rotation of songs o DJs emphasis personality energy humor o Demographic 18 24 Hot AC 25 54 Popular Ethnic Formats o Black Urban o Urban AC Oldies o Rhythmic CHR o Rhythmic AC o Spanish Radio etc Noncommercial Radio 3000 radio stations Two broad categories NPR and Non NPR Three types of noncommercial radio o Community stations licensed to civic groups o College radio sponsored by colleges and communication departments o Public radio CPB qualified NPR Frequencies o No frequencies reserved for AM radio o 1941 first channels reserved for educational use with development of FM five lowest channels o Now channels 201 220 reserved for FM 88 1 to 91 9 MHz Non Commercial Radio Networks National Public Radio est 1970 o FIRST satellite delivered radio network o Stations pay a fee to NPR for service o Vast majority of non comms are not affiliated with NPR American Public Radio now Public Radio International est 1983 American Public Media est 2004 Satellite Radio Today Two national satellite radio broadcasters have merged July 2009 Primary income from subscriptions The combined company has more than 20 5 million subscribers The new company broadcasts over 300 channels o Exclusive radio broadcasts from Howard Stern Oprah and Martha Stewart helped get publicity Conditions of the merger Sirius XM required o To put a tuner on the consumer market capable of accessing both services soon after merger o To permit any device manufacturer to develop equipment capable of delivering the satellite service with no restrictions on adding other technologies like HD Radio iPod ports or broadband connections provided they don t cause interference o To cap rates for 3 years Radio Station Organization Regional Market Manager oversees managers ensures local policies are consistent with corporate policies Operations Manager oversees program directors Program Directors oversees programming for station Director of Sales Sales Manager oversees sales personnel Promotion and Marketing Manager oversees general image or branding of stations coordinates events Web Master oversees website content Engineering Dept keeps station on air with best possible signal implements info technology Business Manager keeps track of financial operations CH 5 Quiz 1700 tv stations today 114 6 million US TV HHs Network tv programs developed and distributed to local affiliates Owned operated most profitable of all local stations Current rules limit a corporate entity from reaching over 39 Of station CPB created by PBA of 1967 Must carry Advertiser supported cable services CNN ESPN USA Ch 6 Internet The Internet Basics 02 15 2012 o A global system of millions of interconnected computers in more than 100 countries o Common set of operating procedures Transmission control protocol TCP Uniform Resource Locator URL Internet protocol IP URL Provides a kep to retrieve info on the Web Domain names help provide unique addresses thirdleveldomainname secondlevel firstlevel edu Communication Medium o Estimated 200 billion emails and about 50 billion IMs sent every day o World Wide Web HTML hypertext markup language Browsers Plug ins helper applications that extend