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

2. Broadcast, Cable, the Internet and Beyond Chapter 4 Radio’s three C’s indicate the nature of the business yCompetition yConsolidation yControl

3. Broadcast, Cable, the Internet and Beyond Chapter 4 Competition zThere are more radio stations than any other media y5 times more radio than newspapers y10 times more radio than television zThere’s competition for advertising revenue within the radio market

4. Broadcast, Cable, the Internet and Beyond Chapter 4

5. The Radio Station Universe zOut of the 13,000 stations y37% are commercial AM stations y47% are commercial FM stations y16% are noncommercial FM stations zRadio is a locally based medium yAMs in local markets rely on local advertising yFMs frequently dominate in larger cities, combination of national spot and local advertising

6. Broadcast, Cable, the Internet and Beyond Chapter 4 Share of the Audience zFM stations - 80% of all radio listening zThe most profitable of all stations yBig FM stations in major cities yAM news/talk stations in major cities zToo early to talk about the effect of satellite radio

7. Broadcast, Cable, the Internet and Beyond Chapter 4 Consolidation zIncreasingly competitive nature of radio reflects the companies now involved in the medium z1990s - NAB lobbied to deregulate radio yMom and Pop stations have largely disappeared yGroups ownership restrictions were lifted yTelecommunications Act of 1996 shifted the radio landscape

8. Broadcast, Cable, the Internet and Beyond Chapter 4 The Telecommunications Act of 1996 zRelaxed ownership standards yNo limit to total number of stations a group can own zSet as a maximum that group owners could own up to 8 stations in one marketplace zSupergroups of station owners formed

9. Broadcast, Cable, the Internet and Beyond Chapter 4 America’s 10 largest radio group owners Rank GroupOwner Stations z 1 Clear Channel Communications1240 z 2 Cumulus Broadcasting Inc. 257 z 3 Citadel Communications Corp 210 z 4 Infinity Broadcasting 185 z 5 Entercom 97 z 6 Cox Radio Inc. 86 z 7 Salem Communications Corp. 72 z 8 Entravision Communications Co. 68 z 9 ABC Radio Inc. 53 z 10 NextMedia Group 51 z Sources:FCC Review 2001/ Broadcasting and Cable 9-2-02

10. Broadcast, Cable, the Internet and Beyond Chapter 4 TABLE 4.2 Largest Radio Group Owners by Revenue Rank Group Revenue ($000) % total revenue z 1 Clear Channel $ 3,388,265 26.2% z 2 Infinity Broadcasting2,354,350 18.2% z 3 Cox Radio Inc. 455,300 3.5% z 4 ABC Radio Inc. 435,100 3.4% z 5 Entercom 429,250 3.3% z 6 Citadel. 350,100 2.7% Source: FCC Review 2001

11. Broadcast, Cable, the Internet and Beyond Chapter 4 Duopoly and LMAs (leased market agreements) zFCC studies show a trend in consolidation zTop 50 markets, Clear Channel controls about 36% of all revenue zThe second largest firm in revenue controls 25% of all station revenue zFour largest groups control 85% of revenues in largest markets

12. Broadcast, Cable, the Internet and Beyond Chapter 4 Ownership Consolidation - pros and cons zAdvocates of consolidation maintain that group ownership allows for economies of scale (more efficient programming/ better news coverage). zCritics 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 Beyond Chapter 4 Control zRadio stations formats are very structured zFormats and music playlists tend to be very tightly controlled by station management zRigorous consumer research is done by group owners

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

15. Broadcast, Cable, the Internet and Beyond Chapter 4 Radio management targets audience by: yAge yGender yMusic preference yLifestyles

16. Broadcast, Cable, the Internet and Beyond Chapter 4 zThe program strategy is known as the radio station’s ‘format’ zSuccessful format consistently delivers its target audience to specific advertisers zTarget Audience attributes include xaggregate size xlifestyle preference xgender xincome level xhabits

17. Broadcast, Cable, the Internet and Beyond Chapter 4 Top Formats AM FM TOTAL z Country643 14912134 z News/Talk 1141 6211762 z Oldies308 508 816 z Religious 347 387 734 z Adult Contemporary116 592 708 z Spanish386 309 695 z Contemporary Chris.116 564 680 z Top 40 8 496 504

18. Broadcast, Cable, the Internet and Beyond Chapter 4 Some Popular Formats zCountry - about 1 in 6 stations play this format yContemporary - concentrates on current hits yTraditional - emphasize country western standards zNews Talk and Sports yMost popular AM format yHelped by nationally syndicated personalities such as Rush Limbaugh zAdult Contemporary and Oldies yMany types of music fall into these categories yTend to attract the audience most in demand by advertisers

19. Broadcast, Cable, the Internet and Beyond Chapter 4 Some Popular Formats zContemporary Hit Radio yEmphasis is on most current hit music yMusic tends to be uptempo yDJs tend to be assertive and loud zPopular Ethnic Formats yHispanic Radio yBlack / Urban Contemporary

20. Broadcast, Cable, the Internet and Beyond Chapter 4 Noncommercial Radio zAbout 2100 radio stations zThree types of noncommercial radio yCommunity stations - licensed to civic groups yCollege radio - sponsored by colleges and communication departments yPublic radio - CPB qualified radio stations

21. Broadcast, Cable, the Internet and Beyond Chapter 4 Satellite Radio Today zTwo national satellite radio broadcasters yXM Satellite radio ySirius Satellite radio zBoth offer 100 channels of programming zBoth are subscription services

22. Broadcast, Cable, the Internet and Beyond Chapter 4 Radio Station Organization zRadio Station Departments yOperations - (a.k.a. traffic) - responsible for placing advertising on the station schedule yProgram Department - overall responsibility for the station’s sound ySales - responsible for sale of commercial time yEngineering - keeps the station on-the-air

23. Broadcast, Cable, the Internet and Beyond Chapter 4