1. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 1 Joseph R. Dominick University of Georgia-- Athens

2. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 2 Part II Media

3. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 3 Chapter 7 Radio  History History  Radio in the Digital Age Radio in the Digital Age  Defining Features of Radio Defining Features of Radio  Organization of the Radio Industry Organization of the Radio Industry  Ownership in the Radio Industry Ownership in the Radio Industry  Producing Radio Programs Producing Radio Programs  Economics Economics  Feedback Feedback  The Radio Industry The Radio Industry Chapter Outline

4. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 4  Early Radio Milestones  1887 – Hertz sends, detects radio waves  1896 – Marconi sends wireless Morse Code  1906 – Fessenden broadcasts voice and music  Post WWI – U.S. Navy takes over patents History

5. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 5  Big Business  GE, AT&T, and Westinghouse invest in Radio Corporation of America (RCA)  Sarnoff – “radio music box”  Mass Audience  Frank Conrad of Westinghouse begins garage radio station  KDKA (1920)  Better Receivers  1926 – radios more user-friendly  By 1930 – 17 million sets sold History

6. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 6  Radio Goes Commercial  WLS, WGN, WSM, WHB  AT&T sells ad time on WEAF (1922)  Networks  Share program production – save money  NBC is first network (1926)  1937 – NBC has 111 affiliated stations, CBS 105  Government Regulation  Radio Act of 1927 sets up FRC  FRC allocates bands and bans portable stations History

7. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 7  The Depression: 1930-1940  Radio grows  Roosevelt creates FCC to regulate entire electromagnetic spectrum (1934)  Birth of FM  Armstrong demos FM to RCA – Sarnoff is not interested – so creates his own station  Radio Programs  Soap operas, “The Lone Ranger”  Wartime radio coverage and radio news History

8. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 8  World War II  Network news thrives as public follows war developments with “name” correspondents.  Ad revenues double 1940-1945 History NBC ABC NBC Supreme Court (1943)

9. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 9  Innovation and Change: 1945-1954  FM technically superior to AM  FM and TV use same bands  FM moved to 88-108 MHz, making half- million radios useless  TV affects radio networks; stations become more local History

10. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 10  Specialized Formats  Stations lose network affiliations  Local personalities emerge  Station develops “Top 40” format  Clock hour invented History

11. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 11  Growth and Stabilization: 1955-1990  # stations: 3343 (1955)  7000 (1970)  DJs’ Top 40 power leads to payola  FM emerges  FCC’s nonduplication rule (1965)  FM begins evolving different sound  NPR starts up (1970) with 80-station network History

12. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 12  The Volatile 1990s  Telecommunication Act of 1966  Unlimited station ownership  Increases same-market ownership to eight stations  Result: a flurry of mergers and acquisitions  Consolidation and employee cutbacks  Clear Channel owns stations in 190 markets  Talk Radio: Rush Limbaugh, Howard Stern History

13. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 13  IBOC -- in band, on channel  Simultaneous analog and digital  Set to debut in 2004  Satellite radio  Satellite-to automobile  XM radio and Sirius subscription service  Mixed commercial and commercial free  Music, talk, news Radio in the Digital Age

14. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 14  Internet radio  Specialized formats  Small audiences  Copyright Arbitration Royalty Panel (2002)  Small Webcaster Settlement Act of 2002 Radio in the Digital Age

15. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 15 Defining Features of Radio Radio PORTABLE UNIVERSAL SUPPLEMENTAL SELECTIVE

16. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 16  ½ billion working radios in USA  12,000 radio stations in operation  Local stations, networks, and syndicators Organization of the Radio Industry Local Stations Networks Syndicators

17. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 17  AM and FM Stations  AM = Amplitude Modulation  Travels farther  Clear channel – single dominant station with strong signal (50 KW)  Regional channel – shared by several stations  Local channel – shared by many stations  FM = Frequency Modulation  Better quality; less interference  Class C – most powerful signal (100 KW)  Classes B and A less powerful Organization of the Radio Industry

18. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 18 Organization of the Radio Industry [Insert Figure 7-2 here] Figure 7-2 Simplified Diagram of the Electromagnetic Spectrum

19. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 19  Station Formats  Programming chooses an audience  Three basic formats  Music – Urban, AC, Top 40, Contemporary, Country  Black / Ethnic – Hispanic, Polish, German, etc.  News / Talk Organization of the Radio Industry

20. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 20  Format Homogenization  Consolidation – cheaper to use same programming in all regions  Low-risk decisions – it worked here, it should work there  Use of a limited band of radio consultants  Use of focus groups and surveys Organization of the Radio Industry

21. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 21  Voice Tracking  A single DJ records intros, extros, chatter  Music mixed in later  Total program delivered to local stations Organization of the Radio Industry

22. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 22  Noncommercial Radio  1,900 stations (2003)  Most owned by educational institutions  Several channels set aside  NPR (National Public Radio)  530 affiliate stations  Each pays NPR a usage fee  Corporation for Public Broadcasting  Funded by Congress  Sponsors nonprofit stations  Public Radio International Organization of the Radio Industry

23. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 23  Telecommunications Act of 1996  5100 different owners in 1996  3800 different owners in 2002  2 companies: 33% of ad revenue in 2003  Clear Channel Communications  Infinity Broadcasting Ownership in the Radio Industry

24. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 24  Departments and Staff  General Manager  Program Director  Sales department  News department  Programming department  Engineering department Producing Radio Programs

25. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 25  Putting Together a Program  Music Format: uses a format wheel  Talk Format  Topics depend on time of day  Some additional electronics  Moderator with delay system  Screener for incoming phone calls  All-News Format  Also uses programming wheel and cycle  Large staff and lots of equipment Producing Radio Programs

26. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 26 Producing Radio Programs [Insert Figure 7-3 here] Figure 7-3 Format Wheel for a Contemporary Rock Station

27. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 27 $Advertising revenue has increased recently $Consolidation efficiency $Dot-com instability $Revenue $Rate card $National advertising (5%) $Regional or national spot advertising (17%) $Local advertising (78%) Economics

28. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 28 $Expenses $Technical – Engineering staff, equipment $Programming – Talent, tape/CDs, licenses $Selling – Sales staff $Administration – Management and clerical staff, interest on loans $News – Covering stories Economics

29. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 29  Ratings provided by professional research organizations  Major company is Arbitron  Monitors 262 markets nationwide  Random sample of listeners  3-4000 day-to-day diaries with 45% return rate  End product is ratings book Feedback

30. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 30 A rating is the ratio of listeners to a particular station to all people in a given market. A share of the audience is the ratio of listeners to a particular station to all radio listeners in a given market. Feedback

31. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 31  Radio Audience Profiles  Two radios per person in USA  1/3 are in cars  Typical day  3/4 of all adults will listen to some radio  Average person has radio on for about three hours  Most listen during rush-hour drive-time  As people age, they tend to evolve from one format to another Feedback

32. © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Slide 32  Entry Level  Small market  Versatile – any job asked to do  Most jobs are in programming and sales  Upward Mobility  DJs – larger markets and better time slots  Sales  Better accounts  Sales manager  General manager The Radio Industry