1. Radio in the U.S. Jon Herbert

2. U.S. Radio Today How Many Radios? How Many Radios? Listening Listening Providers Providers Radio: A Mass Medium Radio: A Mass Medium www.arbitron.com www.arbitron.com www.arbitron.com

3. Core Characteristics A Private Sector Industry A Private Sector Industry Funded by Advertising Funded by Advertising Networks Networks Programming Annoying Programming Annoying Federal Regulation Federal Regulation

4. A Short History: 1 Invention and Growth Invention and Growth Hertz, Marconi… Hertz, Marconi… Frank Conrad & KDKA, 1920 Frank Conrad & KDKA, 1920

5. A Short History: 2 The Rise of Advertising The Rise of Advertising – A.T. & T, & the Queensboro Realty Company Networks Networks –NBC, CBS, ABC – 97% Affiliation by 1947 Federal Regulation Federal Regulation

6. Federal Regulation 1912 Radio Act 1912 Radio Act 1927: Radio Act 1927: Radio Act –Federal Radio Commission 1934: Communications Act 1934: Communications Act –Federal Communications Commission

7. Federal Regulation A. Protecting Localism: Regulation A. Protecting Localism: Regulation 1. Must Survey Listeners on Needs of Community 1. Must Survey Listeners on Needs of Community 2. Must Design Programmes to Respond to Needs 2. Must Design Programmes to Respond to Needs 3. Owners not allowed to sell within three years 3. Owners not allowed to sell within three years 4. Caps on Station Ownership by Companies 4. Caps on Station Ownership by Companies Stations licensed to serve the public interest of those who can hear their signals. Stations licensed to serve the public interest of those who can hear their signals. A Culture of Localism A Culture of Localism

8. A Short History: 3 Boom Times Boom Times Programming Programming A First Status Quo A First Status Quo

9. The 1st Crisis of U.S. Radio World War II World War II The Rise of TV The Rise of TV Why does TV trump Radio? Why does TV trump Radio? The Radio Networks in Trouble The Radio Networks in Trouble Where next for American Radio? Where next for American Radio?

10. The New Model Cut Costs Cut Costs Local Identity Local Identity Niche Broadcasting Niche Broadcasting The Specialized Format The Specialized Format Specialized Advertisers Specialized Advertisers Top 40 (C.H.R.) Top 40 (C.H.R.) A New Status Quo A New Status Quo

11. A Couple of Wrinkles The Rise of FM Broadcasting The Rise of FM Broadcasting Non-Commercial Radio, and N.P.R. Non-Commercial Radio, and N.P.R.

12. De-regulation Telecommunications Act, 1996: Deregulation Telecommunications Act, 1996: Deregulation 1. Survey Requirements: Reduced 1. Survey Requirements: Reduced 2. Three Year Ownership Rule: Dropped 2. Three Year Ownership Rule: Dropped 3. Ownership Caps: Reduced 3. Ownership Caps: Reduced

13. Consolidation A Trading Frenzy… A Trading Frenzy… – Normal Year: About $2bill spent on acquisitions and mergers – 1996, $14.4 billion – 1997, $15.3 billion Big Players Arrive Big Players Arrive – 1992, Biggest Owner is Infinity, 22 stations – 2007, Now it’s Clear Channel, 1,100+ stations

14. Ownership & Consolidation at its peak… 1 Clear Channel 1184 1 Clear Channel 1184 2 Cumulus Broadcasting 300 2 Cumulus Broadcasting 300 3 Citadel Broadcasting 223 3 Citadel Broadcasting 223 4 CBS Radio 179 4 CBS Radio 179 5 Educational Media Foundation 161 5 Educational Media Foundation 161 http://www.stateofthenewsmedia.org/2007 http://www.stateofthenewsmedia.org/2007 http://www.stateofthenewsmedia.org/2007 …but 2007-08: shifting patterns. …but 2007-08: shifting patterns.

15. The Marketplace Decides… Keep Costs Down Keep Costs Down –Centralize Operations –Computerized Production –Voice Tracking Keep Revenues Up Keep Revenues Up –Chase your market –Consultant/Poll Radio –Loss of Community Connection –Rise of Advertising

16. ….on “Corporate Radio” Every City, Same Range of Stations Every City, Same Range of Stations Each Sound The Same Each Sound The Same “Format Homogenization” “Format Homogenization” Dull, Dull, Dull. Dull, Dull, Dull. But… (Hurrah!) … But… (Hurrah!) …

17. The 2 nd Crisis of U.S. Radio The Rise of “New Audio” The War of the Technologies The War of the Technologies Terrestrial Radio Under Attack Terrestrial Radio Under Attack – Satellite – Internet – HD Radio (Digital) – MP3s, iPods and Podcasting – Mobile Phones

18. Satellite Fee Paying Fee Paying Car Partnerships Car Partnerships National & Broad Programming National & Broad Programming 14m subscribers 14m subscribers The Merger: July 2008. The Merger: July 2008.

19. Internet The Arrival of Broadband The Arrival of Broadband The Ultimate Narrowcasting The Ultimate Narrowcasting –minority interests – last.fm, Pandora, Live365 Future Mobility? Future Mobility? The Royalties Issue (Internet Radio Equality Bill) The Royalties Issue (Internet Radio Equality Bill) –

20. HD (Digital) Radio Digital Terrestrial Radio Digital Terrestrial Radio Britain Ahead, Shock! Britain Ahead, Shock! …but why? …but why? Summer 2006: 600 broadcasting in digital format Summer 2006: 600 broadcasting in digital format Fall 2007: 1,300 (NYT) ?? Fall 2007: 1,300 (NYT) ?? But… But…

21. Digital/HD Radio

22. Mobile Phone Radio

23. Clear Channel’s Response Paranoia Paranoia Address the Advertising Problem Address the Advertising Problem – limit times, micro-commercials, sell the programming Experiment with New Formats: “Jack” Experiment with New Formats: “Jack” Deal with the Competition Deal with the Competition Lobby Like Fury Lobby Like Fury Divest Divest

24. Where Next? Clear Channel In Trouble Clear Channel In Trouble The Censorship Issue? The Censorship Issue? How does the technological battle play out? How does the technological battle play out?

25. Radio Exercise Q: Who are you going to target? Q: Who are you going to target? Q: What format will win them over? Q: What format will win them over? Q: Who’s Going to Buy Advertising? Q: Who’s Going to Buy Advertising?

26. Format Wheel