The Radio Industry
1

Radio Today
• 520 million radios in the U.S., 2 per person
• Morning news primarily from radio
• 13,000 stations
• $19.1 billion in revenues, but at plateau
• 20 major chains (2,700 stations) made $10
billion from ads
• Remaining 10,000 stations made $9 billion

Implementing Regulation
• World War I: U.S. Navy took control of radio
for security reasons
• Business and government leaders wanted
radio controlled by private businesses
• U.S. mass media traditionally not controlled
by government
• 1919: government established Radio
Corporation of America (RCA) to control radio
patents, technology, and establishment of new
radio stations
3

More Regulation
• Radio advertising and networks grew: money!
• What is the real “product” of radio?
4

Licensing Process
• Amateur radio interfered with commercial radio
• Radio industry asked government to begin
assigning frequencies
• Radio Act of 1927
• Required broadcasters to “act in the public
interest, convenience and necessity”
5

Radio as a National
Experience
• Media shared immediately
on a new scale
• Cultural, political force:
FDR’s Fireside Chats
• March 12, 1933
• Today: Pres. Obama on
Hulu
6

Radio Is Challenged by
Television
• Listeners, advertisers moved to TV
• Radio could better target audience for
advertisers
• Developed specific styles or “formats” to
appeal to target groups
7

Radio Today 2008 report, Arbitron
8
Radio Formats

Importance of Formats
• Narrowcasting: breaking
down audience into pieces
most attractive to
advertisers
• Rent segment to advertiser
for 15, 30 seconds to
expose to ad
•
9

Telecommunications Act
of 1996
• Deregulation; first major overhaul in 60 years
•
10

Effects of Consolidation
• Homogenization of radio: different local tastes
not represented
•
11

Decline of Traditional
Radio
• Listeners moving away from radio
•
12

Reasons for Leaving Radio
• Too many ads, overplayed music
• Poor quality compared to CDs, MP3s
13

The End of Radio
(As We Know It)?
• Challenges to traditional radio
• Satellite radio
• Streaming audio broadcasts
•
14

Questions
• Compare to newspapers: how do today’s youth relate
to this medium?
• What does this changing relationship mean for the
future of radio?
•
15

• Major changes in the radio world:
• Public resistance to homogeneity and
excessive advertising
• Shift toward customizable programming
and more options (MP3, satellite radio)
•

• Moving on...television
• Ubiquitous medium with serious social impact
• Challenges from new technologies
17

The TV Industry
• Commercial vs.
noncommercial
• Noncommercial: PBS,
community stations,
nonprofits
• Broadcast vs. cable/
satellite
18

Broadcast TV
• “Big Four:” ABC, NBC, CBS, Fox
• Vertically integrated – why?
• Own production, distribution, and some exhibition
(“O&O” stations)
•
19

Cable and Satellite TV
• How does cable/satellite TV make money?
• Ads, subscription fees
• More selection, better reception
•
20

Shows on TV Networks
 Four considerations when selecting shows for
TV:
1. Competition
2. Available viewers
3. Interests of advertisers
4. Costs of programming
21

Competition
• Cable/satellite: is there enough
interest in the topic of network?
• Broadcast: what are other
networks showing at this time?
22

Available Viewers
• How many people would be interested in this
topic/show at this time/day?
• Who are those people?
• How much to invest in programming
• How much to charge advertisers
•
23

Interests of Advertisers &
Costs of Programming
• Who do advertisers want to reach?
• Costs of programming
•
24

Programming Challenges
• What’s the ultimate goal of TV
programming?
• Attract viewers
• Prevent channel surfing
• Produce, order shows to retain viewers
•
25

Creating a TV Program
• Show can be produced by networks or outside
producer
•
26

Convergence in TV
• TLC show “Real Simple, Real Life”
• Convergence project with Real Simple
magazine, TLC network
• Description
27

TV’s Future
• Broadcast networks less popular: competition
• Other changes:
• DVRs in 25% of U.S. homes
• Video on Demand in 35%
• TV show DVDs
• Downloading (legal and otherwise)
• 4.4 million watch video on cell phone
•
28

Big Issues
• WHY have TV viewing patterns changed?
• WHAT is the major effect of these changes
on traditional television?
29

Changes in TV
Advertising
• Decline in traditional TV advertising
• Remote control, availability of DVRs
• DVR users skip 70% of ads
• Increase in product placement (a.k.a. “brand
integration,” “embedded advertising”)
•
30

Product Placement
• Nielsen measures product placement success
• Duration, number in audience seeing product
• Average show contains 4:25 of product placement and
17:35 of local and national TV commercials
•
31

Who Should Pay for TV?
• If most viewers stop watching ads, how will TV
productions be funded?
• How would you like to pay for your TV viewing?
•
32

Next Class...
• Is what we see in the media real...
• ...particularly with regard to politics?