The Radio Industry

Week 7

THE RISE OF RADIO

• Radio in American society has historically meant audio signals transmitted (“broadcast”) over the air by organizations (“stations”) licensed for that activity by the Federal Communications Commission and publicly accessible via devices called radio receivers

• Satellite-delivered music can be considered part of the radio industry but are unlicensed by the FCC and offer music to listeners over the internet

• STREAMING AUDIO – the flow of sounds (usually music) to listeners in such a way that the sounds are meant to disappear after they are heard

FIGURE 11.1 Timeline of the Radio Industryhttp://www.routledge.com/cw/turow

TIMELINE: RADIO INDUSTRY

RADIO HISTORY Historically there was a major radio monopoly that U.S. courts felt needed to be broken up. This decision shaped the new medium in ways that are still with us:

• The development of advertising as a means to support radio• The creation of networks to spread advertiser-sponsored

programming around the country • The creation of a federal regulatory body (first the Federal

Radio Commission and then the Federal Communications Commission) to decide which firms best serve the “public interest”

PATENT TRUST – a company owned by a number of firms that is formed to share their patents in order to prevent other firms from entering their industry unless the trust allows them to use the patents

AM VS. FM RADIO

FREQUENCY MODULATION (FM) – a means of radio broadcasting, utilizing the band between 88 and 108 megahertz; FM signals are marked by high levels of clarity but rarely travel more than 80 miles from the site of their transmission

AMPLITUDE MODULATION (AM) – A means of radio broadcasting, utilizing the band between 540 and 1,700 megahertz; AM signals are prone to frequent static interference, but their high-powered signals allow them to travel great distances, especially at night

How AM and FM Work: http://www.youtube.com/watch?v=D65KXwfDs3s

TABLE 11.1 Radio Listeners (Aged 12+ Years) in the Average Quarter Hour (in Millions)

RADIO LISTENERS OVER THE YEARS

FIGURE 11.2 AM & FM Signals

AM AND FM SIGNALS

COMMERCIAL RADIO STATIONS VS. NONCOMMERCIAL RADIO STATIONS

COMMERCIAL STATIONS – radio stations that support themselves financially by selling time on their airwaves to advertisers

NONCOMMERCIAL STATIONS – radio stations that do not receive financial support from advertisers

BILLBOARDS – the mention of a sponsor’s name at the end of an aired program, acknowledged in return for money

TABLE 11.2 Top 15 Radio Markets by Population, Fall 2012

2012: TOP 15 RADIO MARKETS

PRODUCTION IN THE RADIO INDUSTRY

FORMAT – the personality of a station, designed to attract a particular audience segment

Determining a Station’s Format

• MUSIC STYLE • MUSIC TIME PERIOD• MUSIC ACTIVITY LEVEL• MUSIC SOPHISTICATION

TABLE 11.3 Radio Stations in the U.S., November 2012

RADIO STATIONS IN THE US

TABLE 11.4 A Guide to Radio Station Formats in the U.S.

RADIO STATION FORMATS

TABLE 11.4 B A Guide to Radio Station Formats in the U.S.

A GUIDE TO RADIO STATION FORMATS

TABLE 11.4 C Guide to Radio Station Formats in the U.S.

RADIO STATION FORMATS

SELECTING THE RIGHT FORMAT

FORMAT CONSULTANTS – individuals hired by a radio station to analyze the competition and select a format that will attract the most lucrative audience niche possible

NARROWCASTING – going after specific slices of the radio audience that are especially attractive to advertisers

DETERMINING LISTENING PATTERNS

LISTENING PATTERNS – the habits that describe people’s use of radio

The following five propositions about listening patterns help radio industry executives effectively segment audiences

• Individuals tend to listen to only three radio stations at any particular period in their lives, with the most “preferred” of those stations taking up 65-70 percent of their listening time

• In the United States, there tends to be a large and widening divide between the music preferences of black, white, and hispanic people

• Men and women often have separate musical interests

• People who are 10 years apart in age tend to belong to different “music generations” with different tastes

• Music preferences can be useful tools for identifying people with distinct styles of living and buying

FIGURE 11.3 Organizational Structure of a Typical Radio Station

ORGANIZATION OF A RADIO STATION

WORKING WITH FORMATS

ON-AIR TALENT – term referring to radio workers whose voices and personalities are broadcast over the radio’s airwaves

DEAD AIR – the silence on the airwaves that is produced when a radio station fails to transmit sound

PLAYLIST – the roster or lineup of songs that a radio station can play on the air during a given period of time

FIGURE 11.4Sample Playlist

SAMPLE PLAYLIST

CONDUCTING RESEARCH TO COMPILE THE PLAYLISTBURN MUSIC TEST – surveying people to determine which songs still draw interest and which have lost their popularity (or “burned out”)

FOCUS GROUPS – assemblages of 8 to 10 carefully chosen people who are asked to discuss their habits and opinions about one or more topics

Maintaining the Format and Retaining the Target Audience

FRINGE LISTENERS – listeners who fall within the target audience but rarely listen to a particular station

CORE AUDIENCE – listeners who spend a lot of time listening to a radio station

FIGURE 11.5 Sample Format Clock

FORMAT CLOCK/WHEEL

FORMAT CLOCK (FORMAT WHEEL) – a circular chart that divides one hour of a radio station’s format into different timed program elements

DISTRIBUTION IN THE RADIO INDUSTRY NETWORK – a company that distributes programs simultaneously to radio stations that agree to carry a substantial amount of its material on an ongoing basis; typically, a network provides a regular schedule of programming material to its affiliate stations for broadcast

SYNDICATOR – a company that licenses programming to radio stations on a market-by-market basis

FORMAT NETWORKS – programming firms that provide subscribing radio stations with all the programming they need to fill their airwaves 24 hours a day, seven days a week; often the station needs only to insert local commercial spots into the programming

BARTER – practice in which a syndicator provides the radio program and keeps a number of minutes for the sale of commercials to advertisers

EXHIBITION IN THE RADIO INDUSTRY Advertising’s Role in Radio Exhibition

NATIONAL SPOT ADVERTISING

NETWORK ADVERTISING

LOCAL ADVERTISING

Conducting Market Research to Determine Ratings

PORTABLE PEOPLE METER (PPM) – Arbitron’s electronic device for tracking radio listening both at home and on the street

RATING POINT – one rating point equals 1 percent of the population in a market

RADIO PROMOTION – a radio contest or event in which prizes are given out

FIGURE 11.6 How Satellite Radio Works

HOW SATELLITE RADIO WORKS

RADIO AND THE NEW DIGITAL WORLD • Satellite radio is a technology through which a consumer can

receive streaming channels of music and/or talk through a special receiver

• AUDIO STREAMING – practice in which an audio file is delivered to a computer-like device from a website so that it can be heard while it is coming into the device but cannot be saved or stored

• Traditional radio’s responses to digital music see satellite radio as only a minor annoyance to their business, but they know that online radio is a much bigger competitive force

• HD (HYBRID DIGITAL/ANALOG) RADIO – a system in which digital signals of AM and FM stations are sent along with the traditional analog station sounds on the same frequencies allocated to the analog stations

THE CONSTRUCTION OF RADIO AUDIENCES

The best way to look at audience research is to ask three questions:

• How do the methods used in audience research affect the kinds of facts collected about the people who use a medium?

• How do these facts, in turn, lead to certain ideas or pictures of those people?

• How do these ideas and pictures affect the extent to which, and the way in which, advertisers want to spend money to reach them?