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 will provide 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 network programming firm that provides a subscribing radio station with all the programming it needs to fill its airwaves twenty-four hours a day, seven days a week; often the stations needs only to insert local commercial spots into the programming

The sound that the program director and on-air talent broadcast every day may bt mostly locally produced. But in some cases, producing all of the station's programming locally is not the most competitive tactic. In some cases, for example, it may be that broadcasting concerts by famous rock acts or programs with famous talk sho> hosts (depending on the format) is the best way to attract the right kind of listener to the station. Yet paying for these programs is often far beyond the means of ar. individual radio station. As such, most stations depend on networks or syndicator to supplement their local programming.

The Role of Networks, Syndicators, and Format Networks

A network provides a regular schedule of programming materials to its affiliate radio stations for broadcast. A syndicator typically makes a deal for one show (or one series of shows) at a time. To illustrate the difference between these two, consider a talk radio station that signs on to Salem Radio Network. As part of this network,:: gets a package of five live, daily, and weekend talk shows—for example Bill Bennett: Morning in America and The Dennis Prager Show. By contrast, if the same station wants to air the nationally syndicated Rush Limbaugh Show, it would make a deal with syndicator Premiere Radio Networks (a subsidiary of Clear Channel) for that program alone.

Both networks and syndicators typically circulate their material to stations vii satellite. Stations usually don't pay to receive programming from a network. In fac: the network may pay the station for the privilege of using its airwaves; the amour.: is highly negotiable. Syndicators usually do charge for their programs, although their fees are also negotiable. If a particular station reaches exactly the target audience a syndicator wants, the syndicator may charge that station very little for the show or even give it away for free.

The ultimate in network program­ming is the growing phenomenon of round-the-clock format networks.

ABC Radio Networks (now a subsid­iary of Citadel Broadcasting) provides nine round-the-clock formats, including “classic rock” (targeting the “lucrative 25-49-year-old demographic with the music they crave”) and “today's best country" (which

“attracts a broad demographic of 18-54-year-old listeners”).5 These format networks provide a subscribing station with all the programming it needs, and the station can insert local commercials and break into the programming with local news and weather when needed. A station that is affiliated with one of these networks no lon­ger needs to have a fully staffed programming department, which means a saving of perhaps hundreds of thousands of dollars annually. The stations can still have a person who delivers local news and weather so as to give listeners a sense that they are linked to the community.

Networks, syndicators, and format networks make most of their money by selling time on their programs to advertisers that want to reach the listeners of certain types of radio stations around the United States. They may also give the local station some of the advertis­ing time that is available during the programming. In Philadelphia, for example, the station that airs The Dennis Prnger Show makes money during the first six minutes of the hour by running its own commercials during the news. During the fifty-four minutes of the Prager Show, there will be sixteen minutes of commer­cials. The Salem network will make money running commercials across its networks during five of those minutes. The remaining eleven minutes make up com­mercial time that the station can sell to local or national advertisers.

Even noncommercial stations use networks. The largest, National Public Radio (NPR), distributes cultural and informational programming to its member stations across the country. It is probably best known for its news programs such as All Things Considered and Talk of the Nation. The second-largest noncommercial network is Public Radio International (PRI), which distributes such well-known programs as Marketplace and Prairie Home Companion. Because noncommercial networks are prohibited from soliciting advertisements, these networks help defray their costs by getting foundations or companies to support a program in return for being mentioned on the air, as well as by charging a fee to their affiliated stations. Foundations and companies are attracted by the chance to parade their names in front of the typically well-educated, prosperous, and influential audience that NPR and PRI deliver.

Ryan Seacrest counts down the bits on radio as host of American Top 40, which, can be heard on mo re than 400 radio stations worldwide.

THE NEED FOR LOCAL RADIO

In 2002, a Canadian Pacific Railway train derailed just outside the town of Minot, North Dakota, spilling poisonous anhydrous ammonia. Clear Channel owned six of the town’s radio stations and was running them essen­tially on autopilot. Emergency workers were unable to contact personnel at the radio station to have them alert listeners to the disaster and the need for evacuation. Because only one news broadcaster supported all six Clear Channel stations, there was no local voice to alert citizens to the present danger. Clear Channel argued that it was a technical glitch that prevented the information from reaching the public. This event sparked controversy over the lack of local coverage on Minot’s radio stations. If residents were not alerted about a toxic spill in their community, people argued that it was unlikely that they were receiving local everyday news coverage.

A second concern over the power of Clear Channel was raised during the Iraq war. In 2002, the Dixie Chicks, a country band, had a song, “Travellin’ Soldier,” at the top of the country singles chart. While the song was flying high, being played by country radio stations across the United States, one of the band members made a disparaging comment about then-President George

W. Bush. “Travellin’ Soldier” began slipping down the charts. Clear Channel had its stations pull the song from its playlists. Despite the radio ban, the Dixie Chicks refused to apologize for their comments. In this case, the decision not to play the Dixie Chicks music was made centrally and forced on radio stations across the country, instead of having local radio stations decide what was in the best interests of their community.

In both the Minot case and the Dixie Chicks case, the concern is that local voices were not given the opportunity to be heard. Critics of Clear Channel and other radio conglomerates argue that these incidents, unusual though they are, reflect deep tensions between the needs of a local area and the concerns of a con­glomerate. Clear Channel, CBS, and other firms that own multiple radio stations in cities respond that their ratings reflect that people want to listen to their output. Where do you stand in this debate?

Sources: http://www.wifp.org/FCCandMediaDemocracy.html; Eric Klinenberg, Fighting for Air: The Battle to Control America’s Media (NewYork: Holt, 2008).

Exhibition in the Radio Industry

From the standpoint of the radio station's owner, the purpose of producing a format and/or buying one from a distributor (a network) is to make money at the exhibition point—the moment at which the format is actually broadcast from the station.

Advertising’s Role in Radio Exhibition

national spot advertising form of radio advertising in which airtime is purchased from a local radio station by national advertisers or their representatives

network advertising form of radio advertising in which national advertisers or their representatives purchase airtime not from local radio stations, but from the network that serves the radio station

local advertising advertising money that comes from companies within listening range of the radio station

For the general manager and the program director, the success or failure of their product depends on whether the station's sales team can sell enough advertising to bring the station adequate profits. Two kinds of advertising come into radio stations:

• National spots

• Local advertising

In national spot advertising, airtime is purchased from a local station by major national advertisers or their representatives, such as Nabisco, Paramount Pictures, and Maybelline. The word “spot” distinguishes this kind of sponsorship from network advertising, in which sponsors (perhaps also Nabisco, Paramount, and Maybelline) purchase airtime not from the station, but from a network that serves the station. National advertisers use spots to target certain cities with particular ads. Buying network ads is often more efficient when the aim is to reach a particular radio audience across the country.

Of the $17.6 billion of advertising going into radio in 2008, about $16.5 billion went to radio stations as a result of national and spot commercial buys; the rest (about $1.1 billion) went to networks. Of the money that went to radio stations, local advertising accounted for about 82 percent of the total. A radio station's local market represents advertising dollars that the station can collect from businesses in the area. The station's sales manager and staff must convince local business and organizations to advertise on the station.

The sales manager works with the traffic manager to coordinate the placement of commercials. The traffic manager ensures that advertisements are scheduled and broadcast correctly. For example, it is considered bad practice to schedule commercials from directly competing companies, say Pepsi and Coca-Cola, right after each other.