McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. THE DYNAMICS OF MASS COMMUNCATION Joseph R. Dominick University of Georgia--Athens

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. The Depression: –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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. World War II –Network news thrives as public follows war developments with “name” correspondents. –Ad revenues double History NBC ABC NBC Supreme Court (1943)

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Innovation and Change: –FM technically superior to AM –FM and TV use same bands –FM moved to MHz, making half- million radios useless –TV affects radio networks; stations become more local History

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Specialized Formats –Stations lose network affiliations –Local personalities emerge –Station develops “Top 40” format –Clock hour invented History

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Growth and Stabilization: –# stations: 3343 (1955)  7000 (1970) –DJs’ Top 40 power leads to payola –FM emerges –FCC’s non-duplication rule (1965) –FM begins evolving different sound –NPR starts up (1970) with 80-station network History

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Digital radio receivers introduced in 2004 –400 stations in 125 cities broadcast in HD radio format Satellite radio –XM radio and Sirius subscription service –Receivers for home and car –Wearable receiver similar to Sony’s Walkman introduced Radio in the Digital Age

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Internet radio –Specialized formats –Small audiences –Copyright Arbitration Royalty Panel (2002) –Small Webcaster Settlement Act of 2002 –Major Internet radio providers: MSN Radio, AOL, Yahoo and Live365 Radio in the Digital Age

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Defining Features of Radio Radio PORTABLE UNIVERSAL SUPPLEMENTAL SELECTIVE

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. ½ billion working radios in USA 13,500 radio stations in operation Local stations, networks, and syndicators Organization of the Radio Industry Local Stations Networks Syndicators

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. AM and FM Stations –AM = Amplitude Modulation Travels farther Clear channel – single dominant station with strong signal Regional channel – shared by several stations Local channel – shared by many stations –FM = Frequency Modulation Class C – most powerful signal (100 Better quality; less interference Classes B and A less powerful Organization of the Radio Industry

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Organization of the Radio Industry Figure 7-2 Simplified Diagram of the Electromagnetic Spectrum

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Voice Tracking –A single DJ records intros, extros, chatter –Music mixed in later –Total program delivered to local stations Organization of the Radio Industry

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Noncommercial Radio –2,400 stations (2005) 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Telecommunications Act of 1996 –5100 different owners in 1996 –3800 different owners in 2002 –2 companies: 40% of ad revenue in 2005 Clear Channel Communications Infinity Broadcasting Ownership in the Radio Industry

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Departments and Staff –General Manager –Program Director –Sales department –News department –Programming department –Engineering department Producing Radio Programs

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Producing Radio Programs Figure 7-3 Format Wheel for a Contemporary Rock Station

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. $Revenue from radio advertising is flat $Ad clutter a problem $Radio’s share of total ad $ spent in U.S. only 8% $2004 Clear Channel limited commercial breaks to 4 minutes per hour Rate card $National advertising (5%) $Regional or national spot advertising (17%) $Local advertising (78%) Economics

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. $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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. Ratings provided by professional research organizations Major company is Arbitron –Monitors 280 markets nationwide –Random sample of listeners – day-to-day diaries with less than 50% return rate –End product is ratings book Feedback

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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 3 hours Most listen during rush-hour drive-time –As people age, they tend to evolve from one format to another Feedback

McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All Rights reserved. 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