3. Some History Radio signals the beginning of…? The end of…?
Broadcasting
Wireless communication.
The end of…?
Records
Able to hear free music
Sound Familiar???

4. Industrialization The goal: one point to many
1919, the formation of RCA
Government created monopolies:
in radio for GE and Westinghouse
in telephone for AT&T
Nov : Elections
KDKA Pittsburgh
1st Commercial station

5. Radio Competition 13,500 AM/FM stations Top 10 groups own
2,000 educational stations
Top 10 groups own
2,330 stations (17%)
Top 20 groups own
2,814 (21%)
Not about numbers owned, its…
Control in valuable geographical markets

6. Largest Geographical Markets
For 2010:
Los Angeles ($1.1 billion)
New York ($755 million)
Chicago ($555 million)
Dallas-Ft. Worth ($416 million)
Atlanta ($398.5 million)

7. Radio and Consolidation
Competition
Diversity
Localism

8. Laying Out Some Effects
Since the Telecommunications Act of 1996
Formed large radio chains
playlists have narrowed
advertising rates have nearly doubled
Few locally owned, locally serving stations
4 or fewer groups control 70% of the ad revenue
Music=
Promotion?
Or Ad Sales?

9. Markets…

10. Da Players 840 stations?, $2.7B ($6.8B) 130 stations, $1.9B ($14.5B)
240 international stations
130 stations, $1.9B ($14.5B)
84 stations, $500M ($12B)
277 stations, $400M ($36B)
313 stations, $326M (=)

11. Some Money/Property Thangs
Versus:
ad based vs. subscription based
localism vs. nationalism
censored vs. uncensored
“Listens” model as opposed to sales/rating
Terrestrial=Free promotion for label and performer
Terrestrial pays blanket license for musical work to ASCAP or BMI
The musical work as public performance
Satellite and Internet radio pay every time a song is played
Both the musical work AND sound recordings
SoundExchange collects and distributes the digital public performance royalty

12. Cont’d A “non profit” Board members from…
Pandora= 2.91 cents/hr/listener
Sirius XM= 1.6 cents/hr/listener
Clear Channel= 0 cents

14. History… Television built upon?... Commercially based model Networking
Programming
Advertising
Technologies
Infrastructure
Commercially based model

15. Networks Begin 1946, Dumont first commercial network
1947, NBC as first regularly operating network
1948, CBS and ABC jump in
“Chain Broadcasting”: AT&T lines and microwave relay, reaching west by 50s

16. Local TV stations remain independent
Independently owned/Franchise content from networks
Early local stations got programming from numerous networks
Eventually, stations would affiliate with one network and carry their prime time programs

17. Distribution National Networks Local Stations/Network Affiliates O&O
Content and Ads
Not owned by network
O&O
Local station owned by network
In largest markets
$$$

18. Distro Cont’d Independent Cable/Satellite Public Stations
Sometimes pick up local stations
Basic, Pay, Pay Per View
Public Stations
National Broadcast Networks???

19. Competition Local level, stations compete for??? Against?
Audiences
Local advertisers
Against?
Cable
Internet
National level, networks compete for???
Advertisers

20. Competition Cont’d National networks= Local Stations= Cable=
Oligopoly
Local Stations=
Cable=
Monopoly
Direct TV=
Oligopoly 19.2M subscribers

21. Ad Revenues $46.5B (Cable=$85B) In 2009, Network revenues -7.2%
In 2009, Local Broadcasters -13.8%
Expected a 3% decline in 2011
Ad revenues -12.9% in 2009

22. Product Placement $7B, expect $10B in 2010 ($190M in 1974)
Ad purchase contingent upon product placement, usually a combo fee
Film Placements
Reverse Placements?

23. Markets

24. TV Production:
TV Networks:
Local Stations: 35
Cable:
Pay Cable:

25. TV Production: TV Networks: Cable Systems: Cable: Pay Cable:
12.8M Subscribers
Cable:
Pay Cable:

26. TV Production:
TV Networks:
Local Stations: 10
Cable:

27. These 3 Corporations Are???
Vertically integrated?
Horizontally integrated?
Diversified?
Use synergy(ies) to promote/sell its commodities?

28. The New Fox News

29. Big 4 (or 5?) TV Networks Fox Ent. Group ($2.5B/$30B) CBS ($2B/$14B)
NBC ($1.9B/$157B)
ABC ($1.3B/$36B)
The CW ($26.5M?...private)