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Some History Radio signals the beginning of? The end of?
Broadcasting Wireless communication. The end of? Records Able to
hear free music Sound Familiar??? 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 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 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) Radio and Consolidation
Competition Diversity Localism 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? Markets 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 (=) 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 orBMI 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
publicperformance royalty Contd A non profit Board members
from
Pandora= 2.91 cents/hr/listener Sirius XM= 1.6 cents/hr/listener
Clear Channel= 0 cents History Television built upon?...
Commercially based model Networking
Programming Advertising Technologies Infrastructure Commercially
based model 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 andmicrowave relay,
reaching west by 50s Local TV stations remain independent
Independently owned/Franchise content fromnetworks Early local
stations got programming fromnumerous networks Eventually, stations
would affiliate with onenetwork and carry their prime time programs
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 $$$ Distro Contd Independent
Cable/Satellite Public Stations
Sometimes pick up local stations Basic, Pay, Pay Per View Public
Stations National Broadcast Networks??? Competition Local level,
stations compete for??? Against?
Audiences Local advertisers Against? Cable Internet National level,
networks compete for??? Advertisers Competition Contd National
networks= Local Stations= Cable=
Oligopoly Local Stations= Cable= Monopoly Direct TV= Oligopoly
19.2M subscribers 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 Product Placement $7B, expect $10B in 2010
($190M in 1974)
Ad purchase contingent upon productplacement, usually a combo fee
Film Placements Reverse Placements? Markets TV Production: TV
Networks: Local Stations: 35 Cable: Pay Cable: TV Production: TV
Networks: Cable Systems: Cable: Pay Cable:
12.8M Subscribers Cable: Pay Cable: TV Production: TV Networks:
Local Stations: 10 Cable: These 3 Corporations Are???
Vertically integrated? Horizontally integrated? Diversified? Use
synergy(ies) to promote/sell itscommodities? The New Fox News 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)