Radio

Reading: Definitions/Key Terms: Examples/Key points: Significance of issues:

Media 1. Broadcasting: 1. Creation of the RCA 1. Special example: War
Today, - Term referring to radio - Happened in 1919 when Congress decreed of the Worlds
Chapter transmissions that can that broadcasting was to be a privately
11 be widely received; sponsored enterprise and available to any
originally an citizen who would pay for a license.
agricultural term - Radio Corporation of America created where
meaning to scatter it had power to force anyone interested in
seed over a broad area setting up a radio station to pay for a radio
rather than in patent.
particular places - RCA soon became the most powerful force
2. Radio network in developing the airwaves. US Courts soon
- A group of broke up this radio monopoly, but it brought
interconnected radio about (1) The development of advertising to
stations support radio (2) The creation of networks
3. Network affiliates to spread advertiser-sponsored
- Local radio stations programming around the country.
that transmit network
signals, but that are 2. Radio and advertising
not owned by the - In the 1920s, suppliers, manufacturers, and
network; in exchange selling of radio equipment wanted to
for the transmission of encourage the growth of radio  set up
their signals, the stations with regularly scheduled programs
network agrees to in the more specific hope that people would
compensate the want to tune in and, thinking well of the
affiliatewith a portion manufacturers’ activities, buy the radios
of the revenues they produced.
received from network - However, such promotional stations didn’t
advisers make sense in the long run. The cost of
4. Radio act of 1912 running a serious station with popular
- Radio Act of 1912 programming was climbing into the tens, or
 passed by Congress in even hundreds, of thousands of dollars.
1912, this act gave the Eventually, radio stations would turn to the
Secretary of sale of advertising—a practice that started
Commercethe right to in a strange way.
issue licenses to - AT&T executives in New York became
parties interested in convinced they could make money through
radio broadcasting, radio by letting people pay to speak over
and to decide which the radio—in much the same way as they
radio frequencies paid to speak over the phone. When it
should be used for didn’t look as if individuals were really
which types of services prepared to ante up for a chance at the
(that is, public microphone, the company agreed in 1922
broadcast, military to allow the Queensboro Realty Company to
use, police use, etc.) pay $3,000 for five “talks” extolling
properties it had for sale. The rest, as they
5. Federal Radio say, is history. Other stations picked up
Commission: AT&T’s idea and rushed to sell time on their
- Created by the Radio airwaves. To draw listeners, the advertisers
Act of 1927, this often mixed entertainment with their
commission’s purpose commercial pitches.
was to issue radio
licenses to those who 3. Government regulation of radio
applied for them, and - Radio was becoming too popular in the
to bring order to the 1920s, hence a large number of small
nation’s radio broadcasters started to wreak havoc on the
airwaves. airwaves and this interfered with the ability
of commercial stations to get their signals
6. Federal Communications into homes reliably.
Act of 1934 - In response to this problem, Congress
- The Congressional act passed the Radio Act of 1912. It
that turned the Federal empowered the Secretary of Commerce to
Radio Commission into issue licenses to people who wanted to
 a larger Federal
Communications
Commission, with
responsibilities for
regulating the
telephone and
telegraph industry as
well as the radio
broadcasting industry
7. Federal Communications
Commission (FCC)
- A federal agency
specifically mandated
by Congress to govern
interstate and
international
communication by
television, radio, wire,
satellite, and cable.
8. Terrestrial radio:
- Traditional broadcast radio,
which involves signals that
are broadcast from
transmission towers on the
ground and picked up by
radio sets
9. Cable Radio
- A service in which cable
firms send music to
customers through their
wires
10. Satellite radio
broadcast, and to decide what frequencies
should be used for what kinds of services
(for example, maritime use, military use,
police use, and public broadcast).
- HOWEVER, from the standpoint of
broadcasters wanting to turn radio into a
big business, the result was chaos. In the
1920s, a large number of stations came on
the air across the United States—many on
the same frequencies. Because they
interfered with one another, it was difficult
for audiences to hear any of them
consistently. More and more radio
executives complained that the airwaves
had to be put in order if advertisers were to
get their money’s worth and radio was to
grow as an industry.
- Then, the Radio Act of 1927 created a
Federal Radio Commission (FRC) to issue
radio licenses and bring order to the
airwaves. The FRC kicked some stations off
the air and told the remaining ones the
maximum power at which they could
broadcast. The stations that were the
most powerful and had the best
technology got the best frequencies
with the maximum power allowances.
These stations were generally
commercial broadcasters, and often
they were network affiliates.
Educational and religious stations were
consigned to inferior positions on the dial, if
 - Radio broadcast by
transmitting signals to
satellites that retransmit
them to radio sets
11. Internet radio
- A servicein which streaming
audio is distributed to digital
devices that access the Web
location
12. Commercial station
- A radio station that supports
itself financially by selling
time on its airwaves to
advertisers
13. Non-Commercial station
- A radio station that does not
receive financial support
from advertisers, but rather
from donations from private
foundations and listeners,or
from commercial firms in
return for mentioning the
firm or its products at the
start or end of programs
airing on the station; most of
these stations are located at
the very left of the FM band
(88–92 Mhz) because these
frequencies have been
reserved by the government
exclusively for
noncommercial use.
they stayed on the air at all.
- Another Government regulation: The
Federal Communications Act of 1934
 It was a message that would become
the pillar of the government’s
approach to all broadcasting: the
ability of business interests to develop
the public airwaves for commercial
purposes would be protected, but only
if their programming or other
activities did not create public
controversies.
4. Radio in the 1920s, 30s, 40s
- Radio in the1930s and 40s was more like
the television of today than the radio of
today. National networks also dominated
radio e.g. NBC Red and Blue, CBS. However,
the FCC became too concerned that NBC’s
ownership of two networks gave it
excessive power over radio and ordered
NBC to sell one of them which they did in
the end.
- Radio listeners heard talk-and-variety
programs (The Breakfast Club, Arthur
Godfrey) in the morning, continuing dramas
(The Romance of Helen Trent, One Man’s
Family) in the late morning and early
afternoon, children’s adventure programs
(The Shadow, Dick Tracy) after school, and
sports broadcasts during weekends. In the
evening, in addition to musical variety

14. Billboards
- The mention of a sponsor’s
name or products at the start
or end of an aired program in
return for money
15. Format consultant
- An individual hired by a
radio station to analyze the
competition and select a
format that will attract the
most lucrative audience
niche possible
16. Narrowcasting
- Going after specific slices of
the radio audience that are
especially attractive to
advertisers
17. Call-outs:
- Periodic surveyof
representative listeners in
which a station
representative plays a
snippet of a song and asks a
listener to rate the song
programs, listeners could hear the same
genres of shows that TV viewers see today:
situation comedies (The Charlie McCarthy
Show, Burns and Allen, The Jack Benny
Program, Allen’s Alley, Blondie), general
drama (The Lux Radio Theater, The Mercury
Theater of the Air), quiz and game shows
(Take It or Leave It, The $64,000 Question,
Truth or Consequences), police shows (The
FBI in Peace and War), detective pro- grams
(Philo Vance), doctor shows (Doctor
Christian), mysteries (The Black Castle, The
Shadow), and more.
5. Radio and the Rise of Television
- By 1960, more than 90% of homes had a
television. Instead of listening to network
radio, people tended to watch network
television. With network audiences
declining, nervous radio station owners
began to drop their affiliations and look for
other ways to make money. In total, 97
percent of all radio stations were affiliated
with a network in 1947, but only 50 percent
were network affiliates by 1955. Radio was
undergoing a revolution.
- Drawing advertisers:
 They decided to attract the audience;
and advertisers through devoting
most of their time to broadcasting
music so that specific local audience
segments would tune in to hear. As a
18. Focus groups:
- An assemblage of eight to
ten carefully chosen people
who are asked to discuss
their habits and opinions
about one or more topics
- Ethics and Payola:
19. Fringe listeners
- Listeners who fall within the
target audience but rarely
listen to a particular station
20. Core audience
- Listeners who spend a lot of
time listening to a radio
station
21. Format clock/wheel
- A circular chart that divides
one hour of a radio station’s
format into different, timed
program elements.
22. Drive time
- Early weekday mornings and
late afternoons, when people
are driving to and from
work; this is the time during
which radio stations expect
to capture their largest
audiences.
23. Radio networks
- A company that distributes
programs simultaneously to
result, stations around the country
developed different music formats
based on the kind of music they
played and the radio personalities
who were hired to introduce the
recordings.
 DJs around the country had a lot of
influence because whatever they
played grabbed listeners’ attention
and this turned into record sales.
 Hence, recording firms pressured their pro-
motion personnel to persuade DJs to give
“airplay” to the singers their company was
pushing. The pressure was so great, and the
influence of certain DJs on audiences was
apparently so strong, that many promotion
people started paying DJs to highlight their
company’s recordings—a process known as
payola. The amounts of money delivered to one
DJ could run into the tens of thousands of
dollars.
 The DJs who were caught accepting bribes
could argue that they took money only for songs
that they would have played anyway; the cash
was just a perk of their job. Song salespeople, in
turn, noted that paying to publicize songs was
nothing new.
 What happened in the end:
 When newspaper articles exposed the payola to
the public, many DJs were red, Congress held
 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
24. Syndicator:
- A company that licenses
programming to radio
stations on a market-by-
market basis
25. 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.
26. National spot advertising:
- Form of radio advertising in
which airtime is purchased
from a local radio station by
national advertisers or their
representatives
hearings on the subject, and lawmakers
amended the Federal Communications Act to
make the practice illegal. Many radio stations
took song selection away from individual disc
jockeys and centralized the activity in the hands
of the station’s program director.
 HOWEVER, Radio was so critical for the
promotion of records, however, that the practice
continued in one way or another—often with
the program director as the focus of the activity.
Expensive gifts, including sex and drugs, often
took the place of money and payola remains an
ethical issue even today.
6. Radio after the 1970s
- The introduction of FM stations caused
many AM stations to have a hard time
staying afloat. The ones that remained
tended to focus on non-music programming (all talk, all
news, all business/financial, all sports), religious, and
ethnic (often Spanish-language) formats.
- However, in the 1990s, talk shows became
very popular.
- Radio executives also redefined the idea of
a network. Traditionally, it was just a
distributor of all sorts of programming to
affiliates that had faded with the rise of
television. In its place emerged organizations that
delivered material tailored to the new demands of
segmented, targeted radio.
- EXAMPLE: The ABC radio network set the pattern for
this approach in 1968, when it reorganized into four
27. 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
28. Local advertising:
- Advertising money that
comes from companies
within listening range of the
radio station
29. Portable people meter
- Auditron’s electronic device
for tracking radio listening,
both at home and on the
street
30. Rating point
- One rating point equals 1
percent of the population in
a market
- - Once again, radio executives stand between an old and
services—contemporary, informational, entertainment,
and FM. It offered hourly news reports styled to mirror
different formats.
- As the delivery of programming by satellite became
possible in the 1970s, more and more network-like
services arose to provide stations with everything from
around-the-clock music formats to special music
concerts that matched their formats. Cable television
firms even began to offer their customers audio
music services that could not be received over the
air.
7. Fragmentation
- The fragmentation of terrestrial radio
sparked also the creation of large radio
conglomerate  who can control large
proportions of radio advertising in markets
across the country e.g. Clear Channel
- CRTICISM: The rise of the radio conglomerates has
sparked the criticism that much of terrestrial radio is
repetitive, not innovative, and clogged with
commercials.
new world. They have a lot invested in traditional
broadcast radio, but their audiences are declining. So
they are trying to understand how to adapt to, and
compete with, the new technologies.
8. Where and when people listen to radio
- According to Arbitron, listening at home has been on a
long-term decline. Whereas in 1986 53 percent of all
radio listening (as measured in quarter hours) took
 place at home, by 2008 that percentage had dropped to
39 per- cent. Listening to terrestrial radio has become a
predominantly “away-from-home” (in cars, at work, on
the beach, in the park) activity.
- The company acknowledges that the time spent
listening (TSL) has gone down. The erosion is greatest
overall with teens; in spring 2007, for example, teen
boys and girls tuned in thirty and forty-five minutes
fewer per week, respectively, compared with spring of
2006. For the entire population, TSL fell thirty minutes
per week between spring 2006 and spring 2007.2
- This drop has occurred mostly due to other
technologies that can now stream music, such as the
iPod, the Internet and the mobile phone. This drop in
audience = drop in revenue for radio stations.

9. Commercial VS Non-commercial Radio stations

- The vast majority of stations in the United States—
about 11,000—are commercial stations (see definition).
- In 2008, advertisers spent about $17.6 billion on
terrestrial radio.
- Non-commercial stations do not receive financial
support from advertisers in the traditional sense of
airing commercials. They do it through announcements
known more as billboards.

10. Radio Production: Radio formats

- In both commercial and noncommercial radio, profits
come from breaking the audience into different groups
(segments) and then attracting a lucrative segment. For
 commercial broadcasters, a lucrative segment is one
that many advertisers want to reach. For
noncommercial broadcasters, a lucrative segment is a
population group that has the money to help support the
station or that corporate donors want to impress
- The fragmentation of the radio spurred the creation of
many different radio formats, as radio executives
struggled for ways to reduce their risk of failure amid
enormous competition. They hoped that the formats
they created would help them hone in on audiences that
would be large and desirable enough for local and
national advertisers (or donors) to support e.g. Country
music stations garnering the highest share of audience
listening per average quarter hour.
- Because the format is the basis for attracting a target
audience, radio station executives spend a lot of time
developing it—often hiring format consultants to
analyze the competition and choose a format that will
attract the most lucrative audience niche possible. Most
of the formats are based on music, but to format
consultants the bottom-line issue is a station’s ability to
gather a distinct audience for sponsors—not the
aesthetics or diversity of its sound.
- People in the industry often use the term
narrowcasting to describe the activity of going after
specific slices of the radio audience that are especially
attractive to advertisers. One well-known radio
consultant explained that a radio station’s need for
distinct listeners was the reason behind narrowcasting.
“As the [audience] pie gets thinner and thinner
[because of the large number of competing stations],
it’s not so much whether you have ten thousand
 listeners at any given time . . . [but] what’s the
difference between [stations] A, B, C, and D.”4
- Also, Silence is a big taboo in radio, because the
mandate is to keep the target audience interested.
Figuring out how to fill time attractively is a big
challenge for a DJ. After their shift in the on-air studio,
many disc jockeys move to a production studio, where
they create items like commercials or comedy bits for
later airing.
11. Producing the playlist
- Much research is needed to create the ultimate playlist.
- Such research include surveying listeners – call-outs –
where songs are played to them and they are asked to
rate it  only songs that test well with the audience
will receive enough airplay.
- Radio stations may also hire focus groups so that
individuals will be asked on their thoughts on the
various local radio stations and state what they like and
dislike about a certain radio personality  used to
gauge how their target audience really thinks about
their station.
- To create a balance between fringe listeners and a
station’s core audience, most radio stations create an
hourly format clock to maintain stability while making
sure that key service elements show up at specific
times.
 For example, a radio station may schedule its
news at the top of the hour, followed by a hit
song. To help listeners remember which station
they are hearing, the clock instructs DJs to
broadcast the station’s call letters and frequency
often. Stations may also use jingles to improve
 their listeners’ retention of the station’s identity.
Perhaps most important from the station
owner’s viewpoint, the clock also dictates when
air personalities play those vital commercials.

12. Prime time for radios

- In radio, drive time—or the period when people are
driving to and from work during early weekday
mornings and late afternoons—is when radio stations
expect to capture their largest audience. Given the large
audience during drive time, advertising rates are also at
their highest during these time slots. The morning shift
is especially important for the station, and finding the
right person or team to handle a station’s early morning
shift is often a great challenge. Funny morning
personalities can command large salaries. It is well
known in the radio business that a good morning
personality will keep listeners tuned in to the station for
the rest of the day.
- It is interesting to note that most air personalities have
little input into what music they play. Program
directors and their general managers believe that the
stakes are too high and the risk too great to allow a
single DJ to decide what music to play based on his or
her mood. In contemporary radio, a carefully crafted
format must be consistent throughout the broadcast
day.

13. Distribution in the Radio industry

- 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 show hosts (depending on the format) is the best
way to attract the right kind of listeners to the station.
Yet paying for these programs is often far beyond the
means of an individual radio station. As such, most
stations depend on networks or syndicators to
supplement their local programming.
- Both networks and syndicates typically circulate their
material to stations via satellites. Stations usually don’t
pay to receive programming from a network. In fact,
the network may pay the station for the privilege of
using its airwaves; the amount is very negotiable.
- What is POPULAR in network programming
nowadays is format networks. 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.
 E.g. ABC Radio Networks (now a subsidiary of
Citadel Broadcasting) provides nine round-the-
clock formats,including “classic rock”
(targetingthe “lucrative 25–49-year-old demo-
graphic with the music they crave”)and
“today’s best country”
- 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.
- However, having only one main radio channel
owning too many radio stations is also not good.
 For example, 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.
 Dixie Band radio ban for making one bad
comment about then President Bush: 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.

14. Advertising’s role in radio exhibition

- Two main kinds of advertising: National spots and
local advertising
- Importance of ratings:
 Ratings are to station employees what report
cards are to students: rows of raw numbers that
summarize many months of effort. One rating
point equals 1 percent of the population in a
market. Because typically there are dozens of
stations broadcasting in major markets, the
ratings for individual stations are often quite
small. Stations are considered successful if they
manage to garner only four or five rating points.
Yet the raw number is often not the only thing of
interest to a radio advertiser. The extent to which
the advertiser’s target audience—in demographic
and lifestyle terms—is being reached with an
efficient cost per thousand listeners is often more
important. For example, a concert promoter may
want to know which station in town attracts the
greatest share of the young adult audience so that
she can effectively buy advertising to attract a
rock band’s core audience.
 A station whose ratings are up will often try to
raise its advertising rates to reflect its increased
popularity. Some station employees may directly
 benefit from the ratings report because their
salaries are tied to ratings. But the celebration
cannot last too long because a new ratings report
card is always being prepared. Most large radio
markets, such as Chicago, are surveyed year-
round by Arbitron.
- When poor ratings happen:
 When stations have fared poorly in the ratings, managers
may institute immediate changes. Sometimes managers
blame internal factors such as a poor choice of recorded
music. They may also blame factors outside the station’s
control. For example, many music-intensive stations have
poorer ratings during severe winters because listeners flock
to competing news/talk stations for updates on school
closings and icy roadways.
 When stations have a history of poor ratings and revenue
performance, station owners will frequently decide to try a
new station format in an effort to grab a larger target
audience and more advertisers. Overnight, a station that is
known for playing classical music may start playing
country tunes.
 HOWEVER, although management may consider it deadly
to stick with an unprofitable format, instituting a new
format on a radio station also has risks. Listeners to the old
format are likely to feel abandoned and angry, and it may
be tough to get the new target audience to find the station.
Attempts to attract new listeners through publicity stunts
and advertisements on billboards, on TV, and in
newspapers can be quite expensive. And if the new format
doesn’t work, management may be in a worse situation
than it was in before the change. Nevertheless, the formats
of certain stations do change fairly frequently; their
managers believe that the benefits of responding to the
shifting interests of audiences and advertisers outweigh the
costs and risks of change.

15. Internet radio

- Internet radio could more appropriately be called audio
streaming, as it involves the flow of music or other
audio signals from their originator to a computer via
the packet switching technologies that are at the core of
the internet. Unlike downloading a song from the Web,
streaming music from a website is not designed to be
saved by the computer through which it is playing,
unless a special recording device captures it and
translates it into a saveable format (MP3, for example).
Thousands of websites offer streaming music. Many
earn fees when a listener clicks to buy a song from a
digital music store linked to the site. Often the sites
make money through the advertising placed on their
sites; MySpace is an example. Sometimes the sites
require subscription fees; think Rhapsody. Yahoo!
Music is among the sites that shows you ads before
streaming the song and has ads in the browser while
playing it. But the ads are nothing like the commercial
barrage on many commercial terrestrial radio stations.
- Most music sites have forums that allow fans to talk to
each other and suggest tracks or albums. AH.FM is a
streaming music site and forum for techno and dance
music. Napster is among sites that allow people to
 share music with others. Imeem, supported by
advertising, highlights what others have played among
a large number of different music categories. Rhapsody
trumpets the ability of its subscribers to share the lists
of streams they have created.

16. Traditional Radio responding to challenges:

- Commercial time:
 Some admit that commercial time; some 20
minutes an hour, is driving some listeners away.
Hence, some stations have tried to soften the
blow by bunching commercials together into
long strings; listeners are guaranteed twenty
minutes or more of music before they hear any
ads, for example. Although this approach may
assuage some in the audience, it may get
advertisers upset if they are stuck in the middle
of the commercial break, worried that many
listeners have long since changed the station, if
only temporarily.
 In late 2004, Clear Channel, the nation’s largest
broadcast radio station owner, tried to set a new
example with an approach it called “Less is
More.” Clear Channel committed itself to
reducing its available ad time to no more than
fifteen minutes of ads per hour and no more
than six ads in a row. The policy didn’t stop
audience loss and it lowered revenue.
Consequently, Clear Channel has embarked on
another strategy. Instead of emphasizing
traditional thirty-second commercials, the firm
is intent on dropping some commercial time in
 favor of integrating promotions for products
into the fabric of the station—through the DJ’s
comments, contests, and other activities.
17. Internet participation
 Most radio stations have realized that it needs to
have an internet site.
 For example, consider the website of
Power99FM, one of five Clear Channel radio
stations in Philadelphia. This station focuses on
“Bangin hip hop and R&B,” to quote the site. It
is filled with songs, music videos, and in-studio
performances that reflect the radio station’s
theme and website’s “music on demand”
refrain. Surrounding all this music is a large
promotional and advertising environment.
Listeners can go to the site to find out about the
station’s contests and promotions. It also
conducts its own contests to involve visitors.
You can sign up for a VIP club to “enter
exclusive online contests for concert tickets, hot
prizes, movie passes, sporting event tickets,
cash, trips, cars, you name it.” All of this comes
with advertising for local and national
companies. In addition, the site connects to
iheartradio.com, Clear Channel’s platform for
websites for its “350+ stations.” The site also
allows you to stream albums for free, create a
personal playlist of music videos, and see
various kinds of ads, some of which (for
example movie trailers) are integrated into the
site as if they are merely more Clear Channel
 content.

18. Controversy over the radio

- Radio consolidation
 Media watchdog groups such as the Media
Access Project and consumer groups such as
Consumers Union argue that the purchase of
hundreds of stations by large companies is
reducing the amount of diversity in American
radio.
 Media critics say that such consolidation is
narrowing the actual range of music broadcast.
According to these critics, when the big radio
firms buy up stations, they put in place cookie-
cutter approaches to formats that have proved
efficient in other markets. As a result, cities and
towns around the country increasingly have the
same line-up of formats with the same line-up
of sounds—sometimes even played by twenty-
four- hour format computers in places far away.
As a result of consolidation, they argue, radio
doesn’t reflect different regional or local tastes;
nor does it encourage live performances by
local artists.
 They add that the growth of round-the-clock
format networks that has resulted from
consolidation has further homogenized radio
despite the large number of stations.

- The Radio industry’s influence over royalty fees

 Individuals who want to see music flourish on
 the internet worry that the large radio firms and
the major recording companies could make it
difficult for small websites to compete online.
For example, if these large firms set royalty fees
for the copyright holders of the music at levels
that the big firms with a lot of ad revenues
could afford but that small firms could not, the
traditional industries could block new players.
Critics argued that Sound Exchange, the non-
profit organization that collects and distributes
digital royalties on behalf of artists and labels,
had pushed the government’s Copyright
Royalty Board toward a two-part fee that was
unrealistic for small rms. One part was a high
per-song charge, 17 cents. The other part was a
$500 annual fee for each music channel run by
a company. Independent sites such as Pandora
argued that not only was the per-song charge
tough to support without a lot of advertising, the
annual fee would make it prohibitive for
companies to stream a large variety of channels.
 But supporters of internet music resisted the
Royalty Board and tried to convince Sound
Exchange that the record labels would gain a lot
from the many sites that lower fees would
encourage because they would be a useful way
for millions to discover music.
 Then, finally, in 2009, they came up with a
compromise that allows small sites with less
than $1.25 million in revenue to pay 12 percent
of revenues, going up to 14 percent by 2015,
with no per-song fee. That approach will
encourage even the smallest firms to have a
variety of channels, even personalized channels,
streaming together.