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Some History

Some History. Radio signals the beginning 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:

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Some History

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

  2. 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. 2 1920: Elections • KDKA Pittsburgh • 1st Commercial station

  3. Radio Competition • 13,500 AM/FM stations • 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

  4. 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)

  5. Radio and Consolidation • Consolidation= • Competition • Diversity • Localism

  6. 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?

  7. Markets…

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

  9. 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

  10. 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

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

  12. 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

  13. 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

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

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

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

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

  18. 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

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

  20. Markets

  21. TV Production: • TV Networks: • Local Stations: • 35 • Cable: • Pay Cable:

  22. TV Production: • TV Networks: • Cable Systems: • 12.8M Subscribers • Cable: • Pay Cable:

  23. TV Production: • TV Networks: • Local Stations: • 10 • Cable:

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

  25. The New Fox News

  26. 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)

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