Chapter 7 - The Business of Broadcasting

Electronic media outlets such as radio, television and cable all compete to sell audiences to advertisers. The audience gains entertainment or information and media outlets sell their attention to advertising agencies.

Different media outlets compete for audience attention. For example, television competes against other video outlets such as cable and video rentals. Radio competes against other audio competitors and outdoor advertising. Cable gets revenue through advertising but makes the majority of its incomes charging subscribers an access fee.

The amount of competition in the marketplace frequently defines the kinds of programming that is appropriate. If there is a monopoly there is no effective competition. When there is a great amount of competition, ratings define who the leading media outlets are. In comparing the various outlets to place an advertisement, media buyers look at the cost of advertising on the different media. Media buyers use a variety of statisitcal tools to measure the efficency of one media outlet over another. Cost-per-thousand is a way to compare the cost of advertising on different media.

Both radio and television have different ways of selling time to advertisers. Local, national spot, and network sales provide venues for advertisers to focus in on specific audiences or advertise broadly. Media buyers select timeslots, called dayparts, to advertise for radio. Morning and afternoon drivetime are the most expensive dayparts to buy.

Television networks are complicated media outlets. Networks pay compensation to affiliates for carrying their programs or give affiliates time in which to advertise.

Stations fill broadcast times with syndication and local programming when networks do not provide programming.

There are several types of announcements on radio and television. Commercial time is paid by advertisers. Promotional announcements made by the station itself help to provide excitement for the station or its programming. Public Service Announcements (PSAs) provide free announcements and publicity to not-for-profit organizations.