Send to Printer

Radio

Intro

By the Project for Excellence in Journalism

News remains an important part of what was once simply called radio. In many ways, indeed, the tradition of listening to the news — aural transmission is the original way people got news — is among the most enduring.

But the radio business is undergoing no less of a revolution than any other part of media. The audience is fragmenting across new listening platforms. The revenue models are unclear, and which technology will emerge is uncertain.

What we once knew as radio is now something more complex and in many ways more interesting. In addition to the AM and FM dials, now there is satellite, HD, Internet, MP3s, podcasting, and increasingly, cell phones.

In 2007, the audience for traditional radio continued to slip some. But AM/FM listening still reached 93% of the population over 12 years old, down less than two percentage points overall since 2000.

At the same time, the audiences for new audio continue to grow. The numbers are still small. And it may be that a technology that has not yet become a major factor — cell phones — could in the end be a dominant one. Much more change, in other words, is to come.

Financially, the industry faces large challenges, leading to experimentation and change. Radio is finally putting more resources into the Web, into social networking, on-demand news features and portable Internet radio equipment. Online revenue is growing, but not dramatically.

Some companies, partly in reaction, continued to move toward privatization. Clear Channel, the largest radio concern, started the trend in 2006, and had nearly completed the move by selling off some of its stations by the end of 2007. Cumulus Media signaled its intent to move toward private ownership in 2007 as well.

With fragmentation, moreover, comes variety. Even the content of traditional broadcast radio is now remarkably varied, depending on the source. Public radio thrives. News headlines, our content analysis suggests, provide an important and diverse source of information — and are far more than anchors reading wire copy. Talk radio, meanwhile, is something quite distinct from traditional news, and narrows, not broadens, the agenda.

What seems safest is the idea that listening to news and information is likely to endure, even thrive. But the shape of that is both changing rapidly and in other ways changing very little.

Content Analysis

By the Project for Excellence in Journalism

One of the big events in the pre-primary phase of the presidential campaign was an October 30, 2007, debate in Philadelphia where then-frontrunner Hillary Clinton experienced the first concentrated attacks from her Democratic rivals.

In the media generally, according to the Project’s News Coverage Index, the campaign that week accounted for about one-sixth of all the news coverage, and much of that acknowledged the rough-and-tumble nature of that debate. The New York Times reported that Clinton came under “withering attack” on everything from “candor” to “electability.” “After getting punched around in Tuesday’s Democratic debate, Hillary Clinton is still acting tough,” NBC’s Andrea Mitchell reported.

But in the world of talk radio, the Philadelphia debate was the starter’s gun for something much bigger. The talkers devoted more than 40% of their airtime to the campaign that week. And for them, Clinton wasn’t just a combatant in that debate. She was the big loser.

“She’s blowing this big time… playing the gender card,” declared conservative host Rush Limbaugh, who was responding to complaints from the Clinton camp that her rivals had ganged up on her. Added conservative radio talker and Fox News Channel host Sean Hannity: “Last night’s debate in Philadelphia may soon become known as the great Hillary debacle.” Clinton even got whacked by syndicated liberal host Ed Schultz, who accused her of “whining.”

In many ways, the Philadelphia encounter was a classic example of how talk radio operated, at least in 2007, according to an examination of the top talk radio shows throughout the year.

One clear finding of this examination is that the major personalities in the medium tend to seize on a few major news events each week and amplify them for their own purposes. Many weeks, the top stories in the media generally are roughly twice as big in the talk radio universe.

Generally, those events are then run through an ideological filter and used to create a narrative about good guys and bad guys, winners and losers. That process is fairly similar among both liberal and conservative hosts. It is, at its core, a medium of three P’s–personality, persuasion and polarization.

These are just some of the findings of this study, which included almost 220 hours of talk radio content from 2007, some 4,100 different segments, from five of the leading hosts on both sides of the ideological spectrum.

Among other findings:

• Talk radio was consumed with elections and politics in 2007 (more than a quarter of the airtime studied). The second-biggest talk topic was the media themselves, which accounted for about one out of every six minutes of conversation . In almost half the weeks in 2007, the lead story in talk radio got about twice as much play as the No. 1 story in the media over all.
• Conservative hosts were also fixated on Hillary Clinton, and they weren’t flattering. A study early in the year found she had generated almost three times as many segments on conservative talk as any other candidate, and almost 90% were negative. From July through the end of the year, she was the lead newsmaker in talk radio .
• Among the subjects that generated minimal coverage on talk radio in 2007 were foreign events that did not involve the U.S and a host of domestic issues. Combined coverage of the legal system, business, transportation, education and science and technology filled only 2% of the talk radio newshole.
• Talk radio is not tabloid. Crime and celebrity news filled only about 5% of time studied.
• Radio news headlines (from CBS and ABC) were in many ways a solid supplement to the narrow and selective talk news agenda. The brief hourly headline reports lacked depth but offered a broad and evenly balanced menu of topics. And the story noticeably absent was the 2008 presidential contest. It accounted for just 2% of the time here, a fraction of the attention it got from the talk radio realm. The headlines were also much more than just anchors reading wire copy. Nearly half (46%) were packaged pieces often with reporters from the field and with sound “actualities” or quotes from sources.

In its modern incarnation in the past two decades, talk radio has been a business dominated by conservative voices. While that is still true, liberals have begun to make their mark in the industry in recent years, and the 2004 launch of the Air America network, despite its problems, appears to have helped.As part of its weekly News Coverage Index in 2007, the Project examined the first 30 minutes of the programs from the three conservative talk hosts with the biggest audiences according to Talkers Magazine — Rush Limbaugh (estimated 13.5 million listeners a week), Sean Hannity (12.5 million) and Michael Savage (8 million.) On the Democratic side, the Project looked at two leading liberal hosts, Ed Schultz (3.25 million) and Randi Rhodes (1.5 million).

Talk Radio’s Amplification

The most striking characteristic of talk radio is its tendency for hosts to seize on the news and amplify those events. The hosts might suggest they are analyzing them, or offering a deeper level of clarity and truthfulness. Critics might suggest the hosts are not so much reporting the news as exploiting it.

Whatever one’s view, talk radio tends to amplify the handful of stories best suited to debate and division. Typical was the week of May 13-18, 2007, when several important events — Congressional votes on Iraq war funding, the death of Moral Majority leader Jerry Falwell, the immigration bill, the second Republican presidential debate, and a deadly ambush in Iraq — were all part of the five leading stories in the mainstream media. Each one consumed between 5% and 10% of the newshole and together, they constituted 40% of the week’s overall coverage.

Top 5 Stories for the Week of May 13-18, 2007

Percent of Newshole

Source: PEJ, A Year in the News, 2007

On the radio talk shows, however, just three of those stories — the Iraq policy debate, the campaign and immigration — consumed 50% of the airtime. Many of the other stories of the week got short shrift.

That same trend is evident over time. The top-two broad topic areas in talk radio in 2007 — elections/politics and the media — by themselves filled 44% of the airtime studied over the year. They made up 16% of the overall press coverage.

Four topics accounted for nearly two-thirds of all the time on talk radio -- politics/elections, media, U.S. foreign policy and government -- about 60% more than they did in the media generally.

Top Broad Story Topics: Talk Radio vs. Media Overall
Percent of Newshole

The agenda also differed in its nature.

A major focus of talk radio is the media itself, including the talk radio hosts talking about themselves as victims of attack. Media, the No. 2 talk subject of the year, filled 16% of airtime studied, about six times as much as in the media over all (3%). Elections/politics at 28% was the No. 1 talk topic of the year compared to 13% and No. 2 over all in the media.

Foreign events that did not involve the U.S. directly were largely absent in the discussion on talk radio (2% of time studied compared to 11% in the media over all). Crime, the No. 4 story at 7% in the media over all, was No. 5 on talk radio, but only about half as big at 4%.

Talk radio, however, is also notable for the degree to which, at least in the hours studied, it was not much concerned with two classic elements of the tabloid media formula — crime and celebrity. Those two topics made up about 5% of time studied in talk radio, half of the 10% of the media over all.

This tendency toward amplification also means that the talk radio is particularly narrow. The combined coverage of the legal system, business, transportation, education, and science and technology, accounted for a mere 2% of the talk radio airtime in 2007. The media over all, which still did not cover them extensively, devoted 7% to those issues last year.

In a year in which we have concluded that the media agenda in general was narrow, talk radio focused on an even smaller slice of that pie.

Top Stories : Talk Radio vs. Media Overall
Percent of Newshole

News Through the Prism of Ideology:

On March 29, 2007, former Justice Department official Kyle Sampson offered damning testimony about Attorney General Alberto Gonzales, telling Congress that Gonzales was more involved in the firings of U.S. attorneys than he had acknowledged.

On the talk radio airwaves, liberal talk hosts Ed Schultz and Randi Rhodes eagerly jumped on the Gonzales story. In the airtime examined by PEJ, conservative talkers Rush Limbaugh, Sean Hannity and Michael Savage uttered barely a peep on the matter.

Almost two months later, the announcement of a compromise on immigration legislation galvanized conservative radio hosts who labeled it an “amnesty” bill. Sean Hannity declared that “you cannot begin your career or life as an American by first breaking the law.” Michael Savage said: “We’re not giving away the sovereignty of America. This is the Alamo right now.”

On that subject, their liberal counterparts were virtually silent.

It comes as no surprise that liberal and conservative hosts would have sharply differing views on the war in Iraq or the presidential race or a host of other subjects. But another way in which the ideological wars on talk radio play out is through the selection of stories themselves. In an industry in which hosts much prefer to attack the enemy rather than defend the ally, ideology determines what subjects are even up for discussion.¹

Immigration, a hot-button issue for many conservatives, was the third-biggest topic (at 6%) in conservative talk radio in 2007, right behind the campaign and the Iraq policy debate. Liberal talkers were much less interested, devoting only 1% of their airtime to what was their 10th-most popular story. The third-hottest story among liberal talkers (4%) was domestic terrorism, as they criticized the Bush administration on issues such as torture and electronic surveillance. Conservatives, who tended to back White House policy on terrorism, devoted only 1% of their airtime to that subject.

Not surprisingly, liberal hosts were far chattier about the U.S. attorney firings and the Valerie Plame/CIA leak case that led to the conviction of Vice President Cheney’s aide, I. Lewis (Scooter) Libby Jr., since both were embarrassing to the administration. The arrest of Larry Craig, the conservative Republican Senator accused of sexual overtures to an undercover police officer, was also a much hotter topic on liberal talk.

Story Selection in 2007

Conservative vs. Liberal Talk Radio

Design Your Own Chart

Source: PEJ, A Year in the News, 2007

Conversely, conservative talkers spent a lot more time on the subject of global warming — criticizing its chief advocates, particularly Al Gore. They also invested much more energy on the new Democratic-led Congress, whose leaders, such as House Speaker Nancy Pelosi, were a frequent target for criticism.

And then there is the Hillary Clinton factor. Her history with the conservative talk hosts goes back to the 1990’s when she was First Lady and presided over an unsuccessful attempt to remake the nation’s health care system. (Conservative talk radio’s ascendancy coincided to a significant extent with Bill Clinton’s 1992 election and the hosts decided to make his administration a primary target.) Ever since Hillary Clinton’s January 2007 announcement that she intended to follow in her husband’s footsteps, she has been a prime subject on talk radio, more specifically a prime target of conservative talkers.

For the first five months of 2007, Clinton generated almost three times as many segments on conservative talk radio than any other candidate, a PEJ report on early election coverage found. And 86% of those segments on the conservative air waves about her were negative in tone. In that period, she did not fare particularly well on the liberal talk radio either, but was a far less frequent topic of discussion. A study of the summer months of 2007 found that Clinton was a lead newsmaker in more than four times as many talk radio segments on the campaign as the next closest candidate, Barack Obama. And again, it was largely conservative talk radio’s fixation with her driving that coverage.

Discussing some purported problems with the Clinton campaign on a December edition of his show, Rush Limbaugh opted for a Wizard of Oz wicked witch analogy. People have been e-mailing all morning “asking me ‘Do you believe it’s the end for Hillary?’ ” Limbaugh remarked on Dec. 14. “Until I see the house fall on her… and the legs curl up [and] the body in the casket, she is not dead, she is not finished.”

That ethos was also summed up by Hannity, who during the campaign nicknamed his program The Stop Hillary Express.

Conservative Talk and the Immigration Jihad

The ability of talk hosts to influence voters may be an open question, but on one important legislative matter in 2007, the conservative hosts seemed to have had an impact. In the six weeks between the May 17 introduction of immigration legislation and the bill’s June 28 demise, the talk hosts were in the forefront of a relentless assault on the measure. Day in and day out, Limbaugh, Hannity and Savage — with considerable help from CNN’s Lou Dobbs — railed against the immigration bill and its supporters. So intense was the barrage that among conservative radio hosts, the immigration debate was the No. 1 topic in the second quarter, filling 16% of the airtime. (The second-biggest topic was the presidential campaign at 13%).

What made the conservative talkers’ war on the immigration bill more noteworthy was their willingness to butt heads with some key Republicans who had often been allies, including President George Bush. So exasperated was Republican Senator Trent Lott that he complained openly during the immigration debate that “talk radio is running America.”

That only made Lott a bigger target. “What are we going to do about Mississippi Senator Trent Lott... one of the engineers of the Senate immigration bill, the amnesty bill?” Limbaugh asked his listeners. “Senator Lott’s out there saying the problem with this is talk. Now what does that mean?”

On his radio program, Hannity defended his stance by drawing firm distinctions between conservatives and Republicans. “We stand up for our principles regardless of any party affiliation,” he said. “We find ourselves now at odds with Republicans for one reason and one reason only…. They keep compromising their values.”

That was same argument that conservative talk hosts would make later in explaining their campaign against John McCain, who became the Republican party’s presidential nominee but was deemed too liberal for their tastes.

Differences among Hosts of the Same Ideology:

The conservatives:

Naturally, the most obvious arguments and differences are between the liberal and conservative talk hosts. But a close examination also reveals that there are some significant differences among talkers of the same ideologies.

In terms of news agendas, there were some noticeable differences among the three big conservative hosts. Hannity is most clearly a Washington creature, spending 45% of the first half hour of his program on the topic of politics/campaigns. That is about 150% as much attention as Limbaugh gave the subject in his top 30 minutes and nearly three times as much coverage as Savage offered. Savage, in contrast, whose program has more in-your-face vitriol, seems more culture-oriented and less political. Topics such as lifestyle, immigration, religion, race and gender all get more time on his 30 minutes of air-time (23%) than from Limbaugh (8%) or Hannity (9%). Limbaugh is harder to pin down, but in some ways encompasses, with more wit and less overt anger, combinations of both. But the differences that often stand out the most are stylistic. Limbaugh is a godfather of modern conservative talk and a very influential figure in conservative circles. (Many credited him with a role in the conservative revolution that swept the Republicans into power in the 1994 Congressional elections and he is often characterized as the leading representative of the talk-show wing of the Republican Party.)

Limbaugh’s on-air style is relaxed, conversational and flecked with humor, or at least sarcasm. He has a considerable skill for self-promotion and injecting himself into the middle of major political controversies, a classic example being the “phony soldiers” furor that erupted in September 2007. At the time, Democrats were smarting over congressional resolutions condemning an ad from the liberal group, MoveOn.org, characterizing the top U.S. commander in Iraq, General David Petraeus, as “General Betray Us.” In a September 26 on-air phone conversation about anti-war sentiment, a caller said that media “never talk to real soldiers. They like to pull these soldiers that come up out of the blue and spout to the media.” Limbaugh interrupted, saying, “the phony soldiers.” Limbaugh’s use of the term “phony soldiers” was quickly attacked as an effort to discredit troops who might express doubts about the war and Democrats in Congress introduced a measure condemning the talk host.

Limbaugh countered that his “phony soldiers” remark referred only to one veteran who had fabricated stories about Iraq atrocities. And in a creative response to this dispute, Limbaugh took the letter of complaint about him signed by 41 Democratic senators and auctioned it on eBay, with Limbaugh matching the top bid and the money going to charity. The final bid: $2.1 million. On his show, Limbaugh played a clip of Senate Majority Leader Harry Reid, a major critic in the “phony soldiers” battle, actually lauding the Limbaugh auction as “worthwhile cause.” It was typical of Limbaugh’s knack for making himself part of the story.

Younger and newer on the scene than Limbaugh, Hannity, not only has the bully pulpit of a syndicated talk radio show, but is also co-host of the Fox News Channel’s nightly Hannity & Colmes show where he faces off against liberal Alan Colmes. Hannity and Limbaugh seem quite close on many issues and they spent much of the year battering Hillary Clinton. Almost in sync, they both shifted targets as the Republican primary fight went on, becoming sharply critical of John McCain and Mike Huckabee for being too liberal and thus, becoming the favorite Republican candidates of the liberal mainstream media. Their preferred Republican candidates clearly were Fred Thompson and Mitt Romney, two politicians who dropped out after failing to meet expectations.

The differences between Hannity and Limbaugh appear to be more about style than substance. Hannity tends to be more overtly pugnacious and direct, purveying more of a street-fighting sensibility than Limbaugh, who tends to favor more linguistically intricate soliloquies and ornate reasoning.

The real wildcard among conservative talkers is the San Francisco-based Savage, who is more of a contrarian and loose cannon than either Limbaugh or Hannity. On occasion, he has even taken what can only be characterized as a liberal view of an issue.

When Haliburton, the big military contractor once led by Dick Cheney, decided to open a headquarters in Dubai, Limbaugh defended the decision, charging that the company “is one of the footballs kicked around by the mad, insane left.” But Savage, who attacked the move as an example of the unfettered power of big business, played a clip of President Eisenhower’s famous speech warning of the rise of a “military-industrial complex.” When a student was subdued with a Taser while being disruptive during a John Kerry appearance at the University of Florida, Savage called the campus police “fascist,” and declared that “I don’t want to live in a country where even a left-wing student gets tasered for asking a question.” Savage also remarked that making Barry Bonds the villain in baseball’s steroid scandal “looks like racism to me,” in effect making a classic liberal argument by using a charge of racism in Bonds’ defense .

At the same time, the volcanic Savage is more likely than any host to explode and use scorched-earth rhetoric to make his points. He once likened the wave of immigration in the U.S. to the battle at the Alamo and on another occasion, predicted that many liberals would “die in their own vomit.” He expressed disappointment that Speaker of the House Nancy Pelosi “was not gutsy enough” to make an obscene gesture to Syrian President Bashar Assad on a trip to Damascus. And he denounced those who questioned General David Petraeus during a Congressional hearing as “those slimy, backstabbing, anti-American scum called Democrats.”

Other aspects of Savage’s behavior are unorthodox as well. To protest the media’s extensive coverage of the tabloid Anna Nicole Smith saga, he began reading on the air from “Once Upon a Time in the Catskills” a memoir about the summer of 1958 designed to hark back to a simpler, more innocent time in America. To honor the passing of tenor Luciano Pavarotti, he played classical music, something you don’t usually hear on talk radio.

Top Stories : Conservative Talk Hosts
Percent of Newshole

The liberals:

On the liberal/Democratic side, the North Dakota-based Schultz and New Yorker Rhodes are distinct from each other as well.

First, there were some differences in news agendas. At 18% of the first 30 minutes of his airtime in 2007, Schultz devoted more than twice the attention to the 2008 campaign than Rhodes did (8%). Rhodes was more concerned with the two leading threads of the Iraq war — the policy debate and events inside Iraq — than Schultz, devoting 19% of her newshole to those subjects compared with 13% for Schultz.

But the biggest contrast between the two is stylistic, with Schultz’ moderate Midwestern mores clashing with Rhodes’s Brooklyn brashness and ideological bomb-throwing.

One example of their divergent approaches was the reaction to news that Larry Craig, a conservative Republican Senator from Idaho, had been arrested for making a sexual overture to an undercover police officer in a Minneapolis airport. Rhodes went on the offensive, accusing Craig of being an “anti-homosexual homosexual” and attacking his Republican colleagues who quickly distanced themselves from him as hypocrites. For Schultz, the issue was far different. “The thing that bothers me the most about the Craig thing is that something happened with law enforcement and it went unreported to the Ethics Committee or Republican leadership,” he said. Craig “shouldn’t have the liberty… to be able to hide an arrest.”

Top Stories : Liberal Talk Hosts
Percent of Newshole

On another show, Schultz announced that he liked all the Democratic candidates, the kind of positivity one usually does not here on talk radio. “There isn’t one up there I wouldn’t vote for,” he said. “I’m just a big cheerleader today, aren’t I?”

Rhodes’ elbows and rhetoric are often sharper. She dubbed the First Lady “Crazy Eyes Laura Bush” and voiced her opinion that Bush “had a face lift.” She mocked John McCain’s assertion that the security situation inside Iraq had improved by declaring that during his stay in Iraq “John McCain had more bodyguards with him than P. Diddy getting to the MTV Awards.” At one point, she voiced her displeasure at General Petraeus and U.S. Ambassador to Iraq Ryan Crocker by characterizing them as a “tag team of liars.”

Rhodes was involved in a strange drama back in October, when she suffered significant facial injuries in a fall in New York City. The next day, another liberal host told listeners that Rhodes had been assaulted and raised the specter of a deliberate attack by “the right-wing hate machine.” Rhodes then returned to the airwaves and said that “I don’t know if someone hit me from behind or if I just fainted.” She was not able to clear up the mystery, but the episode offered further proof that in talk radio, everything is about politics.

Radio News Headlines: Brief but Broad

When the 5 o’clock CBS News aired on April 16, 2007, the depth of that day’s tragedy had become clear. In the worst shooting incident in American history, a murderous rampage had left 33 people dead on the campus of Virginia Tech. The newscast led with an update from the scene, followed by a White House reaction from President Bush and devoted a full two minutes to the story, a very long time for the briskly paced radio headlines format.

But even with Virginia Tech dominating, the five-minute newscast featured seven stories that quickly traversed the news landscape—including a jury verdict for a Hurricane Katrina victim; questions about an arthritis drug; Boston Marathon race results; closing stock prices; a terrorism-related trial in Miami; and fears of a cell phone-transmitted virus in Afghanistan.

That newscast offered a smorgasbord of news topics typical of the platform: crime, domestic events, medicine, sports, economics and foreign affairs.

In 2007, the Project for Excellence in Journalism examined these top-of-the-hour radio newscasts from CBS and ABC and found that in their own way, they were models of diversity, brevity and efficiency. These headline services — usually marking the top of the hour on radio talk, news and information stations — are an important force in radio in America, a primary source of news for stations of all kinds of spectrums. And in the hundreds of stations around the country that categorize themselves as “news and talk,” such as the ones that carry major talk show hosts, these headlines represent the news.

In general, the study finds, they offer an impressively broad if quick look at the day’sevents, Cliff Notes to the news. What is absent is depth, any kind of nuanced analysis or comparison of multiple angles on any given issues. But the sense of scale, or ordering of news by importance, is more often found here in the headlines than on the talk programs that often follow.

The news headlines are designed for their well-defined niche, serving time-pressed commuters in their cars, multi-tasking homemakers in the kitchen or those that want to listen mostly to music while still being plugged into the news of the day. They are straightforward and delivered without attitude or agenda.

For all the terrain they cover in a short period, these newscasts are more than rip-and-read exercises in which smooth-sounding anchors regurgitate news or wire stories. The Project’s examination of these reports found that the largest component, 46% of the airtime, consisted of prepared news packages in 2007, often with reporters from the field and with sound “actualities” or quotes from sources. About 32% was made up of live comments or reporting from staff journalists. And only 21% of the time was spent with the anchor functioning as storyteller or reader.

Format of News Radio Headlines
Percent of Newshole

When it comes to news agendas, one striking element of the radio headlines is the subject that did not get very much coverage, the 2008 presidential contest. In a year in which the media were consumed by the campaign, elections/politics was only the 10th-biggest topic area in the headlines, accounting for just 3% of all the airtime. By means of comparison, it was the No. 2 topic (at 13%) in the media over all for 2007 and in the world of talk radio elections/politics represented the top subject area, consuming 28% of the airtime.

Top Broad Story Topics: News Radio Headlines vs. Talk Radio vs. Media Overall
Percent of Newshole

The trend toward limited coverage of the campaign was confirmed when the news headlines were analyzed more narrowly, by individual story rather than the more general topic category. The 2008 campaign was only fourth-biggest radio headlines story (filling 2% of the airtime), compared with No. 1 for the media over all (at 11% of the newshole) and No. 1 on talk radio (17%).

What the radio headlines do deliver is a broad and balanced news menu. U.S. international news, driven primarily by the war in Iraq, topped the topic list (filling 13% of the newshole). That was followed closely by crime (10%), disasters and accidents (10%), economics (10%), foreign events not related to the U.S. (7%) and health/medicine (7%).

That kind of balance in topic selection distinguishes the headlines from the media over all, with its heavier emphasis on three major categories — U.S. international news (17%), elections/politics (13%) and foreign non-U.S. (11%). And it represents a sea change from the world of talk radio, where the pre-occupation with elections/politics (28%) and media (16%) accounted for nearly half the newshole.

Looking at the radio headlines by their coverage of big stories, the editorial balance is even more obvious. The top story of the year, the policy debate over Iraq, was separated from the No. 10 story, rising gasoline prices, by a mere 6 percentage points.

Top Stories: News Radio Headlines vs. Talk Radio vs. Media Overall
Percent of Newshole

The attention given to rising gas prices, a story the public followed very closely this year, highlights another factor that distinguished the radio headlines. The headlines devoted a large portion of the newshole, 10%, to the subject of economics. (For the media over all in 2007, economics was the eighth-biggest subject, at 4%.) Some of that is the result of the dutiful daily reporting of the numbers on Wall Street. But given the fact that the sub-prime mortgage crisis and the slowing economy had by early 2008 emerged as a primary campaign topic, perhaps even eclipsing the Iraq war, the emphasis on economics suggests some solid news judgment at play.

Despite its ability to deliver a brisk news digest, there are natural limits to relying on radio headlines for the bulk of one’s news diet. The average length for a radio headlines story in 2007 studied by the Project for Excellence in Journalism was just under 25 seconds. And given that the lead story often gets more in-depth treatment, many of the others are reduced to quick synopses. On the evening of April 16, 2007, for example, the CBS broadcast devoted slightly more than two minutes to an update on the Virginia Tech tragedy. But five of the remaining six stories in that newscast each took less than 25 seconds. The three stories immediately following the Virginia Tech update on the ABC headlines service that day were each under 10 seconds in length.

While sometimes enhanced with live or taped reporting from the scene, the headline stories are still too brief to offer listeners much nuance or to evaluate complicated issues. A more detailed 2006 study of news in three markets in the U.S. found that most of these stories made almost no attempt to offer listeners much context, explore different elements or try to make any sense of how stories might affect them.²

Footnotes

1. Each day, on the conservative side, the PEJ studied the first 30 minutes of Rush Limbaugh’s show and rotated between the first half-hour of Sean Hannity’s and Michael Savage’s shows. On the liberal side, PEJ rotated between the first half-hour of Randi Rhodes’ program and Ed Schultz’s program each day. In total, the Project examined approximately 7.5 hours of talk radio per week.

2. See state of the News Media 2006, http://www.stateofthenewsmedia.com/2006/narrative_daymedia_radio.asp?cat=9&media=2.

Audience

By the Project for Excellence in Journalism

The audience for what was once called radio is rising — and fragmenting.

Heading into 2008, the big question is which, if any, of the new audio platforms —satellite radio, Internet radio, HD radio, podcasts, MP3/iPod listening or mobile phone radio — will come out on top. So far, no clear winners have emerged.

What we do know about the new technologies is that audience demographics and listening location are closely tied to certain audio devices.

• Wealthy and more educated groups tend to gravitate toward satellite radio. Nearly one in four subscribers has an annual household income over $100,000.¹
  
• Gadget-savvy younger audiences show the most interest in podcasting. More than half (52%) of those who have ever listened to an audio podcast are under the age of 35.²
  
• Car radio audiences still favor the AM/FM dial (93%), but growing numbers are also using MP3 players (19%) and satellite radio (4%) while they drive.³
  
• Online radio is common in the workplace. More than half (52%) of Internet radio listening occurs there.⁴
  
• MP3 players and iPods, the clear winners for on-the-go listening, appear to span all demographics.
  
• Cell phones could become a growing factor in portable listening. Already 44% of cell phone owners, more than for any other audio device, said cell phones had a big impact on their lives.⁵

The implication of all this is that the many audio devices are still in fierce competition for listeners, and for the advertising and subscription revenue that comes with them.

Research into ways to measure new audio’s growing audience has been slow to come together, despite benefits that both the industry and advertisers would likely receive from measuring Internet and HD listeners. No reliable method to capture total audience numbers has emerged. Hopes were high for the Portable People Meter, the long-awaited electronic measurement introduced by Arbitron, the radio ratings company, in March 2007 and rolling out across the country in 2008. Although its potential is considered strong, the technology is off to a troubled and uncertain start.

Broadcast Radio — Impressive Following

Traditional broadcast radio has maintained an impressive following, even among fans of new audio, though the numbers are falling slightly. According to Arbitron, traditional radio commanded a weekly audience of 93.3% of the population 12 and older as of the spring of 2007.⁶ This translates into nearly 233 million people over the age of 12 who tuned into the AM/FM dial at least once during an average week.⁷

That number represents a modest drop of 1.6 percentage points since the spring of 2000. The decline is relatively small compared with newspapers, network television and magazines that, like traditional radio, also face competition from new technologies.

Weekly Radio Reach

Percentage of the Population 12 and Older, 1998-2007

Design Your Own Chart

Source: Arbitron, “The Infinite Dial 2007: Radio’s Digital Platform,” April 19, 2007

And the listening patterns look fairly stable for the AM/FM dial in the foreseeable future. New audio listeners remain loyal to traditional radio. Nearly 8 of 10 podcast listeners (79%) and online radio listeners (77%), according to Arbitron survey data, say they would continue to listen to AM/FM radio as much as they do now.⁸ The number drops slightly for satellite radio listeners: seven out of ten subscribers anticipate maintaining their current levels of traditional radio listening.

These numbers, moreover, appear to be supported by others. A study by the media research group Bridge Ratings also found that AM/FM radio listening in the car has remained high, at 93% (down from 96% in 2004), despite competition from satellite radio and MP3 players.⁹ Furthermore, 75% of survey respondents said that traditional radio was the device they preferred to use most in the car.

HD Radio – Too Late for a Breakthrough?

Over the past three years, the radio industry has spent a lot of time and money promoting HD radio.¹⁰ But so far, it looks as if that effort has not translated into a radio audience big enough to compete with other new audio platforms. The audience for HD radio in 2007 was estimated to be 320,000 (compared with 13 million satellite radio listeners), up from 100,000 in 2005.¹¹ Though this is a large increase, over 200%, the audience is very small .

The digital HD radio platform also offers features that other popular digital formats offer, such as the ability to record particular programs for later listening (the audio equivalent of TiVo) and providing scrolling textual data on the radio “dial” (like program information, artist/song names, weather/traffic updates).

The biggest stumbling block for rolling out HD radio seems to be access. In order to listen to the high-quality sound and multicast channels of HD radio, consumers have to invest in a radio that receives the special signals. In 2007, a modest HD radio cost about $150. Although that price has dropped significantly over the past two years, consumers still do not seem interested in paying that much for a single radio. Listening to HD radio in two locations – at home and in the car, for instance – would mean buying two units.

The trade-off for the initial high cost of access is that the resulting expanded digital dial is then absolutely free, unlike satellite radio, which comes with a monthly subscription fee (currently $12.95) in addition to the initial cost of the satellite receiver(s).

By the end of 2007, 1,629 HD radio stations were on the air and 466 more were licensed but not yet broadcasting.¹² The number of HD stations skyrocketed in 2005, more than tripling from 152 in 2004 to 494. Since then, growth leveled off and has begun to decline. In 2006, 522 new stations were added. And only 394 stations went digital in 2007.

Number of HD Radio Stations

1999-2007

Design Your Own Chart

Source: BIA Financial Network database, PEJ Research

The growth of HD seems to be getting the public’s attention, though perhaps not yet their buy-in. Arbitron reports that more people had heard about HD radio at the beginning of 2007, compared with 2006 (26% vs. 14% in 2006).¹³ But increased awareness does not necessarily translate into more listeners. Just 29% of the public expressed interest in getting HD radio, down from the previous year’s total of 35%. Though interest is waning, HD radio has more reason to be optimistic about growth than satellite radio: Only 18% of people surveyed were interested in subscribing to satellite radio.

Satellite Radio – Subscriptions Still Up

As the two providers of satellite radio service, Sirius Satellite Radio and XM Radio, await the verdict on their proposed merger, they continued to grow in 2007. But growth may not be enough to sustain either company.

According to company press releases, Sirius ended 2007 with 8.3 million subscribers, up 38% from 6 million in 2006. XM added 1.4 million subscribers, bringing its total to more than 9 million, an 18% increase from 2006.¹⁴

Though double-digit growth in audience may seem impressive for satellite radio, especially after only six years on the market, it still has not created a viable business model for either company.

At the outset of 2007, the companies announced their intent to merge, with Sirius Satellite Radio’s CEO, Mel Karmazin, leading the effort. It quickly became a regulatory battle, one still fiercely being waged in Congress at the end of the year. If the two companies are allowed to go forward with the plan, it may be a factor in how radio will be defined in the future – as individual types of competing audio platforms (terrestrial, satellite, HD, online), or as one medium that comprises all forms of listening. (See Ownership.)

Another sign of the uncertain future: Audience growth may be approaching a plateau. According to Arbitron, awareness of both XM and Sirius was almost flat compared with the previous year, 2006.¹⁵ In January 2007, 64% of the population 12 years and older said they had “heard of a satellite radio service called” XM radio, while 60% said the same of Sirius. This compares with 61% for both companies in January 2006.

Satellite Radio Awareness

1999-2007

Design Your Own Chart

Source: Arbitron, “The Infinite Dial 2007: Radio’s Digital Platform,” April 19, 2007

According to the Arbitron survey, interest in satellite radio did not rise in 2007, another threat to sustaining audience growth. In a 2007 survey, only 3% said they would be “very likely” to subscribe to satellite radio services in the next 12 months.¹⁶ And 15% said they would be “somewhat likely.” This is nearly identical to attitudes in 2006, when 4% said they would be “very likely” to subscribe as of January 2006 and 14% said they would be “somewhat likely.”

Internet Radio – Stable Audience

The audience for Internet radio,¹⁷ which received a big bump in 2006, held steady in 2007.

In Arbitron’s April 2007 survey, 11% of Americans age 12 and older, or 29 million people, reported listening to online radio “last week,” about the same as the regular 2006 audience, 12%.¹⁸ And 40% of the population said they had ever listened to radio online. This suggests broad exposure to Internet radio, but perhaps not yet a steady and regular audience.

Though its audience size is far from overwhelming, it still helps offset the steady downward trickle of traditional radio listeners. Of those who had recently listened to Internet radio, 34% said they had heard a simulcast of a traditional AM/FM online station.¹⁹ More important, according to the Bridge Ratings Group, this number has gone up 41% from January 2007 to April 2007. Growth may be hindered however by a recent regulatory change that increased royalty fees for online radio providers. ( See Economics section for more details.)

This growth has been noted by some in the industry who believe radio’s digital push should focus on Internet radio rather than HD. John Hinnen, vice president for radio news programming at station CFTR 680 in Toronto, believes we will all be listening to the radio via the Internet in our cars in the not-so-distant future. Speaking to the National Association of Broadcasters in Las Vegas in 2007, he suggested that news programmers offer listeners ways to personalize the news by creating music or news content from a vast menu of options.

That anytime-anywhere philosophy could have growth potential. As of 2007, the majority of Internet radio listening (52%) occurred at work, whereas most traditional AM/FM listeners tuned in from the car.²⁰ But if wireless Internet was more universal, Internet radio could be freed from the computer.

To get some sense of wireless Internet availability, the CEO of American Media Services-Internet, Reed Bunzel and Laramie Guest, the company’s vice president for engineering, drove 100 miles – from San Jose, Calif., to San Francisco and back — in November 2007 while streaming radio from a laptop. They experienced a nearly flawless signal for the whole trip. Bunzel said, “The underlying incontrovertible truth is that Internet radio no longer is tied to a cable and a surge protector. It is just as portable as terrestrial radio, it doesn’t have to appeal to a mass audience, it can be personal and interactive in nature, and almost anyone can join the club.” ²¹ Whether this extent of steady streaming would be available in other parts of the county is questionable. Still, it does suggest the potential of wireless Internet radio.

The majority of online radio fans tend to listen about 10 to 14 hours a week.²² More than a quarter of Internet listeners (26%) tune in more than 15 hours a week and 12% of that group listens more than 20 hours a week. By comparison, listeners to traditional AM/FM radio spend an average of 19 hours tuned in.²³

Podcasting/MP3 Players – Catching On?

The audience for MP3 players continues to grow at a brisk pace. As of early 2007, nearly a third of the American public (30%) over the age of 12 owned an iPod or other MP3 player, up from 22% the previous year.²⁴

Small, sleek and portable, MP3 players were most popular with kids. More than half (54%) of 12- to 17-year-olds owned an iPod or other type of MP3 player at the beginning of 2007, up from 42% the previous year.

But, despite the prevalence of MP3 players, only 13% of people over the age of 12 —some 32 million — say they have ever listened to podcasts, that is, downloaded audio or video other than songs from the Internet for later consumption.

That may have more to do with the process than the content. The two-step process required to hear podcasts — accessing and downloading — may be the reason the digital platform has not caught on. According to Bridge Ratings, the main reasons people skip podcasts are because they just are not interested (46%) or they think it is “too complicated” (39%).²⁵

Not surprisingly, younger audiences showed more interest in the technology. More than half (52%) of those who have ever listened to an audio podcast are under the age of 35.²⁶

Cell Phone Radio – The New Frontier

Some predict that it won’t be Internet radio, HD radio, satellite radio, podcasting or MP3s that take over as the dominant new audio format, but cell phones and PDAs.The potential for cell phone radio to become the next “must-have” audio device is great, but so far, it is slow to take off.

Only a tiny slice of the population – 1% – already has purchased a device that would tune in local radio stations.²⁷ Interest, however, is higher. Nearly one in three people are “very” or “somewhat” interested in having a cell phone with a radio function. But that leaves 65% who have no interest.

Still, the emergence of the cell phone nation is hard to ignore. Over 250 million people, or 82% of Americans, subscribed to some type of wireless service as of November 2007.²⁸ This represents an increase of 352% since 1997. Not only is cell phone penetration high, but most calling plans offer customers substantial incentives to upgrade their cell phones every two years, ensuring a steady turnover of new gadgetry.

And according to the media research group Bridge Ratings, “Cell phone technology is the only audio-capable technology that could approach traditional radio’s market penetration.” ²⁹

Underscoring this potential is how people feel about their cell phones: 44% said the devices have had a “big impact” on their lives.³⁰ (In comparison, iPods come in at 25%).

Audio Devices That Have Had a "Big Impact" on Users' Lives

2007

Design Your Own Chart

Source: Arbitron, Edison Media Research Survey Question: “How much of an impact on your life has (name of platform/device) had? Where 5 = big impact and 1 = no impact

What could this mean for radio? Wish lists from cell phone owners pointed to a demand for information solidly within the realm of radio. The services survey respondents preferred getting most on cell phones (other than phone calls and text messaging) were traffic reports (39%), music downloads (37%) and news/sports (28%).³¹ Fifteen percent said they were interested in having an AM/FM receiver on their phone, while 12% were interested in browsing the Internet and 13% in watching TV.

News on the AM/FM Dial

Like the audience for radio overall, the audience for news, talk and information is holding steady on the traditional AM/FM dial.

The percentage of people who listened to some kind of news, talk or information on their traditional radios during an average week was 16.1% in 2006.³² Of this overall figure, 1.4% listened to straight news on the “all news” format, 2.1% to “talk/personality” radio stations, 2.2% to an “all sports” format, and the largest group – 10.4% – tuned into a mixed format of “news/talk/information.”

Listening to the news continues to be an activity that older Americans prefer. In fact, every cohort except those between the ages 55 and 64 and those over 65 listened to the news less in 2006.

Listeners to News/Talk/Information Stations, by Age

2000 - 2006

Design Your Own Chart

Source: Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” April 13, 2007

“News/talk/information” tended to be most popular in states in New England and the western regions of the Rocky Mountains and the Pacific Coast, as well as the West North Central and East North Central regions. In each region, the share of listeners to news/talk/information is greater than the national average of 10.4%. There was considerably less interest in the format in the southeastern part of the country, especially Mississippi, Louisiana, Tennessee and Kentucky.

On average, people spent a little over nine hours a week listening to news/talk/information.³³ This compared with a national average of 19 hours a week for all radio listening, regardless of format.

Most listening occurred at home (51.7%), followed by the car (34.2%) and work (12.8%).³⁴ This diverged from the overall listening patterns (regardless of format), which were more evenly distributed – 39% at home, 34.8% in the car and 23.8% at work.

The News on ‘New Audio’

Are people using other new audio devices to tune into news and information? Yes, but to what extent is more difficult to answer.

With respect to HD Radio, news and talk dominated the digital dial in 2007, with 330 channels.³⁵ On the AM/FM dial, news is the second-most-programmed format: In 2006, there were 1,503 news/talk/information stations, which were second to country stations at 1,704.³⁶

The predominance of news on HD could be a result of a big push by the Corporation of Public Broadcasting to fund the transition of public radio stations from analog to digital. From 2002 to 2006, the Corporation of Public Broadcasting gave grants to 540 public radio stations for the digital conversion, and in 2006, it announced funding for 85 more stations.³⁷ Because news is such a prevalent format for public radio, the grant program gave a boost to the number of news channels populating the HD radio dial.

Top Format Categories of HD Radio Stations

Design Your Own Chart

Source: BIA Financial Network database, PEJ Research

Of the 330 news/talk/information stations broadcast on HD radio in 2007, 48 were multicast stations, which is to say they provide an additional news/talk channel new to the AM/FM dial. In a surveyed sample of managers and executives of these multicasting news/talk/information stations, the Project for Excellence in Journalism found the content largely comes from radio networks such as National Public Radio, the BBC, Public Radio International, American Public Media, talk host syndicates or already produced local content.

Many of those surveyed hoped to introduce unique local content, but lack of revenue is a shared obstacle. ( See Economics section for more details.) But immediate profits aside, the consensus was that HD radio is an investment worth making to build audiences.

For listeners who like to take their programming on the go via podcasts, the content most desired for downloading was news and commentary about technology. Coming in second and third were national news and local news/public affairs. Tech-savvy folk use their MP3 players to keep up on current affairs.

Interest in newsy podcasts also was reflected in the amount of programming available. According to Podcast Alley, which tracks podcast content and trends, of the 37,388 podcasts as of January 2008, some 993 were about news and politics.³⁸ And of the top10 podcasts tracked in January, half focused on news and politics.

Popular Podcast Topics

Percent Listening to Each Category

Design Your Own Chart

Source: Arbitron, “Public Radio Today, How America Listens to Public Radio,” July 12, 2007 Note: Percent of podcast users "very" interested in downloading podcasts

Public Radio

When listeners tune in to public radio, news, generally, is what they want to hear.

These 32 million listeners tune in to stations providing content from public radio networks all over the country – such as National Public Radio, American Public Media and Public Radio International – and in eight formats.³⁹ The format leader, by audience, is news/talk, followed by news-classical, classical music, jazz, news-music, adult album alternative /eclectic, news-jazz and variety music.

Nearly half of the audience share of public radio (43.6%) tuned in to the news and information format in 2006, the most recent year for which there are data.⁴⁰ This is down slightly from the previous year (44.8%). Mixed news formats also command a major segment, adding to the overall influence of news. News-classical music, for instance, picked up 21.1% of the audience.⁴¹

News/talk audiences tend to be older, educated and affluent. Two-thirds (67.7%) are at least 45 years old, nearly three-quarters (71.6%) are college graduates and 52.6% have a household income over $75,000.⁴² The audience is nearly evenly split between male and female, although males show a slight preference for news/talk – 52% are male and 48% female. In contrast, commercial news/talk/information listeners are more male (56%), less educated (43.5% have college degrees (still a good deal higher than the 27% of the public over all) and less affluent (39.4% have incomes over $75,000) than public radio news listeners.⁴³ Both public and commercial news radio audiences, however, tend to be older, with 70% of commercial news audiences at least 45 years old.

According to Adam Clayton Powell III⁴⁴, a former news radio executive now at the University of Southern California, “Demographics of all-news radio are largely a function of its largely being a format on the AM band. When KSL and WTOP switched all-news from AM to FM, with identical programming, the average age dropped ten years.” The first station is in Salt Lake City and the second is in Washington, D.C.

Also, public radio, cognizant of aging audiences, has been working on ways to attract younger listeners. NPR began a new news program called “Bryant Park Project,” which appealed to younger audiences. ( See News Investment section.)

Education Level

:Public Radio vs. Commercial News/Talk/Information, 2006

Design Your Own Chart

Source: Arbitron, “Public Radio Today, How America Listens to Public Radio,” July 12, 2007, and Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” April 13, 2007

Public radio news/talk listeners stretch across the country. Of the eight regions that Arbitron identified, the Pacific region of California, Oregon and Washington commanded a quarter of total public radio news/talk listening and tallied the highest average listening share of all the regions, 11.3%.⁴⁵ Second was the Middle Atlantic region (8% share), followed by the South Atlantic (6.9% share). The South Central region, from Texas to Mississippi and up to Kentucky, had the least interest in public radio news/talk (2.1% share).

Age was the determining factor in how much news/talk radio was consumed in 2006, consistent with the previous year. Listeners aged 12 to 24 years old tuned in only 3.5 hours a week, while that number nearly doubled for those aged 25 to 54 (6.5 hours a week).⁴⁶

As in years past, listeners spent less time per week with public news/talk than commercial news/talk in 2006. Commercial radio’s news/talk stations are heavy on the more popular talk format, as opposed to public radio fare that leans toward a longer and more analytical news reporting style. Also, public radio often repeats news programming – for instance, one NPR news program, “Morning Edition,” airs for two hours before repeating content, while the conservative pundit Rush Limbaugh, on the commercial dial, offers a three-hour program of original, personality-driven commentary every day.

Time Spent Listening

:Public Radio vs. Commercial News/Talk/Information, 2006

Design Your Own Chart

Source: Arbitron, “Public Radio Today, How America Listens to Public Radio,” July 12, 2007 and Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” April 13, 2007

New Audience Measurement: The Portable People Meter

After years of research and field testing, the Portable People Meter — a new passive electronic device for measuring radio audiences — finally has been put in place in select markets. The new audience measure was rolled out in 2007, starting in Philadelphia in March, followed by Houston in June.

Issued by Arbitron, the radio ratings research group, the new audience measure replaces the manual method of diaries, in which panelists were asked to keep a written log of their radio use for each day. Instead of asking participants to record their listening habits, the electronic version captures them passively via a small electronic device that users carry with them throughout the day. The device detects inaudible codes that are hidden in broadcast streams and reports them to Arbitron at the end of the day. The broadcast codes identify the station and have the potential to distinguish between regular AM/FM stations, HD radio channels and even Internet streams.

Satellite radio is not yet encoded and cannot be measured by the Portable People Meter.

There are clear benefits, which is why nine out of ten top radio owner groups have opted to use it. The device can draw from a larger sample size, which leads to more stable measurements. And it measures children aged 6 to 11, while diaries measured only age 12 and older. Also, because the measurements are electronic, the data can be released much more quickly.

Arbitron expects all top-50 radio markets will turn audience measurement over to the Portable People Meter by the end of 2010.

So far, the electronic ratings measurement device is off to a rough start.

Early results from Philadelphia, Houston and New York have shown sharp rating declines for younger listening audiences and minority groups, especially African-Americans and Hispanics, compared with results from the paper diaries. Since these ratings measurements affect advertising rates, such declines could reduce revenue for radio stations that appeal to such audiences. James Winston, executive director of and general counsel of National Association of Black Owned Broadcasters, said, “Defective ratings information being spread by Arbitron is more than a business crisis for African American and Hispanic station owners. It is a civil rights crisis for all of America.” ⁴⁷

In mid-November, leading broadcasters such as Clear Channel, Cox Radio, Cumulus Media and Radio One sent a letter to Arbitron to assert their dissatisfaction with the people meter results, asserting that the “PPM has not provided accurate or reliable data for all demographic groups” and saying that “the number of people participating in the PPM survey must be increased.” ⁴⁸ The root of the problem was that Arbitron failed to attract sufficient representation from young (18- to 34-year-olds) and ethnic demographics, which skewed audience ratings downward for stations that appeal to such groups.

In response to these complaints, Arbitron announced at the end of November 2007 that it would delay introducing the Portable People Meter in the nine markets it was expecting to launch in late 2007 and 2008: New York City, Nassau-Suffolk Counties in New York, Middlesex-Somerset-Union Counties in New Jersey, Los Angeles, Riverside, Calif., Chicago, San Francisco, San Jose, Calif., and Dallas. In announcing the decision, Arbitron's CEO, Steve Morris, said, “We remain confident in the audience estimates that the Portable People Meter service is producing. However, over the past three weeks, feedback from our customers, the Media Rating Council and other constituencies has led us to conclude that the radio industry would be better served if we were to delay further commercialization of the PPM in order to address their issues.”⁴⁹

Morris also said that Arbitron would use the time granted by the delays to focus on how to improve sample sizes and meter compliance among the 18- to 34-year-old group, especially young ethnic adults.

Footnotes

1. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007.

2. Ibid.

3. Bridge Ratings, “Digital Media Growth Predictions,” April 25, 2007..

4. Bridge Ratings Group, “Bridge Ratings Industry Update – Internet Radio Perceptions,” April 18, 2007.

5. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007.

6. Arbitron, "Persons Using Radio Report," Cume Rating Monday-Sunday 6 a.m.-midnight: http://wargod.arbitron.com/scripts/ndb/ndbradio2.asp .This figure is based on what Arbitron calls “Cume,” which is the number of people who tuned into radio at least once and at least for five minutes in an average week

7. Arbitron RADAR 93, June 2007, via Radio Advertising Bureau, “Radio Marketing Guide and Fact Book 2007-2008.”

8. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007.

9. Bridge Ratings Group, “Digital Media Growth Projections – Updated 4/25/07.”

10. Ibid.

11. BIA Financial Network database, station updates through August 31, 2007.

12. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007. Only 6% of people are very interested in getting an HD radio, and 23% expressed that they were “somewhat interested.”.

13. Sirius Radio and XM Radio press releases.

14. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007.

15. Ibid.

16. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007.

17. Bridge Ratings Group, “Bridge Ratings Industry Update – Internet Radio Perceptions,” April 18, 2007.

18. Ibid.

19. Radio Business Report, “Internet Streaming Close to Becoming a Fully Mobile Media,” November 16, 2007.

20. Ibid.

21. Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” April 13, 2007.

22. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007.

23. Bridge Ratings Group, “Digital Media Growth Projections – Updated 4/25/07.”

24. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007.

25. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007.

26. “U.S. Wireless Subscribership Passes 250 Million Mark,” CTIA press release, November 13, 2007, http://www.ctia.org/media/press/body.cfm/prid/1724.

27. Bridge Ratings, “The Mobile Phone Consumer: Implications for Terrestrial Radio,” May 9, 2007.

28. Arbitron, “The Infinite Dial 2007: Radio’s Digital Platforms,” April 19, 2007.

29. Bridge Ratings, “The Mobile Phone Consumer: Implications for Terrestrial Radio,” May 9, 2007.

30. Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” April 13, 2007.

31. Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” April 13, 2007.

32. Ibid. Based on average quarterly hour share of listening.

33. BIA Financial Network database, August 31, 2007.

34. Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” April 13, 2007. Because formats can be defined differently, Inside Radio found different format totals, but the same conclusion: the total number of commercial country stations was 2,019 and the total number of commercial news/talk stations was 1,324 in 2005-2006.

35. Corporation for Public Broadcasting, August 23, 2006, http://www.cpb.org/pressroom/re lease.php?prn=566.

36. Podcast Alley, podcastalley.com, January 15, 2008.

37. Arbitron, “Public Radio Today, How America Listens to Public Radio,” July 12, 2007.

38. Ibid.

39. Ibid.

40. Ibid.

41. Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” April 13, 2007.

42. Adam Clayton Powell III is currently the provost for globalization at USC. Formerly, he was vice president for news at NPR, head of network radio news operations at CBS and news director of all-news WINS in New York City.

43. Arbitron, “Public Radio Today, How America Listens to Public Radio,” July 12, 2007. Based on Average Quarterly Hour Share.

44. Ibid.

45. W. Scott Bailey, “Clear Channel, Others Raise Ratings Concerns Over Arbitron System,” MSNBC, December 16, 2007.

46. Erik Sass, “Dear Arbitron: Radio Industry Letter Delivers Broadside,” Media Post, November 15, 2007.

47. Radio Business Report, “Arbitron to Delay PPM Rollout in NYC, LA, Chicago, San Francisco and Dallas,” November 27, 2007.

Economics

By the Project for Excellence in Journalism

Has new audio changed the economic picture for radio?

While traditional AM/FM advertising revenue still dominates, satellite and digital ad dollars are responsible for a growing percentage of overall radio revenue.

In 2006, total radio revenue (including broadcast, satellite and digital) increased 3.7% to $21.77 billion, up 2.8% over the previous year.¹ The lion’s share (92.5%) of 2006 revenue – $20.14 billion – came from traditional AM/FM radio.

Traditional radio revenue has remained relatively flat in the past two years, but advertisers slowly are putting more faith in satellite radio, broadcast and non-broadcast Internet stations, podcasting and even cell phone radio.

The most promising players are broadcast Internet stations, which added to radio’s overall bottom line with small but sharp increases in ad revenue for 2007. And though satellite radio relies primarily on subscription fees for revenue, its relatively small slice of the advertising pie ($66 million in 2006) still makes it a competitor, with growth in triple digits (155% in 2006).²

Advertisers have made it clear they are willing to spend money to capture the new audio audiences, who tend to be more affluent. But they are still waiting for an accurate tool to measure an audience that now crisscrosses technology platforms. (See Audience section on the Portable People Meter.)

Advertising Revenue on the AM/FM Dial

Year-end figures for 2007 show that overall advertising revenue was down 2% from 2006 to $21.3 billion for traditional radio. But the economic diagnosis is much more complex.

Most stations still build the majority of their revenue on local advertising on the AM/FM dial: Local ads accounted for 77% of total advertising revenue in 2006. And this metric was down 2% in 2007 to $15.1 billion. But this is not as alarming as the revenue losses observed in other media sectors, like, for example, the ailing newspaper industry.

The good news: Revenue from what the radio industry calls “non-spot” advertising, made up primarily of Internet advertising revenue and station-sponsored events such as concerts, is way up. This figure has been growing steadily over the past four years that the Radio Advertising Bureau has released the data, but year-end numbers for 2007 show steep increases, with non-spot advertising growing 10% to $1.7 billion. That figure accounted for 8% of all advertising revenue for the year.

On the other hand, the national advertising category, which amounted to only 17.6% of total advertising in 2006, further declined. It was down 6% to $3.3 billion for the year. National revenue generally goes through one of the two giant national advertising reps – Katz Media Group or Interep. Though big-name national brands like McDonalds, Coca-Cola and automotive manufacturers do purchase corporate advertising campaigns through Katz or Interep, most of the advertising actually gets carried at the local level, so it is difficult to say whether these national companies are advertising less on radio.

Radio Revenues Growth by Quarter

Design Your Own Chart

Source: Radio Advertising Bureau

New Audio Revenue

Radio’s economic picture is far from neat and tidy.

So far, media research companies have not found an efficient way to separate revenue or audience figures for new audio choices, making it impossible to gauge what is working in these new and competing industries, much less offer a definitive side-by-side comparison.

What we do know is that the economic impact of the new audio platforms – satellite radio, HD Radio, Internet radio, cell phone radio and podcasting – is still a small slice of the total revenue pie. To put it in perspective:

• Broadcast radio’s annual revenue ($20.1 billion) was nearly 14 times bigger than satellite radio’s annual revenue ($1.47 billion) in 2006.³
• Satellite radio’s revenue was nearly 10 times bigger than the next best financial performer, Internet radio ($151 million).
• Internet radio’s revenue was 50 times bigger than cell phone radio’s meager 2006 revenue ($3 million).

Audio Revenue Growth

2001 - 2006

Design Your Own Chart

Source: Veronis Suhler Stevenson, “Communications Industry Forecast 2007-2011”

Further complicating the picture is the fact that several radio platforms are interdependent.

For instance, Internet radio consists of both traditional AM/FM broadcast content streamed online as well as on online-only audio channels like Pandora. Some Internet listening can only be streamed and some downloaded as podcasts, while others can be downloaded and then burned onto CDs. Podcasts can then be heard not only on any MP3 player and computer, but also on a number of enabled cell phones.

And certain radio content can be shared across all of these platforms.

Take National Public Radio, whose content is aired on local affiliate stations as well as HD stations and satellite radio. An NPR listener can also access news stories online, either at npr.org or through a local station’s Web site. From there, a user can stream live radio content, read a story, listen to a program or download it as a podcast for later listening on an MP3 player. NPR listeners also can access news and features from their cell phones.

With all of this innovation, the audience gets a wide range of listening options, but there is no accurate method to measure who is listening to what. And it is very difficult to parse out how much ad revenue each platform is bringing in.

Internet Radio, Small but Significant

Internet radio has been the humble success story of new audio.

Though its other new audio competitors have attracted more attention, Internet radio is in some ways better equipped to sustain high levels of revenue growth. Its compound growth rate of advertising from 2001 to 2006 was 50%, and, according to the media research group Veronis Suhler Stevenson, is predicted to continue at a respectable 40% over the following five years.⁴

Total advertising revenue for online radio was $106 million in 2006, up 77% from $60 million in 2005. But another component – paid content in the form of subscriptions and podcasts – accounted for an additional $45 million in 2006. That growth, up 66% from the previous year, is expected to slow down in the coming years – compound growth for 2006 to 2011 is predicted to be 25% over that period. Earnings from content amounted to slightly less than 30% of total revenue in 2006.

It is unclear how much the news sector has contributed to that growth. But there is a chance that news, talk and information content may gain more traction, thanks to a major cost factor that online music stations faced starting in 2007.

In June 2007, the Copyright Royalty Board approved a new structure that imposed stricter copyright fees on Internet radio stations. The royalty fee structure would charge online music stations (including both AM/FM Webcasters and online-only stations) on a per-song, per-listener basis, instead of as a percentage of revenue.

For all but the largest online radio groups, this could prove devastating. Many small and medium-sized Internet-based radio stations have already shut down because the fees exceeded their total revenue. Bill Goldsmith, owner of Radio Paradise, an eclectic online rock radio station, said, “This royalty structure would wipe out an entire class of business, small independent Webcasters such as myself and my wife, who operate Radio Paradise. Our obligation under this rate structure would be equal to over 125% of our total income. There is no practical way for us to increase our income so dramatically as to render that affordable.” ⁵

Congress could override the decision by passing a bipartisan measure, the Internet Radio Equality Act, which would instead charge a flat fee equal to 7.5% of an online radio station’s total revenue.

Satellite Radio’s Unprofitable Success

Satellite radio has generated the most revenue among the new audio devices, despite its troubled growth and the continuing quest by its two players – XM Radio and Sirius Satellite Radio – to reduce costs by merging into a single satellite provider.

Total revenue for XM in the first half of 2007 was up 24%, to $541.4 million over the first half of 2006. Sirius, which spearheaded the merger, performed even better. Its revenue for the first half of 2007 was $430.5 million, up 55% from the same time in 2006.⁶

The better financial indicator for the satellite radio companies, however, might be their net losses. Both companies pay such a high cost for recruiting on-air talent – Howard Stern’s five-year contract cost Sirius $500 million and XM paid Oprah Winfrey $55 million over three years – that the companies operate with a hefty debt. In other words, new subscribers are not making up for all that high-profile talent.

Both companies did reduce their net losses for the second quarter of 2007, XM by 23% over the second quarter of 2006 and Sirius by 44% over the same quarter.⁷

The revenue model for satellite radio, however, is different than that of broadcast radio. According to Veronis Suhler Stevenson, subscriptions accounted for 95.5% of satellite radio’s revenue in 2006.

Satellite Radio Revenues

2001 - 2006

Design Your Own Chart

Source: Veronis Suhler Stevenson, “Communications Industry Forecast 2007-2011”

The Predicament of HD Radio

Despite all the HD radio hype, the economic returns have not yet materialized. But that has not stopped stations from investing in the new technology.

Over all, HD Radio’s ambitions are based largely on unmet expectations. In July 2007, the Project for Excellence in Journalism (PEJ) interviewed station managers or executives at 14 HD radio news stations across the country. Among those, all of which were public radio stations, none had seen revenue gains from the crystal-clear broadcasts, even though most had been operating on the digital platform for more than two years.⁸ As noted above ( see HD section of Audience), news/talk programming dominates the HD radio dial largely because of an influx of grant money from the Corporation for Public Broadcasting, which enabled many public radio news stations to go digital.

Tim Eby, station manager at WOSU in Columbus, Ohio, and the central part of the state, said he expects “it will be several years before our HD channels begin producing significant amounts of revenue.” John Hingsbergen of WMUB in Oxford, Ohio, told the PEJ that “we don’t expect direct funding support for these channels until HD radios are more commonly available.” In the meantime, he said that he could only hope that “the addition of HD multicasting channels [can] help assure loyalty of station listeners and members.”

But Rich Dean of KUT at the University of Texas seems less optimistic about the financial future of digital radio. Dean said his station is “not even close to bringing in a profit.” Furthermore, he said the technology has performed poorly. “We are reluctant to push listeners to buy these expensive radios,” he said. “Already we bear the brunt of complaints about coverage and reception, as well as the poor build quality of the radios themselves.”

Have these pioneering news/talk/information stations borne a hefty financial burden in making the switch?

The cost of making the conversion to the HD radio signal varies with the size of the terrestrial analog signal. Of the stations interviewed, the bill ranged from $100,000 to $290,000. On average, the CPB grants cover about half of the conversion costs, although some covered more. Some stations received more financial assistance from other state and local grants. For example, the three stations operated by the University of Kansas did not pay any money for the conversion, but their general manager, Janet Campbell, said it did cost a lot of staff time.

For public radio stations providing news, talk and information, the digital broadcasting platform appears to be a win-win. It comes at a reasonable price and has strong potential to bring diversity to the airwaves and new avenues of revenue. Until that revenue comes in, HD radio stations will have to operate like any other local radio station that has few listeners – by broadcasting network programs and other syndicated shows.

The Potential of Cell Phone Radio

Cell phone forecasts, as was the case last year, are much healthier than actual performance.

Mobile phone radio is making a lot of noise among gadget-savvy consumers who are eager to consume a variety of radio-equipped phones from Nokia, Samsung and Motorola. But, so far, the financial splash is quieter. By year-end 2006, mobile phone radio revenue amounted to a meager $3 million, of which $2 million came from subscriptions to cell-phone-specific radio content and $1 million from advertising.⁹

As with satellite radio, cell phone radio is making more from subscription-based earnings than advertising. At the end of 2006, subscriptions were taking in double that of advertising dollars, although advertising’s share of the growth is rising much faster. Still, many analysts see a strong economic future for the platform. Veronis Suhler Stevenson, a highly regarded industry forecaster, predicts that both advertising and content-based revenue will increase at triple digits through 2008. By 2010, total advertising dollars are expected to surpass revenue earned from subscription-based content.

Looking forward, the media research group predicts a total compound growth rate of 104.5% for mobile phone radio revenue through 2011.¹⁰ Of that, advertising is expected to grow 126.7% over the five-year forecast and subscription-based revenue at a rate of 88.4%.

These, of course, are just predictions, subject to an array of other emerging trends and economic conditions over the next several years.

Audio Revenue Growth Predictions

2007 - 2011

Design Your Own Chart

Source: Veronis Suhler Stevenson, “Communications Industry Forecast 2007-2011”

News and Talk Revenue

How does news and information fit into the overall picture of radio’s economic health?

Radio newsrooms have an up-and-down profit history, but 2006 was the most profitable in a decade, according to an annual survey of news directors conducted for the Radio and Television News Directors Association and Ball State University by Robert Papper, formerly with Ball State. Nearly twice as many news directors (29.1%) in 2006 reported profitable newsrooms, compared with the previous year (18.1%).¹¹ In turn, fewer reported losses or breaking even. And consistent with years past, most news directors (49.1%) did not know how their newsrooms were performing financially.

Radio News Profitability

Survey of News Directors, 1996-2005

Design Your Own Chart

Source: RTNDA/Ball State University Newsroom Surveys Note: Based on survey responses of news directors

When broken down by ownership groups, some significant differences emerge. CBS has the most profitable news operation in terms of average revenue per news station ($26.6 million), followed by Citadel/ABC ($24.5 million).¹² Clear Channel, which leads in news outlets, lags in profit, earning $4.1 million per station. One explanation for the revenue differences probably has to do with the markets where each group has news stations. CBS Radio operates stations in the top markets in the country. Seven of its 17 stations broadcast from the top five markets – New York, Los Angeles, Chicago, San Francisco and Philadelphia. By contrast, Clear Channel operates many news stations in midsize markets, particularly in the Southeast, where all-news stations fare the worst.

Is news or talk more profitable? Despite the proliferation of talk radio, mixed news/talk/information stations generally are more lucrative than straight talk stations.

CBS Radio’s news operation, for example, pulls in almost two and a half times the revenue of its talk programming. The gap for Citadel/ABC is a bit smaller, but still notable: News stations generate one and a half times the revenue of the talk stations. Exceptions to this rule, however, are Cumulus Media Partners and Radio One, whose talk formats outperform their news formats. While these comparisons indicate which formats are more lucrative for particular companies, such comparisons would benefit from factoring in market rank and coverage area to help explain why one format outperforms another.

Revenue Per Station: News vs. Talk

2006

Design Your Own Chart

Source: BIA Financial Network, PEJ Research

Which company makes the most from news and talk programming as a percentage of its total radio revenue? Citadel/ABC was the leader among the top ownership groups in 2006, with a news operation that amounted to 39% of its total revenue. CBS Radio followed with 30% of its total revenue coming from news, then Salem Communications with 23%.¹³

Revenue by Ownership Groups

Clear Channel continues to dominate the economic playing field of the radio industry.

Year-end figures for 2006, the last year for which full data are available, show that the top two radio ownership groups both experienced a drop in revenue compared with the previous year. Clear Channel’s revenue declined 1.6% from 2005 to 2006 (to $3.57 billion), and CBS dropped a substantial 14.2% (to $1.96 billion). The third-highest revenue-earning radio group, Entercom had an increase in 2006 over 2005, rising 9.5% to $553 million.¹⁴

Radio Revenues

2005 vs. 2006

Design Your Own Chart

Source: BIA Financial Network, PEJ Research

While CBS Radio’s news stations remained strong in 2006, the company’s large revenue drop can be largely attributed to the failure of its new music formats in New York and other major cities. The loss of Howard Stern, the No. 1 attraction of its talk stations, to Sirius, also affected the year’s revenues.

At least some of Clear Channel’s drop can be explained by its pending move to go private and the house-cleaning that followed the decision. The company put 448 of its stations up for sale in late 2006 and received conditional FCC and Justice Department approval in early 2008. By year-end 2006, it owned 1,134 stations, 50 fewer than in 2005.

Another factor: The economic growth spurred by the company’s “Less is More” advertising program, started in 2004, may have reached a plateau. Clear Channel aimed to reduce on-air ad clutter in an effort to increase ratings and gain more advertising. It began selling 30-second advertising spots instead of the traditional 60-second spots. As of early 2006, the company reported selling more than 35% of its advertising inventory in 30-second and 15-second spots.¹⁵ The company met its goals, but it could be debated whether the ratings benefits that come from reducing commercial airtime are being exhausted.

Without a definitive answer, some radio stations – including a few Clear Channel properties – are experimenting with exclusive sponsorship for an entire hour of programming. Network television also is testing the single-sponsor ad model, which was in use in early television.

Profits by Market Size

Are news stations in bigger markets more profitable? Not necessarily.

The Radio-Television News Directors Association (RTNDA) annual survey of news directors revealed that stations in small markets (those with less than 50,000 listeners) performed slightly better than major-market stations (those stations with more than 1 million potential listeners). More than 30% of news directors in small markets reported profits, compared to 26.7% at major markets. More small-station directors also reported breaking even (18.6%) than major-market colleagues (6.7%).

Radio News Profitability by Market Size

Survey of News Directors, 2006

Design Your Own Chart

Source: RTNDA/Ball State University Newsroom Surveys Note: Based on survey responses of news directors. Major markets are those with 1 million or more potential listeners. Large markets are 250,000 to 1 million; medium markets are 50,000 to 250,000; and small markets are fewer than 50,000 listeners.

Looking at it another way, the two radio owners with the best average market rank also had the highest revenue-generating newsrooms. CBS Radio, whose 140 stations had an average market rank of 12.1, leads radio owners with an average of $26.6 million in revenue for its newsrooms. And Citadel/ABC, whose 24 stations ranked 3.9, had the second-highest value of news revenue per station ($24.5 million).

On the other hand, Citadel (excluding the newly acquired ABC stations), ranked 107 and its newsrooms earn an average of $1.6 million per station. Yet Radio One, with a respectable rank of 21.4, only generates about $735,000 per news station.

Footnotes

1. Veronis Suhler Stevenson, “Communications Industry Forecast 2007-2011.”

2. Ibid

3. Veronis Suhler Stevenson, “Communications Industry Forecast 2007-2011.”

4. Veronis Suhler Stevenson, “Communications Industry Forecast 2007-2011.”

5. Radio and Internet Newsletter, “Hanson Addresses FAQ’s about Royalty Rate Decision,” March 2, 2007.

6. XM and Sirius press releases.

7. Ibid.

8. In July 2007, the Project for Excellence in Journalism solicited interviews from 49 HD news radio stations. The 49 stations were selected from the entire database of iBiquity Digital, the developer and licenser of HD radio technology (which then listed 2,000 commercial/non-commercial HD-1, HD-2 and HD-3 channels). Of the 49 stations that PEJ contacted, 14 returned a complete survey.

9. Ibid.

10. Ibid.

11. Robert Papper, RTNDA/Ball State University annual news director survey, “News, Staffing and Profitability,” The Communicator, October 2007. Note: Since 1997 when the question of profitability was first asked in this survey, approximately 50% of respondents have not known how to answer the question. This survey, however, remains the best indicator of the economic reality inside of radio newsrooms.

About the study: This survey was conducted in the fourth quarter of 2006. Valid responses came from 225 radio news directors and general managers representing 740 radio stations.

12. BIA Financial Network

13. BIA Financial Network .

14. Ibid.

15. Veronis Suhler Stevenson, “Communications Industry Forecast 2007-2011.”

Ownership

By the Project for Excellence in Journalism

Changes in the ownership structure of radio’s major players appear to be redefining the industry.

The industry behemoth Clear Channel kick-started the trend in 2006 with its makeover into a private company. Its closest competitor, Cumulus Media, moved toward privatization in 2007, and rumors circulated that Emmis Communications and Westwood One would follow.

It could be that 2008 will see other large publicly held radio companies trade the unprofitable model of concentrated ownership for the longer-term growth promised outside Wall Street.

Clear Channel has led the way since the deregulation of radio in the 1990s, when the industry experienced a flurry of station consolidation. In 2006, beset by declining revenues, Clear Channel decided to forgo the pressures of Wall Street’s demands for increasing profit margins. It also agreed to sell off 448 of its smaller-market radio stations, a reduction of nearly 40% of its inventory.

The second big story in ownership in 2007 – and into 2008 – is the continuing legal debate over the merger of the two satellite radio service providers, Sirius and XM. In many ways, the outcome of this debate may define the shape and scope of radio for the future, by answering the question: Is radio just the AM/FM dial or is it all of the incarnations of new listening options?

The Privatization of Radio?

Clear Channel was not the only company to move toward private ownership in 2007.

On July 23, 2007, Cumulus Media, the second largest radio station owner with 342 stations, announced its intent to go private, expected in early 2008. The buyer, an investment group that includes its current chairman, president and CEO, Lewis W. Dickey Jr., some family members and an affiliate of Merrill Lynch Global Private Equity, is spending $1.3 billion for the media company. Shareholders were bought out for $11.75 per share of Cumulus stock, a premium of 40% over its closing price before Dickey announced the buyout.

The deal comes amid industry-wide declines in revenue. Despite that, Dickey, who will retain his titles after the deal is completed, said, “We strongly believe in this industry and in the long-term opportunities to grow the business.” ¹ So strongly, that he has said in interviews that a privately held Cumulus will pursue more stations. “We feel … that [we] can continue to be aggressive in consolidation, provided the deals make sense,” he said.²

Rumors swirled in 2007 about two other possible buyouts: Emmis Communications and Westwood One.

In October, an Emmis shareholder, Arnhold & S. Bleichroeder Advisers, urged Jeff Smulyan, the CEO, to reconsider his plan to take the Indianapolis-based radio company private, announced in May 2006. Smulyan’s attempt to buy out the company for $15.25 per share was refused by a special committee of shareholders. The stock price plummeted. Shares of Emmis have fallen almost 65% since August 2006, closing at $5.13 at the end of October 2007.³

Shareholders immediately weighed in. “Aggressive action must be taken by the Emmis board of directors for the benefit of all minority shareholders to realize the value inherent in the company’s portfolio of underperforming radio assets,” read a statement issued by Arnhold & Bleichroeder Advisers.⁴ Two other shareholder groups also have urged Smulyan to sell the company. Despite the pressure, Smulyan refused. This led many industry observers to conclude that it was just a matter of time before Smulyan offered another bid.

Talk of a buyout at the radio network, Westwood One, was quieter, but still loud enough to give its stock prices a mild boost in late September 2007. That occurred when Deutsche Bank declared the company a likely takeover target by private equity groups. So far, though, a buyer has yet to emerge.

Clear Channel’s transition from public to private was not quick or easy. It was not until September 23, 2007, nearly a full year after the broadcast giant announced its intentions to evaluate “strategic alternatives,” that its sale was finally approved by shareholders. And in January 2008, the FCC gave its approval to the merger, almost assuring the transition.

Things moved slowly after November 2006, when Clear Channel announced its complicated agreement with Thomas H. Lee Partners and Bain Capital Partners to be bought out for $18.7 billion, or $37.60 a share. Shareholders delayed several meetings, demanding higher stock prices. Clear Channel finally mustered the two-thirds majority vote required to seal the buyout in late September 2007. The new owners agreed to $39.20 a share, raising the total cost of the transaction to $19.5 billion (not including Clear Channel’s $8.1 billion in debt).

To sweeten the deal for reluctant shareholders, the private equity groups also offered them up to a 30% stake in the company, an unusual move in a world where total control is the norm.

The last regulatory hurdle was overcome in February 2008, when the Justice Department ordered the company to sell stations in four cities – Cincinnati, Houston, Las Vegas and San Francisco – within 90 days of the deal closing.

Clear Channel now waits to see if its two private equity buyers – and the consortium of banks bearing the debt financing – will remain committed to the expensive deal.

ABC Radio and Citadel

The $2.5 billion acquisition of Disney-owned ABC Radio by Citadel Broadcasting announced in February 2006 finally became official on June 12, 2007. In the deal, the Walt Disney Company agreed to sell ABC Radio and its 22 radio stations, making Citadel the third-largest radio station owner by revenue, with 245 stations at the time of the merger. ABC, however, continues to hold onto to its news network and ESPN sports radio stations.

De-consolidation, a Surprising Result of Deregulation?

In late 2006, not only did Clear Channel find a private buyer, but it also declared its intent to sharply trim the size of its radio holdings. The leader of consolidation in the post-Telecommunications Act of 1996 may now be leading yet another trend, this time de-consolidation.

In 2007, Clear Channel had begun to shed 448 of the stations it proposed to sell, all of them outside the top 100 U.S. media markets. According to Clear Channel's CEO, Mark Mays, “Our decision to divest these broadcast properties was reached as a result of the ongoing optimization of our diverse portfolio of media assets.” He added that the sale of the stations would allow Clear Channel to better position itself to serve its listeners.

It may be that Clear Channel’s radio empire was just too big to manage effectively.

Mel Karmazin, now CEO of Sirius Satellite Radio, and former president of both Infinity Broadcasting and CBS, both competitors of Clear Channel, points a finger at the Telecommunications Act of 1996 for creating problems for radio. The deregulation policies were good for business, he told the Chicago Tribune, “but no one asked me if it was good for consumers.” ⁵

Looking ahead to 2008, we’ll see if Clear Channel’s divestitures will have an impact on radio’s business model.

Sirius-XM Merger

After the two satellite radio providers – Sirius and XM – announced plans to merge in February 2006, Karmazin, the proposed CEO of the merged company, spent the better part of 2007 trying to convince the Federal Communications Commission and the Justice Department that the merger was, as he put it, a “no-brainer.” ( See 2007 State of the News Media report.)

Karmazin told the Chicago Tribune editorial board on November 7 that the merger’s resulting $3 billion to $9 billion in cost savings would allow the companies to lower subscription prices and attract more subscribers. Currently, the monthly subscription rates for both companies start at $12.95 and decrease with a longer commitment. Karmazin has not indicated a post-merger monthly rate, but he has proposed grouping channels into packages that would bring down the price.

“By giving them [consumers] lower prices and more choice, including à la carte offerings, we think that serves the public interest,” Karmazin said. “From our point of view, the merger should be a no-brainer.” ⁶

At the heart of the FCC’s decision is how to define satellite radio. Proponents of the merger argue that it is only one of several competing platforms – including traditional radio, HD radio, iPods and MP3s, Internet radio and even cell phone radio – in the audio entertainment landscape. Critics see the merger simply as a monopoly waiting to happen.

The merger’s chances seemed to improve in August 2007, when the Federal Trade Commission dismissed a separate, but somewhat similar, antitrust case. In the case, the FTC ruled in favor of defining the two merging companies, Whole Foods Markets and Wild Oats Markets, in the larger context of the supermarket and grocery business rather than the limited scope of a premium and natural organic food market. Proponents of the XM-Sirius merger say they believe that the FCC will take a similarly broad view of the audio market.

There have been other encouraging signs for XM and Sirius. In November 2007, the FCC asked for more information from the two companies about their business operations. According to a Bear Stearns analyst, Robert Peck, that request indicates the likelihood that the Department of Justice is close to allowing the deal, “which would necessitate the FCC to expeditiously complete the documentation process.” ⁷

Also in November, both Sirius and XM shareholders voted overwhelmingly for the merger. Of shareholder votes, 96% at Sirius were in favor, as were more than 99% at XM.

Further encouragement came from a consummate insider. When the FCC issued licenses to the two satellite companies in 1997, it also issued a warning: No merger. But the FCC chairman at the time, Reed E. Hundt, appears to have had a change of heart. In a November 13, 2007, interview, Hundt said, “I think that if XM and Sirius combined, it will be pro-competitive in all likelihood.… It seems to me that what has happened over time is that these two firms have proved when kept apart to be incapable of mounting the really serious competition against … terrestrial radio that I had always hoped for.” ⁸

The Top Companies

Where does all this leave the lineup of companies in radio?

Clear Channel, the dominant radio group owner of the decade, continues to be the leader. Even after it completes the proposed sale of 448 stations in addition to about a hundred more that had to be divested according to FCC regulations and Justice Department rulings, Clear Channel will still be more than double the size of its nearest competitor, Cumulus. Cumulus, in turn, owns about 100 stations more than Citadel.

When Clear Channel made its announcement to go private in November 2006, it also announced the sale of a little less than half of its radio stations, as well as all of its local television holdings (51 stations). There already were several additional sales pending at the close of 2006. By the end of 2007, the company completed sales of 498 stations, with 52 more still in process.

The planned sales will continue into 2008. But for now, Clear Channel remains the largest radio station owner. ⁹

Number of Stations Owned by Top Broadcasting Companies
2006 vs. 2007

Source: BIAfn Media Access Pro, PEJ Research, December 2007
Note: Clear Channel numbers include pending sales. Year-end numbers not offered for Cumulus for 2006; year-end 2005 numbers offered instead.

The top companies, in terms of the number of stations owned, differ from the top stations by revenue. The top three revenue-generating companies are Clear Channel, CBS Radio and Entercom. ( See Economics section.)

The top station owners also reached the greatest number of markets in 2007. Clear Channel led in the number of markets reached (120), more than double that of its next competitors, Cumulus (57) and Citadel Communications (48). Except for Clear Channel, these numbers remained about the same as the previous year. ABC/Disney, which owned only 47 radio stations, had them distributed in 42 markets.

Number of Markets Reached by Top Companies

2007

Design Your Own Chart

Source: BIA Financial Network, PEJ Research

And which radio group owners led the way in the number of news and talk stations? Again, Clear Channel takes the lead. As of year-end 2007, it owned 103 stations – 71 news and 32 talk. Cumulus came in a distant second with 29 news stations, followed by Salem with 23. Wisconsin Public Radio and CBS Radio followed Clear Channel in the number of talk stations, with 13 and 10, respectively.

Number of News & Talk Stations Owned by Top Companies
2007

Source: BIAfn Media Access Pro, PEJ Research, December 2007

Despite the fact that Clear Channel programs the most news and talk, Salem Communications programs the greatest proportion of news and talk on its stations. Of its total inventory of 98 stations, it programs 31% with news and talk programming. Citadel/ABC is next with 29%, followed by CBS Radio with 19% and Entercom with 17%. Clear Channel falls to 11th on of the list of top station owners, with only 9% of its radio holdings programmed with news or talk content.

Footnotes

1. Erik Sass, “Radio Buys: Cumulus Acquired by Private Equity,” Media Post, July 24, 2007.

2. Michele Gershberg, “Cumulus Media Agrees to $1.3 Billion Buyout,” Reuters, July 23, 2007.

3. John Ketzenberger, “Drumbeat Sounds Anew for Emmis Buyout Deal,” the Indianapolis Star, October 30, 2007.

4. Erika D. Smith, “Emmis Again Urged to Go Private,” The Indianapolis Star, October 25, 2007.

5. Phil Rosenthal, “Homogenized Radio Stations Bottle Up Growth,” Chicago Tribune, November 11, 2007.

6. Ibid.

7. Evelyn M. Rusli, “Sirius About A Merger,” Forbes.com. November 13, 2007,

8. “Former FCC Chairman Hundt Comments on Sirius-XM Merger in Interview,” Sirius and XM press releases, November 13, 2007.

9. The number of stations owned, sold or pending sale can differ in press reports and databases, for two reasons: First, BIA databases only include on-air stations owned by Clear Channel, whereas Clear Channel press releases often report stations it is licensed to operate for other broadcasters. Second, BIA numbers always include pending sales, while Clear Channel’s may not.

News Investment

The vital signs in radio newsrooms have remained relatively stable recently, despite some dips and rises.

The amount of news being broadcast on local stations rose slightly in 2006, a recovery from a small dip in 2005. Stations in the largest markets were the reason for this increase, while smaller-market stations programmed about the same amount of news as they had in the previous year. ¹

The trend toward centralized newsrooms continues. That is, more news directors (76%) are in charge of providing news content to several stations.

Radio newsroom salaries, as in years past, are far from lucrative. Radio news employees – whether news directors, producers, reporters or anchors – are consistently paid less than their television counterparts.

As radio news employees have taken on more responsibility over the years (due to centralization of newsrooms and Web duties), their salaries have not even risen with the rate of inflation. Though 2006 saw some increases in median salaries, these rises came after some substantial drops in 2005.

Radio newsrooms are disproportionately male and Caucasian. However, there was a slight increase in 2006 in the number of minorities who had risen to the top as news directors.

Radio looks to be getting savvier and more ambitious with its presence on the Web by taking strides into social networking, on-demand news features and with portable Internet radio equipment.

Amount of News

The amount of news broadcast on radio stations increased slightly in 2006, the most recent year for which there are data.

According to the 2007 Radio and Television News Directors Association annual survey of news directors, the average radio station broadcast 40.1 minutes a day of local news during the week, three minutes more than in 2005.² More than half was broadcast during the morning commute.

Most of the increase in local news was attributed to major market stations, those with more than 1 million potential listeners, which aired just under an hour of news on a typical weekday, compared with 42 minutes in the previous year.

According to the survey of news directors, 73.9% said their stations had aired the same amount of news in 2006 as they had the previous year.³ More stations (15.3%) increased the amount of news than decreased it (10.2%). But in the same survey conducted a year earlier, 28% planned to air more news than they actually did in 2006.

When news directors were asked how much news they planned to program in 2007, 79.7% said there would be no change.⁴ Only 13% planned to increase their news broadcasts, while 7% were not sure. According to Adam Clayton Powell III, a former news radio executive now at the University of Southern California, “The real news here is that with radio ad revenues flat and a recession widely predicted, no one is forecasting a reduction of radio news.”

Newsroom Size

Newsrooms grew in 2006, due largely to staff increases at stations in larger markets.

But the trend toward centralizing radio newsrooms continued. More independent local news operations are being replaced by a single centralized source of news for the region.

More than three-quarters (76.2%) of radio news directors in 2006 said they were providing news content to more than one station. This is up 6 percent from the previous year, continuing a trend in the centralization of newsrooms. In contrast, the percentage of news directors who oversaw just one newsroom in 2006 remained low, 18.2%, an increase over the previous year (17%).⁵

Over all, radio newsroom staff size increased marginally from 2005 to 2006. The average staff in 2006 was 3.8 employees, with 2.5 full-time and 1.3 part-time workers. That was up from 3.2 employees in 2005 -- 2 full time and 1.2 part time.

While newsrooms in smaller markets shrank slightly, those in larger markets pulled up the overall numbers.

Major markets – stations with more than 1 million potential listeners – employed on average 8.6 full-time staff members in 2006. This is a big jump compared with the previous year, when news directors at major market stations reported an average of 3.1 full-time staff. The statistics here may be misleading, since the steep rise can be explained by the fact that more major market news directors responded to the 2006 survey and at least one of these news directors reported a staff size of 60 full-time workers, compared with the largest newsroom in 2005 of only 19 employees.⁶

The next largest market, with 250,000 to 1 million listeners, also grew, up to 3.3 full-time staff members in 2006 from 2.2 in 2005.

The newsroom size of medium-market news stations (50,000 to 250,000 listeners) fell, from 2.4 full-time staffers in 2006 to 1.8 in 2005. Staff in small markets (less than 50,000 listeners) dropped slightly, to 1.3 full-time staff members from 1.5 in 2005.

The average number of stations that a single news director served in 2006 was 3.4 within the local market and 0.4 outside the local market, according to the RTNDA news director survey.⁷ That changed little from the previous year’s data, which reported the average newsroom supplied news to 3.3 stations within the local market and 0.6 stations elsewhere.

Looking ahead, the majority of news directors (67%) expect to keep their staff sizes about the same for the upcoming year; 26.6% plan to do more hiring.⁸

Radio Salaries

Are staff salaries keeping pace with added responsibilities and workload?

Despite ups and downs in salaries over the last several years, it does not appear so.

Over all, radio news staffs continue to be low paid. From 2001 to 2006, salaries have grown only 5%, according to the RTNDA/Ball State University annual news director survey. This figure does not account for inflation, which, at 13.8% in the same period, has grown at a much faster clip.⁹

News reporters fared best. Over the past five years (2001 to 2006), their salaries have kept pace with inflation at 13.6%. The median annual salary of a radio news reporter in 2006 was $25,000, the same as 2005.¹⁰

News producers, news anchors and news directors all had increases in their median salaries in 2006. After two years of significant pay losses, news producers received the biggest boost, from $20,500 a year in 2005 to $27,800 in 2006.¹¹ The jump still does not bring producers up to their 2004 reported salary of $38,000.

But these sharp fluctuations are a bit deceiving. There are relatively few news producers at commercial radio stations anymore, with the exception of larger stations, making any change look more dramatic than it really is. The sample size for radio reporters and news directors is larger, making those more stable indicators of salary patterns.

Median Radio News Salary Comparisons Over Time

1994 - 2006

Design Your Own Chart

Source: Robert Papper, RTNDA/Ball State University Annual News Director Survey “Where the Jobs Are,” RTNDA Communicator, June 2007. Note: Based on survey responses of news directors

Radio news salaries still lagged behind those in television. Radio news directors make less than half of their television counterparts -- $32,000 vs. $74,000.¹² This is consistent with years past, as is the discrepancy in salaries for radio news anchors, $29,000 compared with $60,000 for television. The difference in salaries between news reporters in the two mediums, however, is not as great — $25,000 for radio and $29,500 for television. News producers in the two mediums also had similar salaries in 2006. Television news producers out-earned their radio counterparts, $30,000 to $27,800.

Median Salaries: Radio vs. Television

1994-2006

Design Your Own Chart

Source: Robert Papper, RTNDA/Ball State University Annual News Director Survey “Seize the Pay,” RTNDA Communicator, June 2007. Note: Based on survey responses of news directors

As newsrooms move to a business model that serves not one but several stations, are they able to offer their staffs better salaries? Survey responses in the RTNDA study are inconclusive. While there are certainly fewer newsrooms serving only one station, it does not appear that salaries have increased much despite the added responsibility. The lack of a pattern here suggests that radio stations and groups are using varied combinations of full-time employees, part-time labor, interns and volunteers. That may mask the actual salaries in a radio group.

Radio Salaries, by Number of Stations Served

Survey of News Directors, 2006

Design Your Own Chart

Source: Robert Papper, RTNDA/Ball State University Annual News Director Survey “Seize the Pay,” RTNDA Communicator, June 2007. Note: Based on survey responses of news directors.

As far as the size of the newsroom goes, again there is no clear salary pattern based on the number of full-time staff.  News directors do seem to be paid more as staff size increases, going from a median salary of $30,000 for a sole full-time staffer to $45,000 when there are at least five other full-timers.¹³ News reporters’ salaries also rise, to $28,000, when there are five or more people employed by the station.

Radio Newsroom Diversity

In 2006, radio newsrooms became even more disproportionately male and Caucasian, although more minorities occupied leadership positions than in years past.

The annual survey of news directors found the percentage of minorities fell only marginally in 2006, to 6.2%, but that marks its lowest level since the survey began.¹⁴ A year earlier, the number was 6.4%, down from 8% in 2004 and 11.8% in 2003.

Looked at another way, in 2006 only 11.7% of all radio newsrooms even had minorities on staff – a slight decrease over 2005 (12.4%) and much smaller than 2004 (17.1%).¹⁵ This is a vastly disproportionate relationship to the 34.5% total minority population in the United States.

More diversity could be found among radio news directors in 2006 – more African Americans, Hispanics, Asian Americans and Native Americans occupied these top positions. The percentage of Caucasian news directors fell 7 percentage points, to 88%, compared with 2005, when 95.6% were white.¹⁶ General management of stations, however, remained mostly Caucasians in 2006 – 94.5%. General managers of minority ethnicity are twice as likely to be found at non-commercial stations as commercial stations.

The situation for women is slightly better, but a far cry from equilibrium. Women made up just shy of 25% of the workforce in radio newsrooms in 2006, which is fairly consistent with years past.¹⁷ However, nearly two out of three (63.8%) radio newsrooms across the country have no women on staff, a rise over the previous year (52.7%). As for leadership positions, only about one in five women work as either news directors (23.5%) or general managers (20.3%).

Public Radio

Public radio has expanded its citizen media experiment, as well as ways to appeal to younger audiences.

Public Insight Journalism, a Web-based network of citizens who offer knowledge to reporters researching stories, was the brainchild of Minnesota Public Radio (MPR), which began integrating it into its newsrooms in 2003. In 2007, Public Insight Journalism launched similar pilot programs in Colorado, New Hampshire, Oregon and North Carolina.

The Public Insight network gives MPR reporters access to thousands of citizens with expert knowledge in a variety of issues to improve news coverage. “It’s bringing whatever content we can to bear on news stories and intermingling it with our news coverage,” Andrew Haeg, senior producer for the Center for Innovation in Journalism (with MPR’s sibling, American Public Radio), told Current magazine.¹⁸

With the pilot programs, MPR hopes to learn how to effectively integrate the Public Insight system into more newsrooms to equip other public radio stations with a system for tapping into the public’s knowledge.

In an effort to draw in a younger audience, National Public Radio launched the Bryant Park Project in October 2007 after months of experimenting with it as an online-only pilot program.

Luke Burbank, one of the two hosts of the live conversational news show (along with Alison Stewart), told the New York Times that the Bryant Park Project is “a show for people who take the news seriously but not themselves,” providing context by noting that many of his friends read both the New Yorker and Us Weekly.¹⁹

At its broadcast debut, six terrestrial radio stations carried the program, which is broadcast Monday through Friday mornings. But several HD stations, as well as Sirius Satellite Radio, are broadcasting the program, and the content can be accessed at npr.org and downloaded as a podcast.

The program, which highlights topics that appeal to younger audiences, is intended to offer an alternative to NPR’s popular “Morning Edition.” The median age of people listening to NPR’s newsmagazine programs is 53. Jay Kernis, until recently NPR’s senior vice president for programming and now managing editor of CNN, said, “When you talk with younger audiences or potential younger audiences, there is an enormous interest in health care, but they don’t really want to know about prostate cancer. They’re much more interested in child rearing and those issues. One size can’t fit all.”²⁰

Satellite Radio News

Satellite radio isn’t just about commercial-free music.

Both XM and Sirius offer a deep and well-rounded selection of news and talk channels on their listening menus. Of XM’s 160-plus channels, it programs 18 news and political talk channels.²¹ Sirius, which has just over 130 channels, also programs 18 news and political talk channels.²²

From there, however, the two services follow divergent programming paths.

Sirius programs NPR on three channels, while XM has a single public radio station that broadcasts a mix of hosts and shows. Through its contract with C-SPAN, XM hosts XM Emergency Alert, a 24-hour information channel focusing on natural disasters. Sirius offers popular partisan hosts with its conservative Sirius Patriot channel and liberal Sirius Left, while XM syndicates the liberal talk network “Air America” and, on the other end of the spectrum, “America Right.”

News and Political Talk on Satellite Radio

Source: XM and Sirius channel line-up (see http://xmradio.com/onxm/full-channel-listing.xmc, and http://www.sirius.com/channelguide)

Stepping up its political coverage, XM Radio launched a channel devoted entirely to the presidential campaign, a first for a national radio channel. On September 24, 2007, XM launched POTUS ’08 (a government acronym for the President of the United States), a 24/7, commercial-free channel devoted to news and opinion from both sides of the partisan spectrum. Content comes from both mainstream and alternative sources: C-SPAN, the National Journal, Slate, the Washington Monthly, Fox News, CNN, ABC, bloggers, podcasters, think tanks, polling groups, universities and the candidates themselves. Presidential candidates have access to free air time each day to address listeners.

As XM Radio’s CEO Hugh Panero put it, “This channel is a unique public service opportunity to provide our listeners with a commercial-free and politically neutral destination that is focused solely on this important presidential election.” ²³

POTUS ’08 can even be accessed free by non-subscribers, although a listener still needs an XM receiver. The channel is expected to air through November 2008.

Radio Gets Web-Savvy

Radio took some ambitious strides into the digital arena in 2007.

Social networking was the buzzword for 2007 and radio tried to capitalize on its ability to offer local connections.

By the summer of 2007, Clear Channel introduced a dozen station-branded social networks, including “The Wild Space” in San Francisco, the “Z-Zone” in New York and “The Mob” in Chicago. Borrowing from the MySpace and Facebook model, the new sites allow users to create their own home pages, set up blogs and share music, pictures and video with old and new friends. With more than 100 million people on MySpace and 50 million people using Facebook, what would attract “friends” to these micro sites?²⁴ According to Evan Harrison, executive vice president/online of Clear Channel, “the indicators are that people want to connect locally.” ²⁵

Each of the 12 stations trying out this online networking tool manages its own Web site, but the framework of the sites comes from OneSite.com, a provider of social networking technology to businesses and organizations. While none of these stations carry news, Clear Channel’s venture into social networking exhibits just one way that radio stations can take advantage of the Web to increase their audience.

More radio news staff is being devoted to Web operations. Staffing for radio news Web sites increased by half a person each in 2006, compared with 2005. This brings the total full-time and part-time Web staff to two persons per newsroom.²⁶ But in terms of what these newsrooms are displaying on their Web sites, only the major-market radio stations are making technological strides. Smaller stations are still dominated by text, only slowly adding new technologies to their Web sites.

Elements of Radio News Web Sites

Source: Robert Papper, RTNDA/Ball State University Annual News Director Survey “Net Worth,” RTNDA Communicator, May 2007.

Another signal that the radio industry is waking up to its online potential is Fox News Radio’s decision to offer an on-demand news service. In September 2007, Fox News Radio broke new ground by offering an online, on-demand news service to the 400 affiliates that receive its five-minute radio headlines. “Fox News Radio On-Demand” is updated 24 hours a day to provide affiliates with newscasts for their Web sites, enabling online users to access up-to-date news when they choose.

On the equipment front, a few companies have released Internet radios that behave like traditional radio receivers. Companies like Roku, Com One, Revo, Terratec and Tivoli have made standard-looking tabletop radios that free the online listener from their computers. Instead of an antenna, these radios are equipped with internal WiFi receivers. As with standard radios, some come equipped with batteries so they can be taken anywhere a wireless signal can be picked up. Most also play podcasts. Like HD radios, though, they’re not cheap – most models ran upwards of $300 as of 2007.

Footnotes

1. All bulleted data from Robert Papper, RTNDA/Ball State University Annual News Director Survey, “News, Staffing and Profitability,” The Communicator, October 2007.

2. Robert Papper, RTNDA/Ball State University Annual News Director Survey, “News, Staffing and Profitability,” The Communicator, October 2007. Survey responses came from 225 radio news directors and general managers representing 740 radio stations.

3. Ibid

4. Ibid.

5. Ibid.

6. The presence of such an outlier in the data has a large impact on the results, especially given that the survey’s sample only represents 225 news directors (and 749 news stations).

7. Ibid.

8. According to the Papper survey, 1.1% of news directors said they expected to decrease staff and 5.3% said they were not sure.

9. Robert Papper, RTNDA/Ball State University Annual News Director Survey “Seize the Pay,” RTNDA Communicator, June 2007.

10. Ibid

11. Robert Papper, RTNDA/Ball State University Annual News Director Survey “Where the Jobs Are,” RTNDA Communicator, June 2006.

12. Robert Papper, RTNDA/Ball State University Annual News Director Survey “Seize the Pay,” RTNDA Communicator, June 2007.

13. Ibid.

14. Ibid.

15. Karen Everhart, “Newsrooms Try ‘Public Insight’ Tool,” Current Magazine, August 13, 2007.

16. Elizabeth Jensen, “An NPR Program Aims to Awaken a Younger Crowd,” New York Times, September 27, 2007.

17. Ibid.

18. As of the end of November 2007, XM listed 166 stations on its Web site’s “Channel Line-up,” http://xmradio.com/onxm/full-channel-listing.xmc, including six Christmas music channels. XM also programs 20 other “Talk and Variety” channels that are not of an explicitly political talk/news format (including “Oprah and Friends”), as well as 25 sports channels and 20 traffic and weather stations. This brings the total news/talk/information channels to 83.

19. As of the end of November 2007, Sirius listed 131 stations on its Web site’s “Channel Guide,” http://www.sirius.com/channelguide. Sirius also programs 11 other talk/entertainment channels (including two Howard Stern channels), 12 sports channels and 10 traffic and weather channels. This brings the total news/talk/information channels to 51.

20. Drudge Report, “XM/C-SPAN to Launch First National Radio Channel Dedicated to the Presidential Election,” May 21, 2007.

21. comScore, http://www.comscore.com/ press/release.asp?press=1555.

22. Brian Garrity, “Clear Channel Launches Social Networking Sites,” Billboard.Biz, April 30, 2007.

23. Bob Papper, RTNDA/Ball State University Annual News Director Survey “Net Worth,” RTNDA Communicator, May 2007.

Talk Radio

By the Project for Excellence in Journalism

More than 20 years into its run, what Americans have come to call talk radio continues to grow, and in 2007 again demonstrated its political muscle.

According to the latest data available, 1,370 radio stations carry talk radio programming.¹ And over 47 million Americans listen to it each week.²

The medium remains distinctly conservative. But a notable, if small, group of liberal talkers has established itself as well.

In many ways, talk radio is as old as radio itself. In 1933, President Franklin Delano Roosevelt launched his fireside chats from the White House over the radio. And Father Charles W. Coughlin and the humorist Will Rogers each hosted popular political talk shows in the early 1930s, with opinionated banter as the foundation.

Yet after a period of relative balance brought on by strict regulation in 1960s, the modern era of talk is generally considered to have begun in the 1980s with Reagan-era deregulation, particularly the repeal of the Fairness Doctrine in 1987. The repeal, taken as cable and other new technologies changed the media landscape, freed stations from an obligation to offer equal representation to all sides of a controversial question. Also, with the elimination of the Fairness Doctrine, the mandate for radio stations to cover issues of local importance disappeared and nationally appealing satire-driven commentary flourished. Though there is talk among some Democrats in Congress about bringing the Fairness Doctrine back, it seems unlikely.

The number of stations carrying talk programming swelled from about 400 nationwide in 1990 to 1,400 in 2006, a growth of almost 250%, according to Inside Radio.³ Though the growth of stations has slowed since the mid-1990s, it is still getting larger.

News/Talk Radio Growth

1990-2007, Select Years

Design Your Own Chart

Source: Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” February 14, 2007 Note: No figures available for 2000

Talk Radio Still Wears a Conservative Crown

In 2007, Rush Limbaugh continued his reign as the king of radio talk. According to data from Talkers Magazine, he commanded an estimated 13.5 million weekly listeners in spring 2007.⁴ But talk radio’s No. 1 voice also has apparently peaked. These 2007 audience numbers are down one million from 2003, when 14.5 million tuned in weekly.

Though definitive explanations of his ebbing audience are impossible, the most obvious factor is that the man who helped define the medium now has more competition. Chief among those is conservative rival and long-time runner-up Sean Hannity. In the spring of 2007, according to the Talkers data, Hannity trailed Limbaugh by one million weekly listeners by cume, the number of people who tuned into radio at least once and at least for five minutes in an average week .

Other conservatives have also been increasing their radio audiences over time: These include Michael Savage and on-air counselor Dr. Laura Schlessinger (both with 8 million weekly listeners), and Laura Ingraham and Glenn Beck (both with 5 million listeners).⁵

Liberal listeners have to look much further down the list of leading talkers to find a personality reflecting their views — Ed Schultz, with 3.25 million listeners weekly. Other liberal talkers barely attract audiences over 1 million: Lionel, Thom Hartmann, Randi Rhodes, Stephanie Miller and Alan Colmes (each with 1.5 million weekly listeners).⁶

Talk Radio Audience
Weekly Cume (in millions)

Source: Talkers magazine, “Top Talk Personalities,” Spring 2007
Note: * = Information unavailable; NA = Talk host not nationally broadcast

Audience Demographics

The talk radio audience is largely male, relatively young and ideologically conservative, although not necessarily Republican. Talkers magazine put the party breakdown in 2007 at 23% Republican, 14% Democratic, and a majority, 58%, independent. Data from the Pew Research Center for the People and the Press found a more equal spread among regular listeners in 2006: 32% Republican, 35% Democratic and 30% independent.⁷

Nearly two-thirds (63%) of the “talk/personality” audience was male, according to the 2007 “Radio Today” Arbitron report. And more than 36% of the talk audience is between 25 and 44 years old, compared with 22% in the news/talk/information grouping.

Talkers magazine’s Talk Radio Research Project, released in the fall of 2007, found that talk listeners tend to identify themselves as conservative (38%), of which 12% identify as “ultra conservative,” or middle-of-the-road (23% said they were moderate and 18% fiscal conservative/social liberal).⁸ Only 14% of the talk audience identified themselves as liberal, of which only 2% said they were “ultra liberal.”

Air America 2.0

Major changes were set in motion when Air America, the “progressive” talk radio network, declared bankruptcy in October 2006.

In late January 2007, Stephen Green, a New York real estate entrepreneur, agreed to acquire the fledgling network for $4.25 million and Green Family Media formally completed the acquisition on March 6, 2007.

Stephen Green became board chairman and majority shareholder and his brother Mark Green, the author, politician, former Ralph Nader associate and professor at New York University, was named president. Scott Elberg, Air America’s chief operating officer since spring 2005, retained his title.

“We intend to stabilize its structure, programming and balance sheet – and then to turn it around by next year,” said Stephen Green. “I’m a businessman used to making money and Air America will be no exception.” ⁹

Mark Green outlined a two-pronged strategy. “First, we’ll make sure our programming stays informative, sharp and entertaining – so that it’s appealing to a growing audience and advertisers alike. Second, we’ll be thinking outside the radio box by creatively distributing great content across many platforms in the next years, including the Web, video, mobile and broadband. We intend to become a must-hear content site for all people interested in truth, justice and the Air American way.”

The company has some rebuilding to do. As of December 2007, Air America content was being carried on 62 traditional radio stations, or affiliates, as well as XM satellite radio.¹⁰ Before declaring bankruptcy in October 2006, it had 90-plus affiliates.

On May 21, 2007, the new ownership introduced Air America 2.0 by launching a new and more interactive Web site talk lineup, adding three new shows to its weekday offerings and five new shows on the weekends (see http://w ww.airamerica.com/schedule for full lineup). The kickoff featured two days of interviews with 30 political leaders and celebrities, including Senator Hillary Clinton, Senator John Edwards, Senator Barack Obama, Robert Redford, Paul Newman, Governor Eliot Spitzer of New York, Mayor Michael Bloomberg of New York City, Gloria Steinem and Theodore Sorensen.

On April 25, Westwood One took over from Jones Radio Networks to manage the network and affiliate advertising sales. Westwood One, managed by CBS Radio, serves more than 5,000 radio stations and distributes more than 150 news, sports, music, talk, entertainment programs, features and live events.

“Because Westwood One is such a renowned network ad and affiliate sales firm,” said Elberg, “it’s obviously exciting that Westwood One will be a vital part of AAR 2.0.” ¹¹

As expected, there also were talent changes, initiated in mid-February when the humorist and host Al Franken left the network to pursue a U.S. Senate seat.

Lionel, one of the top-rated progressive talkers with an average weekly audience of 1.5 million listeners, joined the lineup. Another program, “Seder on Sunday,” targeted the interactive audience with its recap and review of the Sunday morning political talk shows, largely from the view of bloggers.

The Return of Don Imus

On December 3, 2007, Don Imus’ radio show, Imus in the Morning, returned to the airwaves.

Citadel’s New York station, WABC, became the new home for the controversial host nearly eight months after his show was canceled by CBS Radio and the MSNBC cable television station.

An apologetic Imus was welcomed back with a four-hour show and several standing ovations from the large audience that filled a New York theater. Imus repaid his new network with a significant ratings boost. According to Portable People Meter ratings for New York, the show reached 87% more people than the average audience listening during the show he replaced at the same time slot (6 a.m. to 10 a.m.) on the previous 10 Mondays.¹² But listeners looking for more of Imus’ caustic shock-jock spiel may have been disappointed. Washington Post reporter Paul Farhi wrote that the show was “a cautious, even stilted affair, especially compared with the freewheeling satire and commentary that characterized his program before the controversy.”¹³ According to Farhi, the most irreverent note Imus hit was when he declared, “Dick Cheney is still a war criminal, Hillary Clinton is still Satan and I’m back on the radio!”

The ABC Radio Network syndicates the show, which also is simulcast on RFD-TV, a cable and satellite network that reaches about 30 million homes, through a five-year deal with Rural Media Group.

Imus’ difficulties started on April 4, 2007, when the radio host described players on the largely African American women’s basketball team at Rutgers University as “nappy-headed hos.” The National Association of Black Journalists shortly called for Imus to taken off the air.

Outrage against Imus grew when several public figures, including the Rev. Al Sharpton insisted that he should be fired. Imus responded by issuing a formal apology, but the disc jockey made the situation worse when he tried to do damage control. Imus appeared on Sharpton’s radio program, apparently looking for the black political leader’s blessing. When Sharpton and a phone caller continued to argue that he should be fired, a frustrated Imus blurted, “I can’t get anywhere with you people.” Syndicator CBS and MSNBC soon reacted with a suspension. But public outrage grew and, in the week that followed, big-name (and big-money) advertisers like General Motors, Staples, American Express and Procter & Gamble pulled their ads. After a frank meeting with NBC staff, at which prominent African American NBC personalities reportedly expressed anger, MSNBC fired Imus on April 11 and CBS did the same a day later. According to estimates from several analysts, Imus accounted for about $20 million in ad sales for CBS in 2006.¹⁴ And he attracted a weekly audience of 2.5 million listeners.¹⁵

Legal battles followed the firing. Imus filed a lawsuit against CBS in May for breaching his contract, which amounted to $40 million over five years. CBS countered, demanding compensation for lost advertising revenue and fees from radio stations and MSNBC, which paid to carry the show. Imus and CBS settled their claims in August, and Imus walked away with $20 million.

In August, Kia Vaughn, a Rutgers basketball player, sued Imus, citing slander, libel and defamation of character. Nearly a month later, she dropped the case, citing her need to focus on her studies and basketball training.

Who Syndicates the Hottest Air (Talent)?

What radio companies are benefiting from presenting and syndicating the most popular radio talk talent?

Premiere Radio Networks, a property of Clear Channel Communications, syndicates four of the top six talkers: Limbaugh, Schlessinger, Ingraham and Beck. Combined, these four reach 31.5 million listeners a week, according to their individual audience totals, though much of this total is likely a common audience.

Companies That Syndicate the Top Talkers

Source: PEJ Research
Note: Premiere Radio Networks is a property of Clear Channel. * Information not available.

On average, these leading talk hosts have been broadcasting nationally just since 1998. Limbaugh, with the largest audience, has been attracting national listeners the longest, for nearly 20 years. But Sean Hannity, his conservative rival, only has six years of national exposure. The Hannity show bears close watching over the next years to see if it gains enough of a following to eclipse the talk domination that Limbaugh has maintained for so long.

Footnotes

1. Inside Radio

2. Arbitron, “Radio Today: How Americans Listen to Radio, 2007 Edition,” April, 13 2007.

3. M Street Directory 1989-1999 and Inside Radio, Radio Book, 2006-2007. Inside Radio, formerly M Street Corporation, redefined the news/talk category to remove the category of sports talk. It began recording stations with the all-sports format in 1994. Before that, the news/talk figures reflect a removal of only estimated sports talk stations. According to Scott Fybush of Inside Radio, the number of sports stations was insignificant before 1993.

4. Talkers Magazine, “Top Talk Personalities,” October 2007: http://www.talkers.com/main/index.php?option=com_content&task=view&id=17&Itemid=34. Talkers bases its analysis on Arbitron’s Spring 2006 Monday-Sunday weekly cume ratings, supported by other reliable indicators in rated and non-rated markets. Estimates are rounded off to the nearest .25 million listeners.

5. Ibid.

6. Ibid.

7. Pew Research Center for the People and the Press, biennial news consumption survey, “Online Papers Modestly Boost Newspaper Readership,” July 30, 2006.

8. Talkers magazine, “The Talk Radio Research Project,” http://www.talkers.com/main/index.php?option= com_content&task=view&id=16&Itemid=33. Data are drawn from interviews with listeners of general news/talk radio across the U.S., supplemented by input from talk radio programmers, hosts, sales personnel, radio station in-house research, and some studies by academic institutions.

9. “Air America Completes Sale to Green Family,” Air America press release, March 6, 2007.

10. http://www.ai ramericaradio.com/stations .

11. Air America blog, April 25, 2007, http://www.airamerica.com/press.

12. Katy Bachman, “Imus Gives WABC Ratings Boost,” MediaWeek, December 10, 2007.

13. Paul Farhi, “Don Imus Gingerly Steps Back on the Air,” Washington Post, December 4, 2007.

14. Paul R. La Monica, “CBS’ Imus Problem,” CNNMoney.com, April 13, 2007

15. Peter Johnson, “Coach: Team Accepts Imus Apology,” USA Today, April 12, 2007.