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April 20th 04, 09:08 PM

On 20 Apr 2004 15:14:06 GMT, (Scott McCollum)
wrote:

Since I don't work in radio professionally and I'm just learning about
this business, I'd like to get this correct by repeating what I've
just learned in this forum using the simplest terms:

1. Major market radio stations that are *NOT* owned by a network but
are affiliates don't have to pay for ABC Radio News, any of the
Westwood One news offerings (CBS to CNN), Salem Radio News, or any
other top of the hour news content providers.

Not only that, the networks pay the stations to run network
commercials.

2. Smaller markets do not pay for the news either, but rather "barter"
for the content by broadcasting the news content from a provider a
certain number of times during a specified weekly schedule.

The "barter" is that they get the news content free in return for
broadcasting the commercials, for which advertisers have paid the
network.

If these two statements are basically accurate, I would like to know
how news content providers make money. It almost sounds like radio
stations don't pay for these news briefs at all (almost like a public
service).

With the exception of the AP Radio Network, which carries no
commercials, the networks are paid by advertisers, just like stations
are. APRN is alone among nets in being a cash-for-content deal,
although even they are now stepping into the barter business, as fewer
and fewer stations are willing to pay cash.

My expectation was that a radio station would have contracts to pay
ABC News a fee (that was determined by number of listeners,
demographics, etc.) for broadcasting their news briefs. It sounds like
it's much more complex than that and I'd like to understand why.

No, ABC charges its advertisers, based on the audience(s) that the
affiliate stations deliver for the commercials.

The concept is not complicated. Networks are an efficient way for
advertisers to get national coverage without having to contract
individually with hundreds of stations. The programming content
supplied by the network (which may be entertainment programming or
news) is provided in return for the stations airing the commercials.
Larger stations get paid some money as well -- but generally far less
than they would get for selling the same spot directly to an
advertiser. The most extreme example I know of in this regard is my
own employer, which was being paid $1 by ABC to run a spot we could
charge $50 for locally (this was 20+ years ago). We dropped ABC in
favor of APRN because it was cheaper for us to buy news than barter
for it, and did not have a commercial network affiliation again until
we bought another station and put a 24/7 ABC music format on it.
It's a niche format we could never afford to do if we had to staff it
ourselves, so this time it makes economic sense.

Mark Howell

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