How can you compete against satellite radio NOW?
By Eric Norberg

www.ACmusicResearch.com

Although it makes absolutely no sense from an antitrust perspective, the U.S. government recently permitted the nation’s only two satellite radio companies to merge into one.

There were two originally on purpose – to provide the guarantee of competition, and thus to help keep rates down. As an explicit part of receiving their licenses, both XM Satellite Radio and Sirus Radio agreed NEVER to try to merge, and to develop and promote interoperable satellite radios capable of picking up both services (again, to facilitate competition).

So now, as a reward for breaking the only two restrictions placed upon them at the time their licenses were granted, these two services have been governmentally granted a merger – and a monopoly.

The theory that permitted this, in governmental circles, apparently held that since there are other audio sources available to the consumer, such as local radio, iPods – and possibly bagpipe bands, here and there? – there is still competition, and the satellite radio monopoly wouldn’t really be a monopoly.

That’s like saying all the U.S. (and U.S. based) car manufacturers can go ahead and merge into one huge national car company, because after all, there are other companies building bicycles – and gosh, there are rollerblades and Segways too – to provide ongoing price-controlling competition for the consumer!

Perhaps when the government eventually perceives how it has unbalanced the nation’s broadcast scene by pitting one huge national radio company offering hundreds of channels against local broadcasters who have neither the resources nor the frequencies to offer even the slightest competition, they will come up with another block of frequencies for a new satellite radio company to form and use, to restore competition to that business.

In the meantime, it’s time to confront the issue of satellite radio sucking away some of the ears your station needs to continue operating as a viable business.

Back when satellite radio was just preparing to launch, most broadcasters were giggling, thinking that local radio could not be hurt by a generic national radio service.

I was not so sure, because local radio stations in this era of multi-station ownerships have gotten pretty generic themselves, with the use of shows from out-of-market DJs, frequently unstaffed studios, and with no requirements for news or public service announcements anymore.

And I offered some suggestions to help tip the balance back toward the local broadcasters.

Now that it’s been demonstrated that millions of people are willing to PAY to hear satellite radio, maybe it’s time to go over those suggestions again.

First, about that matter of no more news and public service announcement requirements.

Yes, the FCC used to require quotas, and would not renew licenses till the station could demonstrate that those quotas were met. Speaking from experience I can passionately agree that it really is nice not to have to stare down that gun barrel at renewal time; and it certainly is a relief not to have to devote those many, many staff hours to analyzing program logs and developing volumes of paperwork to prove we did what we said we would do (or worse yet, to explain why we didn’t, but still deserve license renewal).

Broadcasters have always been licensed to serve “the public interest, convenience, and necessity.”

They still are. It’s just that in recent years, the FCC has decided that they need not compel it, because if your station doesn’t offer such, you will be penalized by the listeners.

They’re probably right about that, but most broadcasters haven’t noticed, if for no other reason than that Arbitron – alone of all rating services that ever were – refuses to list otherwise-qualified ratings for noncommercial station listening in the rating books.

Those who have seen the actual noncommercial station figures, which can be bought by public radio stations, have learned that there is a LOT of local listening to public radio these days in many markets – and in quite a few of them, public radio beats ALL commercial radio in some time periods!

What do you suppose that public radio is offering that appeals to a mass audience, which commercial broadcasters apparently do not?

Put another way, how can this niche radio medium blow the socks off mainstream radio like this?

Actually, it’s not the classical music and jazz that usually beats commercial radio so badly – it’s news and public affairs!

Turns out, it really IS good programming to include these elements on a COMMERCIAL radio station (if you want to draw an audience, that is!!).

Maybe you’ll buy that, and maybe you won’t. But if you won’t, you will then have to explain how it happens that public radio is creaming commercial radio in so many markets.

And if you didn’t know they’re doing that, you need to do a little research (or perhaps buy a survey from an Arbitron competitor, which will incidentally buy you a more statistically-valid survey).

Next time, I’ll have a few suggestions on how to make use of what used to be FCC mandates (and are now simply voluntary programming elements), to give your station back a real edge in the marketplace!

Questions? Comments? Email Eric!