STEPS TO OPEN A RADIO STATION - STATION EARNINGS
If
you are considering the steps to open a FM radio station, it is important
to assess what your radio station earnings may be. The state of the local
economy will also have a reasonably major impact on the earning potential
of your radio station. If the local economy is buoyant, generally radio
advertising spend will be up, and you would expect to earn more for advertisements
that are played on air.
However, the reverse is also true. When the local economy is struggling,
radio advertising is one area that businesses will look at cutting back
on first. Many businesses do not consider advertising to be an essential
spend, and simply put, if the business is not doing as well, they will
have less discretionary money to spend on advertising in general. During
times of protracted stagnation in the local economy, it is not uncommon
for ad rates to also drop, which of course will have an impact on your
station's revenue.
STEPS TO OPEN A RADIO STATION - STATION EARNINGS - Continued
Finally, there are the quarterly radio surveys to take into account. During
these surveys, a random selection of listeners in your area are given
survey cards, on which they are to indicate which radio stations they
listen to during different times of the day. When these survey results
are published, they will give an indication of which radio stations have
the highest audience share, and over a period of time, also show how the
ratings are changing.
Advertisers can then look at these survey results, and see how your station
compares to other stations. If your audience has gone up over the previous
survey, you could look forward to more advertisers wanting to place ads
with your station, and also being able to increase your ad rates. Again,
the reverse is also true. If your audience share has reduced over the
last period, you may find advertises less willing to renew advertising
contracts, and may look to doing so at a reduced ad rate.
© HoganWest, 2008
This is an excerpt from Mulcher Broadcasting 'Guide to starting a FM radio
station'. We provide this publication as part of our service which assists
people with information and advice on the steps to open a FM radio station.
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Mulcher Broadcasting
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