As part of the process about how to open a radio station, we frequently get asked to assess how much a proposed FM radio station may earn. However, determining how much a potential FM radio station can earn is quite difficult. It is dependent on several factors, including:

- the physical area your radio station broadcasts to.
- the intended format of the station, and how well this fits in with the audience you broadcast to
- the state of the local economy
- and perhaps most importantly, how well you do in local radio surveys

The physical area your radio station can broadcast to is quite important, as this will give an indication of the maximum number of prospective listeners you may have. If for instance you a broadcasting on a relatively low powered FM frequency, you obviously won't be able to achieve the same broadcast distance as other, more powerful broadcasters. So what this does is effectively restrict your audience, you won't be able to reach as many people, so advertisements on your radio station will be less valuable than on a station that can broadcast to a larger distance.

In addition to the wider issues about how to open a FM radio station, your station format, also plays a major part in determining the income you could earn from the station. If for instance you wanted to operate a station that replayed speeches from 20th century politicians for 24 hours a day, you may find it a reasonably unpopular type of format, and in which case your audience level would be reduced somewhat. Even if you do have a more agreeable format, this is by no means a guarantee you'll be able to secure all the listeners you hoped for. Other factors of course come into play such as the amount of local content on your station, the DJs and announcers you use, how well all your content is scheduled and programmed for playback, etc.

© HoganWest, 2009

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 how to open a FM radio station.


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