In comments filed with the FCC Friday, the National Association of Broadcasters is again calling on The Commission to loosen ownership caps for radio. Two big reasons the NAB is calling for more deregulation is radio’s declining revenue and audience due to the competition it’s facing. The NAB states it has submitted “unrefuted evidence demonstrating the increasing parlous financial position of the radio industry.”
The NAB used the following stats to make its point: “Local radio stations’ OTA ad revenues fell 44.9 percent in nominal terms ($17.6 billion to $9.7 billion) from 2005-2020, and even when taking stations’ 2020 digital ad revenues into account, their total ad revenues still dropped 39.8 percent in nominal terms ($17.6 to $10.6 billion) over that time period.”
The NAB filing then broke the revenue decline down even further, using Nielsen’s 253 rated markets. “The advertising revenues of FM stations mirror the radio industry as a whole, with FM stations’ revenues over the same 2005-2020 period showing a similarly stark decline. According to BIA data, the OTA ad revenues of FM stations in the 253 continuously surveyed Arbitron/Nielsen Audio markets fell from $10.5 billion in 2005 to $6.0 billion in 2020, a decline of 42.9 percent in nominal terms. These revenue data show a clear and present threat to FM stations’ “ability to serve the public interest in the spirit of the Communications Act.”
Then it was on to how listeners are leaving radio. “According to Nielsen Audio, the Average Quarter Hour (AQH) Listening of FM stations dropped 23.5 percent in just the past five years. Falling AQH audiences directly impact the competitive and financial viability of FM (and AM) stations because advertising is sold based on stations’ AQH listening, rather than stations’ audience reach or weekly cume. AQH audience metrics are accordingly much more relevant for the FCC’s competition analysis in this proceeding than any measure of radio stations’ cumulative reach.
The NAB, on behalf of several radio groups, states these problems radio is having can be fixed by lifting the ownership caps, allowing radio to better compete with big tech companies. “Broadcast stations clearly have myriad rivals for customers (i.e., audiences and advertisers) and increasingly struggle for a competitive share of the marketplace. They should not have to compete with these rivals while encumbered by asymmetric rules precluding competition on an even remotely level playing field. NAB again urges the FCC to act without further delay to reform its local radio and TV ownership rules.”
The NAB’s 75 page filing also says that radio lost 200 radio stations in the past two years with a “growing numbers of stations that are unprofitable and experiencing negative advertising growth.” And, that they are dealing with their advertising issues “constrained by outdated ownership restrictions.” And, according to the NAB, that is leading to more stations “unable to maintain a significant local presence and offer a high level of local services.”
Here is what the NAB is asking for:
· eliminate caps on AM ownership in all markets;
· permit a single entity to own up to eight commercial FM stations in Nielsen Audio 1-75 markets, with the opportunity to own two more FM stations through successful participation in the FCC’s incubator program; and
· remove restrictions on FM station ownership in Nielsen markets 76 and lower and in unrated areas.
Read the NAB filing HERE.