NAB admits listening, declining revenues

In comments filed with the FCC on Friday, the National Association of Broadcasters again calls on the Commission to relax the radio ownership caps. Two big reasons the NAB is calling for more deregulation are the decline in radio revenues and audiences due to the competition it faces. The NAB says it has submitted “unchallenged evidence demonstrating the growing and precarious financial situation of the radio industry.”

The NAB used the following statistics to make their point: “OTA advertising revenues for local radio stations fell 44.9% in nominal terms ($ 17.6 billion to $ 9.7 billion) from 2005 to 2020, and even taking into account the stations’ digital advertising revenues for 2020, their total advertising revenues fell a further 39.8% in nominal terms ($ 17.6 billion to $ 10.6 billion) during that period. period. “

The NAB record then broke the revenue decline even more, using the 253 markets rated by Nielsen. “FM station advertising revenues mirror the radio industry as a whole, with FM station revenues over the same period 2005-2020 showing an equally steep decline. According to BIA data, OTA advertising revenue for FM stations in the 253 Arbitron / Nielsen Audio continuously surveyed markets fell from $ 10.5 billion in 2005 to $ 6.0 billion in 2020, a decrease of 42 , 9% in nominal terms. These revenue data show a clear and current threat to the “ability of FM stations to serve the public interest in the spirit of the Communications Act”.

Then it was about how listeners leave the radio. “According to Nielsen Audio, the average quarter hour (AQH) of listening to FM stations has fallen 23.5% over the past five years. Declining AQH audiences has a direct impact on the competitive and financial viability of FM (and AM) stations as advertising is sold based on station AQH tuning, rather than station audience reach or aggregation. weekly. AQH’s audience metrics are therefore much more relevant to the FCC’s competitive analysis in this proceeding than any cumulative reach measurement of radio stations.

The NAB, on behalf of several radio groups, says these radio problems can be solved by lifting ownership caps, allowing the radio to better compete with big tech companies. “Broadcast stations clearly have a myriad of rivals for customers (ie audiences and advertisers) and increasingly compete for a competitive share of the market. They shouldn’t have to compete with these rivals while being hampered by asymmetric rules that prevent even competition from a distance. NAB again urges the FCC to act without further delay to reform its local radio and television ownership rules. “

The 75-page NAB dossier also states that radio has lost 200 radio stations over the past two years with an “increasing number of stations unprofitable and experiencing negative advertising growth.” And that they deal with their advertising problems “limited by outdated ownership restrictions”. And, according to the NAB, this is leading to more stations “unable to maintain a significant local presence and offer a high level of local service”.

Here’s what the NAB is asking for:
· Eliminate AM ownership caps in all markets;
· Allow a single entity to own up to eight commercial FM stations in Nielsen Audio 1-75 markets, with the possibility of owning two additional FM stations through successful participation in the FCC Incubation Program; and
· Remove restrictions on the ownership of FM stations in Nielsen 76 and lower markets and unrated areas.

Read the NAB dossier HERE.

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