The radio industry and licensing
The radio stations need to acquire a license before starting its operations. A fee is paid to different licensing organizations which include American Society of Composers to gain the license to broadcast the music. Recently, the number of radio stations has increased since the Act limiting the ownership was eliminated. It resulted in a decrease in ownership due to mergers and acquisitions by different radio stations. The radio stations used different formats in their advertisement to please the listeners and advertisers. These formats include live reads and produced spots. Live reads are the type of advertisement where a radio personality reads the advert live on air. This is important to the advertiser since the radio personality supports the product. It is also efficient since the advert can be presented to target specific listeners thus they can get immediate feedback. Produced spots are the most used formats. It is divided into different categories which include straight reads, dialogues, and comedy. It is cheap for an advertiser to use this format since it is easy to produce. The sound effects and music used can be captivating to the listeners, thus motivating them to listen to the adverts.
Revenue sources and expenses
The radio stations earn their revenues in different forms which include advertisements, events, and selling newscasts. The adverts are the primary source of revenue for the commercial stations. The events earn income by selling tickets and other products. The stations also sell their news, which includes breaking news, to other radio stations. The stations also incur different expenses and costs in their operation. These expenses include advertising costs which are incurred when producing the advert content, rent, salaries, and licensing to air their content.
