FUTURE OF RADIO DEPENDS ON RESTRUCTURING, SAYS CAB
By Adnews Staff
Two studies released this week show that the Canadian commercial radio industry needs some changes, according to the Canadian Association of Broadcasters. One study done by TD Securites Inc. was commissioned by CAB in anticipation of the Canadian Radio-television and Telecommunications Commission's upcoming review of the radio industry. This study shows that the current ownership policy of one AM and one FM station per owner, per market, is an important factor behind the industry's poor financial performance. "Advertising dollars are the lifeblood of radio," CAB president Michael McCabe says in a release. "Too many owners means that radio stations can't offer the kind of concentrated audience reach that advertisers want and that other media, like newspapers and television, can deliver." Another study by McCord-Granum examines the situation of American commercial radio, whose ownership policies were liberalized in 1992. Before ownership policies were changed, as many as 59% of U.S. radio stations were unprofitable. After the restructuring, revenues grew 44%. CAB believes that multiple license ownership is essential to achieving stability.