Brian Donegan said:
What is more important to the survival of a station? High ratings, or station revenue? ....
If I read into this correctly ratings mean diddley squat while ad revenue is what really matters. Is this a accurate conclusion? If so than why even keep track of ratings?
PS: I am an "outsider" to the business.
What is more important to a person? Length of life? Quality of life?
Equally impossible to generalize as is the answere of the ratings/revenue question.
For the most part ratings = revenue. Simplistic. More accurately put, high ratings equate to the potential for more revenue when there is a good sales force applying the numbers properly to get the business. And, good ratings equate to a more valuable product for which a station can ask a higher price.
Not every station can be #1 in a market. Obvious, of course. But there is value, particularly with advertising agencies, in the #2, #3 and, in some cases, #4 rankings especially when there is a listener demographic that gets the attention for one of their particular clients. For instance, if the #1 station gets highest overall but the demos suggest the listeners are mostly 12 to 18 years of age McDonald's is going to want to make a big buy but a Cadillac dealer will not.
An interesting exercise would be for you to listen for a couple of days to the #1 station in your town. Note what their format is, being specific. Not just "music" or "talk". Note some detail. Also note who is buying their advertising. What products? You'll find a correlation between product and audience age. Then do the same for #2 and #3. You'll easily see the difference.
Is that to say the lower rated stations aren't making money? For some, those dithering between formats, it's probably a safe bet that they're money losers. But for many with apparently low ratings and perhaps also lousy signals, you may find very few advertisements but lots of sponsored programming (brokered stuff). These owners are making a living off their investment. Not necessarily getting rich; but making a living.
In a few instances you'll find stations that have been in the same hands for a long, long time and have been "doing" a format with a small but loyal audience. In many of those cases it's a person (the owner) doing what he/she loves and, so long as it's self-supporting, damn the competition. These stations usually are sold off within minutes after the owner goes to the Great NAB Convention In The Sky (NOT satellite radio...a higher authority!).
Always remember, though, the big group ownerships want to see ratings, ratings, ratings to get the highest spot rates and greatest number of sales. Community service? That's for the dedicated old-time owners and plain fools.
