Hi there ~
I'm going to use radio as the media in a comparison - and use the
Dallas/Ft Worth metroplex (DFW) area and Tucson, Arizona for purposes
of illustration. Please forgive me if I take you back to "Media Buying
101", but I'll try to explain it as I would to a marketing group
trying to decide if radio is a good place for them to be.
According to the 2000 US Census - DFW's population is 5,221,801, and
it is the 5th largest radio market in the US.
The population of Tucson, Arizona is 486,699 and it's radio market is
... well ... not that high.
Copyright prohibits my quoting or reproducing the Arbitron ratings for
those listeners, but it lists the general population of radio
listeners (the market) and each radio station's share of that market.
The ratings can also broken down into further 'types' or 'markets'
within the 'market' (confused yet?), such as young adults 18-25,
listening between 2-4, etc.
For purposes of answering this, let's stick to the broader stats.
If you're interested, the DFW radio market stats are here:
http://www.radioandrecords.com/Subscribers/ratings/ratmain.asp?mkt=dal
The stats for Tucson radio stations are here:
http://www.radioandrecords.com/Subscribers/ratings/ratmain.asp?mkt=tuc
Obviously, the number 1 rating in the 5th largest market in the US is
an enviable place to be. It's good for anything airing on that
station, it's good for advertising revenue from selling, etc.
From the position of a syndicated show such as Casey Kasim (KC) ... he
probably starts with an expectation of 'x' dollars he could reasonably
expect from being on that station. He has access to the ratings, too.
He might (and probably does) have a figure which is absolute minimum
.... there's also an expectation on the part of the radio station that
having his show at a certain time will enhance, not detract from, its
ratings. They both want the deal, it's just hammering out the price.
As a rule, the 'cost' to the studio for running the show is the
percentage of ad revenue they give to the syndicator. A show like KC's
may bargain for a quarter of the ad revenue with a bottom line figure,
they'll offer a cap, too. It behooves both the station and the
syndicated show to perform well -- the station to deliver the
advertising revenue, and KC to have a show that people will want to
tune in to.
It's really not too complicated or hard ... both the station and the
syndicator have a pretty good idea what the show is worth in that time
slot. They both bargain for the best deal for themselves, knowing that
if either side performs poorly, it falls apart.
Obviously, a 30 second commercial on the #1 station in the #5 national
market warrants a bigger dollar amount than the same commercial in the
#1 station in the Tucson market. While the percentage of revenue (for
example, 25%) remains the same, the dollar amount is different because
of the different markets and ratings.
Confused yet? Perhaps I can work to really muddy the waters here.
To answer your question, what to look for:
From the station's point of view, they always want good content to
fill air time. Talk radio wants good shows that people will listen to,
music stations catering to the young adult or teen market wants good
music to draw and hold the audience. More audience, more advertising
revenue. The station also wants an "out" in case the syndicator runs
off and marries his dog after a drunken high speed chase across four
state lines. In such a case, his value to the station then will no
doubt be close to zero. They want a bottom cap, so to speak.
From the syndicator's point of view, they want the station with the
highest market share they can get. They are willing to drop their
percentage if the drop in dollars isn't going below their bottom line
figure. Often times the revenue share may be incremental, increasing
the percentage as revenue increases. The syndicators have a stake in
the success of the station, too, so they'll probably bargain for an
out in case the station owner runs off a group of aliens declaring
himself the saviour of the universe.
They both come to the table equipped with the same information; both
have a good idea what the dollar amount should be for the market
share, etc., and they consider those factors and work out a
syndication agreement.
The dollar amount in Tucson may turn out to be $500, and in DFW it
might amount to $2500.
This is why it is hard to set a firm dollar amount answer to your
question.
Having said that, I bet somewhere there are some syndicated shows that
state a flat rate fee, regardless of the market and market share. I
also suspect they don't get a lot of air time unless their fee is
really low or their mother owns the radio station.
Internet Search terms:
Arbitron: Dallas Ft Worth (URL above)
Arbitron: Tucson (URL above)
Printed matter:
Introduction to Advertising Media: Research, Planning, and Buying,
by Jim Surmanek, 1992
I hope the above helps answer your questions in terms better than a
vague, "depends" -- even if the answer really is sort of a vague
'depends' because of factors like the market itself, the market share,
etc.
Thanks for giving me this chance to explain it from a syndicator's
point of view, instead of a media buyer's point of view as I usually
do, although the two are very similar.
Yours ever so,
Serenata |
