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Picture this. You’re on your way home from work. Or you’re taking your child to soccer practice. Or you got a HAWT date. And, life is great until you enter your car and you hear “that sound.”
Quick! Who’s your favorite DJ? What’s your favorite radio station?
That wasn’t difficult, was it? And it really doesn’t matter if you listen to your favorite radio station in the car, at work, or at home, nor does it matter if you listen on your computer, your iPhone, or your car tuner. The point is, you’ve got your “dial” preset to quickly access your favorite music, talk show, or DJ.
A recent Jacobs Media blog addressed a situation that is occurring at radio stations around the country. Many stations are hitting their ratings goals, but missing their sales goals.
Unquestionably, a strong ratings position can have a positive impact on sales. If it didn’t, broadcasters would not focus so much on growing their ratings. However, a station, no matter how strong their ratings are, cannot rely on just ratings and rank.
Since the mid-eighteenth century, economists like Adam Smith and James Denham-Steuart have detailed the effect of supply and demand on a product’s price. As supply fell or demand increased, the cost of a given product would rise. Conversely, as supply rose or demand decreased, the price of that product would fall.
There’s been a lot of buzz about ABC/Disney’s recent decision to sell 23 of their 24 Radio Disney O&Os. Does this send a signal about the viability of radio? Or does it say something about Radio Disney’s specific business model?
