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Report to Congressional Requesters: 

United States Government Accountability Office: 
GAO: 

March 2010: 

Media Programming: 

Factors Influencing the Availability of Independent Programming in 
Television and Programming Decisions in Radio: 

GAO-10-369: 

GAO Highlights: 

Highlights of GAO-10-369, a report to congressional requesters. 

Why GAO Did This Study: 

The media industry plays a vital role in informing and entertaining 
the public. Media ownership and the availability of diverse 
programming have been a long-standing concern of Congress. Despite 
numerous programming choices in television and radio available to the 
public, some studies have reported that independently produced 
programming-—that is, programming not affiliated with broadcast 
networks or cable operators—has decreased through the years. This 
requested report discusses (1) the extent to which the sources of 
television programming have changed over the last decade, (2) the 
factors industry stakeholders identified as affecting the availability 
of independent television programming, and (3) the factors industry 
stakeholders identified as influencing programming decisions in radio. 
To address these issues, GAO analyzed data from the Federal 
Communications Commission (FCC) and industry on sources of broadcast 
television programming in prime time (weeknights generally from 8:00 
p.m. to 11:00 p.m.) and companies owning cable networks, as well as 
radio format data to determine programming variety. GAO also reviewed 
legal, agency, and industry documents and interviewed industry 
stakeholders, public interest groups, and others. 

GAO provided FCC with a draft of this report for comment. In response, 
FCC provided technical comments that we incorporated where appropriate. 

What GAO Found: 

The sources of broadcast and basic cable television programming have 
changed little in recent years. As a source of programming for prime 
time television, major broadcasters (ABC, CBS, Fox, and NBC) and their 
affiliated studios produced the majority of programming in each of the 
selected years that GAO analyzed. In particular, GAO found major 
broadcasters produced about 76 to 84 percent of prime time programming 
hours. The remaining programming came from independent producers, 
which are not affiliated with the major broadcasters. Since basic 
cable networks are also a source of television programming, GAO 
analyzed the ownership of those networks as an indicator of which 
entities control the television programming. On the basis of GAO 
analysis of ownership in the 20 most widely distributed basic cable 
networks, major broadcasters and companies affiliated with both major 
broadcasters and cable operators have owned half or more of the top 20 
cable networks for each year reviewed. Combining ownership in both 
prime time programming and basic cable networks, the major 
broadcasters have controlled a significant share of television 
programming over the last decade. 

Stakeholders primarily cited economic factors as influencing the 
availability of independent television programming. In this regard, 
producers GAO contacted stated that developing and producing broadcast 
television programs is costly and financially risky. And while funds 
need to be secured early on in the development and production process 
to finance these costs, independent producers stressed that it is 
difficult to obtain financing for production costs. For cable 
television (viewed through a subscription video service), 
representatives of independent cable networks said a new network faces 
considerable uncertainty as to whether it will be distributed by a 
sufficient number of video providers (such as Comcast and DirecTV) to 
make its operations viable. By contrast, cable networks developed by 
cable operators or major broadcasters are able to negotiate 
distribution of the network with video providers as part of an 
agreement for distribution of an established affiliated network. 

For radio, stakeholders cited economic factors, local community 
interests, and consolidation in the radio industry as influences on 
programming decisions. Among both commercial and public radio 
stations, stakeholders said that programming decisions are based on 
listeners’ interests in a given market. GAO found that within two of 
the three largest local markets nationwide, many of the most common 
local radio formats differ from the most common radio formats 
nationally, indicating that programming decisions are affected by 
local community interests. Over the last 10 years there has been 
consolidation in the radio industry; however, stakeholders’ opinions 
varied about the extent to which consolidation has affected 
programming decisions. While some studies show that consolidation has 
led to homogenized radio playlists in different markets nationwide, 
GAO’s analysis shows diverse formats and preferences are reflected 
within individual local markets. 

View [hyperlink, http://www.gao.gov/products/GAO-10-369] or key 
components. For more information, contact David J. Wise at (202) 512-
2834 or wised@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Sources of Broadcast and Cable Television Programming Have Changed 
Little in the Last Decade: 

Stakeholders Cited Economic Factors, Technical Issues, and Legal 
Conditions as Affecting the Availability of Independent Television 
Programming: 

Stakeholders Cited Various Factors as Influencing Programming 
Decisions, Including Format and Playlist Selection, in Commercial and 
Public Radio: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Registered Marks Used in the Report: 

Appendix III: Comments from the Federal Communications Commission: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Glossary of Terms: 

Table 2: Top 10 Radio Station Owners in 2009 and Number of Stations 
Owned in 2007-2009: 

Table 3: Percentage of Format Overlap among Top 10 Radio Station 
Owners in 2009: 

Table 4: Experts and Industry Stakeholders We Contacted: 

Figures: 

Figure 1: Television Programming in Broadcast and Subscription Video 
Service: 

Figure 2: Annual Broadcasting Program Development Process for Scripted 
Programming: 

Figure 3: Percentage of Broadcast Prime Time Program Hours Provided by 
Major Broadcaster-Affiliated Studios and Independent Producers for 
2002, 2005, 2008, and 2009: 

Figure 4: Top Five Owners of Basic Cable Networks and the Number of 
Cable Networks They Have Owned from 1998 to 2008: 

Figure 5: Number of Networks by Ownership Interest in the Top 20 Most 
Widely Distributed Basic Cable Networks: 

Figure 6: Most Popular Formats Nationwide in 2009: 

Figure 7: Most Popular Formats in Arbitron Market 1 (New York) and 
Arbitron Market 3 (Chicago) in 2009: 

Figure 8: Top 10 Formats among Commercial and Public Radio Stations: 

Figure 9: Share of Commercial Radio Stations Owned by Top 10 Radio 
Station Owners for Selected Years: 

Abbreviations: 

BIAfn: Broadcast Investment Analyst Financial Network: 

FCC: Federal Communications Commission: 

MSA: Metropolitan Statistical Area: 

NPR: National Public Radio: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

March 17, 2010: 

The Honorable Patrick J. Leahy: 
Chairman: 
Committee on the Judiciary: 
United States Senate: 

The Honorable Herbert Kohl: 
Chairman:
Subcommittee on Antitrust, Competition Policy, and Consumer Rights: 
Committee on the Judiciary: 
United States Senate: 

The Honorable Byron L. Dorgan: 
United States Senate: 

The media industry plays an important role in educating and 
entertaining the public. Given this vital role, the ownership of media 
outlets and the availability of diverse programming in the media have 
been a long-standing concern of Congress. One such concern, in 
particular, is that with consolidation in the media industry, the 
percentage of independently produced programming content on media 
outlets has decreased, thus limiting the number of distinct media 
voices and selection choices for the public. [Footnote 1] In 1995, the 
Federal Communications Commission (FCC) repealed the Financial- 
Syndication Rules, thereby allowing broadcast networks to have 
ownership interests in television programs during prime time.[Footnote 
2] In addition, the Telecommunications Act of 1996, among other 
things, directed FCC to conduct a rulemaking to evaluate local limits 
of ownership in television and relaxed the ownership limits in local 
radio stations, leading to consolidation in some segments of the media 
industry.[Footnote 3] For example, prior to the act, the largest radio 
station owner owned fewer than 65 radio stations, whereas in 2009, the 
largest radio station owner owned over 800 stations, raising concerns 
about the variety of programming available on the radio. Although the 
current media environment provides the public with numerous 
programming choices in television and radio, and over the Internet, 
some media industry stakeholders and studies have reported that 
independently produced programming has decreased through the years as 
a result of media consolidation. 

You requested that we study the state of programming for television 
and radio and the factors influencing programming decisions. As such, 
we reviewed (1) the extent to which the sources of programming in 
television have changed over the last decade, (2) the factors and 
conditions industry stakeholders identified as affecting the 
availability of independent programming in television, and (3) the 
factors industry stakeholders identified as influencing programming 
decisions in radio. 

To determine the extent to which the sources of programming in 
television have changed during the last decade, we analyzed available 
data on two key sources of television programming--companies producing 
prime time television programs for major broadcast networks[Footnote 
4] and companies with basic cable network[Footnote 5] ownership 
interests over the last decade. We focused on programs broadcasted on 
prime time because that is the block of time on television with 
generally the most viewers, and in turn these programs generate the 
most advertisement revenue for networks.[Footnote 6] To determine 
which companies produced prime time broadcast television programming, 
we classified prime time programs into two categories: (1) programs 
produced by major broadcasters, and (2) programs produced by 
independent production companies not affiliated with a major 
broadcaster (independent producers). Because annual data that track 
program production in these categories are limited, we analyzed the 
fall prime time schedules in 2002, 2005, 2008, and 2009 and classified 
them in the two categories. We selected these years based on available 
data from FCC's previous study that contained data in the two 
categories for 2002. We then conducted our analysis for every third 
year and classified the programs into the two categories. We also 
analyzed the 2009 fall prime time schedule to provide the most current 
data available. Since basic cable networks are also a source of 
television programming, we analyzed the ownership of those networks as 
an indicator of which entities control the television programming on 
the networks. Specifically, we used data from SNL Kagan to determine 
the types and the number of companies with ownership interests in 
basic cable networks that were available from 1998 to 2008, and the 
companies that owned the largest number of basic cable networks during 
this period.[Footnote 7] Of the 20 most widely distributed basic cable 
networks, as measured by the number of subscribers for each year from 
1998 to 2008, we determined how many were affiliated with major 
broadcasters, cable operators, and other media companies and how many 
were unaffiliated independent cable networks. 

To determine the factors industry stakeholders identified as affecting 
the availability of independent programming in television, and as 
influencing programming decisions in radio, we met with FCC officials 
and interviewed or obtained written comments from selected academic 
experts and industry stakeholders and associations, including 
representatives from broadcasting (such as ABC and Fox), cable and 
satellite (such as Comcast and DirecTV), commercial and public radio 
(such as Clear Channel Communications and National Public Radio), 
independent programming groups (such as Future of Music Coalition and 
Independent Film and Television Alliance), and public interest groups 
(such as Consumers Union and Free Press). See appendix I for a 
complete list of academic experts and industry stakeholders we 
contacted. We selected experts and industry stakeholders based on 
published studies, representation of the different segments of the 
media (i.e., broadcast and cable televisions and radio), and 
recommendations from other industry stakeholders; we intended to 
obtain diverse views and did not weight views of the experts and 
stakeholders but grouped similar stakeholders that represent a segment 
of the media industry. We also reviewed the relevant laws, 
regulations, and literature, including comments filed by stakeholders 
in various FCC proceedings. Additionally, for radio, we focused on 
radio station formats indicating the types of programming a station 
might play.[Footnote 8] To conduct this analysis, we obtained 
historical data on the distribution of radio stations by their primary 
formats nationwide and in local markets from 1999 to 2003 and station-
level format data from the Broadcast Investment Analyst Financial 
Network's (BIAfn) Media Access Pro Database for commercial and public 
radio stations from 2004 to 2009. Although the BIAfn format data 
provide a general overview of the type of programming aired on a given 
radio station, they do not identify specific programming content that 
is played on the station. We did not assess independently produced 
programming on radio because a national playlist database identifying 
record label affiliation is not available. We analyzed the format data 
to determine programming variety and distribution of radio stations by 
their format nationwide and in two selected local markets in 2009. 
[Footnote 9] For local markets, we selected New York and Chicago 
because they are similar in size with different demographic 
populations. We also examined 2009 format data for commercial and 
public radio stations and identified the top 10 most popular formats 
(based on the number of stations with the particular formats 
available) for each group nationwide.[Footnote 10] To examine the 
extent of programming variety among radio stations, we selected the 
top 10 radio station owners--that is, owners who own the most radio 
stations nationwide--and examined similarities and differences in 
formats for each owner's radio stations in the same market. To 
identify the top 10 radio station owners in 1996-1998, 2000-2002, 
2007, and 2009 we used data from FCC reports and the BIAfn database. 
The top 10 radio station ownership data were not available in 2003-
2006 and 2008. We also reviewed studies on radio programming for 
information on radio station playlists and the extent to which 
playlists for each owner's radio stations overlap in the same market. 
We determined that the television and radio data we obtained were 
sufficiently reliable for the purposes of this report. 

We conducted our work from May 2009 to March 2010 in accordance with 
all sections of GAO's Quality Assurance Framework that are relevant to 
our objectives. The framework requires that we plan and perform the 
engagement to obtain sufficient and appropriate evidence to meet our 
stated objectives and discuss any limitations in our work. We believe 
that the information and data obtained, and the analysis conducted, 
provide a reasonable basis for any findings and conclusions in this 
product. Appendix I contains a more detailed discussion of our 
objectives, scope, and methodology. 

Background: 

The media industry has its own terminology, and the following glossary 
provides the definition of terms used throughout this report: 

Table 1: Glossary of Terms: 

Term: Basic cable network; 
Definition: An organization that may produce television programs, 
which are distributed to the public through a subscription video 
service. 

Term: Independent cable network; 
Definition: An organization that is not affiliated with major 
broadcasters, cable operators, or satellite providers. 

Term: Radio station format; 
Definition: Type of programming content on a radio station, such as 
Adult Contemporary, Country, Jazz, News and Information, Sports, Talk, 
and so forth. 

Term: Public radio stations; 
Definition: Locally owned and operated stations that receive some or 
all of their funding from listener contributions, the federal 
government, or other sources. Some public radio stations are 
affiliated with National Public Radio, which is a national radio 
service that provides station programming content. 

Term: Multichannel video programming distributors (referred to as 
video providers in this report); 
Definition: Entities such as a cable operator, a direct broadcast 
satellite service, or telecommunications company that distributes 
video programming to subscribers for a subscription fee. 

Term: Scripted programming; 
Definition: Programs that are developed based on written scripts by 
writers and producers and include different program genres, including 
comedy and drama. 

Term: Nonscripted programming; 
Definition: Programs that are not based on written scripts, such as 
reality programs, game shows, and sports. 

Term: Arbitron radio market; 
Definition: A geographically contiguous area in which the listenership 
of radio stations is surveyed for ratings by Arbitron Inc. 

Source: GAO based on FCC and industry information. 

[End of table] 

Typically, the general public views television programming through 
broadcast or subscription video service. Broadcast television provides 
free over-the-air programming to the public through local television 
stations. By contrast, consumers pay fees for subscription video 
service to video providers, including cable operators, satellite 
providers, or telecommunications companies. Programming for broadcast 
and subscription video service differs, as illustrated in figure 1. 

Figure 1: Television Programming in Broadcast and Subscription Video 
Service: 

[Refer to PDF for image: illustration] 

Broadcast television: 
* Program producers: Studios, producers, writers, and actors; 
* Major broadcast networks: ABC, CBS, FOX, and NBC; 
* Local television stations: 
- Network-affiliated stations; 
- Unaffiliated stations; 
* Consumers. 

Subscription video service: 
* Program producers: Studios, producers, writers, and actors; 
* Cable networks: Includes basic networks such as ESPN, MTV, 
Discovery, and other networks; 
* Multichannel video programming distributors (includes Major 
broadcast networks and local television stations): 
- Cable operators, such as Comcast, Time Warner; 
- Satellite providers: DirecTV and DISH Network; 
- Telecommunications companies, such as AT&T U-verse and Verizon FiOS; 
* Consumers. 

Source: FCC and GAO. 

[End of figure] 

Broadcast television consists mainly of four major broadcast networks 
(ABC, CBS, Fox, and NBC) and several smaller networks, such as the CW 
Television Network, MyNetworkTV, and ION Television. Each of the four 
major broadcasters owns and operates some local television stations; 
other stations can be affiliated with one of the major broadcasters 
or, as is the case with public television, unaffiliated with the major 
broadcasters.[Footnote 11] The four major broadcasters provide 
scripted and nonscripted programming to the local television stations 
that is produced either by the major broadcasters' affiliated 
production companies or by independent producers. The development 
process of scripted programs (i.e., drama and comedy series) for prime 
time programming involves steps that allow major broadcasters to 
periodically assess the program as it develops, as described in figure 
2. 

Figure 2: Annual Broadcasting Program Development Process for Scripted 
Programming: 

[Refer to PDF for image: illustration] 

Producers, writers, and actors pitch ideas to major broadcasters: 
* Approximately from June through November, each broadcaster gets 
"pitched" with about 250-400 drama and 250-400 comedy program ideas. 
In total, about 2,000 programming ideas are pitched to the 
broadcasters. 

Major broadcasters order scripts: 
Each broadcaster will order between 40 and 75 comedy and 60 to 80 
drama pilot scripts. Pilot scripts are delivered from November through 
January. 

Major broadcasters order pilot program: 
Each broadcaster will order between 10 and 15 pilot comedies and 8-12 
pilot dramas. Around mid-April, pilots are delivered to the 
broadcasters. 

Major broadcasters select programs after screening pilots: 
Each broadcaster will select about 6 or 7 comedies and 6 or 7 dramas 
for series production for the fall season lineup. 

Major broadcasters present fall lineup schedule to advertisers in May: 
Advertisers select the programs during which they want to air 
commercials and purchase time slots from the broadcasters. 

Source: GAO analysis of major broadcasters’ data. 

[End of figure] 

In contrast, the development process for nonscripted programs, such as 
reality programs and game shows, does not involve most of the steps 
shown in figure 2. Scripts and pilots do not need to be developed for 
nonscripted programs, making them less expensive to produce than 
scripted programs. 

For subscription video service, video providers obtain a variety of 
programming from both broadcasters (which can include major networks 
and local stations) and cable networks.[Footnote 12] Video providers 
must negotiate with broadcasters and cable networks to air and 
distribute their programming. Negotiations include the price, terms, 
and conditions for distribution on the video providers' systems. Video 
providers have the discretion to select which cable networks will be 
available and, subject to negotiation, how they will be packaged and 
marketed to subscribers.[Footnote 13] According to a recent FCC 
report, more than 500 cable networks exist, including national cable 
networks (such as CNN, Discovery Channel, ESPN, and Fox News) as well 
as regional cable networks (such as the California Channel, Comcast 
SportsNet Chicago, and the YES Network). Cable networks can provide 
niche programming--that is, programming that targets specific 
demographics. For instance, Lifetime Network offers programming that 
specifically targets women, while MTV Network targets programming for 
the 18-to-34 age demographic. 

The general public receives radio programming through commercial and 
public radio stations. Over the last 5 years, the number of full-power 
radio stations has increased from 13,590 in 2005 to over 14,600 in 
2009, with the vast majority of these stations being commercial (78 
percent, or 11,430 stations) and the remainder being public (22 
percent, or 3,198 stations).[Footnote 14] Following passage of the 
Telecommunications Act of 1996, concentration in radio station 
ownership increased significantly because of the act's relaxation of 
national and local multiple radio ownership limits.[Footnote 15] For 
example, in 1996, the two largest radio station owners held fewer than 
65 radio stations each. By contrast, as of 2009, Clear Channel 
Communications Inc. owned over 800 radio stations (down from 1,135 in 
2007), and the second largest group owner, Cumulus Broadcasting LLC, 
owned about 300 radio stations (see table 2).[Footnote 16] In 2009, 
the top 10 radio station owners owned 20 percent of all commercial 
radio stations. In addition, each radio station has a primary 
programming format designation that describes the programming content 
on that station. For example, in 2009, radio station KQSD in Lowry, 
South Dakota's, primary format was Classical, its secondary format was 
News, and its tertiary format was Jazz. As such, the station primarily 
plays Classical music, but it also provides some news and plays some 
Jazz. 

Table 2: Top 10 Radio Station Owners in 2009 and Number of Stations 
Owned in 2007-2009: 

Radio station owners: Clear Channel Communications Inc.; 
2007: 1,135; 
2008: 694; 
2009: 847. 

Radio station owners: Cumulus Broadcasting LLC; 
2007: 306; 
2008: 306; 
2009: 305. 

Radio station owners: Educational Media Foundation; 
2007: 180; 
2008: 205; 
2009: 253. 

Radio station owners: Citadel Communications; 
2007: 212; 
2008: 204; 
2009: 205. 

Radio station owners: American Family Association Inc.; 
2007: 126; 
2008: 130; 
2009: 137. 

Radio station owners: CBS Radio; 
2007: 140; 
2008: 140; 
2009: 134. 

Radio station owners: Entercom; 
2007: 120; 
2008: 115; 
2009: 112. 

Radio station owners: Salem Communications Corporation; 
2007: 98; 
2008: 97; 
2009: 93. 

Radio station owners: Saga Communications Inc.; 
2007: 89; 
2008: 91; 
2009: 91. 

Radio station owners: Cox Radio Inc.; 
2007: 79; 
2008: 79; 
2009: 85. 

Source: GAO analysis of BIAfn data. 

[End of table] 

FCC awards licenses to television and radio stations to use the 
airwaves expressly on the condition that licenses serve the public 
interest and licensees are responsive to the needs of its local 
community. Toward this end, FCC has long identified localism, 
competition, and diversity as its three core goals of media policy. 
Within this framework, FCC has considered the public interest best 
served by promoting free expression of diverse views and has promoted 
program diversity by limiting the number of broadcast outlets any one 
entity may own. As such, individual radio and television stations 
generally have discretion to select programming and to determine how 
best to serve the local community audience. 

Since the mid-1990s, FCC has amended or repealed a number of rules and 
regulations affecting the media industry. In 1995, FCC repealed the 
Financial Interest and Syndication Rules (Fin-Syn rules)[Footnote 17] 
so that a major broadcaster can own programming that it airs during 
prime time hours, as well as own syndication rights to programs 
purchased from independent producers.[Footnote 18] Following the 
repeal of the Fin-Syn rules, each of the four major broadcasters 
merged with, or acquired an ownership interest in, at least one major 
production studio. For instance, the Walt Disney Company acquired ABC 
and developed ABC Television Studio; CBS became affiliated with the 
studio Paramount Television; and NBC merged with Universal Pictures. 
In addition, News Corporation--which launched the Fox Broadcasting 
Network in 1986--owns several production studios, including 20th 
Century Fox. FCC is required to review media ownership rules every 4 
years and determine whether those rules are necessary in the public 
interest.[Footnote 19] 

Although FCC regulates television primarily through ownership rules 
and station licensing, some of its other rules also affect aspects of 
television programming. Some of the key rules that affect programming 
and carriage were adopted in 1992 and are summarized below.[Footnote 
20] 

* Retransmission consent and must carry rules.[Footnote 21] Under 
these rules, every 3 years local commercial television stations 
(including those owned and operated by the major broadcasters) must 
decide whether to negotiate individual retransmission consent 
agreements with each cable operator in its designated market area for 
compensation in exchange for the cable operator's right to carry the 
broadcast signal.[Footnote 22] In lieu of negotiation, stations may 
elect to require each cable operator in its designated market area to 
carry its signal (i.e., must carry), without receiving compensation 
for such carriage. 

* Program carriage rule.[Footnote 23] This rule prevents a video 
provider from requiring a financial interest in programming or 
coercing a programmer (i.e., cable network) to grant exclusive rights 
as a condition for carriage, or from discriminating against an 
independent cable network in a way that unreasonably restrains the 
ability of the network to compete. 

* Commercial leased access rule.[Footnote 24] Under this rule, cable 
operators are required to set aside a certain number of channels, 
depending on the size of the cable system, that can be leased out to 
independent cable networks for access on its distribution system. 
[Footnote 25] Congress has required FCC to (1) determine the maximum 
reasonable rates that a cable operator may establish for commercial 
use of the designated channels; (2) establish reasonable terms and 
conditions for such use, including those for billing and collections; 
and (3) establish procedures for the expedited resolution of disputes 
concerning rates or carriage.[Footnote 26] 

Sources of Broadcast and Cable Television Programming Have Changed 
Little in the Last Decade: 

Major Broadcasters and Their Affiliated Studios Have Produced the 
Majority of Broadcast Prime Time Programming: 

Major broadcasters and their affiliated studios have produced the 
majority of broadcast prime time programming in each of the selected 
years that we analyzed. In particular, major broadcaster-affiliated 
studios produced from 76 to 84 percent of broadcast prime time 
programming hours, with the remaining hours coming from independent 
producers. As shown in figure 3, in most of the years that we 
reviewed, the share of major broadcaster-produced prime time programs 
did not change significantly. However in 2008, the prime time 
programming from independent producers increased slightly compared 
with such programming in 2005. 

Figure 3: Percentage of Broadcast Prime Time Program Hours Provided by 
Major Broadcaster-Affiliated Studios and Independent Producers for 
2002, 2005, 2008, and 2009: 

[Refer to PDF for image: vertical bar graph] 

Selected year: 2002; 
Percentage of broadcast prime time program hours, Major broadcaster-
affiliated studios: 86%; 
Percentage of broadcast prime time program hours, Independent: 14%. 

Selected year: 2005; 
Percentage of broadcast prime time program hours, Major broadcaster-
affiliated studios: 82.2%; 
Percentage of broadcast prime time program hours, Independent: 17.8%. 

Selected year: 2008; 
Percentage of broadcast prime time program hours, Major broadcaster-
affiliated studios: 76.3%; 
Percentage of broadcast prime time program hours, Independent: 23.7%. 

Selected year: 2009; 
Percentage of broadcast prime time program hours, Major broadcaster-
affiliated studios: 82.5%; 
Percentage of broadcast prime time program hours, Independent: 17.5%. 

Source: GAO analysis of data from FCC Media Ownership Working Group 
Report and International Television & Video Almanac used by permission 
from Quigley Publishing Company. 

Note: For each of the selected years, the independent category 
includes studios, regardless of their size, that were not affiliated 
with a major broadcaster. For example, Universal Television Studios 
merged with NBC in 2004; therefore it was included in the independent 
category in 2002 and in the broadcaster category in the other selected 
years. Sony Pictures Television Studio is not affiliated with a major 
broadcaster, so it is included in the independent category for shows 
it produced in the selected years. 

[End of figure] 

For the fall 2009 broadcast prime time schedule, the top five program 
producers as measured in prime time program hours were studios 
affiliated with ABC, CBS, Fox, NBC, and Warner Bros.[Footnote 27] 
These producers provided approximately 76 total programs, amounting to 
about 82 percent, in the fall prime time schedule. We identified 11 
prime time programs that fell into the independent producer category 
for the fall 2009 prime time schedule. Of those, Sony Pictures 
Television Studio produced 3 programs, and eight other independent 
producers each supplied a program. Although most of the programs 
produced during the years we reviewed were affiliated with major 
broadcasters, a previous FCC-commissioned study indicated that the 
number and affiliation of prime time programming producers has changed 
significantly since the repeal of the Fin-Syn rules in 1995.[Footnote 
28] The study found that in 1995, the top five program producers 
provided about 54 percent of prime time programming, with three 
producers affiliated with a major broadcaster. 

Numerous Companies Own Cable Networks, but Major Broadcasters and 
Their Affiliated Companies Have Continued to Own about Half of the 
Most Widely Distributed Cable Networks: 

Since basic cable networks are also a source of television 
programming, we analyzed the ownership of those networks as an 
indicator of which entities control the television programming on the 
networks. On the basis of our analysis of ownership interests over the 
last decade, we found that a number of companies have ownership 
interests in a basic cable network (cable network), but a much smaller 
group of companies have ownership interests in 5 or more such 
networks.[Footnote 29] From 1998 to 2008, 94 companies on average have 
owned an interest in at least 1 cable network. The number of companies 
has declined somewhat over time, however, from a high of 106 companies 
in 1998 to a low of 81 companies in 2008.[Footnote 30] Cable network 
owners include owners of major broadcasters, such as News Corporation, 
which owns Fox, and Walt Disney Company, which owns ABC; cable 
operators, such as Comcast and Cablevision; owners of major 
publications and television stations, such as Tribune Company and 
Hearst Corporation; and other media companies, such as Liberty Media 
Corporation and Scripps Networks Interactive. On the basis of our 
analysis of all the companies with cable network ownership interests 
from 1998 to 2008, we found a range of 11 to 13 companies that owned 
an interest in 5 or more networks in at least 1 year. Of these 
companies, we found a range of 5 to 7 companies that owned at least 12 
cable networks over the decade. As shown in figure 4, the number of 
basic cable networks owned by these top 5 companies has not changed 
significantly over the last 11 years. 

Figure 4: Top Five Owners of Basic Cable Networks and the Number of 
Cable Networks They Have Owned from 1998 to 2008: 

[Refer to PDF for image: stacked vertical bar graph] 

Number of cable networks: 

Year: 1998; 
Walt Disney Company: 21; 
Viacom Inc.: 23; 
News Corporation: 17; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 12; 
Total: 89. 

Year: 1999; 
Walt Disney Company: 21; 
Viacom Inc.: 23; 
News Corporation: 17; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 13; 
Total: 90. 

Year: 2000; 
Walt Disney Company: 21; 
Viacom Inc.: 27; 
News Corporation: 17; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 13; 
Total: 94. 

Year: 2001; 
Walt Disney Company: 22; 
Viacom Inc.: 26; 
News Corporation: 14; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 14; 
Total: 92. 

Year: 2002; 
Walt Disney Company: 22; 
Viacom Inc.: 26; 
News Corporation: 14; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 14; 
Total: 92. 

Year: 2003; 
Walt Disney Company: 22; 
Viacom Inc.: 26; 
News Corporation: 13; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 14; 
Total: 91. 

Year: 2004; 
Walt Disney Company: 22; 
Viacom Inc.: 26; 
News Corporation: 13; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 14; 
Total: 91. 

Year: 2005; 
Walt Disney Company: 22; 
Viacom Inc.: 26; 
News Corporation: 13; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 14; 
Total: 91. 

Year: 2006; 
Walt Disney Company: 20; 
Viacom Inc.: 26; 
News Corporation: 13; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 14; 
Total: 89. 

Year: 2007; 
Walt Disney Company: 20; 
Viacom Inc.: 26; 
News Corporation: 13; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 13; 
Total: 88. 

Year: 2008; 
Walt Disney Company: 20; 
Viacom Inc.: 26; 
News Corporation: 13; 
Hearst Corporation: 16; 
Discovery Communications Inc.: 13; 
Total: 88. 

Source: GAO analysis of SNL Kagan data. 

Note: The top owners were determined using company names presented in 
data obtained from SNL Kagan. For example, for 2008, the data indicate 
that NBC Universal had an ownership interest in 7 basic cable networks 
and General Electric (GE) had an ownership interest in 11 cable 
networks. Although GE is a parent company of NBC Universal, this 
analysis does not attribute ownership interest in the 7 NBC Universal- 
owned cable networks to GE. In 2008, the total number of cable 
networks with either a GE or NBC Universal affiliation totaled 18. 

[End of figure] 

Viacom and Walt Disney Company had ownership interests in the most 
cable networks over the last decade, with each owning more than 20 
networks in each year. None of the top five owners has increased the 
number of cable networks owned since 2001. In 2008, these top five 
companies owned about half of basic cable networks. 

We analyzed ownership of the 20 most widely distributed basic cable 
networks, as measured by the number of subscribers for each year from 
1998 to 2008 (referred to as top 20 cable networks). On the basis of 
our analysis, we found major broadcasters and companies affiliated 
with both major broadcasters and cable operators combined owned 50 
percent or more of the top 20 networks. As shown in figure 5, the 
number of major broadcaster-owned top 20 cable networks ranged from 6 
in 1998 to a high of 12 in 2004 before declining to 8 cable networks 
in 2008. The number of top 20 cable networks owned by companies 
affiliated with both major broadcasters and cable operators remained 
relatively steady during the decade at 3 to 4. Cable operators without 
a broadcast company affiliation owned 5 of the top 20 cable networks 
in 1998, but this number declined over time and was zero in 2007 and 
2008. 

Figure 5: Number of Networks by Ownership Interest in the Top 20 Most 
Widely Distributed Basic Cable Networks: 

[Refer to PDF for image: stacked vertical bar graph] 

Number of cable networks: 

Year: 1998; 
Major broadcaster: 6; 
Major broadcaster and cable operator: 4; 
Cable operator: 5; 
Other: 5; 
Total: 20. 

Year: 1999; 
Major broadcaster: 7; 
Major broadcaster and cable operator: 3; 
Cable operator: 5; 
Other: 5; 
Total: 20. 

Year: 2000; 
Major broadcaster: 9; 
Major broadcaster and cable operator: 4; 
Cable operator: 5; 
Other: 2; 
Total: 20. 

Year: 2001; 
Major broadcaster: 9; 
Major broadcaster and cable operator: 4; 
Cable operator: 5; 
Other: 2; 
Total: 20. 

Year: 2002; 
Major broadcaster: 10; 
Major broadcaster and cable operator: 4; 
Cable operator: 3; 
Other: 3; 
Total: 20. 

Year: 2003; 
Major broadcaster: 11; 
Major broadcaster and cable operator: 4; 
Cable operator: 3; 
Other: 1; 
Total: 20. 

Year: 2004; 
Major broadcaster: 12; 
Major broadcaster and cable operator: 4; 
Cable operator: 2; 
Other: 2; 
Total: 20. 

Year: 2005; 
Major broadcaster: 9; 
Major broadcaster and cable operator: 4; 
Cable operator: 2; 
Other: 5; 
Total: 20. 

Year: 2006; 
Major broadcaster: 7; 
Major broadcaster and cable operator: 4; 
Cable operator: 2; 
Other: 7; 
Total: 20. 

Year: 2007; 
Major broadcaster: 7; 
Major broadcaster and cable operator: 4; 
Cable operator: 0; 
Other: 9; 
Total: 20. 

Year: 2008; 
Major broadcaster: 8; 
Major broadcaster and cable operator: 4; 
Cable operator: 0; 
Other: 8; 
Total: 20. 

Source: GAO analysis of SNL Kagan data. 

Note: We categorized owners that had an ownership interest in a top 20 
basic cable network into four categories: major broadcaster, both 
major broadcaster and cable operator (or satellite provider), cable 
operator (or satellite provider), and other. Basic cable network 
owners that fell into the "other" category were generally those that 
could not be identified with the three other categories and included 
independent cable networks. 

[End of figure] 

In 2008, the last year of our analysis of ownership of the top 20 
cable networks, we found 8 cable networks that were affiliated with 
major broadcasters. For example, 2 top 20 cable networks, ABC Family 
Channel and Disney Channel, are owned by Disney, a company that also 
owns the ABC broadcast network. Four networks in the top 20 were 
affiliated with both major broadcasters and cable operators. For 
example, in 2008, CNN, TBS, and TNT were owned by Time Warner, a 
company affiliated with cable operator Time Warner Cable, broadcaster 
CW Television Network, and television production studio Warner Bros. 
[Footnote 31] In addition, 8 networks in the top 20 fell in the 
"other" category for 2008, because they did not appear to have a 
direct affiliation with a major broadcaster, cable operator, or 
satellite provider. Some of the networks in this category, including 
the Food Network and HGTV network, which are owned by Scripps 
Networks, could be identified as independent networks. Other cable 
networks identified as independent networks in other studies, such as 
the Hallmark Channel and the NFL Network, did not fall into the top 20 
cable networks by subscribership in 2008 or in previous years, so they 
were not included in our analysis. 

Combining ownership in both prime time broadcast programming and 
widely distributed basic cable networks, the major broadcasters have 
had an interest in a significant share of television programming over 
the last decade. Independent producers have been a source for a 
smaller share of prime time broadcast programming. Cable operators 
without a major broadcaster affiliation are not a source of prime time 
broadcast network programming,[Footnote 32] and over the last decade 
their interest in the top 20 most widely distributed basic cable 
networks has decreased. However, they make programming decisions for 
the cable networks they own and determine which cable networks will be 
carried on their cable distribution systems. FCC annually reports on 
cable network programming variety and ownership as part of its video 
competition report, but the report does not assess the extent to which 
the sources of programming affect variety in television and selection 
choices for the public. 

Stakeholders Cited Economic Factors, Technical Issues, and Legal 
Conditions as Affecting the Availability of Independent Television 
Programming: 

In Broadcast Television, Economic Factors Influence the Availability 
of Independent Programming: 

Industry stakeholders we interviewed stated that the high cost of 
developing, producing, and distributing television programs is a 
significant factor that affects the availability of independent 
programming in broadcast television. According to television broadcast 
executives and representatives of independent producers, developing 
and producing broadcast television programs is costly and financially 
risky. For example, one report estimated that major broadcasters spent 
about $120 million for the 1997-1998 season to develop 49 drama pilots 
and used 14 in their schedules, of which 1 program returned for a 
second season.[Footnote 33] Moreover, according to television 
broadcast executives, once programming is developed, the costs to 
produce a scripted drama or comedy program range from about $21 
million to $48 million for 21 program episodes per season, with no 
guarantee that a program will continue to be produced for another 
season.[Footnote 34] 

Producers need to sell their program ideas to major broadcasters and 
secure financing to cover the costs of developing and producing 
scripted television programs. Because of their large size and access 
to capital, major broadcaster-affiliated studios and other large 
unaffiliated studios often have the ability to finance development and 
production costs.[Footnote 35] However, representatives of independent 
producers stressed that it is difficult for them to obtain financing 
for development and production costs, and oftentimes they must secure 
financing through the major broadcaster-affiliated studios. The 
independent producers said since major broadcasters have the ability 
to finance production costs and make programming decisions, it results 
in seven or eight companies controlling a significant portion of the 
program content on television. 

When selecting programming for prime time, television broadcast 
executives told us that they strive to air programming that will 
achieve high ratings. Advertisers will generally pay more for programs 
that achieve higher ratings, and since major broadcasters rely on 
advertising revenue, it is in their financial interest to select 
programs that will accrue the high level of audience that drives 
advertising revenue. Television broadcast executives and an academic 
expert we contacted stated that they also consider quality for prime 
time programming, and not necessarily the source of programming (i.e., 
whether the program was produced by an independent producer or an 
affiliated production studio).[Footnote 36] They said quality 
programming will attract the largest share of viewers, which in turn, 
drives advertising revenue. Further, they stated that since 
advertisers spend less overall during times of economic downturn and 
have multiple choices for their advertising dollars (such as on cable 
television and the Internet), it is all the more essential to have 
quality programming to attract the advertisers. 

While television broadcast executives said that it is the quality, not 
the source, of programming that influences the selection of prime time 
programming, major broadcasters are, nevertheless, financially 
invested in the affiliate-produced programs and stand to gain 
additional profits if the affiliated programming makes it to 
syndication. Consequently, some stakeholders said broadcasters might 
choose their own programming over that of independent producers. In 
particular, according to an academic expert and representatives of 
independent producers, if both major broadcaster-affiliated studios 
and an independent producer offer similar genre and programming 
content to a major broadcaster, the major broadcaster will select the 
program from its affiliated studio over an independent producer 
because of these financial interests. As we previously noted, major 
broadcaster-affiliated studios (5 companies) produced 82 percent of 
prime time programming in the fall 2009 prime time schedule. While 
independent producers most likely would be unable to produce and 
distribute programming without some financial arrangements with major 
broadcasters, they said working under the major broadcasters' control 
could cause them to lose creative control of the program's content, 
with the writing of the program being directed by the studio bearing 
the financial risk of production. For example, an independent producer 
cited the replacement of a writer for CBS's The Education of Max 
Bickford, a drama on the major broadcaster's 2001 prime time schedule, 
when creative differences arose with the major broadcaster that owned 
the program. 

In Cable Television, Economic Factors, Finite Capacity, and Federal 
Law Affect Network Carriage: 

For carriage on cable television, stakeholders cited (1) economic 
factors, (2) finite capacity, and (3) federal law as affecting 
carriage of new independent networks. 

Economic factors. Representatives of independent networks and some 
video providers said economic factors affect carriage of new 
independent networks and their programming. According to video 
providers, it is difficult to determine the cost and value of new 
independent networks and how many subscribers will be gained based on 
concepts and business plans of unproven independent networks. 
Representatives of independent networks we contacted and a study we 
reviewed indicated that a new network usually faces considerable 
uncertainty as to whether it will be distributed by a sufficient 
number of video providers to make its operations viable. Similarly, an 
academic study indicates that for new networks, there is a high cost 
to sustaining operations while attracting a sufficient number of video 
providers and their subscribers.[Footnote 37] For instance, one report 
stated that cable network Fox News Network had invested over $150 
million by the time it launched in 1996, but it was expected to lose 
up to $400 million in the next 5 years.[Footnote 38] Representatives 
of independent networks told us that it is difficult to obtain 
financing for a new cable network because commercial banks want a 
network to secure carriage with a major cable company, such as 
Comcast, before extending financing to it. 

By contrast, cable networks developed by cable operators, major 
broadcasters, or other media companies are generally more able to 
finance the development of affiliated networks over new independent 
networks. As our analysis indicated, major broadcasters and their 
affiliated companies owned at least half of the most widely 
distributed cable networks. Basic cable networks that are affiliated 
with cable operators, major broadcasters, or other media companies can 
negotiate carriage of an affiliated cable network as part of an 
agreement for carriage of an established affiliated network. For 
example, the Walt Disney Company owns ESPN, SoapNet, and ABC Family 
cable networks, along with ABC. According to representatives of small 
cable operators, during the course of negotiating for carriage for 
ESPN, they must also carry ESPN's spin-off cable networks, including 
ESPN2 and ESPNEWS. In another example, a new cable network--Wedding 
Central--that is affiliated with cable operator Cablevision was 
launched in August 2009 on its distribution system. 

Finite capacity. Stakeholders also cited finite capacity in cable 
system infrastructure of some video providers as a technical issue 
that affects selection and availability of independent programming. 
Representatives of video providers we contacted commented that 
although their overall capacity to carry television programs has 
expanded with advanced technology, it remains finite. Because cable 
operators and telecommunications companies offer a wide array of 
services over their broadband networks, they must determine how to 
allocate their systems' capacity among these multiple services. 
[Footnote 39] Representatives of cable operators and television 
broadcast executives told us that adding another cable network--
independently produced or otherwise--when more than 75 already exist 
in basic cable, might not be considered the most efficient use of 
cable operators' resources and capacity. For example, given the demand 
for high-speed Internet services, cable operators told us they want to 
ensure they are using the finite capacity of their systems efficiently 
to be able to meet that demand. 

Despite the constraints on capacity in the cable system 
infrastructure, representatives of video providers and television 
broadcast executives we spoke with noted that alternative distribution 
platforms, such as online video streams, have provided more outlets 
and opportunities for independent programming. For instance, in 2007, 
two independent producers produced a television drama called 
Quarterlife, which was aired on the social network Web site 
MySpace.com. On the other hand, television broadcast executives and 
representatives of independent producers we contacted commented that 
although the Internet provides the opportunity for distribution of 
independent programming, it does not translate to success with regard 
to attracting the number of viewers that television offers. 

Federal law. Stakeholders cited, and studies have reported, that FCC 
rules and regulations implementing certain federal statutes can also 
influence programming decisions. 

* Retransmission issues.[Footnote 40] As we previously mentioned, 
representatives of some video providers stated that the business 
practice of bundling networks--meaning that certain networks are sold 
as a package with broadcast networks rather than being sold 
individually--which may occur during negotiations between broadcasters 
(which can include major networks and local stations) and video 
providers for retransmission rights. Such bundling influences video 
providers' carriage decisions and limits their ability to select 
independent programming. In 2004, we reported that because the terms 
of retransmission agreements often include the carriage of major 
broadcaster-owned cable networks, cable operators sometimes carry 
cable networks they otherwise might not have carried.[Footnote 41] 
Representatives of some video providers told us recently that this 
practice also fills their systems' capacity, leaving less capacity for 
independent cable networks and making it difficult for independent 
cable networks to gain carriage. Television broadcast executives, on 
the other hand, commented that negotiations in lieu of invoking the 
retransmission rule may be necessary for them to be fully compensated 
for their content. 

As part of its annual report on the status of competition in the 
delivery of video programming, FCC is currently seeking data and 
analysis on implementation of the retransmission consent rules. 
[Footnote 42] FCC also has a separate proceeding specifically looking 
at revisions to the retransmission consent rules and whether it would 
be appropriate to preclude the practice of programmers tying desired 
programming with undesired programming, such as tying carriage of a 
major broadcaster-owned cable network to retransmission conditions for 
a broadcast signal.[Footnote 43] The comment period for the notice 
closed in December 2007, and FCC officials are currently reviewing 
comments. 

* Program carriage rule.[Footnote 44] Representatives of independent 
cable networks and public interest groups stated that although the 
program carriage rule is needed to promote independent programming, 
FCC criteria for determining discrimination on the basis of 
affiliation are unclear. They told us more precise standards for 
proving discriminatory or exclusionary conduct by cable operators as 
well as the establishment of a time frame for FCC to determine whether 
the complaining independent cable networks have sufficient evidence to 
proceed to a hearing would make the rule more effective. According to 
independent cable network representatives, some independent cable 
networks have waited over a year before FCC determined whether it 
would conduct a hearing. Because the independent cable network is not 
being carried by the defendant cable operator in the interim, some 
independent cable networks can go out of business before a decision is 
made.[Footnote 45] Representatives of cable operators, on the other 
hand, stated that the rule is not necessary because a cable operator's 
decision to reject a network could be based on the program quality and 
similarity of content and not on the ownership of a network. 

* Leased access rule.[Footnote 46] In the case of the leased access 
rule, a public interest group official indicated that this rule has 
not achieved what it was intended to do because the prices for leased 
access were set too high.[Footnote 47] Representatives of cable 
operators explained that the rule forces cable operators to carry 
programming even if they believe the channel does not bring much value 
to the subscribers. Representatives of cable operators cited home 
shopping channels as an example of programming that relies on leased 
access to gain carriage. The rule also affects the cable operators' 
ability to carry other programming because the set-aside channels 
consume capacity that could be used for other programming. Cable 
operators also noted that the rule does not apply to satellite 
providers and their systems. 

Stakeholders Cited Various Factors as Influencing Programming 
Decisions, Including Format and Playlist Selection, in Commercial and 
Public Radio: 

Commercial Radio Stations Largely Make Programming Decisions Based on 
Economic Factors: 

In selecting radio station formats and music playlists, stakeholders 
we interviewed stated that (1) advertisement revenue, (2) cost of 
programming, and (3) market competition are key economic factors that 
influence programming decisions in commercial radio. 

Advertisement revenue. Commercial radio stations are primarily funded 
by advertisement revenue obtained from selling radio time to companies 
seeking to reach specific demographic segments.[Footnote 48] Radio 
station owners and experts told us that when making decisions about 
format and playlist selection, program directors will consider the 
number of listeners that programming will likely attract,[Footnote 49] 
and, in turn, the advertisement revenue they may earn.[Footnote 50] 
The rates that a station obtains for advertising time depend on the 
station's ability to attract listeners within the advertisement 
companies' target demographic segment, the length of the advertisement 
spot, and the size of the market, with larger markets typically 
receiving higher rates than smaller markets. Radio stations compete 
for listeners and advertising revenue with other stations within their 
respective local markets. Consequently, radio stations continuously 
examine their programming content to try to attract an audience that 
is highly desirable to advertisers. In particular, a radio station's 
format enables it to target specific segments of listeners sharing 
demographics that appeal to advertisers. According to a radio industry 
expert, if the advertising market is not interested in reaching the 
specific target audience of a music format, the station will not be 
able to survive economically because it will not be able to gain 
enough ad revenue. Moreover, radio station owners with stations in 
different markets but of the same format can be more effective at 
attracting revenue from advertisers who want to reach a similar 
demographic in multiple markets. 

Cost of programming. Another economic factor that influences 
programming decisions is the cost to produce radio content. For 
example, radio station owners and experts told us that increased costs 
and decreased advertisement revenue over the past decade have led to 
an increase in the use of voice tracking and syndicated programming. 
[Footnote 51] According to radio station owners and experts, voice 
tracking is less costly than producing shows for individual markets, 
and to save programming costs, some stations choose to import 
programming from another market during peak listener times rather than 
hire their own radio personalities. In addition, radio industry 
experts pointed out that historically, stations in small markets have 
generally relied on nationally syndicated programming to bring in 
marketable talent that will allow them to compete with other stations 
in the market. Some stakeholders have expressed concern that voice 
tracking and syndicated programming are replacing local programming 
and therefore the needs and interests of the local community are not 
being reflected by the voice-tracked or syndicated programming. 
However, representatives of radio station owners have stated that 
there is no evidence that voice tracking or syndicated programming 
diminishes localism. For example, one station owner pointed out that 
the value of programming is determined by how strongly it resonates 
with listeners, regardless of where it originates. 

Market competition. Marketplace factors, such as the extent of 
competition in a given market, also affect programming decisions. For 
example, radio station owners stated that when radio station program 
directors are trying to determine a station's format, they will 
consider what formats are currently available in the local market and 
what formats are missing. If there are already stations programmed 
with a popular format in a given market, a radio station will likely 
look to competitively differentiate itself by selecting a format 
targeted toward a demographic that is not currently being served. In 
doing so, a station may also better compete for audiences and 
advertising revenues with other media. 

Experts and representatives of independent producers told us that 
radio station formats have become more specific in recent years in an 
attempt to enable stations to target a specific demographic and 
attract advertisers, and as a result, radio station formats have 
changed over time. According to radio station owners, the number of 
radio station formats has increased. Representatives of radio station 
owners conducted a study examining radio station formats, and found 
that from 2001 to 2005, the number of radio station formats increased 
by 7.5 percent. Station owners have characterized this increase in the 
number of formats as an increase in variety in radio programming. 
However, some experts and representatives of independent producers 
have noted that formats with different names often have similar 
playlists, diminishing real variety among those formats. For example, 
one expert noted that it is very difficult to discern differences in 
playlists between radio formats such as Rock and Light Rock. 

Local Interests Also Affect Programming Decisions in Both Commercial 
and Public Radio Stations: 

Stakeholders stated that in both commercial and public radio, 
programming decisions such as selection of format and music playlists 
are based on the interests of listeners in a given market. Radio 
station owners in both commercial and public radio reported that 
program directors will conduct research related to the demographics 
and preferences of the listeners in their markets to ensure they are 
meeting the needs of their community. In commercial radio, 
understanding the interests of listeners in a given market is 
important for the station to attract a large audience and, as 
previously noted, attract advertising revenue. According to radio 
station owners, program directors are expected to be familiar with 
music interests in their markets and make programming decisions that 
will be successful in reaching an audience within their market. A 
stakeholder also noted that even among similarly formatted radio 
stations, the playlist will vary to meet the needs of the local 
market. For example, the type of country music that is popular in 
Tucson, Arizona, can be very different from popular country music in 
New York City. 

According to our analysis, in 2009, the 10 most common formats across 
all national radio stations included Country, News, Christian, Adult 
Contemporary, Oldies, Sports, Christian Contemporary, Variety, Classic 
Rock, and Talk, as shown in figure 6. 

Figure 6: Most Popular Formats Nationwide in 2009: 

[Refer to PDF for image: vertical bar graph] 

Format: Country; 
Number of stations: 2,029. 

Format: News; 
Number of stations: 1,217. 

Format: Christian; 
Number of stations: 792. 

Format: Adult Contemporary; 
Number of stations: 733. 

Format: Oldies; 
Number of stations: 669. 

Format: Sports; 
Number of stations: 624. 

Format: Christian Contemporary; 
Number of stations: 580. 

Format: Variety; 
Number of stations: 559. 

Format: Classic Rock; 
Number of stations: 526. 

Format: Talk; 
Number of stations: 427. 

Source: GAO analysis of BIAfn data. 

Note: The "Primary Format" field in the BIAfn database was used to 
identity the most popular formats in 2009 and includes data for 14,628 
stations, both in and outside of Arbitron-rated markets, and 
commercial and public stations. Stations designated as multicast 
stations, or having a construction permit, are not included in this 
analysis because multicast stations are available only to listeners 
who have purchased an HD radio and radio stations designated as having 
construction permits are not yet operating. 

[End of figure] 

We found that within selected individual markets, the top radio 
formats differ from the top radio formats nationally, indicating that 
programming decisions are locally based on the preferences and 
interests of listeners within a given market. For example, the most 
popular radio station formats in New York City (the largest Arbitron 
market) include 5 formats not reflected in the top 10 national radio 
formats (Alternative, Spanish, Contemporary Hit Radio, Ethnic, and 
Adult Album Alternative). In addition, we found 19 percent of all 
stations in the New York market were designated as Ethnic and Spanish 
formats compared with 7 percent nationwide, suggesting that 
programming decisions among radio stations in this market reflect the 
demographics and interests in the market.[Footnote 52] By comparison, 
in Chicago, Illinois (the third-largest Arbitron market), we found 
that 11 percent of stations in this market were designated as Ethnic 
and Spanish formats. Furthermore, formats that were among the most 
popular in Chicago but not in New York included Christian, Talk, and 
Rock (see figure 7). 

Figure 7: Most Popular Formats in Arbitron Market 1 (New York) and 
Arbitron Market 3 (Chicago) in 2009: 

[Refer to PDF for image: horizontal bar graph] 

New York: 

Format: News; 
Number of stations: 8. 

Format: Alternative; 
Number of stations: 6. 

Format: Spanish; 
Number of stations: 5. 

Format: Contemporary Hit Radio; 
Number of stations: 4; 

Format: Variety; 
Number of stations: 4. 

Format: Adult Contemporary; 
Number of stations: 4. 

Format: Ethnic; 
Number of stations: 4. 

Format: Adult Album Alternative; 
Number of stations: 3; 

Format: Sports; 
Number of stations: 3. 

Chicago: 

Format: Variety; 
Number of stations: 19. 

Format: News; 
Number of stations: 13. 

Format: Adult Contemporary; 
Number of stations: 9. 

Format: Christian; 
Number of stations: 9. 

Format: Talk; 
Number of stations: 7. 

Format: Ethnic; 
Number of stations: 4. 

Format: Rock; 
Number of stations: 4. 

Source: GAO analysis of BIAfn database. 

Note: Datasets for Arbitron Market 1 (New York) included data for 74 
radio stations and 130 radio stations for Arbitron Market 3 (Chicago). 
Both datasets included commercial and public FM and AM stations. 

[End of figure] 

As is the case in commercial radio, representatives of public radio 
reported that programming decisions are locally based on the 
preferences and interests of listeners within a given market; however, 
they said their community service orientation also influences 
programming decisions. Representatives of public radio explained that 
local public stations select their own formats and determine their own 
audience strategies based on their understanding of local community 
needs, and their role in serving those needs. They also said the cost 
of programming is a final consideration for public radio stations 
after quality-and mission-related factors are considered. In addition, 
representatives of public radio noted that public stations generally 
play music from artists that are signed to small, independent labels. 
[Footnote 53] Independent labels generally seek out a station if the 
station's format includes music similar to that of the labels, and 
will then establish relationships with such stations. On the basis of 
our review of 2009 format data for commercial and public radio 
stations, we found that the top 10 formats in public radio differ from 
the top 10 formats in commercial radio (see figure 8). Only two 
formats (News and Spanish) were among the top 10 formats in both 
commercial and public radio. 

Figure 8: Top 10 Formats among Commercial and Public Radio Stations: 

[Refer to PDF for image: horizontal bar graph] 

Commercial Radio Stations: 

Format: Country; 
Number of stations: 2,014. 

Format: News; 
Number of stations: 962. 

Format: Adult Contemporary; 
Number of stations: 710. 

Format: Oldies; 
Number of stations: 652. 

Format: Sports; 
Number of stations: 622. 

Format: Classic Rock; 
Number of stations: 522. 

Format: Talk; 
Number of stations: 407. 

Format: Hot Adult Contemporary; 
Number of stations: 367. 

Format: Spanish; 
Number of stations: 354. 

Format: Classic Hits; 
Number of stations: 336. 

Public Radio Stations: 

Format: Christian; 
Number of stations: 525. 

Format: Variety; 
Number of stations: 443. 

Format: Christian Contemporary; 
Number of stations: 417. 

Format: Classical; 
Number of stations: 255. 

Format: News; 
Number of stations: 255. 

Format: Religion; 
Number of stations: 244. 

Format: National Public Radio (NPR); 
Number of stations: 147. 

Format: Alternative; 
Number of stations: 139. 

Format: Spanish; 
Number of stations: 60. 

Format: Religious Music; 
Number of stations: 18. 

Source: GAO analysis of BIAfn data. 

Note: Data used for analysis include 6,946 commercial stations and 
2,503 public stations, both inside and outside of Arbitron-rated 
markets, and FM and AM stations. Stations designated as multicast 
stations, or having a construction permit, are not included in this 
analysis. 

[End of figure] 

Opinions Vary on How Consolidation in the Radio Industry Has Affected 
Programming Decisions: 

Stakeholders that we interviewed generally agreed that since 1996, the 
number of stations owned by a single radio station owner has 
increased; however, viewpoints varied about the extent to which 
consolidation has affected programming decisions. Experts and 
representatives of independent producers we contacted stated that the 
elimination of the radio ownership limits in 1996 resulted in an 
increase in the number of stations owned by a single station owner 
nationally and in local markets. Independent producers have reported 
that the radio station holdings of the 10 largest radio station owners 
have increased significantly. On the basis of our analysis, we found 
that the share of commercial stations owned by the top 10 station 
owners did increase, from 4 percent in 1996 to 20 percent in 2009. 
However, throughout that period, the top 10 radio station owners did 
not own more than 21 percent of all commercial stations, as shown in 
figure 9. 

Figure 9: Share of Commercial Radio Stations Owned by Top 10 Radio 
Station Owners for Selected Years: 

[Refer to PDF for image: stacked vertical bar graph] 

Fiscal year: 1995; 
Percentage owned by other station owners: 96%; 
Percentage owned by top 10: 4%. 

Fiscal year: 1997; 
Percentage owned by other station owners: 92%; 
Percentage owned by top 10: 8%. 

Fiscal year: 1998; 
Percentage owned by other station owners: 89%; 
Percentage owned by top 10: 11%. 

Fiscal year: 2000; 
Percentage owned by other station owners: 83%; 
Percentage owned by top 10: 17%. 

Fiscal year: 2001; 
Percentage owned by other station owners: 81%; 
Percentage owned by top 10: 19%. 

Fiscal year: 2002; 
Percentage owned by other station owners: 79%; 
Percentage owned by top 10: 21%. 

Fiscal year: 2007; 
Percentage owned by other station owners: 79%; 
Percentage owned by top 10: 21%. 

Fiscal year: 2009; 
Percentage owned by other station owners: 80%; 
Percentage owned by top 10: 20%. 

Source: GAO analysis of FCC and BIAfn data. 

Note: Because of data limitations, we did not include data for 2003 
through 2006 and for 2008. 

[End of figure] 

In addition, we analyzed data for the top 10 national radio station 
owners in 2009 and found that for most owners (7 out of the 10 
owners), stations' formats were differentiated within individual 
markets. For example, Clear Channel--the largest radio station owner--
owns multiple radio stations in 148 Arbitron markets. We found that in 
most of those markets (72 percent), Clear Channel programmed its 
stations with different formats, while in 28 percent of those markets 
some stations were programmed with the same format. As illustrated in 
table 3, among the station owners that we reviewed, those with the 
highest percentage of overlap among radio stations in the same market 
included American Family Association (78 percent), Cox Radio (56 
percent), and Educational Media (56 percent). We also found that 75 
percent of the markets where format overlap did exist included large 
markets with 30 or more radio stations. 

Table 3: Percentage of Format Overlap among Top 10 Radio Station 
Owners in 2009: 

Radio station owner company: Clear Channel Communications Inc.; 
Number of Arbitron markets where owner is present: 153; 
Number of Arbitron markets where owner owns multiple stations: 148; 
Percentage of markets where owner owns multiple stations with the same 
format: 28. 

Radio station owner company: Educational Media Foundation; 
Number of Arbitron markets where owner is present: 103; 
Number of Arbitron markets where owner owns multiple stations: 34; 
Percentage of markets where owner owns multiple stations with the same 
format: 56. 

Radio station owner company: Cumulus Broadcasting LLC; 
Number of Arbitron markets where owner is present: 58; 
Number of Arbitron markets where owner owns multiple stations: 54; 
Percentage of markets where owner owns multiple stations with the same 
format: 19. 

Radio station owner company: Citadel Communications; 
Number of Arbitron markets where owner is present: 48; 
Number of Arbitron markets where owner owns multiple stations: 43; 
Percentage of markets where owner owns multiple stations with the same 
format: 33. 

Radio station owner company: American Family Association Inc.; 
Number of Arbitron markets where owner is present: 45; 
Number of Arbitron markets where owner owns multiple stations: 9; 
Percentage of markets where owner owns multiple stations with the same 
format: 78. 

Radio station owner company: Salem Communications Corporation; 
Number of Arbitron markets where owner is present: 35; 
Number of Arbitron markets where owner owns multiple stations: 28; 
Percentage of markets where owner owns multiple stations with the same 
format: 39. 

Radio station owner company: CBS Radio; 
Number of Arbitron markets where owner is present: 30; 
Number of Arbitron markets where owner owns multiple stations: 28; 
Percentage of markets where owner owns multiple stations with the same 
format: 21. 

Radio station owner company: Entercom; 
Number of Arbitron markets where owner is present: 24; 
Number of Arbitron markets where owner owns multiple stations: 21; 
Percentage of markets where owner owns multiple stations with the same 
format: 33. 

Radio station owner company: Cox Radio Inc.; 
Number of Arbitron markets where owner is present: 19; 
Number of Arbitron markets where owner owns multiple stations: 16; 
Percentage of markets where owner owns multiple stations with the same 
format: 56. 

Radio station owner company: Saga Communications Inc.; 
Number of Arbitron markets where owner is present: 14; 
Number of Arbitron markets where owner owns multiple stations: 13; 
Percentage of markets where owner owns multiple stations with the same 
format: 15. 

Source: GAO analysis of BIAfn data. 

[End of table] 

Radio station owners and representatives of independent producers 
offered different perspectives on how consolidation in the radio 
industry has affected programming decisions nationally and in 
individual markets. On one side, radio station owners and experts told 
us that to remain financially viable, stations have had to eliminate 
duplicative operating and overhead expenses and establish a business 
model where one program director is responsible for programming 
decisions for multiple stations. Some station owners added that 
program directors overseeing programming decisions for stations in 
multiple markets make decisions based on the interests of listeners 
within the individual markets. Further, radio station owners and 
experts have reported that common ownership of multiple stations in a 
single market benefits the audience in that market, as the station 
owner will choose to diversify formats among its stations to attract a 
large share of the listening audience in the market.[Footnote 54] 

Another viewpoint expressed by representatives of independent 
producers and experts is that the increased consolidation has changed 
the stations' decision-making structure, resulting in homogenized 
programming decisions across markets and resulting in large companies 
using centralized methods to make programming decisions. According to 
this view, as jobs are consolidated when one entity owns multiple 
stations, one program director may make similar programming decisions 
across multiple stations in different markets. The independent 
producers said that as a result, playlists of radio stations owned by 
the same owner will overlap. Studies conducted by representatives of 
independent producers and academic experts examined playlists of radio 
stations owned by the same owner across all markets and found overlap 
in playlists of stations with the same format.[Footnote 55] For 
example, a December 2006 study published by the Future of Music 
Coalition found examples of overlap among playlists of individual 
stations owned by the same company in different markets--such as an 
overlap for the playlists of two country stations located in different 
markets (WQRB-FM in Eau Claire, Wisconsin, and WRWD-FM in 
Poughkeepsie, New York). However, the study did not examine overlap 
and differences among playlists of owners' radio stations in the same 
market. A January 2006 study conducted by an academic expert also 
examined playlist data for each owner's radio stations and found that 
the playlists of radio stations in different markets overlapped, but 
that the playlists of radio stations in the same market were different. 

Agency Comments: 

We provided a draft of this report to FCC for official review and 
comment. FCC provided technical comments that we incorporated where 
appropriate. FCC's written comments appear in appendix III. 

We will send copies of this report to the Chairman of the Federal 
Communications Commission and appropriate congressional committees. In 
addition, the report is available at no charge on GAO's Web site at 
[hyperlink, http://www.gao.gov]. 

If you or your staff have any questions concerning this report, please 
contact me on (202) 512-2834 or wised@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made major contributions 
to this report are listed in appendix IV. 

Signed by: 

David J. Wise: 
Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

To obtain information on the extent to which sources of programming in 
television have changed over last decade, we analyzed available data 
on two major sources of television programming--companies producing 
prime time broadcast television programs and companies with cable 
channel ownership interests during the last decade. We focused on 
programs broadcasted during prime time because that is the block of 
time on television with generally the most viewers and in turn 
generates the most advertisement revenue for networks.[Footnote 56] To 
determine which companies produced prime time broadcast television 
programming, we used a previous Federal Communications Commission 
(FCC) study and the International Television & Video Almanac to 
classify prime time programs into two categories: (1) programs 
produced by major broadcasters, and (2) programs produced by 
independent production companies not affiliated with a major 
broadcaster (independent producers). We analyzed the fall prime time 
schedules in 2002, 2005, 2008, and 2009 and classified them in the two 
categories. We selected these years because annual data that tracked 
production information in the two categories were limited; FCC's 
previous study contained data in the two categories for 2002. We then 
conducted our analysis for every third year (2005 and 2008) using the 
Almanac's production company information for each television program 
in that year's debut fall broadcast prime time schedule and classified 
the programs into the two categories. We also analyzed the Almanac for 
the 2009 fall prime time schedule to provide the most current data 
available. Additionally, since basic cable networks are also a source 
of television programming, we analyzed the ownership of those networks 
as an indicator of which entities control the television programming 
on the networks. To determine cable network ownership over the last 
decade, we used data from SNL Kagan, which show companies having an 
ownership interest in each of the basic cable networks from 1998 to 
2008.[Footnote 57] We analyzed these data to determine the types and 
the number of companies that have had an ownership interest in basic 
cable networks and the companies that owned the largest number of 
networks during this period. To analyze cable network ownership for 
the most widely distributed networks, we used the 20 basic cable 
networks with the most subscribers (the top 20 networks) from 1998 to 
2008 and classified the networks into one of four categories: (1) 
networks owned by major broadcasters, (2) networks owned by video 
providers, (3) networks owned by both major broadcasters and video 
providers, and (4) networks owned by other types of companies. We also 
examined the top 20 networks in 2008 for any independent cable 
networks; that is, any network that did not have an affiliation with a 
major broadcaster or video provider, or an affiliation with a major 
holding company with media interests. 

To determine the factors and conditions that stakeholders identified 
as affecting the availability of independent programming in television 
and factors that influence radio programming decisions, we interviewed 
or obtained written comments from a variety of experts and industry 
stakeholders, including academics, industry representatives, media 
companies, and public interest groups (as shown in table 4) to obtain 
their views on the factors that affect the availability of independent 
programming in television and radio. 

Table 4: Experts and Industry Stakeholders We Contacted: 

Stakeholder groups: Academic experts; 
Stakeholders: 
Mara Einstein, New York University and Queens College; 
David Waterman, Indiana University; 
Philip Napoli, Fordham University; 
Andrew Sweeting, Duke University. 

Stakeholder groups: Broadcast television and affiliates groups; 
Stakeholders: 
The Walt Disney Company/ABC; 
CBS Corporation; 
NBC Universal; 
News Corporation/Fox; 
CBS and NBC Affiliate Association; 
Sinclair Broadcast Group; 
Young Broadcasting. 

Stakeholder groups: Radio station owners group; 
Stakeholders: 
Clear Channel Communications; 
Citadel Broadcasting; 
American Public Media/Minnesota Public Radio. 

Stakeholder groups: Public television and radio; 
Stakeholders: 
Association of Public Television Stations; 
Public Broadcasting Service; 
National Federation of Community Broadcasters; 
National Public Radio. 

Stakeholder groups: Video providers; 
Stakeholders: 
Comcast; 
DirecTV; 
DISH; 
AT&T; 
Verizon. 

Stakeholder groups: Cable networks; 
Stakeholder: 
Discovery Communications. 

Stakeholder groups: Industry associations; 
Stakeholders: 
American Cable Association; 
National Association of Broadcasters; 
National Association of Independent Networks; 
National Cable and Telecommunications Association. 

Stakeholder groups: Independent programming groups; 
Stakeholders: 
Independent Film and Television Alliance; 
Writers Guild of America, West; 
Center for Creative Voices in Media; 
American Association of Independent Music; 
Future of Music Coalition. 

Stakeholder groups: Public interest, nonprofit groups; 
Stakeholders: 
Consumers Union; 
Consumer Federation of America; 
Media Access Project; 
Progress and Freedom Foundation; 
Free Press. 

Stakeholder groups: Industry Research Group; 
Stakeholder: 
Edison Research. 

Source: GAO. 

[End of table] 

We selected the experts and stakeholders based on relevant published 
literature, including FCC filings and reports, stakeholders' 
recognition and affiliation with a segment of the media industry 
(i.e., cable operators, satellite providers, broadcasters, radio 
station owners, independent radio advocacy groups, and so forth), and 
other stakeholders' recommendations. In our selection of experts and 
stakeholders, we intended to obtain balanced and diverse views; we did 
not weight experts' and stakeholders' views but grouped similar 
stakeholders that represent a segment of the media industry. We 
conducted semistructured interviews and analyzed the responses to 
determine patterns and the extent to which the experts and 
stakeholders agreed on the key factors affecting independent 
programming and radio programming decisions. We also spoke with FCC 
officials and reviewed the relevant laws, regulations, literature, 
comments filed by stakeholders in various FCC proceedings, FCC 
studies, and FCC-sponsored research on television and radio 
programming. 

In addition, for radio, we examined radio station formats, indicating 
the genre and types of programming, such as Adult Contemporary, 
Country, News, Sports, and Talk, a station might play. We obtained 
historical data on the distribution of radio stations by their primary 
formats nationwide and in local markets from 1999 to 2003 and format 
data from the Broadcast Investment Analyst Financial Network's (BIAfn) 
Media Access Pro Database, containing station-level data for 
commercial and public radio stations in the United States from 2004 to 
2009. Although the BIAfn format data provide a general overview of the 
genre of programming aired on a given radio station, they do not 
identify specific programming content that is played on the station. 
We did not look at independently produced programming on radio because 
national playlist data identifying record label affiliation are not 
available. We analyzed the data to determine programming variety and 
distribution of radio stations by their format nationwide and in local 
markets in 2009. To highlight programming variety in local markets, we 
selected two radio station markets-New York and Chicago-and analyzed 
the format data of radio stations in those markets and compared them 
with national radio station format data in 2009. We selected New York 
and Chicago because these two markets are similar in size, (New York 
is the largest market, and Chicago is the third-largest market) but 
have different demographic populations. In addition, each market 
contains both commercial and public stations, FM and AM stations, and 
contains multiple radio station owners in the market. To highlight 
similarities and differences in programming variety among commercial 
and public stations, we examined 2009 format data for commercial and 
public radio stations and identified the top 10 most popular formats 
(based on the number of stations with the particular formats 
available) for each group nationwide. Finally, to examine programming 
variety for each owner's radio stations and consolidation in the radio 
industry, we selected the top 10 radio station owners--that is, owners 
who own the most radio stations nationwide--and reviewed format data 
of stations owned by the top 10 owners. To identify the top 10 radio 
station owners in 1996-1998, 2000-2002, 2007, and 2009, we used data 
from FCC reports and the BIAfn database. The top 10 radio station 
ownership data were not available in 2003-2006 and 2008. Collectively, 
in 2009, the top 10 owners owned a total of 2,262 commercial radio 
stations, or 20 percent of all U.S. commercial radio stations. In 
addition, the top 10 owners owned stations that reach a 44 percent 
share of total Arbitron listeners in the United States and collect 52 
percent of the radio industry's revenue. For each station owner, we 
then examined similarities and differences in formats among commonly 
owned radio stations in the same market. We also reviewed studies on 
radio programming for information on radio station playlists and the 
extent to which playlists for commonly owned radio stations overlap in 
the same market. 

To assess the reliability of the basic cable network data obtained 
from SNL Kagan, and radio data obtained from BIAfn used in our 
analysis, we (1) obtained information from the system owners on their 
data reliability procedures, (2) reviewed systems documentation, (3) 
reviewed data to identify obvious errors in accuracy and completeness, 
and (4) compared the data with information we obtained from other 
sources, including FCC studies. After reviewing the data sources, we 
determined that the data were sufficiently reliable for the purposes 
for which we have used them in this report. 

We conducted our work from May 2009 to March 2010 in accordance with 
all sections of GAO's Quality Assurance Framework that are relevant to 
our objectives. The framework requires that we plan and perform the 
engagement to obtain sufficient and appropriate evidence to meet our 
stated objectives and discuss any limitations in our work. We believe 
that the information and data obtained, and the analysis conducted, 
provide a reasonable basis for any findings and conclusions in this 
product. 

[End of section] 

Appendix II: Registered Marks Used in the Report: 

Registered mark: 20th Century Fox; 
Listed owner: Twentieth Century Fox Film Corporation. 

Registered mark: ABC; 
Listed owner: American Broadcasting Companies Inc. 

Registered mark: ABC Family; 
Listed owner: American Broadcasting Companies Inc. 

Registered mark: Arbitron; 
Listed owner: Arbitron Inc. 

Registered mark: AT&T; 
Listed owner: AT&T Intellectual Property II L.P. 

Registered mark: BIAfn; 
Listed owner: BIA Financial Network Inc. 

Registered mark: Cablevision; 
Listed owner: Cablevision Systems Corporation. 

Registered mark: CapStar Broadcasting; 
Listed owner: CapStar LLC. 

Registered mark: CBS; 
Listed owner: CBS Broadcasting Inc. 

Registered mark: CBS Radio; 
Listed owner: CBS Broadcasting Inc. 

Registered mark: Citadel Communications Company; 
Listed owner: Citadel Communications Company. 

Registered mark: Clear Channel; 
Listed owner: Clear Channel Communications Inc. 

Registered mark: CNN; 
Listed owner: Cable News Network LP. 

Registered mark: Comcast; 
Listed owner: Comcast Corporation. 

Registered mark: Comcast SportsNet; 
Listed owner: Comcast Sports Management Services LLC. 

Registered mark: Consumers Union; 
Listed owner: Consumers Union of United States Inc. 

Registered mark: Consumers Federation of America; 
Listed owner: Consumers Federation of America. 

Registered mark: Cox Communications; 
Listed owner: Cox Communications Inc. 

Registered mark: Cox Radio; 
Listed owner: Cox Radio Inc. 

Registered mark: DirecTV; 
Listed owner: Directv Inc. 

Registered mark: Discovery Channel; 
Listed owner: Discovery Communications LLC. 

Registered mark: DISH Network; 
Listed owner: DISH Network LLC. 

Registered mark: Disney Channel; 
Listed owner: Walt Disney Productions Corporation. 

Registered mark: Edison Research; 
Listed owner: Edison Media Research Inc. 

Registered mark: Entercom; 
Listed owner: Entertainment Communications Inc. 

Registered mark: ESPN; 
Listed owner: ESPN Inc. 

Registered mark: Fox; 
Listed owner: Twentieth Century Fox Film Corporation. 

Registered mark: Fox News; 
Listed owner: Twentieth Century Fox Film Corporation. 

Registered mark: GE; 
Listed owner: General Electric Company. 

Registered mark: Hallmark; 
Listed owner: Hallmark Licensing Inc. 

Registered mark: HBO; 
Listed owner: Home Box Office Inc. 

Registered mark: HGTV; 
Listed owner: Scripps Networks Inc. 

Registered mark: Independent Film and Television Alliance; 
Listed owner: Independent Film & Television Alliance Corporation. 

Registered mark: ION Television; 
Listed owner: ION Media Networks Inc. 

Registered mark: Lifetime Networks; 
Listed owner: Lifetime Entertainment Services LLC. 

Registered mark: Media Access Project; 
Listed owner: Media Access Project. 

Registered mark: Minnesota Public Radio; 
Listed owner: Minnesota Public Radio. 

Registered mark: MTV Networks; 
Listed owner: Viacom International Inc. 

Registered mark: MyNetworkTV; 
Listed owner: MynetworkTV Inc. 

Registered mark: National Public Radio; 
Listed owner: National Public Radio, Inc. 

Registered mark: NBC; 
Listed owner: NBC Universal, Inc. 

Registered mark: News Corporation; 
Listed owner: News Holdings Pty Ltd. 

Registered mark: NFL Network; 
Listed owner: National Football League. 

Registered mark: Paramount Television; 
Listed owner: Paramount Pictures Corporation. 

Registered mark: Saga Communications Inc; 
Listed owner: Saga Communications Inc. 

Registered mark: Salem Communications Corporations; 
Listed owner: Salem Communications Corporation. 

Registered mark: Scripps Networks; 
Listed owner: Scripps Howard Broadcasting Company. 

Registered mark: Showtime; 
Listed owner: Showtime Network Inc. 

Registered mark: SNL; 
Listed owner: SNL Financial LC. 

Registered mark: SoapNet; 
Listed owner: Disney Enterprises Inc. 

Registered mark: Sony Pictures; 
Listed owner: Sony Corporation. 

Registered mark: Starz; 
Listed owner: Starz Entertainment Group LLC. 

Registered mark: TBS; 
Listed owner: Superstation Inc. 

Registered mark: The Food Network; 
Listed owner: Television Food Network, G.P. , et Al. 

Registered mark: Time Warner Cable; 
Listed owner: Time Warner Inc. 

Source: Trademark Electronic Search System, United States Patent and 
Trademark Office. 

[End of table] 

[End of section] 

Appendix III: Comments from the Federal Communications Commission: 

Federal Communications Commission: 
Washington, D.C. 20554: 

March 1, 2010: 

David Wise: 
Director, Physical Infrastructure Issues: 
United States Government Accountability Office: 
Washington, D.C. 20548: 

Re: GAO-10-369: 

Dear Mr. Wise: 

Thank you for the opportunity to review and comment on the Government 
Accountability Office Draft Report Media Programming — Factors 
Influencing the Availability of Independent Programming in Television 
and Programming Decisions in Radio. 

While the Draft Report does not contain any specific recommendations 
for action by the Federal Communications Commission, the Draft Report 
does recognize the important role that the media industry plays in 
educating and entertaining the public and acknowledges that the 
Commission's rules can affect programming decisions. To that end, the 
Commission's longstanding goals in the development and implementation 
of media policy have been the promotion of diversity, competition, and 
localism in media. The report covers several subjects pertinent to our 
media ownership policy. The Commission does not propose any editorial 
recommendations to the Draft Report. In an attachment to this letter, 
however, we offer technical corrections for your consideration. 

As the Draft Report notes, the Commission is required to review its 
media ownership rules every four years to determine whether those 
rules are necessary in the public interest. Currently, the Commission 
is in the early stages of the 2010 quadrennial media ownership review. 
The Draft Report's availability comes at a time that its information 
and findings can assist the Commission as it moves forward in the 
ownership review. 

Thank you for the opportunity to comment on the Draft Report. The FCC 
appreciates your contribution regarding the important subject areas 
covered. 

Sincerely, 

Signed by: 

William T. Lake: 
Chief, Media Bureau: 

Attachment: 

On p.1, clarify the actions taken by the Telecommunications Act of 
1996 ("The 1996 Act"). The 1996 Act eliminated nationwide broadcast 
television and radio station ownership limits and relaxed (rather than 
"reduced") local broadcast radio station limits. The 1996 Act did not 
change local television ownership limits, but directed the FCC to 
conduct a rulemaking to evaluate its existing local television 
ownership limitations. See 1996 Act § 202. 

Regarding p.8 n.15, at the time of the 1996 Act's enactment, the FCC's 
rules contained a national radio limit of 20 AM plus 20 FM stations 
and a local radio limit of two or three AM plus two or three FM 
stations, depending on the size of the local market. See Revision of 
Radio Rules and Policies, 9 FCC Rcd 7183 (1994). 

Regarding the second paragraph of the "Retransmission Consent" bullet 
on p.23-24, the FCC released an Order on January 10, 2010 in the 
program access proceeding adopting rules permitting complainants to 
pursue program access claims involving terrestrially delivered, cable-
affiliated programming similar to the claims that they may pursue for 
satellite-delivered, cable-affiliated programming, where the purpose 
or effect of the challenged act is to significantly hinder or prevent 
the complainant from providing satellite cable programming or 
satellite broadcast programming. See 2009 WL 236800 (released Jan. 20, 
2010). 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO contact: 

David Wise, (202) 512-2834 or Wised@gao.gov: 

Acknowledgments: 

In addition to the contact above, Sally Moino, Assistant Director; Amy 
Abramowitz; Brad Dubbs; Alana Finley; Bert Japikse; Delwen Jones; 
Jennifer Kim; Maria Mercado; and Andrew Stavisky made key 
contributions to this report. 

[End of section] 

Footnotes: 

[1] Independently produced programming has no affiliation with 
broadcast networks, cable operators, or satellite providers. 

[2] In re Review of the Syndication and Financial Interest Rules, 
Sections 73.659-73.663 of the Commission's Rules, F.C.C. 95-382, 10 
F.C.C.R. 12165, 10 F.C.C. Rcd. 12165, (1995). 

[3] Pub. L. No. 104-104, Title II, § 202, 110 Stat. 110, 111-112, as 
amended by Pub. L. No. 108-199, Div. B, Title VI, § 629, 118 Stat. 3, 
99-100 (2004) (47 U.S.C. § 303 Note). 

[4] A broadcast network is an organization that may produce and 
distribute television programs, such as drama, comedy, reality 
programs, and news, to the public through local television stations. 
We refer to the broadcast networks (ABC, CBS, Fox, and NBC) as major 
broadcasters in this report, although the term "broadcasters" can 
include local television stations that are not owned by the major 
broadcast networks. Throughout this report, we refer to media firms by 
their popularly known acronyms or names, some of which like ABC, CBS, 
Fox, and NBC, are registered trade or service marks. Appendix II 
contains a list of registered marks appearing in this report. 

[5] A basic cable network is an organization that may produce 
television programs, which are distributed to the public through a 
subscription video service. 

[6] To analyze the fall prime time schedule in each year, we included 
programs on the schedule Monday through Saturday from 8 p.m. to 11 
p.m., and on Sunday from 7 p.m. to 11 p.m. Because some prime time 
program schedule changes or cancellations can occur in the fall prime 
time schedule, we used the debut schedule of programs that appeared in 
September of each selected year. 

[7] SNL Kagan Media and Communications is a private research company 
that collects and maintains data on cable networks. 

[8] A radio station format refers to the type of programming content 
on a radio station, such as Adult Contemporary, Country, Jazz, News 
and Information, Sports, Talk, and so forth. 

[9] Local markets, also known as Arbitron markets, are geographically 
contiguous areas in which Arbitron Inc. surveys the listenership of 
radio stations for rating. These markets align with the Office of 
Management and Budget's Metropolitan Statistical Area (MSA) 
definitions. As of August 2009, there were 300 Arbitron markets. 

[10] Public radio stations are locally owned and operated stations 
that receive some or all of their funding from listener contributions, 
the federal government, or other sources. Some public radio stations 
are affiliated with National Public Radio, which is a national radio 
service that provides station programming content. 

[11] Affiliated stations are stations not owned by major broadcasters 
but grant broadcasters use of specific time periods for network 
programming and advertisement, for compensation. 

[12] Video providers offer subscribers television programming through 
different service tiers--that is, bundles of networks grouped into a 
package. A basic tier, which is the lowest level of cable services, 
includes the local broadcast stations. Video providers also offer an 
expanded basic service tier, which expands upon the basic service. 
Additionally, subscribers can also purchase digital tiers and premium 
pay channels, such as HBO and Showtime, for an additional fee. 

[13] Video providers must also pay licensee fees--usually on a per 
subscriber basis--for the rights to carry cable networks and their 
respective programming. 

[14] The number of stations includes full-service commercial and 
public stations and excludes low-power FM stations and stations with 
construction permits. 

[15] Pub. L. No. 104-104, §202(h), 110 Stat. 56. In response to the 
directive in the 1996 Telecommunications Act, FCC eliminated the 
nationwide radio ownership limits rule. 

[16] In 1999, CapStar Broadcasting and Chancellor Media Corporation 
merged and were later acquired by Clear Channel Communications Inc., 
which subsequently became the largest radio station owner, with over 
1,000 radio stations in 2007. In 2006, Clear Channel sold off several 
of its radio stations. 

[17] In re Review of the Syndication and Financial Interest Rules, 
supra. The Fin-Syn rules were adopted in 1970 to limit broadcasters' 
control over television programming and restricted their ability to 
own and syndicate programming. 

[18] Broadcasters can request syndication rights for programs when 
they are negotiating the financing of programs. If a program remains 
on the network long enough to accumulate about 80 to 100 episodes, 
then the program can be syndicated, that is, offered and sold to local 
television stations or cable networks for the right to broadcast the 
programs again during non-prime time hours. 

[19] Telecommunications Act of 1996, § 202, as amended (47 U.S.C. § 
303 Note). 

[20] The Cable Televisions Consumer Protection and Competition Act of 
1992, Pub. L. No. 102-385, 106 Stat 1460, established these rules, 
placed in Sections 325, 614, and 616 of the Communications Act, as 
amended (47 U.S.C. § 534). FCC then established regulations to put 
into effect those statutory provisions. (In addition, the act 
established the program access rule to prevent a vertically integrated 
cable operator from discriminating in the process, terms, and 
conditions that it makes programming available to unaffiliated 
distributors or have exclusive access to the programming in which it 
has an ownership interest. Because stakeholders we interviewed did not 
identify how this rule affects independent programming, we did not 
include a discussion of the issue.) 

[21] Communications Act of 1934, § 614, as amended (47 U.S.C. § 534); 
47 C.F.R. §§ 76.56, 76.64. 

[22] Compensation can take the form of cash payments, the video 
provider's purchase of advertising time on the broadcast station, the 
broadcaster being given free advertising time on the video provider's 
system, the video provider's carriage (and tier placement) of other 
program networks owned by the broadcaster, or some combination of 
these. 

[23] Communications Act of 1934, § 616, as amended (47 U.S.C. § 536); 
47 C.F.R. §§ 76.1301, 76.1302. 

[24] Communications Act of 1934, § 612, as amended (47 U.S.C. § 532); 
47 C.F.R. §§ 76.970, 76.971. 

[25] Cable operators with 36 to 54 activated channels must set aside 
10 percent, while cable operators with 55 to 100 activated channels 
must set aside 15 percent of those channels not otherwise required for 
use or prohibited from use by federal law or regulation. Cable 
operators with more than 100 activated channels must designate 15 
percent of such channels for commercial use. 

[26] The Cable Television Consumer Protection and Competition Act of 
1992, Pub. L. No. 102-385, § 9, 106 Stat. 1460 (codified at 47 U.S.C. 
§ 532) 

[27] Warner Bros. is affiliated with the CW Television Network. 

[28] Mara Einstein, "Program Diversity and the Program Selection 
Process on Broadcast Network Television," Federal Communications 
Commission Media Ownership Working Group, Washington, D.C., September 
2002. 

[29] Our analysis included ownership interests in basic cable 
networks, which are those cable networks that often appear in the 
basic service tier for consumers, and did not include other cable 
networks carried on a digital tier and premium cable networks, such as 
HBO, Showtime, and Starz. 

[30] During the last decade, the number of basic cable networks has 
ranged from about 160 to 180. 

[31] Because of data availability, our analysis was for the 11 years 
from 1998 to 2008. In 2009, Time Warner announced a spin-off of its 
Time Warner Cable operations. 

[32] In December 2009, Comcast, a cable operator, announced that it 
had signed a definitive agreement with GE (owner of NBC) to form a 
joint programming venture that will be 51 percent owned by Comcast, 49 
percent owned by GE, and managed by Comcast. 

[33] Joe Schlosser, "Wolf Says Shows Can Fly without Pilots," 
Broadcasting & Cable, July 6, 1998, 30. 

[34] In contrast, nonscripted programs are less costly to produce 
because there are no costs associated with ordering scripts and pilots. 

[35] An example of a large unaffiliated studio is Sony Pictures 
Television Studio, which is not affiliated with any broadcasters. 
Although large unaffiliated studios may have the ability to finance 
production costs, stakeholders said they produced fewer programs than 
broadcaster-affiliated studios because one of the few unaffiliated 
studios decided to primarily produce movies rather than television 
programs. 

[36] Although quality is subject to the preferences of the networks 
that select the programs, according to television broadcast 
executives, general criteria for quality include good ideas, mass 
audience appeal, and whether the content of the program meets the 
specific needs of the network. Literature we reviewed indicated that 
quality programming depends on talent and high production values, both 
of which can be costly. 

[37] Richard Caves, Karen Guo, Catherine O'Gorman, Matthew S. 
Rosenberg, and Richard J. Wegener, Switching Channels: Organization 
and Change in TV Broadcasting. (Cambridge, Mass.: Harvard University 
Press, 2005). 

[38] Jim McConville, "Fox Ready to Roll Dice in All-News Gamble," 
Broadcasting & Cable, October 7, 1996, 52. 

[39] The array of services that cable operators and telecommunications 
companies offer includes high-speed Internet, telephone, and digital 
television, as well as traditional analog television services. A 
satellite provider we interviewed stated that competing uses for 
broadband is not an issue, since it cannot offer high-speed Internet 
and telephones services, but it noted that available capacity on its 
basic service tier is also limited. 

[40] 47 C.F.R. § § 76.56, 76.64. As previously mentioned, the 
retransmission consent rule requires local broadcast stations, some of 
which are owned and operated by broadcasters, who have opted against 
must carry status, to negotiate individual retransmission consent 
agreements with each cable operator in its service area for 
compensation in exchange for the cable operator's right to carry the 
broadcast signal. 

[41] 47 C.F.R. § § 76.56, 76.64. As previously mentioned, the 
retransmission consent rule requires local broadcast stations, some of 
which are owned and operated by broadcasters, who have opted against 
must carry status, to negotiate individual retransmission consent 
agreements with each cable operator in its service area for 
compensation in exchange for the cable operator's right to carry the 
broadcast signal. 

[42] In the Matter of the Annual Assessment of the Status of the 
Competition in the Market for the Delivery of Video Programming, FCC 
MB Docket No. 07-269. FCC 07-207, 24 F.C.C.R. 750, 24 FCC Rcd. 750 
(January 16, 2009), as supplemented at 24 F.C.C.R. 4401, 24 F.C.C. 
Rcd. 4401 (April 9, 2009). 

[43] In the Matter of the Review of the Commission's Program Access 
Rules and Examination of Programming Tying Arrangements, FCC MB Docket 
No. 07-198, Notice of Proposed Rulemaking, 22 F.C.C. Rcd. 17791 
(October 1, 2007). 

[44] 47 C.F.R. §§ 76.1301, 76.1302. As previously noted, the program 
carriage rule prevents video providers from requiring financial 
interest in programming as a condition for carriage. 

[45] FCC officials told us that it takes time to adjudicate these 
cases because program carriage disputes are complicated and often 
result from behavior related to program carriage negotiations and 
require an evaluation of facts and behavior. They further noted that 
an action one party views as prohibited under the statute may be 
viewed by the other as a legitimate business practice. In some 
instances, additional measures are required to perform a proper 
evaluation. In the event that the staff is unable to resolve a program 
carriage complaint on the basis of the written record, a case may be 
sent for a hearing before an administrative law judge. 

[46] 47 C.F.R. §§ 76.970, 76.971. The commercial leased access rule 
requires cable operators to set aside a certain number of channels 
that can be leased out to independent cable networks for access on its 
distribution system. 

[47] FCC reviewed the price rate for leased access and announced its 
decision to reduce the charge in November 2007. In the Matter of 
Leased Commercial Access, FCC 07-208, 23 F.C.C.R. 2909, 23 F.C.C. Rcd. 
2909 (Feb. 1, 2008). However, FCC's decision has been appealed. 

[48] In contrast, public radio stations are primarily funded by 
contributions received from listeners and, in some cases, government 
funding. 

[49] By "format" of radio programming, we mean the genre of 
programming content on a radio station, such as Country, Sports, Adult 
Contemporary, Smooth Jazz, and Rock. 

[50] Advertisers and radio stations use data published by audience 
measuring services, such as Arbitron Inc., to estimate the number and 
demographics of listeners within an Arbitron radio market. 

[51] Voice tracking occurs when a radio station personality prerecords 
a program that is then aired in multiple markets, including markets 
other than that of the local radio station. Syndicated programming 
includes programming that is purchased by a radio station (such as the 
Ryan Seacrest Top 40 Program) to air on multiple stations in different 
markets. 

[52] FCC commissioned 2007 Media Ownership Study 5 (Tasneem Chipty, 
Station Ownership and Programming in Radio, Boston, Mass.: CRA 
International, June 24, 2007) indicated that ethnic formats included 
Asian, Greek, Hawaiian, International, Japanese, Korean, Polish, and 
Portuguese formats. Spanish formats included Hurban, Mexican, 
Ranchera, Reggaeton, Spanish, Spanish Adult Contemporary, Tejano, and 
Tropical formats. 

[53] An independent label refers to a record label that is not 
associated with a major record label. 

[54] A 2007 FCC-commissioned study (Tasneem Chipty, Station Ownership 
and Programming in Radio, Boston, Mass.: CRA International, June 24, 
2007) and other academic studies (Andrew Sweeting, Too Much Rock and 
Roll? Station Ownership, Programming, and Listenership in the Music 
Radio Industry, Evanston, Ill.: Northwestern University, January 15, 
2006) found similar results, finding that markets with large radio 
ownership groups offer more format choices within given markets. 

[55] While our analysis examined format data, these studies looked at 
playlists. 

[56] To analyze the fall prime time schedule in each year, we included 
programs on the schedule Monday through Saturday from 8 p.m. to 11 
p.m., and on Sunday from 7 p.m. to 11 p.m. Because some prime time 
program schedule changes or cancellations can occur in the fall prime 
time schedule, we used the debut schedule of programs that appeared in 
September of each selected year. 

[57] Because data that track program production information were 
limited for programming on all cable networks, we looked at the 
ownership of basic cable networks only. 

[End of section] 

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