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Chapter 571 mcn?

If the news center represents an upstream expansion, then the radio station represents a downstream extension.

"Let's talk about the radio station."

Knowing that Mancuso had his own plans for the news data center, Ernst asked about the radio business, which was most closely related to the news data center.

The United States is a nation on wheels, and that's no joke.

This doesn't mean that the United States has a high number of cars, or that everyone owns a car; rather, it means that cars are used too frequently.

The United States is a country with a land area no smaller than that of China, but in terms of travel, especially long-distance travel, the two countries present completely different scenarios with significant differences.

In China, the concept of transportation planning is that commuting relies on public transportation, short and medium-distance trips mainly depend on rail transportation, and long-distance trips are mainly by air.

In the United States, the population density is low, and the distances between cities and between cities and suburbs are far. Both rail transit and public transportation are very underdeveloped in terms of coverage and construction, which has led to Americans' high dependence on cars.

Americans spend an average of 1.2 hours driving each day, with over 60% of the population taking at least one long-distance drive of more than 100 miles per week, and 15% completing at least one drive across three or more states per year.

Despite America's developed aviation industry, the vast majority of Americans still prefer to travel by car, even when traveling from the East Coast to the West Coast, crossing the entire American continent.

This unique mode of transportation directly fostered the radio culture that flourished in the United States. For people who spend long periods of time driving, radio became the most convenient and efficient channel for obtaining information and entertainment, perfectly meeting the needs of the driving scenario.

According to research data from the American Broadcasting Association, more than 35% of Americans spend more time listening to the radio each year than they do on any other form of entertainment or information, such as television, newspapers, or books.

The average daily radio listening time reached 2.1 hours, with 72% of that listening occurring while driving.

Americans spend an average of 1.2 hours driving per day, but an average of 2.1 hours listening to the radio per day, indicating that Americans listen to the radio not only while driving, but also as a form of entertainment.

In the United States, television, newspapers, and radio have long been divided into three main media outlets, highlighting the importance of radio in the media industry.

Moreover, radio has another advantage: it can broadcast things that television and newspapers cannot.

Compared to television and newspapers, the content censorship standards of radio stations cannot be described as relatively lenient; they are extremely lenient.

Especially late-night radio shows, where you don't just hear adult audio stories, you feel like you're actually engaged in a real battle.

Frank Mancuso presented Ernst with a document titled "In-Depth Analysis of the 1996 Telecommunications Act," which stated that "the most significant breakthrough of the 1996 Telecommunications Act was the removal of restrictions on cross-market ownership of radio stations."

Ernst knew that before this, a single entity could only own a maximum of two AM radio stations and two FM radio stations in the same market, and cross-market ownership was strictly controlled, which directly limited the large-scale development of the radio industry.

After the implementation of the Telecommunications Act of 1996, ownership restrictions were greatly relaxed, allowing a single entity to own up to eight radio stations in large markets, six in medium-sized markets, and four in small markets, and cross-market operations were no longer subject to geographical restrictions.

Not only radio stations, but also television stations, the telecommunications industry, and even newspapers have benefited. But what does this have to do with the MGM radio business strategy of the other party's leadership?

Mancuso pulled out another document and continued, "In just three months after the bill was implemented, the value of mergers and acquisitions in the U.S. radio industry exceeded $7 million, more than the total value of radio mergers and acquisitions in the previous few years."

"So far this year, the total value of mergers and acquisitions in the radio industry has exceeded US$12 billion, and the market's heat has led to a continuous rise in the valuation of even small radio stations."

"Last week, The Washington Post completed the sale of its TP-FM radio station, which has a daily listener count of only 4200 and is a typical small to medium-sized regional station, but the final sale price was as high as $60."

"After conversion, the valuation of a single listener reached $142.8, which is an outrageous value, almost tripling."

Looking at the data in the document and listening to the other party's explanation, Ernst began to understand: "So you gave up the idea of ​​directly acquiring the radio station and instead entered the market through this form of cooperation."

"That's right," Frank nodded, adding, "The biggest characteristic of the American radio industry is its sheer number and high degree of fragmentation."

"According to the latest statistics from the Federal Communications Commission, there are more than 1.5 radio stations in the United States that have obtained legal operating licenses, including about 4700 AM radio stations and about 1.02 FM radio stations. This does not include a large number of unregistered underground radio stations."

Because the entry barriers to the radio industry are extremely low, unlike television stations and telecommunications operators which require special licenses, radio stations only need to submit filing materials to the Federal Communications Commission and obtain a frequency usage license to start operating.

Small radio stations that have just started broadcasting can achieve regional signal coverage and begin broadcasting by purchasing simple transmitting equipment from the second-hand market.

If things aren't going well, just switch tracks and start over.

If things go well, and after accumulating a certain audience base and commercial value, then they can complete the necessary registration procedures and move towards legal operation. Frank Mancuso continued, "In New York State alone, there are more than 1200 legally registered radio stations, covering major cities such as New York City, Buffalo, and Rochester, as well as surrounding suburbs."

"If you want to build a radio network covering major cities and key transportation routes across the United States through direct acquisition, you would need to integrate at least 500 regional core radio stations."

"Based on the current industry average acquisition price, the total expenditure will probably not be less than $10 billion." He then emphasized, "This is only for major cities, and the population covered may be less than half."

"It's not just a matter of cost; the integration after the acquisition is also a challenge that can't be completed in a short time. With so many radio stations, each with different operating models, team structures, and audiences, achieving synergy requires a long period of adjustment."

"MGM's core objective in developing its radio business is to expand its influence in the media dissemination field and build downstream distribution channels for its news data center, rather than simply pursuing ownership of radio assets."

"Compared to the high-cost, high-risk acquisition model, controlling the information sources of these radio stations through cooperation, and achieving resource sharing and complementary advantages, is, in my opinion, a more efficient and sustainable strategic choice."

"So you designed this radio station industrial park project, planning to attract small radio stations with development potential but lacking resource support, and accompany them as they grow from their initial stages?"

"Yes." Ernst could hear a sense of accomplishment and undisguised confidence in Frank's tone. "The core positioning of the radio industrial park is to create a growth accelerator for radio stations."

"We will provide a range of resources, including space, technical equipment, and operational support, to attract small radio stations that are creative and have potential but lack funds and resources."

"In this way, MGM can not only save huge acquisition costs, but also make these radio stations our long-term customers through park operation and resource output."

Frank then shifted his focus, emphasizing, "If these radio stations want to break through and enter the mid-sized radio industry, they must have a source of news, and this bottleneck is precisely where MGM has an advantage over these radio stations."

"Those media giants simply don't care about these small radio stations with low profitability. They would never provide them with news resources and would only block resources and suppress them. This is exactly our opportunity to enter the market." News sources are extremely important for a television station.

Don't be fooled by the fact that radio broadcasts mostly consist of nonsense, just like short video bloggers in later generations.

However, established radio stations are much more professional than bloggers who spout nonsense; they will insert breaking and important information into their broadcasts.

These radio stations are backed by media giants, who either invest in them or acquire them.

Ernst agreed with this idea, but there were also problems: "Frank, your idea is very innovative, but we need to consider the stability of the strategy."

"Have you considered that while we can indeed establish partnerships with these smaller radio stations by providing news and other resources, is the bond of such partnership strong enough? Once these radio stations grow and are acquired by other media giants, they will have leverage to negotiate with other giants and could easily obtain news resources from companies like ABC and CBS. How will we control them then?"

You can't expect all the cabbages you've nurtured to end up being eaten by pigs, can you?

A media sycophant? Ernst has no desire to be one.

The other party's ideas, in terms of cost, operation, and profitability, are definitely far superior to those of other media outlets.

However, from a strategic perspective, this strategic layout is too unstable and carries too many hidden risks.

Faced with Ernst's questioning, Frank smiled slightly and put forward a more disruptive concept: "Therefore, our ultimate goal is not simply resource cooperation, but to create a radio production line and build an irreplaceable alliance ecosystem."

"A radio production line?" Ernst's eyes flashed with curiosity; this was a business concept he had never heard of before. "Yes, we will launch an MGM Radio Alliance based on the radio industrial park. Radio stations that join the alliance will not only have access to real-time news materials from our news data center, but will also share the core resources of the MGM Group."

"For example, our professional media law team can provide compliance consultation, risk warning and litigation support to radio stations within the alliance, helping them to avoid regulatory risks from the Federal Communications Commission."

"There are also government and political resources. During key periods such as election years, political topics are the key to radio station traffic. We can use MGM's connections in the political world to connect radio stations in the alliance with local legislators and candidates, arrange live interviews, policy interpretations and other programs to enhance the authority and influence of the radio stations."

"Another resource is commercial channels. We can integrate MGM's existing GG customer resources to provide GG connection services for radio stations within the alliance, helping them obtain higher-quality and higher-priced GG orders."

Frank further elaborated on his radio pipeline plan, becoming increasingly excited as he listed the details, gesturing with both hands: "In addition to resource sharing, we can also utilize the user data accumulated in the news data center to provide precise content planning suggestions for radio stations within the alliance through data analysis."

"For example, based on the age structure, occupational characteristics, and interests of listeners in different regions, we can suggest that radio stations adjust their broadcast types to help increase listener engagement and ratings."

"Once we figure out this standardized operating model, we can mass-produce radio stations. From the station's positioning, content planning, and team building to GG recruitment and compliant operation, we can form a replicable process and continuously cultivate high-quality alliance radio stations."

Upon hearing this, Ernst's expression turned somewhat strange. "Isn't this just an MCN agency?"

But thinking about it, he felt there was no problem. Aren't these radio stations just a bunch of faceless anchors?

What he said was indeed very appealing to those free radio stations.

Although radio stations have a wider range of restrictions, they are not without constraints. For example, political issues are a red line set by the Federal Communications Commission.

It's not that broadcasting is forbidden, but rather how it's broadcast. But with radio, support is praise, and lack of support is criticism; this industry is too free, which also indicates a lax approach.

Television stations dare not inquire about the mothers of presidential candidates, nor do major radio stations, all for fear of being sued and facing suppression if the candidate takes office.

But for small radio stations, I'll go to your grandma's ass; insulting your mother is the least of their worries—it's easy to cross the line.

However, there is no set standard for what constitutes crossing the line.

With MGM's legal support, at least serious crimes can be punished leniently, and minor crimes can be left unpunished.

But the most crucial factor is still profit.

GG (Gross Gaming) is the primary, and arguably the only, source of revenue for radio stations.

With the MGM brand, it's easy to get sponsored by these radio stations and secure contracts with one broadcaster and several stations.

Anyway, the cost isn't high. For a small or medium-sized radio station with fewer than 3,000 listeners, the annual GG fee is only a few thousand to tens of thousands of US dollars. Even for a medium-sized radio station with 5,000 listeners, a maximum of 100,000 US dollars is enough.

These GG providers are more willing to pay hundreds of thousands or even millions of dollars a year for GG services, which means that these radio stations have a wide enough coverage area and a large enough number of listeners.

Ernst thought about it and realized that this was a collaboration that would benefit both parties.

MGM increased its revenue; after all, they weren't going to give you access to these resources for free. Furthermore, they could use these methods to tie these radio stations to themselves, preventing them from switching sides.

As for radio stations, the increased revenue and promising development prospects make them hesitant when faced with acquisition offers from other media outlets.

If other media giants want to acquire them, the cost of acquisition will increase.

Ernst wanted to ask more questions about this matter, but his secretary suddenly pushed open the door and whispered something in his ear, making him frown.

"Let's adjourn the meeting here for today."

Knowing that Ernst had something to attend to, the management in the conference room all stood up and excused themselves.