A report from the Federal Communications Commission (FCC) in Washington D.C. has found that, on the whole, low-power FM (LPFM) radio stations – as community radio is known in the United States – generally do not have an economic impact on commercial FM radio stations and nor are they expected to do so in the future.
To quote from the Report and Economic Study, the “results of [the] analysis show that, on the whole, LPFM stations do not currently have, and in the future are unlikely to have, a demonstrable economic impact on full-service commercial FM radio stations”.
The FCC found, after compiling information its own and a commercial database, that LPFM stations serve primarily small and rural markets and have geographic and population reaches that are magnitudes smaller than those of full-service commercial FM stations.
Additionally, LPFM stations generally have not been in operation as long as full-service commercial FM stations, have less of an Internet presence, and offer different programming formats. The Commission also found that by all available measures the average LPFM station has minimal ratings and has a much smaller audience size than those of most full-service stations in the same market.
Notably, however, there is evidence to suggest that the most popular LPFM stations have a fan base that, though relatively small, is comprised of a loyal listener base. Specifically, a number of the LPFM stations achieve high values of Time Spent Listening (“TSL”), indicating that listeners to LPFM stations tend to tune in for long periods of time.
The second part of the Study looked in-depth at eight LPFM stations to provide a snapshot of the wider sector. Although each of the stations differs considerably in its individual characteristics, the results of the case studies show that the selected LPFM stations generally broadcast a wide variety of programming continuously throughout the day, operate with very small budgets, rely on mostly part-time and volunteer staff, do not have measurable ratings, have limited population reach, and do not generate significant underwriting earnings. All but one of the station managers interviewed stated that the LPFM station is not competing directly for listeners with any specific full-service stations.
The third section of the Study assessed the potential ability of LPFM stations to compete with full-service commercial FM stations based on their relative positions of economic strength in the radio marketplace. The conclusion was that given their regulatory and operational constraints, LPFM stations are unlikely to have more than a negligible economic impact on full-service commercial FM stations.