The difference between non-commercial and commercial FM broadcasting (PDF)
FM radio offers a unique opportunity for businesses & ministries today. Most people new to radio are confused by the differences between non-commercial and commercial radio. If you wonder which type offers the best opportunities for you, we invite you to read on.
Differences between Non-Commercial and Commercial Radio
Commercial is generally very easy for people to understand. Commercial Radio sells advertising using a sales force, charges promotional fees, and involves itself in many ways of profit making business.
Most people do not realize that Non-commercial FM stations are very similar in practice except that all of their income is turned back into the corporation for station growth, upgrades, repairs, salaries, etc. so that the station will never realize a profit. All income is re-invested into the corporation. Non -comms differ from commercial FM stations primarily in that they are not permitted to accept revenue in exchange for broadcasting “spots” (announcements advertising goods and services), yet they may charge for broadcasting programs. The licensee of a non-commercial educational FM station is expected to provide a broadcast schedule that is “non-commercial”. Remember, the Congress ordered the FCC to find a way to reserve some channels in the new FM service for educational, instructional, and cultural purposes. The method chosen by the FCC requires that an applicant for one of the reserved channels form a non-profit that is educational in nature.
The History and Development of the FM Spectrum:
In the 1940’s Congress watched with concern as schools, colleges, and universities were driven from the AM radio band in the early days of radio. As a result, Congress ordered the Federal Communications Commission (FCC) to implement a policy which would allow educational broadcasters, and commercial broadcasters to establish themselves without competing for channels on the newly created FM band. The FCC responded by reserving the first twenty channels (88.1 through 91.9 Mhz) of the FM band for educational broadcasters.
There was much enthusiasm for the new medium. How-ever, with the outbreak of World War II development of FM was halted. After the war, television became the dominant medium, and AM began its period of decline. Interest in FM diminished and development all but ceased.
With the 1960’s came a renewed interest in FM broadcasting. The AM broadcast band had become saturated, and the FCC adopted standards for FM stereophonic sound, and thus began a period of rapid growth that continues today.
Like its predecessor, AM radio, the FM radio band is filling up. What is unique, is that while FM radio is enjoying a period of tremendous growth and commercial success; opportunities for frequencies exist because channels were “reserved” for applicants who will offer educational, instructional, and cultural programming. By including these programs in their schedules, schools, churches, and other non-profit groups are establishing FM stations in ever increasing numbers. And thanks to a ruling in the early 80’s called “Docket 80-90”, commercial channels that were unavailable prior to the ruling, are now able to be utilized.
The opportunity for establishing a FM radio station, in-creased by the Docket 80-90 rules of the 80’s, and now again in the late 90’s with the new Low Power FM proposal substantially raise the number of FM radio channels available.
Non-profit Advertising Allowed –The reduction of federal subsidies to Non-Commercial Educational stations has resulted in significant reductions in the funds available to establish new stations and for the operation of existing stations. The FCC, recognizing the financial difficulties that existing non-commercial educational stations were facing, has liberalized its rules regarding the broadcast of announcements and programs for non-comms.
Presently, non-commercial educational stations may accept advertising for goods and services pro-vided by non-profit organizations. As well, they may receive underwriting and sponsorship spots from national and local businesses to pay for programming. Stations may accept donations from members of the general public and from businesses. Individual donors may be identified by their name, address and a description of their products and services. An example of the extent of this liberalization may be seen by viewing any non-commercial educational “public television” station. Non-commercial educational FM stations operated by churches, schools, and organizations interested in educational formats, have benefited from the FCC policy changes. Local businesses are now potential sources of revenue, and the station can now provide a useful promotional service in return. Programs produced by others may be broadcast, and the cost of airing the programs may be charged to the entity supplying the program.
Examples of Non-Commercial Advertising:
“The following programming is sponsored by …., home of the…, located at…..”
“Funding provided by …”
“This hour of music was made available by The Univ. of …,
The Robert Jones Singers will be appearing in concert at the Univ. of …. on Sat. night, April 15 at 8 pm. Admission is $10. For reservations please call ….”
“We appreciate the contributions of …..”
“The sponsor of our program offers additional helps by inviting you to attend ….”
“The Little Theatre downtown is putting on a series of two act plays featuring the work of Mary Beth Mather. For time and ticket info. please call …..”
“Our local Coca Cola Bottling Company sponsors this hour of programming and is also the host of this years THREE STATE/ THREE MOUNTAIN CHALLENGE.”
When choosing between a non-commercial channel or commercial channel it’s important to determine which will best suit your purposes.
Let’s review the differences & similarities:
- Non-commercial educational stations cannot accept compensation for advertising in the manner commercial stations do.
- Non-commercial educational stations must include educational, instructional, and cultural programming in their schedules. Generally one percent of the total program schedule is acceptable to the FCC.
- Local businesses are now potential sources of revenue for non-comm stations, and the station can now provide a useful promotional service in return.
- Programs produced by others may be broadcast, and the cost of airing the programs may be charged to the entity supplying the program.
- Unlike commercial FM channels, there is less competition for non-commercial educational FM channels. There are, therefore, fewer instances when a FCC hearing is required to determine a winner among competing applicants.
- Though non-commercial educational FM channels comprise only twenty percent of available channels, there are generally more opportunities for new stations. This is be-cause ownership is restricted to non-profit educational entities.
- Both may broadcast the same type of news, sports, weather, and music programming.
- A non-commercial educational FM station will have the same coverage as its commercial counterpart with comparable transmitting facilities.
- Both may generate income through the broadcast of announcements and programs.
- Equipment, staffing, and operating requirements are essentially the same.
Which to Choose? What then should be your choice? Non-commercial educational or commercial? If you are interested in owning a FM radio station, it doesn’t make much difference. You can be successful with either. The choice is more often determined by the type of the available channel.
Commercial FM channels are governed by a table of assignments, by which the FCC allocates channels for individual communities. These channels are then auctioned to the highest bidding Applicant. Non-commercial channels are awarded based on a points system from the “Comparative Hearing Standard” such as local ownership, ownership integrated into management, minority ownership, coverage, etc.
When you contact Sterling about owning a FM radio station, we help you make decisions concerning these many questions which must be considered. We will check the FCC table of assignments to see if an unused and already assigned channel could serve your purpose. If the answer is no, a computerized FM Frequency Search is necessary to determine whether there is any available channel which could be used. Please review our FM searches for more information.
…a note of thanks for the wonderful and professional work you have provided for the many stations we have had over the years. It seems like we are always changing or moving something with the stations. As the years pass, we have found that we can trust your services and can call, at almost any time, with questions that we need your help to answer. Thanks again for your years of service for us here at Alabama Christian Radio, Inc.
With over 50 years of broadcasting behind us here at VCY America Radio and TV, the importance of quality consulting and engineering remains the foundation for our more than 35 facilities across the network. James Price and the wonderful team at Sterling Communications have never disappointed us and their outstanding work is testimony before the broadcast industry and the FCC of the quality of their work. Sterling Communications knows how to get it done and done right.
We have, through the application process for a LPFM Radio Station, found James Price and his staff to be professional in every way. They were always, even through our “ignorant questions”, “affable, available and affordable”. At every decision junction, they released wisdom filled with judgement based on their experience and engineering knowledge. All through our application process they shared with us the appropriate direction to take based on what we needed, not what was perhaps best for them. Our application was successful due to their labor and we continue to look to them for all the necessary next steps. With Sterling Communications you receive professional care and sensitivity to the needs of you the client.
I will tell you that I have used many engineers before Sterling. None were as caring, effective and knowledgeable as James and his father have been. Jim Price (the father) was one of the most knowledgeable and innovative persons / engineers that I have known in my rather long career, and James has those same qualities. The Sterling staff is and always has been extremely willing to help. In addition, as a last comment, which is one of the most important items in any business, Sterling's pricing is always acceptable and very competitive.
In 2004, we knew God was leading our ministry to purchase a 100kW FM non-commercial station, but we didn’t know much at all about FCC regulations, radio equipment, engineering studies or coverage maps. James Price and crew at Sterling Communications patiently answered ALL our questions and gave us information about questions we didn’t know enough to ask! Their engineering expertise enabled us to receive 3 construction permits during a non-commercial FM filing window, move antennas to more strategic locations and make well-informed decisions as opportunities arose to purchase other stations. They walked us through growing our network from that first station to 7 stations and 9 translators throughout Nebraska, all with faith, good humor and an awareness of our need to stretch each dollar!