The Effect of Format Changes and Ownership Consolidation on Radio Station Outcomes

Analyzing a panel data set tracking format changes and ownership consolidation in local radio markets, we find that format changes frequently have enabled stations to improve their performance. The success of reformatting varies widely across format, and the likelihood that changing to another format will boost station performance declines as that format space becomes more crowded. Successful reformatting is not limited to large radio groups. In fact, weak evidence that radio groups garner economies of scope from owning multiple stations in the same format is the only indication we find that larger radio groups have been able to choose formats strategically in order to obtain a boost in their listening shares. In the face of substantial and ongoing ownership consolidation in local radio markets, our results suggest that format changes by smaller station groups may counter the potential exercise of market power by a radio group that acquires a substantial share of a particular audience demographic through merger