The dataset comprises of information on market shares, advertising, station character-istics, and market characteristics. The dataset covers 43 radio stations in 12 regions for 23 time periods from the first two-monthly period (January-February, February-March, etc) of 2005 to the last two-monthly period of 2006. The radio stations that are included in this study are radio stations with positive market shares in the radio audience measurement data. This gives an unbalanced panel dataset in which a radio station is included in our sample for a period with a positive market share whereas it is not included in our sample in another period with zero market share. Two ra-dio stations are excluded because of lack of information on advertising data which are Business News Radio and 100% NL.9
A market is defined on the basis of the presence of a public regional radio station.
There are 12 provinces in the Netherlands with each having one public regional radio station except for the province Zuid-Holland which has two public regional stations.
The region Flevoland is not included because the response rate is too low to produce reliable ratings data.
The ratings data come from Intomart GfK who provides data on the Dutch televi-sion audience measurement (SKO) and radio audience measurement (CLO). The CLO ratings data are generated from listening diaries submitted by panel participants. In-tomart GfK receives listening diaries from roughly 10,000 participants. The partici-pants record their quarter-hour listening behavior during one week. Intomart GfK re-leases ratings data on a monthly basis over a two-monthly period. These ratings data are from Monday to Sunday from 7AM to 7PM for the population aged 10 and older
9The radio station 100% NL started broadcasting in the final two periods of our sample.
(10+) and are available for 12 regions in the Netherlands. The ratings data also provide information on the 10+ population in each region. The most important rating figure is the Average Quarter-Hour (AQH) persons which is the average number of listeners to a particular radio station for at least eight minutes during a 15-minute period. From this figure two other important ratings can be calculated which are the AQH rating and the AQH share. The AQH rating is the AQH persons expressed as a percentage of the 10+ population whereas the AQH share is the AQH persons expressed as a percentage of the total number of listeners.
This data is enriched by information on advertising revenues which is supplied by Nielsen Media Research who monitors and publishes advertising revenue of radio stations on a monthly basis. Advertising quantities are calculated as the amount of advertising revenue divided by the advertising spot price. This price is the advertising price per second multiplied by the average length of an advertisement (which is 20 seconds). Information on advertising prices per second is collected from individual websites of radio stations, the website www.radionieuws.nl, and by contacting radio stations.
The market characteristics that are available in every time period are the 10+ pop-ulation, the number of competing stations, and economic climate which is an index used by Statistics Netherlands. This index is based on two questions concerning the economic situation over the past 12 months and the future 12 months. Negative values indicate that individuals perceive the economic situation as bad whereas positive val-ues indicate good economic times. Appendix 2.A gives an overview of the variables used in this study and the data sources.
Table 2.3 provides summary statistics for the main variables included in this study.
During an average 15-minute period, 21.5% of the population listens to radio for at least eight minutes. This figure includes public and commercial listening to radio sta-tions broadcasting from both inside and outside the market.10 Listening is almost evenly divided between commercial and public stations. Although not reported in Table 2.3, the vast majority of listening, 21.07 percentage points of the 21.51%, is to
10National radio stations operate inside every market because they have national reach. Regional radio stations operate inside one or a few markets. However, regional radio stations can be received in markets that do not belong their target markets due to technical specifications which can transcend geographical borders.
Table 2.3. Summary statistics
Variables Mean Median SD Min Max
Station-level variables (# obs = 6,328)
AQH persons 10,953 4,600 15,038 100 87,800
AQH rating 0.94 0.44 1.16 0.02 9.61
AQH share 4.36 2.04 5.33 0.08 41.48
Advertising 3,621 2,773 2,896 11.68 15,154
National 0.72 1 0.45 0 1
Public 0.41 0 0.49 0 1
No FM 0.16 0 0.37 0 1
In-market 0.82 1 0.38 0 1
Market-level variables (# obs = 276)
AQH persons 253,871 225,300 143,128 57,000 563,100
AQH rating 21.51 21.46 2.12 16.77 26.98
- Commercial 10.95 10.97 1.62 6.91 14.99
- Public 10.53 10.46 1.77 6.87 14.62
AQH share 91.94 93 3.69 80.10 97.20
Number of stations 23.03 23 1.54 18 29
Economic climate −7.495 −14 19.63 −41 37
Population 10+ 1,177,000 1,023,000 631,314 340,000 2,296,000
stations from broadcasting inside their target market.
On average, almost 254,000 persons listen to radio with a minimum number of listeners of 57,000 persons in Zeeland and a maximum of 563,100 listeners in Noord-Brabant. The market-level AQH share reported in Table 2.3 indicates that only a small fraction of listening is not included because this study covers on average around 90%
of total listening. The lowest AQH share is found in Limburg and ranges between 80% and 88%. Its geographical location, being surrounded by three other countries, makes it difficult to have good radio coverage without intervening with foreign radio stations. It is thus not surprising that Limburg also has the highest AQH share in the category “Other” which includes foreign radio stations and other radio stations that are not included in the radio audience measurement.
The number of radio stations in a region ranges between 18 and 29 with an average of 23 radio stations. Again, Limburg is the market with the lowest number of radio stations available for the same reasons as mentioned above. In contrast, Gelderland which is a centrally located market has the maximum number of radio stations. Panel
Figure 2.1. Stations and listening by market
0200,000400,000600,000Total AQH persons
15 20 25 30
Number of stations
(a)
0102030Percentage of markets
15 20 25 30
Number of stations
(b)
(a) of Figure 2.1 shows that the number of listeners increases slightly with the number of stations. However, the total number of listeners varies greatly among markets with 22 to 24 radio stations. This is also the most common number or radio stations across markets as can be seen from Panel (b).
The station-level variables indicate that a radio station attracts on average 1% of the population and broadcasts on average 3,621 advertisements. The dummy variables indicate that the sample consists mainly of nationally commercial radio stations that have full coverage and broadcast via FM. However, there is quite some variation in lis-tening shares and advertising. The regional public radio stations are the most popular choice in the northern markets with Radio Noord peaking with a market share of 9.6%
in its target market Groningen. Radio stations that broadcast from outside the market have the lowest market shares as they do not have full coverage in those markets.
The mean and median of the AQH rating for different types of radio stations are shown in Table 2.4. This table also provides a t-test for assessing whether the means for these different types are statistically different. The last two columns indicate that the means of the AQH rating for the four characteristics are statistically different from each other at the 5% significance level. These characteristics will also be taken into account in the empirical specification.
Public and national radio stations have higher mean AQH rating compared to com-mercial and regional stations, respectively. The highest market shares for national broadcasters are around 5% and are obtained by three radio stations which are Ra-dio 3FM, RaRa-dio 538 and Sky RaRa-dio 101 FM (and closely followed by RaRa-dio 2). RaRa-dio 3FM is a public broadcaster whereas Radio 538 and Sky Radio 101 FM are commercial broadcasters. The two commercial radio stations are often referred to as the market leaders of the radio broadcasting industry. The median AQH rating for regional radio stations is lower than for national stations. The market shares for commercial regional radio stations range between 0.1% and 1.5% and these stations are thus less popular.
Not surprisingly, the mean and median for radio stations not broadcasting via FM and from outside the market are lower than radio stations that broadcast via FM and broadcast from inside their target market.
Table 2.4. AQH rating by station characteristics
t-test(H0: µa=µb)
Variables Observations Mean Median t-statistic Decision
a. Commercial 3757 0.805 0.46 −10.193 Reject H0
b. Public 2571 1.133 0.37
a. National 4544 1.012 0.65 6.703 Reject H0
b. Regional 1784 0.748 0.11
a. FM 5329 1.019 0.46 23.720 Reject H0
b. No FM 999 0.505 0.39
a. In-market 5193 1.120 0.65 57.847 Reject H0
b. Out-market 1135 0.106 0.05
Note: The results are shown for performing a two sample t-test with unequal vari-ances for testing whether the AQH ratings of different types of radio stations are equal.
Although not shown in this table, the F-values reject the null hypothesis of equal vari-ances.