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SYNDICATION 101... Bartering vs. Brokering, Part 1

Many people are introduced to radio syndication through "brokering"... the purchasing of half-hour and one-hour time blocks where just about any type of programming can be aired. This usually occurs because the host contacts a local station, and a salesperson there offers what seems to be a quick-start and semi-guaranteed way of getting listeners: Buying them.

There is nothing wrong with brokering... it has it's uses. So does a taxi. If you move to a new town and you don't yet own a car (but you need one to get to work,) you start your workweek out by hiring a taxi to get around. You do this simply because you know what you are getting, you know what it costs, and you know you can have it at your door the next day. But keeping a taxi as your only mode of transportation (outside of New York) would be cost prohibitive within just a few weeks. This idea can be carried over to brokering.

With brokering, you are buying the time on a station (or a network of stations), and you instantly get whatever listeners they have at the time you are on. But... the taxi meter is ticking. If you stop paying (or if some other unforeseen snag arises,) you will be off the station(s), and the listeners that you and your show had will be gone. That's why you want to own your own car. Another analogy would be opening a restaurant: Brokering is paying people to come in and eat, while bartering would be the way restaurants normally work.

The radio equivalent of car-ownership (or regular restaurants) is bartering. With barter, you don't pay stations to air your show... you instead market your show to them, the way songs are marketed to music stations. In this fashion, when you get a station (an "affiliate"), it is owned by you, and it cannot be taken away simply because you stop paying them (because, you never were paying them.) Most small-medium syndicated shows, along with almost all medium syndicated shows (not to mention every single major show in radio AND TV) operates on the barter system... because it simply costs too much to buy that number of listeners and stations over a long period of time. The other reason why a show would want to try to barter is that it has no marketing budget to broker with; there is no choice but to build "real" affiliates using the much lower cost barter system.

So why would a station carry your show for free? Because (1) You are providing sales pointers to their sales staff, instructing them how to sell your show to their local sponsors; (2) Your host is telephoning (or visiting) not only the station management and sales staff, but also the stations' prospective clients... which will help them close sales. And (3) you are building a "hit" show... lots of stations airing the same show at the same time across the country (stations can sell ads in hit shows much easier than non-hit shows; if a show does not spread to other stations, people assume it is not a hit.) These three points will convince some stations that they can make more money bartering your show than brokering it.

Here are some points to be aware of when comparing brokering to bartering:

BROKER: Most people are comfortable with the concept of "pay something, get something". These people like to compare syndication to advertising. BARTER: This is more difficult to understand, especially for those that have not been employed in the broadcast media. To understand it, you have to compare syndication to public relations, where you hire a PR firm for a period of time to get you press; you get an unpredictable amount of presss, but the press is free. You would never try to "buy" all that press directly; it would be cost prohibitive, and it would not look like "real" press even if you could buy it.

BROKER: Requires disclosures before and after the show; This is a big concern for certain types of shows. BARTER: No disclosures are required.

Next Topic: Bartering vs Brokering, Part 2

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