How to Start a Radio Station: Step-by-Step Guide

How To Start a Radio Station in Nine Steps

Sometimes the hardest part of starting something new is not knowing where to start. That's where we come in. Whether you're starting a hobby radio station or breaking into professional radio broadcasting, the steps we outline here will help you turn your broadcasting dreams into reality.

Choose a Broadcast Format

If you're looking to start a radio station, you must decide whether terrestrial or online radio is right for your radio business. Radio stations can be classified in different ways based on the type of technology used to broadcast the signal and the corresponding range of the transmission. Choosing the right option will depend on your goals, available budget, and target audience.

Terrestrial Radio Stations

Terrestrial radio stations are what you might think of as traditional over-the-air radio stations. They use land-based transmission systems, which have a localized, limited geographical range and require expensive transmission equipment. Traditional radio also requires a special license from the Federal Communications Commission (FCC).

Online Radio Stations

Online radio stations, also called internet radio stations or streaming radio, use the internet to transmit broadcasts, allowing them to reach any market with an internet connection.

Terrestrial Radio Station vs. Online Radio Station

Terrestrial stations require more money to get started due to the high cost of physical transmitting equipment, licensing fees, and other start-up costs associated with opening a formal radio studio.

Online radio stations have lower start-up costs since they don't require physical transmitting equipment or FCC licensing. Online radio can reach listeners anywhere worldwide as long as they have an internet connection, whereas terrestrial radio is limited to a specific geographic area. Both types of radio are broadcasted live to listeners.

Online radio stations can be online-only, or they can be affiliated with terrestrial or satellite radio stations. In today's digital environment, terrestrial radio stations typically have an internet presence to extend their outreach. If this online presence is the same content as their over-the-air signal it is called a simulcast.

Because of this overlap, even if you want to start a terrestrial station, starting an internet-only station can be an efficient and cost-effective way to lay a foundation and test out your formatting as you work on FCC licensing and purchasing an FM or AM station.

You can start an entire radio network with online radio for much less than purchasing an FM station. Or if you start one FM station, you can still have an entire online network of stations to compete with the iHearts and Audacys of the world. Examples include:

These networks stream multiple programmed channels of music to listeners over the internet. Channels are organized by genre, just like terrestrial stations.

Evaluate the Demand for Your Radio Station

Conduct Market Research

Any successful business operation depends on a good plan, and the foundation of an effective business plan is market research. Your research should tell you essential information about your market, such as:

You can obtain this information from resources such as Nielsen, Think with Google, social media analytics, website surveys, industry market research reports, Census Bureau data, and other sources.

Research Audience Demographics

Use these resources to specify the demographics of your target audience and what they like to listen to and buy. This information will help you estimate the size of your market and your potential advertising revenue, which is critical for your financial planning.

Knowing your audience will help you determine which radio format best suits them. Radio formats can differ based on your broadcasting method. AM radio is the original radio format for terrestrial radio and is often used for talk radio and news programming. FM radio is a more recent development commonly used for music and entertainment programming. Online radio allows listeners to access a wide variety of programming, which can be niched for many market segments.

Analyze Your Competition

Another primary objective of market research is analyzing your competition. Find out who your competitors are, what they play, and how they position themselves in the market. This information will help you determine what you can do differently to distinguish your station.

Develop a Business Plan

Your market research is a foundation for other business plan components. Other elements of a complete business plan include:

Your financial projections are particularly critical for the success of your business plan. To generate them, you'll need to analyze the potential revenue streams and costs associated with starting your radio station and extrapolate several years out. The key to success in the start-up stage is keeping costs down. Consider online radio as a more straightforward and accessible option that doesn't require high start-up costs and elaborate plans to begin.

Obtain Funding for Start-Up and Ongoing Costs

Your business plan's financial projections position you to seek funding for your start-up phase. You'll need enough financing to cover any projected cash-flow gaps until your business begins turning a profit.

Potential funding sources include:

Your ability to qualify for loans and attract investors will depend on factors such as your credit rating and the strength of your financial projections. If you plan to seek these funding sources, take preliminary steps, such as having an accountant review your business plan and reducing the balance on your credit cards to improve your credit score.

If you plan to approach investors, you'll need a presentation that emphasizes benefits to them. You'll also need to convince them of your ability to repay any loans. If you plan to start an online radio station, you might emphasize how the cost savings improve the financial viability of your plan.

Ensure Licensing and Regulatory Compliance

To start your radio station, you must comply with state and federal licensing and regulatory requirements. These vary depending on whether you plan to pursue a terrestrial or online radio station:

Terrestrial Radio Station Licensing

The Federal Communications Commission (FCC) regulates AM and FM radio licensing to ensure that no station uses frequencies that interfere with another station. Station frequencies are in heavy demand, and the filing process can be complex and time-consuming. Because of this, the FCC recommends that applicants don't purchase any equipment before receiving a construction permit.

Since demand for frequencies is so competitive, the FCC has a filing window for new station applications, which opens at specific times. They're not always open, so you'll have to wait for the next window to file your application.

If you do gain approval, the process of finding a location, building a studio, and purchasing equipment are complex. Before you embark on this investment, you should seek professional help from experienced radio attorneys and consultants to navigate the process and increase your odds of success.

Online Radio Station Licensing

You don't need an FCC license to broadcast online, so obtaining a license for an online radio station is generally less complex and time-consuming than obtaining a license for AM or FM commercial radio stations. However, some licensing requirements still need to be met to ensure compliance with copyright laws.

To legally play copyrighted music, online radio stations must obtain licenses from performance rights organizations such as the American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC (originally the Society of European Stage Authors and Composers). Additionally, you must comply with the rules of the countries you are broadcasting from and to. Work with an attorney or consultant familiar with internet radio licensing obtain licenses internet radio licensing requirements to ensure compliance and avoid potential legal issues.

Purchase Necessary Equipment and Studio Setup

Once you've cleared any licensing concerns, you can purchase equipment to set up your studio. What equipment you'll need will vary depending on whether you plan to set up a terrestrial radio station or an online station.

Terrestrial Radio Broadcasting Equipment

Purchasing equipment for an AM or FM studio requires significant capital. You'll need a budget and financing for big-ticket items such as:

Online Radio Broadcasting Equipment

Purchasing equipment for an online radio station is more straightforward and cost-effective. It will require essential recording equipment such as:

This list is representative rather than comprehensive. We'll go into more detail on what broadcasting equipment you will need in Chapter 2.

You can cut labor and costs on these items by outsourcing to a broadcasting solution provider. A broadcasting service lets you tap into cloud-based infrastructure your provider already owns and shares with other customers, reducing your ownership and maintenance costs. You pay based on your usage needs, as with other on-demand services.

Develop Programming for Your Audience

After purchasing equipment, you can begin developing your programming format and content, hiring staff, and planning your broadcasting schedule.

Choose a Radio Station format

Your radio station format defines the scope of your content in terms of genres:

You can combine these formats by assigning different time slots to different formats.

Use Syndicated Media

If you include syndicated news, sports broadcasts, or music as part of your programming, you'll need to obtain access to content. You can use resources such as Westwood One, affiliated with Cumulus Media, to access news and sports. For access to music, you can reach out to local record labels and music promoters or use professional music services such as Radio Exclusive.

Hire Staff and On-Air Talent

To run your broadcasting operations, you may need to hire staff. If you're running an online radio station, you may be able to run it yourself or want to hire help. For terrestrial radio stations, you'll definitely need help. Positions you may wish to fill include:

A significant task for your team will be planning your programming schedule. One consideration is how many hours of live broadcast you will air per week and whether you will use any automated broadcasting. Staffing a radio station with live content around the clock is expensive and impractical, so many stations that broadcast 24/7 use automated station management services. These services allow you to use software to plan your schedule and schedule blocks of automated programming between blocks of live broadcasts.

Promote and Market Your Radio Station

Set Your Marketing Budget

Promotion is essential to making a radio station successful, both in the start-up phase and on an ongoing basis. You should allocate a portion of your budget to marketing. As a budgeting rule of thumb, most businesses will need to devote 20% to 30% of their revenue toward marketing in the start-up phase. As you establish yourself in the market, this can be reduced to 5% to 7%.

Choose Your Marketing Channels

When starting up your own station, your marketing efforts can go toward tasks such as:

Connect with Advertisers

Connecting with advertisers extends your promotional partnership network and attracts revenue, which can help you cover your operational costs and eventually turn a profit. You can automate the process of finding advertisers by using programmatic advertising, which deploys technology to find ad content geared toward your target market. Direct sales and sponsorship arrangements are other ways to generate revenue.

Find Distribution Opportunities

Automated distribution services can assist you with the task of building your audience. For example, Live365 offers a distribution service to get your station on over 200 connected devices, reaching 30+ million US listeners and millions more in Canada and the United Kingdom. Live365 helps build your audience by getting you publicity through a web directory, mobile apps, dedicated players, smart TV apps, Alexa skills, and even premium distribution via iHeartRadio and TuneIn On Air.

Launch Your Station and Grow Your Audience

Generate Buzz Around Your Radio Launch

With your promotional plan in place, you're ready to launch your radio station and grow your audience. Consider holding a special event to celebrate and promote the launch of your station. One option is to work with your promotional partners to set up a local or online event where you can initiate your broadcast. Featuring a celebrity guest also can help you publicize your launch.

Collect Feedback from Your Listeners

As you're growing your station, it's vital to collect objective feedback on your success by continuously monitoring and analyzing audience engagement. This feedback will let you know how your programming is going with your target audience, what's working and what isn't, and whether you need to make any adjustments. Live365 provides a statistics tool you can use to monitor audience engagement in real time.

To improve your station's performance, you can implement strategies to maintain and grow your audience, such as:

Monetize Your Radio Station

As your station grows, look for opportunities to capitalize on your success by monetizing your station. A great way to increase your advertising revenue is to use automated tools which provide ads geared toward your target audience. Live365 offers a monetization feature that connects you with ad exchanges, trading desks, and ad buyers to automatically insert relevant ads into your programming at intervals you select. For example, you can set your station up to run ads every half hour or on the hour. This feature allows you to maximize your revenue with minimal manual effort, giving you more time to plan your content.

The Next Step to Starting Your Own Radio Station: Acquiring Tools and Equipment

Starting a radio station, whether a terrestrial AM/FM station or an online station, requires significant planning, research, and preparation. A solid business plan backed by market research and financial projections positions you for success. Obtaining funding and licensing are critical steps you should take before buying equipment. Planning your content and hiring your staff are other essential tasks in the start-up phase. Once you've set up your studio, you're ready to shift your focus to promoting and growing your station.

So far, we've covered the nine essential steps for starting a radio station. Hopefully, you've gained some clarity on what your next actions need to be to get your station up and running. However, there's still much to learn.

In Chapter 2, we'll explore the essential radio studio tools and equipment you need to begin broadcasting. You'll learn about various types of equipment that comprise a professional studio setup and how to prioritize the right equipment for your budget and needs.