Although it will undoubtedly reduce competition, the recent buying spree by Canada’s major radio broadcasters won’t necessarily drive up advertising rates, says at least one radio advertising expert.

David Bray, senior vice-president of RadioWorks, the radio advertising division of Toronto’s Hennessey & Bray Communications says recent acquisitions by Telemedia, Chum and Astral will create economies of scale that should keep costs down and open up possibilities for greater niche marketing.

‘I think you’re going to start to see [broadcasters] each striving for their own niche, controlling that niche and, hopefully, not getting too greedy about things,’ he says.

‘It’s no good to have a bunch of rock stations going head to head in a market. It waters it down and means you have to buy three or four stations deep if that’s the target you want.’

Bray says that by consolidating management and accounting functions in each market, broadcasters should be able to improve their bottom line without having to raise rates. Further savings could be accomplished, he says, by developing network programming that can be shared among stations with similar formats, providing national or near-national sponsorship opportunities for advertisers.

Although Canada is not quite at the national network stage yet, some broadcasters are well on their way now that regulatory changes made by the CRTC allow radio broadcasters to own more than one station in a given market.

Just this month, Astral Communications offered to purchase Montreal-based Radiomutuel. If the CRTC approves the bid, the move would give Astral a dominant position in French-language broadcasting with ownership of 12 radio stations and co-ownership with Telemedia in two.

Telemedia Communications of Montreal recently became Canada’s largest radio chain with its purchase of eight Maritime radio stations from Radio One and Radio Atlantic, and 31 stations from Vancouver-based Okanagan Skeena Group. These acquisitions have allowed Telemedia to build a network of 65 stations across Ontario, Quebec, the Maritimes, Alberta and British Columbia.

Also in May, Rawlco Communications of Calgary sold two Ottawa radio stations to CHUM Group Radio of Toronto and two Calgary stations to Rogers Broadcasting.

Jim MacLeod, president of Radiocorp, which owns two radio stations each in the Hamilton and London, Ont. markets, doesn’t rule out the possibility of modest rate hikes, but says it depends on the market.

‘At the end of the day, there will be more choices on the radio, more people listening as a result. Collectively, we will all do better,’ he says.

Radiocorp was purchased by Telemedia late last November. CRTC approval of the deal is expected later this summer.

‘In the long run, the real win in this is that we will be able to do a better job of segmenting our products,’ MacLeod says, explaining that a concentrated ownership structure will enable distinct formats to survive in a single market rather than having two or three similar stations slugging it out for supremacy.

In the London market, for example, Radiocorp’s AM station is a talk format, its FM station is country, while Telemedia’s AM station – the number one station in the market – is adult contemporary.

If Radiocorp had wanted to better itself in the market, says MacLeod, it would have had to have changed formats and gone after some segment on the pop side, but it doesn’t make sense to do that now that Telemedia has a foot in each format.