The Death of "Local Radio.".
THE 1996 TELECOMMUNICATIONS Act was one of the most lobbied bills in history. Telecom and media interests spent $34 million on campaign contributions for the 1995-96 election cycle--almost 40 percent more than the previous election. The Telecom Act was chock full of goodies for the industry, from cable TV to wireless phone service providers, from television stations to long distance telephone companies. The bill covered so much ground that the quiet but revolutionary changes it made to the rules governing the ownership of radio stations went practically unnoticed.
Until 1996, a company could own no more than 40 radio stations nationwide, and no more than two AM and two FM stations in a market, regardless of the market's size. The Telecom Act removed all restrictions on national ownership, and greatly relaxed the rules on how many stations a company could own in a particular market. In a big market, a company can now own as many as eight stations, and in smaller markets, between five and seven. In smaller cities, it is now possible for two companies to lock up the entire market.
Predictably, these new rules triggered a feeding frenzy. One third of all radio stations in the United States have changed hands since 1996. In 1996 alone, 2045 radio stations were sold, for a total of $13.6 billion. Of the 4992 stations in the 268 ranked markets, almost half are now part a "superduopoly," that is, they are owned by a company that has three or more stations in the market. In 1996 the top ten radio companies controlled only 600 or so radio stations. Today, the four biggest companies--Chancellor Media, Infinity Broadcasting, Clear Channel Communications, and Jacor Communications, which Clear Channel is currently buying--control nearly twice that number. If you live in a major market, chances are there isn't an independent commercial radio station on your radio dial. There are 1,000 fewer station owners today than there were in 1995.
The Bland Band
What commercial radio broadcasters sought--and got--in the 1996 Telecom Act was the ability to create huge national media companies that could put radio on the national advertising map. They could pitch their stations to local and national advertisers alike. If Ford wants to sell cars in Cincinnati, it can deal exclusively with Jacor Communications, which controls eight stations in the city with a range of formats. It can target the 25-54-year-old soccer moms who might buy Aerostar minivans on Adult Contemporary station WVMX, tempt 18-35-year-old males with Mustangs on Rock station WEBN, and peddle Tauruses and Explorers to 35-54-year-old males on news/talk station WKRC.
Ohio-based Jacor was one of the earliest and most aggressive consolidators. In 1995 Jacor had 25 stations, by late 1996 it had 64 stations, and it currently owns 240 stations in 53 mid-sized markets. Pam Taylor, a spokesperson for Jacor, describes its operating strategy as a "hub and spoke" system: "At a small station in a small market, it costs a lot to have a live, local person on the air even 12 hours of the day. If you limit on-air live time to morning and afternoon drive, you can get the rest of the day's programming from the hub." New satellite and internet technology allows a technician at a small station literally to cut and paste bits of local news, weather and chatter into piped-in programming with a click of a mouse on a computer screen. Stations can even apply this technology to listener requests and call-in promotions, by simply clicking and dragging bits of dialogue into the appropriate places. The computer wizardry makes the broadcast seem local, and in many cases, it is hard for listeners to know they are hearing something shipped in from out of town.
For listeners, the most important result of consolidation has been that playlists are strategically selected by teams of market researchers who often live and work hundreds of miles away from the people that will actually hear the music. What you hear has been carefully crafted to appeal to targeted demographic groups. "Jacor is nothing if not shameless in taking what works at one station and applying it to others," says Pam Taylor. DJs at corporate stations have little discretion in what they play; it becomes unlikely that something new and untested will get on the airwaves. A recent story in The Washington Post showed a compelling link between the corporatization of post-deregulation radio and the greater difficulties facing new artists trying to get record deals and get their music played on radio stations.
Changes in any realm are usually cause for nostalgia, and so it has been with radio deregulation. It is easy to forget that radio has always been in thrall to the top 40, and the notion of the mythic, music-loving DJ who plays whatever strikes his fancy is mostly fiction. But consolidation has made it even less likely that you'll hear something new, different, or even slightly out of the ordinary. On an oldies station, probably the most heavily researched and systematized format in radio, you'll hear the Beatles' "Hey Jude" and "In My Life" practically every day, but more obscure songs like "I Need You" and "I'm Only Sleeping" get little or no play.
"A small entrepreneur can take risks and push the envelope for his or her vision," says Cheryl Leanza, deputy director of the Media Access Project, a public interest telecommunications law firm that advocates diversity in media. A publicly held media conglomerate simply cannot afford to take those kinds of risks--they have stockholders to please.
Radio has always had to balance listeners' desires with the need to deliver a predictable audience to advertisers. But it used to be the case that if listeners didn't like what they heard on a station, if it was monotonous and repetitive, they could tune away. Now there is just less choice out there. The radio spectrum is a preciously limited and publicly owned commodity. There is only so much room on it, and the big companies intend to dominate as much of it as they can.
The story of WAAI is a kind of parable for what has happened to small radio stations all over the country. An independently owned country music station based in the small town of Hurlock on the Eastern Shore of Maryland, WAAI employed five full-time announcers and a newsman, as well as a sales and management staff. The station broadcast live local programming from 5 a.m. to midnight. It was, by all accounts, a successful station--so successful that it turned a profit from the very first year it was in business.
When consolidation came in 1996, WAAI found its carefully-built advertiser base in serious jeopardy. "Stations that were owned by companies that had big stations in Washington and Baltimore could afford to offer ads in their smaller markets at a fraction of what we could," one staff member recalls. The corporate-owned stations were squeezing WAAI in the local advertising market, while simultaneously pressuring the owners to sell the station. In 1997 the owners sold the station to MTS Broadcasting for close to $1 million, nearly twice its actual value.
Not all small stations have sold out. But the Telecom Act drove station prices to lofty heights, putting them out of the reach of the typical entrepreneur and making it difficult for station owners to resist the financial pressures to sell. As a result, only the most dedicated local owners have survived. WDKX-FM, in Rochester, NY, has broadcast live, local programming 24 hours a day, seven days a week for the last 25 years. It is ranked fourth in a market of 35 stations. It is the only independently owned commercial radio station left in Rochester. WDKX broadcasts an eclectic, quasi-urban contemporary format that includes R & B, soul, blues, jazz, gospel, hip-hop, and even some country music. The station has nine full-time on-air personalities and five part-timers who broadcast on the weekends. Even the station's location is unusual--WDKX broadcasts out of a renovated mansion in downtown Rochester, not an industrial park on the edge of town. Andrew Langston, the owner, feels that the expense of all-live local programming is a small price to pay for the loyalty of his listeners. "We are connected to our community, and that is the most important thing for a radio station," Langston says. All of WDKX's market research is done locally, and the program director, Langston's son Andre, personally oversees play lists. The station's call letters also evince a personal touch--they were selected by Langston to represent famous black leaders: Frederick Douglass, Martin Luther King Jr., and Malcolm X. Langston says he has had many offers to buy his station, but he is not selling. "The station can do more for the Langston family and the Langston family can do more for the community," he says. If he can hold out, he'll be unusual among single station owners.
Low Power to the People
The Federal Communications Commission seems to be sympathetic to single station owners, and its chairman, William Kennard, has taken steps to encourage further diversity in ownership by proposing to create three new classes of licenses for low-power FM stations (LPFMs). The proposed rules would allow licensing for stations to broadcast at powers ranging from one to one thousand watts. Currently most broadcasters are required to transmit at a minimum of 6,000 watts. This would open up the airwaves to hundreds, if not thousands, of new broadcasters. While no one is sure what the licenses would cost, the basic equipment to set up a small microradio station can be had for as little as $1,000.
LPFM could be an antidote to the corporatization of radio, putting licenses into the hands of people like Amanda Huron. Huron teaches radio production classes to children in an after-school program at the Latin American Youth Center in Washington, D.C. She wants to set up a community radio station in her neighborhood, Mount Pleasant, a mainly working-class area that is home to immigrants from Central and South America, the horn of Africa, and Southeast Asia, as well as an increasing number of whites drawn to the inexpensive old row houses, cultural diversity, and close-knit community. "Most of the Spanish programming available to the residents here is produced in the southwest or in Latin America," Huron says. "Why not have something more local, dealing with local issues?" Huron says she would run her station entirely with volunteers, and would incorporate as wide a variety of programming as she could, ranging from community news and event broadcasts to music shows and radio dramas.
The broadcasting industry hates the idea of LPFM. The industry's man on the Hill is Rep. Billy Tauzin (R-La.), chairman of the House communications subcommittee. The National Association of Broadcasters has vociferously opposed the proposed rules from the beginning. Tauzin told a group of NAB executives in February that LPFM would cripple existing radio stations by stealing their audience and taking away advertising dollars and possibly causing interference.
The industry's main fear about LPFM is simple: Competition does not make profits, consolidation does. The dust is finally starting to settle after the buying bonanza of the last few years, and the new mega-companies are saddled with the debt they racked up in their acquisition binges. The last thing they need right now is more competition.
The claim that LPFM would muddle the signals of larger stations seems dubious. The current interference standards were set 37 years ago, long before the advent of digital receivers that could pinpoint a station's signal on the dial and improved transmitter technology. Everybody but the broadcasting industry agrees that current standards are overly cautious and could be relaxed with no adverse effects on existing signals. Besides, the current standards represent a freebie to broadcasters. A station with a transmitter in Washington, D.C. might have a 20-mile radius listening area in which its signal is protected from interference. But the interference standards are so strict that the signal will probably go all the way to Baltimore, over 40 miles away. Broadcasters are not legally entitled to this extra reach, but they have grown accustomed to it. If an LPFM station were licensed in Columbia, Md., a suburb right between Washington and Baltimore, it could cut into the freebie radius of commercial stations in both cities.
When broadcasting began in the 1920s, it was mainly colleges and universities, labor unions, churches, and community organizations who ruled the airwaves. It wasn't until the late 1920s that the Federal Radio Commission, predecessor to the FCC, was established to oversee the radio spectrum, impose broadcasting standards, and issue broadcasting licenses. At that time it was decided that broadcasting of a more general character was in the public's interest, and the longstanding policy of the Commission has been to favor large, full-service stations. Until the early 1980s, the FCC imposed strict limits on the amount of advertising a broadcaster could air, and required that broadcasters commit a certain percentage of their on-air time to news, public affairs, and informational programming. Reagan-era deregulation removed those restrictions, leaving the marketplace to decide what broadcasters should and shouldn't provide to their listeners. Now with the Telecom Act, the barriers to consolidation have tumbled as well. Radio is just one of many sectors of our economy in which the space for small entrepreneurs is shrinking.
This is a shame. Radio is best when it is local, and media conglomerates, no matter how earnest they are in serving a local community, will always choose the cost and revenue benefits of consolidation over the particular desires of listeners. There should be room on that most public of open spaces, the radio spectrum, for as many different voices as humanity and the laws of physics allow. Now that LPFM offers a practical way to recapture some of radio's lost diversity, there's no exuse for not making it the law.
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|Title Annotation:||companies are buying radio stations|
|Date:||Apr 1, 1999|
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