Media Musings: Local radio content fading
“There are still 3,800 owners out there, compared to the record industry, the movie industry, banking, grocery, retail. While there has been an enormous amount of change over the last seven years, radio is far from a consolidated business.”
So, John Hogan, CEO of Clear Channel Radio, told the Country Radio Seminar in Nashville last week. If the remark sounds defensive, it is. Clear Channel now owns more than 1,200 radio stations billing $3.6 billion a year.
His closest competitor is Infinity Broadcasting, billing $2.5 billion. Leaders of the radio industry predicted another billion-dollar player would emerge soon through the continued merging of radio companies.
Well, you may wonder how radio got so concentrated and it goes back to the Telecommunications Act of 1996, the single worst piece of legislation written when Clinton and Gore were walking the Oval Office. Among many other pieces of work, the act dropped limitations on the number of stations any company could own. In seven short years, it did change the radio world – forever.
The underlying philosophy of allowing radio industry consolidation actually began in the Reagan Administration, which fought to get the Federal Communications Commission to replace the old standard -?radio had to act in the public interest, convenience, and necessity – with an economic model where the marketplace rules, rather than government regulation.
Those fighting the Clear Channels of American radio argue the real loser is our democracy. Radio, once America’s beloved friend and source of news, opinion and information, is no longer serving any other function but being the number one salesman for recorded music or the voice of right-wing talk shows. News coverage is minimal or non-existent.
It was reported during the conference that 91 percent of those interviewed in a survey said they first heard new music on radio. But, even there, the record business is still complaining that these mega-radio empires so control the access to new voices – a charge loudly denied by Hogan — that radio, too, is hurting the record business.
Really, what this all comes down to is which model of modern radio will survive? If it is the Wal-Mart model, where the mom and pop hardware store and grocery store died under the juggernaut, then radio will see more stations die (in the trades it’s “go dark”).
The three major radio chains will be able, by offering advertising packages, to drive the small AM station, especially, out of business. There is no will, at least in public statements, by Congress or the FCC to alter the 1996 act to change the current direction of the industry.
To some concerned critics and observers, this situation means radio is a tragedy. More and more stations will have national jocks handing many stations with only local inserts to make you think it’s a local station.
The idea of a local station caring about a town like Nashville or McMinnville will be mostly history. There is however, perhaps another set of challenges the industry should focus on. This is the era of the Internet and wireless communication.
The CD may die just like vinyl records did, replaced by downloading music. Radio may see its future with some fear due to satellite radio as Detroit puts receivers in more and more new cars this fall.
Technology never favors any industry forever and as hand-held devices, now under development by Bose, go into the marketplace, college students, who have never known a world without the computer, will adopt as soon as they can afford it. Add to that the inability of the computer industry to find firewalls to protect copyrighted works, and you see why all of this talk is so nervous.
For in truth, no one really knows what the techno-world will birth next. But I don’t think I would buy an AM station today. Wait a while.
(Ed Kimbrell is a professor in MTSU’s College of Mass Communication.)