The Future of Music Coalition’s Jenny Toomey (also former leader of Tsunami, solo artist) blasts the results of corporate radio consolidation since the 1996 Telecommunications Act in the Nation, using evidence derived from the FMC’s recently released study.
- Radio is a public resource managed on citizens’ behalf by the federal government. This was established in 1934 through the passage of the Communications Act, which created a regulatory body, the Federal Communications Commission, and laid the ground rules for the regulation of radio. The act also determined that the spectrum would be managed according to a “trusteeship” model. Broadcasters received fixed-term, renewable licenses that gave them exclusive use of a slice of the spectrum for free. In exchange, they were required to serve the “public interest, convenience and necessity.” Though they laid their trust in the mechanics of the marketplace, legislators did not turn the entire spectrum over to commercial broadcasters. The 1934 act included some key provisions that were designed to foster localism and encourage diversity in programming.
Although changes were made to limits on ownership and FCC regulatory control in years hence, the Communications Act of 1934 remained essentially intact until it was thoroughly overhauled in 1996 with the passage of the Telecommunications Act. But even before President Clinton signed the act into law in February 1996, numerous predictions were made regarding its effect on the radio industry:
§ The number of individual radio-station owners would decrease. Those in the industry with enough capital would begin to snatch up valuable but underperforming stations in many markets–big and small.
§ Station owners–given the ability to purchase more stations both locally and nationally–would benefit from economies of scale. Radio runs on many fixed costs: Equipment, operations and staffing costs are the same whether broadcasting to one person or 1 million. Owners knew that if they could control more than one station in a local market, they could consolidate operations and reduce fixed expenses. Lower costs would mean increased profit potential. This would, in turn, make for more financially sound radio stations, which would be able to compete more effectively against new media competitors: cable TV and the Internet.
§ There was a prediction based on a theory posited by a 1950s economist named Peter Steiner that increased ownership consolidation on the local level would lead to a subsequent increase in the number of radio format choices available to the listening public. (Steiner, writing in 1952, was not talking about oligopolistic control of the market by a few firms, as we have in the United States; rather, he was basing his predictions on an analysis of BBC radio, which is a nationally owned radio monopoly, not an oligopoly.) According to Steiner’s theory, a single owner with multiple stations in a local market wouldn’t want to compete against himself. Instead, he would program each station differently to meet the tastes of a variety of listeners.
But what really happened?
Well, one prediction certainly came true: The 1996 act opened the floodgates for ownership consolidation. Ten parent companies now dominate the radio spectrum, radio listenership and radio revenues, controlling two-thirds of both listeners and revenue nationwide. Two parent companies in particular–Clear Channel and Viacom–together control 42 percent of listeners and 45 percent of industry revenues.
Consolidation is particularly extreme in the case of Clear Channel. Since passage of the Telecommunications Act, Clear Channel has grown from forty stations to 1,240 stations–thirty times more than Congressional regulation previously allowed. No potential competitor owns even one-quarter the number of Clear Channel stations. With more than 100 million listeners, Clear Channel reaches more than one-third of the US population.
….listeners are losing. With an emphasis on cost-cutting and an effort to move decision-making out of the hands of local station staff, much of radio has become bland and formulaic. Recall Steiner’s hopeful theory that an owner would not want to compete against his own company and would therefore operate stations with different programming. We found evidence to the contrary: Radio companies regularly operate two or more stations with the same format–for example, rock, country, adult contemporary, top 40–in the same local market. In a recent New York Times article, “Fewer Media Owners, More Media Choices,” FCC chairman Michael Powell denied this, propping up Steiner’s theory by saying things like, “Common ownership can lead to more diversity–what does the owner get for having duplicative products?” But we found 561 instances of format redundancy nationwide–a parent company operating two or more stations in the same market, with the same format–amounting to massive missed opportunities for variety.
Still, from 1996 to 2000, format variety–the average number of formats available in each local market–actually increased in both large and small markets. But format variety is not equivalent to true diversity in programming, since formats with different names have similar playlists. For example, alternative, top 40, rock and hot adult contemporary are all likely to play songs by the band Creed, even though their formats are not the same. In fact, an analysis of data from charts in Radio and Records and Billboard’s Airplay Monitor revealed considerable playlist overlap–as much as 76 percent–between supposedly distinct formats. If the FCC or the National Association of Broadcasters are sincerely trying to measure programming “diversity,” doing so on the basis of the number of formats in a given market is a flawed methodology.
As someone who has worked in commercial radio on and off over the last 20+ years, I can tell you that from a creativity, musical diversity, and employment standpoint, commerical radio is a disaster. Talk about cultural imperialism: it exists much more WITHIN the US than without, with a few companies dictating what the public will hear. Only the safest, lowest-common denominator music is even considered with vast financial leverage hanging over the stations, causing the programmers to aim for offending the least, not playing the best.
From an employment standpoint things couldn’t be much worse with syndicated shows eliminating any hint of local flavor, computerized voice-tracking removing even local jocks from real-time involvement, and an emphasis everywhere on generic predictability. Commercial radio today is hell for all except the suits, and the FCC’s Powell wants to allow EVEN MORE consolidation.