Is Radio Biting Off More Than It Can Chew?

caravelle radio broadcast stationThere are lots of items in the news these days about what the radio industry should be doing. Streaming, podcasting, smart speaker accessible etc. The one thing I hear little talk about is, improving the core product and focusing on what the listener is seeking.

The Radio Ecosystem

If you think about it, the radio ecosystem, AM/FM radios, have not seen any real changes in decades. Oh, there was the introduction of HD Radio – introduced around the same time as Apple introduced the iPod (R.I.P. 2001-2014), but listeners never really understood the need for it. HD Radio was embraced by commercial broadcasters when they learned they could feed analog FM translators from HD Radio signals and have more FM radio stations in a single marketplace. This was hardly listener focused and actually chained the radio ecosystem to old analog technology.

What IS Radio?

In the beginning, radio was a way to wirelessly communicate with other people using Morse Code on spark gap transmissions. Guglielmo Marconi built a radio empire on this technology.

David Sarnoff, a skilled Morse Code operator and a Marconi employee envisioned a “radio music box” and wrote a memo about developing a commercially marketed radio receiver for use in the home. It wasn’t until after World War I, when Sarnoff proposed the concept again, this time in his new position as general manager of the Radio Corporation of America (RCA), that it would see the light of day.

Sarnoff would demonstrate the power of radio by broadcasting a boxing match between Jack Dempsey and Georges Carpentier. In just three years, RCA sold over $80 million worth of AM radios, and not soon after created the National Broadcasting Company (NBC).

Federal Radio Commission

America’s first attempt at regulating radio transmission was the Radio Act of 1912, that was enacted after the sinking of the Titanic. This law didn’t mention or envision radio broadcasting.

As radio broadcasting began to grow in the 1920s, then Secretary of Commerce Herbert Hoover would begin the process of trying to regulate the limited spectrum that everyone now wanted a piece of.

The Radio Act of 1927 was America’s first real attempt at regulating radio broadcasting. The Federal Radio Commission (FRC) was then formed by this act.

It should be noted that the FRC operated under the philosophy that fewer radio stations, that were well funded and provided live original programs, were better for America than a plethora of radio stations providing mediocre programming. It was an idea that the major radio receiver companies championed.

Federal Communications Commission

In 1934, the Congress took another attempt at regulating broadcasting (radio & TV) as well as all the other forms of communication that now existed. The Communications Act of 1934 created a new regulatory body called the Federal Communications Commission (FCC). By 1934, radio broadcasting had evolved into a highly profitable business. Broadcast educator, Fritz Messere, writes: “Many of the most powerful broadcasting stations, designated as ‘clear channels’ were licensed to the large broadcasting or radio manufacturing companies, and the Federal Radio Commission’s adoption of a rigid allotment scheme, under General Order 40, solidified the interests of the large Broadcasters.”

The biggest and most well-funded broadcasters have been favored since the very beginning. What kept things in check until 1996 was the limit on the number of AM, FM and TV stations a single company could own.

Telcom Act of 1996

Those limits would evaporate with President Clinton’s signing of the Telcom Act of 1996. Radio, as America had known it, would be over.

Now, for the most part, a single owner could own as many radio stations as their pocketbook could afford. Lowry Mays and Red McCombs, founders of Clear Channel Communications, would grow their portfolio of radio stations to over 1200 from the 43 radio stations they owned before the act was signed.

In 2003, Mays testified before the United States Senate that the deregulation of the telecommunications industry had not hurt the public. However, in an interview that same year with Fortune Magazine, he remarked, “We’re not in the business of providing news and information. We’re not in the business of providing well-researched music. We’re simply in the business of selling our customers products.” (Mckibben, Bill (2007). Deep Economy. San Francisco: Ignatius Press. p. 132.)

Radio Zoning The FCC is now considering whether to further loosen up the ownership limits of radio and TV stations in America. FCC Attorney John Garziglia recently wrote:

“If radio stations could be erected like fast-food establishments and grocery stores, with no numerical limits imposed other than a businessperson’s risk tolerance, it would be difficult to argue for FCC-imposed ownership limits on radio. Indeed, a regulatory agency enacting numerical limitations on restaurants and grocery stores would likely not pass legal muster.

But there are widely-enacted municipal limitations on just about every type of local business. The limitations are called “zoning” – the permitting or prohibiting of certain uses in certain areas to protect the character of the community.

The FCC’s radio ownership rules can be thought of as a kind of radio zoning. In the same way as land-use zoning protects a community’s character, the FCC’s ownership rules permit or prohibit certain radio station combinations protecting the amorphous concept of the public interest.

With land-use zoning, communities maintain a distinct character, livability, aesthetic, and economic success by not bowing exclusively to the profit motive of land developers. Allowing several or fewer owners to own virtually all of the radio stations in the country would doom the specialness of our radio industry.”

 

I think John makes some excellent points and I would encourage you to read his complete article HERE.

Biting Off More…

Radio operators today can’t properly staff and program the stations they already own. What makes them think that will change if they own even more of them? Most radio stations are nothing more than a “radio music box” run off a computer hard drive, an OTA (over-the-air) Pandora or Spotify.

Former Clear Channel CEO, John Hogan, introduced the “Less Is More” concept when I worked for the company. While it actually introduced more on-air clutter, not less, the idea was neither new or wrong.

If owning more radio stations was the answer in 1996, then why in 2018 are we worse off than we were then?

Why was Jerry Lee able to own a single station in Philadelphia and dominate that radio market?

Why are many locally owned and operated radio stations some of the healthiest and most revered in America today?

Radio not only needs zoning on the number of radio stations a single owner can control in a market, but the total number of radio station on-the-air in a market. And it needs radio stations that are neglected to be condemned like property owners who let their land go to seed.

The FRC wasn’t perfect, but the concept of “less is more” served America well for many decades. Fewer radio stations that provided high quality, live programming, operating in the ‘public interest, convenience and necessity’ and by virtue of that diversity of ownership, provided diversity of voice and opinions, as well as healthy competition.

 

19 Comments

Filed under Education, Mentor, Radio, Sales

19 responses to “Is Radio Biting Off More Than It Can Chew?

  1. Public Interest, Convenience and Necessity is Service. If few listen, something’s lacking. When signals deliver excellent professionalism, that’s fine. However, lack of local service, combines with sparse listenership and a glut of interference and “one size fits all” will not benefit Real Radio. An essential quality consideration for deregulation and the FCC.

    Liked by 1 person

  2. Rick Tallent

    As someone who has been in radio and television since I was a teenager, I have watched the demise of our industry. As an air operator/announcer, I enjoyed my time playing music, programming, and reading the news. And, I enjoyed the local impact a 1 kw radio station had on the community. Once I had obtained the coveted First Class Phone license, I moved into engineering and have made a good living as a broadcast technician/engineer. Then, with a few partners, we purchased a dead AM/FM combo and returned them to powerful and beloved local stations with the finances to support themselves. I have now returned to consulting and engineering and am watching the industry as it slowly dissolves into oblivion.

    WHY is radio having such a difficult time? Is it technological changes? The internet? The lack of advertising monies? Or is it that we have watched it be destroyed by deregulation and the proliferation of the mega-corp station groups?

    I believe the slow death of radio and television is happening because of the failure of the government to maintain integrity in the process. How many FCC lawyers and commissioners have left the Commission and become executives with these large corporations? How many of the regulatory changes have benefited these same corporations and the FCC lawyers and commissioners (and don’t forget their families!)? Deregulation has allowed a few to control the industry, all of them backed by Wall Street funding, even when they are bleeding red ink worse than a ruptured pipeline! The technical standards have disappeared along with the requirement that the “technician” or “chief engineer” actually be qualified to do the work, not to mention one “broadcast engineer” handling multiple stations in several cities for a mega-corp licensee.

    The old joke “Yesterday I culdn’t spell ‘ingune’r’ and today I are one!” has become reality as many who have no clue are serving as the technicians in charge of transmitters that are now spewing trash across the airwaves. As a technical consultant, I am appalled at the lack of maintenance the owners now have performed. Sites that are inaccessible due to brush, trees, and general debris are the rule instead of the exception, and the owners could care less as long as the transmitter remains on-the-air. They only care about the DOLLARS and as long as the FCC does not concern themselves with the technical specifications of a broadcast signal, neither will they.

    “We have met the enemy and he is us!” is a true maxim for broadcasting. THE LICENSEES have demanded less and less regulatory oversight, and their PAC money has purchased it. Rather than KEEP transmitter systems in good technical condition, they are allowed to degenerate into RF noise, and antenna systems (especially in AM) are destroyed by a total lack of maintenance.

    I don’t know how many more years I have in the business because after over 40 years, I am pretty disgusted with not being permitted to do what needs to be done to make and keep transmitters operating cleanly and legally. It seems that the owners do not care as long as it is on-the-air. One licensee recently told me that he didn’t care if his 5 kw AM was even on-the-air because he has a 400 watt FM translator that covers enough of his market to make him happy. Another licensee installed a well-used 1 kw transmitter when his 5 KW went down for the count, and then started whining that he needed a translator. Of course, he spent the money on the translator and has never bothered to replace the “temporary” 1 kw or return to his licensed power. In the meantime, a “licensee” of a couple of LPFMs operates them as commercial stations without regard for the regulations, and even the FCC turns their head and ignores them.

    When an industry will NOT police itself, it MUST be regulated by the government, hopefully with an agency that maintains integrity and separates itself from political posturing and the money that is waved in their faces.

    We would not tolerate the oil and petrochemical industry behaving like this, would we? We would not tolerate the electric company behaving like this, would we? Then why should broadcasting get a free pass?

    AM broadcasting is an example of an industry that has been abandoned rather than maintained and nurtured. In many towns, the electrical noise is so bad that AM signals cannot penetrate it, so the answer is to shut down the AM station and replace it with an FM. Why not force the creators of the electrical interference to clean up their act? Doesn’t happen, so AM continues to be the unwanted stepchild of a deceased parent whose only benefit is the monthly check received on its behalf.

    Don’t get me wrong: I LOVE BROADCASTING and would buy another dead station if I had the money; however, with the current attitude about radio broadcasting, I sometimes wonder if I will be able to supplement my meager retirement with consulting work long enough to finish my course. It’s sad, yet true, that we have allowed our industry to be destroyed from within because a few wanted it all, and now that they are failing, the entire industry will pay for their visions of grandeur and power.

    “The Three Amigos” is what I call them, and they destroy everything they touch. Prestige, Power, and Profit……the lusts of the flesh, the lusts of the eyes, and the pride of life.

    We wanted less regulation, and we got it, but the price we have paid is far higher than the money that changes hands in Washington to make it happen. The long-term effect has been the utter destruction of our industry.

    And that’s the way I see it. Add a buck or so to it and you can buy a cup of bad coffee.

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  3. “Radio, as America had known it, would be over.” No radio evolved, and many didn’t want to make the change. With or without the telecommunications act stations would of went dark or started signing off. (maybe that should of happened). The media landscape has changed. Radio will need to change. You can’t use Jerry Lee’s station as a blanket example. He was (is) a fixture in the market for years, and is well known in the industry. Radio will need to compliment other media with digital, NTR, events, etc in order to make revenue and projections. Every industry has increased competition and will need to think out of the box. Sears is a good example. Retail is not dead, Sears just didn’t expand and change their business model. A bunch of DJ with egos and chatter doesn’t work also. With today’s voicetracking, stations have better sound quality (carts suck, records skipped, and yes DJs did announce songs incorrectly) and dead air has been reduced to nothing. Our playback system also works nights, Holidays and weekends, and usually doesn’t have issues. I don’t miss the days of DJ’s ignoring format or having to go in at midnight, or weekends because somebody quit or didn’t show up. We get more email responses and texts at our stations now. The phone..it collects dust and the old radio guard can’t seem to come to terms with that. I evolved from the DJ because I saw the writing on the wall. I traded my T-shirt for casual dress. I didn’t wan’t to travel town to town, so I became a owner. In closing, if the ownership cap is raised those stations will still be on the air, and not much will change. The DJ of thirty years ago is not coming back.

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    • Rick Singel

      Damon you can take your voice tracking and stuff
      it in a toilet. It has ruined radio. And can you be ANY
      more insulting to Dick? He won’t say it so I will-you are
      a real jerk.

      Like

  4. KFodor@aol.com.

    If radio has to evolve…so, too do announcers.

    Liked by 1 person

    • We’ve got folks who’ve been complaining online for 20 year about the changes and they haven’t been reversed yet. It’s hard to make a case that the woman cutting hair all day with the adult contemporary station in the background knows…or cares…that a station is voice tracked

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      • Re: “It’s hard to make a case that the woman cutting hair all day with the adult contemporary station in the background knows…or cares…that a station is voice tracked”

        Brad: You are correct, but fail to mention how there are far fewer of these women listening to local radio AC while they cut hair – today it is mostly Sirius, Pandora and Spotify that’s on in their salons.

        Liked by 1 person

      • Ken, that’s a very good point. I always monitor what people in various businesses are listening to and what I’m constantly finding is it’s any number of streaming services vs. OTA radio. That should be very concerning to any broadcaster.
        -DT

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  5. Bob Schilling

    Thanks for both the historical view and your conclusions. The majority of our friends agree, quality stations are a rarity and while we love the good ones, all those garbage stations dilute the ad dollars to the point it makes it difficult for any of them to survive and be healthy. Unfortunately, I fear the unfettered amount of money being spread around by lobbyists will continue to make it very difficult to change the situation or even keep it from getting worse.

    Liked by 1 person

  6. WALTER LUFFMAN

    The zoning idea makes a lot of sense. I suggest this be coupled with increased proof of public service requirements, with emphasis placed on local news coverage.

    Liked by 1 person

    • What if you have an audience that doesn’t want local news coverage at every spot on the dial? Why do 30 stations have to cover the same accidents, fires and city council meetings every hour of the day? Try to force feed stuff to listeners, and they can turn you off faster than you can say “public interest, convenience and necessity”

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      • The problem with too many radio signals to be supported by the advertising/listener base is that instead of great local news coverage, you have multiple stations providing mediocre coverage or reading wire copy or reading the news out of the local paper.
        -DT

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  7. Kyle

    Isn’t radio kind of like Sears? Something that was once large and great. But now just needs to go away.

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  8. TheBigA

    If the problem is too many radio signals, whose problem is that? Not the radio owners. When the FCC enacted Docket 80-90, they doubled the number of FMs. Then they added LPFMs and translators. Radio owners are trying to keep up with all the new signals. Maybe it’s time for the FCC to start cutting back on the number of stations. On the other side, you have companies like Pandora and Spotify running thousands of stations all owned by the same company. No one is criticizing them for their inability to staff those stations. Their response is to have no air staff at all. And you say you’re hearing more streaming radio in businesses. Perhaps FM radio should provide more unstaffed radio channels like Pandora and Spotify, if that’s what the people want.

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  9. I was struck by “serving the public interest” which was pointed out by one of the posters here – another way of saying “let the marketplace decide”. Radio was initially designed to serve the public-now it’s been diluted by the digital revolution. More entertainment sources than ever before. Everything from podcasts to pureplays. My 26-year old son listens to podcasts that contain subjects and language that broadcasting could never get away with. We’ve taken technology and twisted it to serve the suppliers and not the intended audience. What IS in the public interest? A well planned research project by a well organized organization will come up with the answer…they’ll put it into practice and “broad” casting will resume. Is that AM? FM? Online? Shortwave? Cell phone? The laws of supply and demand will still apply here. What the hell do they (the public) want? If you know, then GIVE it to them. Thanks! Oh and to answer the original question- just like EVERY business is….radio is trying to eat that elephant.

    Liked by 1 person

    • Thanks for stopping by the blog Dave and adding your perspective.

      By the way, the concept of operating in the “public interest, convenience and necessity” was never really made clear since those words were placed into the communications acts.
      -DT

      Like

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