For many of you, this past week has been a very stressful one. The world’s largest radio owner/operator, iHeartMedia, announced a countrywide Reduction In Force or RIFs. However, reading an internal memo obtained by All Access, I see that the new term for this is “employee dislocation.”
No matter how your phrase it, a lot of good radio people lost their job this week.
Is Your Iceberg Melting?
Let’s face it, the radio industry so many of us fell in love with, is melting away.
Back in 2009, the book everyone was reading was by Ken Blanchard called “Who Moved My Cheese?” Ken actually published this little 95-page book back in 1999 and it’s still an extremely great read.
But today, maybe the book everyone in broadcasting ought to be reading is “Our Iceberg is Melting and Succeeding Under Any Circumstances” by John Kotter, who is an award winning author from the Harvard Business School.
In Melting, Kotter writes a simply fable about doing well in an ever-changing world.
The fable is about penguins in Antarctica that discover a potentially devastating problem to their home – an iceberg – it’s melting away.
It’s a story that will resonate with anyone in broadcasting, as a new round of “employee dislocations” occur and there are fewer radio stations to relocate to, as this is the same thing that is happening by the other big box broadcasters nationwide.
Kotter’s book walks you through the eight steps that produce positive change with any group. You will not only enjoy the read, but will be guided with valuable insights to deal with our 21st Century world that is moving faster and faster every day.
The Big Take Away
Regarding change, when all employees, corporate and middle management are on the same page, it is amazing what can happen. What I’m hearing from the broadcasters I know, both those that have been RIF’d and those who have not, it is a feeling that there’s a lack of honesty in communication from the top through the entire organization.
“Fool me once, shame on you.
Fool me twice, shame on me.
Fool me three times, shame on both of us.”
-Stephen King
The problem for the leaders of the broadcasting industry is that radio people have been fooled too many times and the level of trust is at an all time low. Daryl Ledyard, who was “dislocated” from a position he’s held at WBBS in Syracuse for over ten years told Rolling Stone “[iHeartMedia is] very much convinced that the local aspect of radio is no longer important.” However, iHeartMedia says in their statement “we will continue to serve every local community in which we operate just as we always have.”
It begs the question of how that will be possible when the number of on-air people have been reduced to one or two or none.
Live & Local?
Over the years, at every radio meeting I attended, the one refrain heard over and over and over was that “the power of radio is live & local.”
In October 2017, the FCC voted along party lines 3 to 2 to eliminate the Main Studio Rule.
When the FCC voted to end that provision in America’s broadcast law, what did that mean to regulations that have been in place since 1934? FCC attorney Gregg Skall explained it this way in his 1991 “Main Studio Rule and Staffing” memo:
The main studio rule as clarified in 1988 requires a station to maintain a main studio within its principal community contour “which has the capability adequately to meet its function…of serving the needs and interests of the residents of the station’s community of license.” That rule has now been further revised to allow a main studio to be located either within 25 miles from its community of license reference coordinates, or within the principal community contours of any station, of any service, licensed to its community of license. (See memo, Revised Main Studio and Public File Rules). Jones Eastern requires the station to maintain a “meaningful management and staff presence” at the main studio on a full-time basis during regular business hours.
You can read the full memo HERE
Since the introduction of automation systems, syndication, satellite delivery and computer voice tracking, the LIVE aspect of radio has been on the wane. Even in the #1 radio market in America, New York City, stations may or may not have a live operator behind the microphone when you’re tuned in.
In 1967, when I was starting out in radio, we used to have to announce whether a program was live or pre-recorded so the listeners wouldn’t be deceived about the broadcast. In the early days of radio, virtually all radio was live, it was the exception for something to have been recorded.
Today, what you are listening to is more than likely not live but syndicated, voice-tracked or pre-recorded.
With the Main Studio Rule, the goal was, that there would be a live person at the station and the studio would be in the community the licensee was licensed to serve.
Lance Venta writing on RadioInsight on October 24, 2017 wrote “But what will it (elimination of the Main Studio Rule) mean in the short term? Probably not a lot. In the long term, be prepared for a much leaner broadcast facility.” You can read Lance’s entire article “The Radio Station of the Future…Today!” HERE
The National Association of Broadcasters lobbied for the elimination of the Main Studio Rule, and its then executive VP of communications Dennis Wharton said “We’re confident that cost savings realized from ending the main studio rule will be reinvested by broadcasters in better programming and modernized equipment to better serve our local communities.”
Public Safety
When a broadcaster doesn’t have a studio in the local community it serves, it delivers its programming through the internet, satellites, microwaves or wired lines. Broadcasters have been quick to point out how these forms of communication are first to go down in natural disasters.
What seems to be missing in this conversation, is what happens when a local community is hit with a Black Swan Event. I wrote a whole blog article about how such an event could impact communities FCC licensed radio stations are empowered to serve. You can read that article HERE
Those who believe in the unconditional benefits of past experience should consider this pearl of wisdom allegedly voiced by a famous ship’s captain:
‘But in all my experience, I have never been in any accident… of any sort worth speaking about. I have seen but one vessel in distress in all my years at sea. I never saw a wreck and never have been wrecked nor was I ever in any predicament that threatened to end in disaster of any sort.’
-E. J. Smith, 1907, Captain, RMS Titanic
[Captain Smith’s ship sank in 1912 and became the most talked-about shipwreck in history.]
The Future Predicted in 2004
On May 24, 2004, the Federal Communications Commission (FCC) held a “Broadcast Localism Hearing” in Rapid City, South Dakota. The president, general manager and co-owner of KLQP-FM licensed to Madison, Minnesota (population 1,767) Maynard Meyer addressed the commission. Telling them:
“I have been involved in the radio business in announcing, sales, engineering and management for about 36 years, all of my experience is in communities of 5,000 people or less. We personally live in the communities we serve so we know the ‘issues,’ we work to address them in our programming and have been doing so for the past 21 years.“
“A few years ago, many stations operated this way, but much of that has changed for a variety of reasons. I think the beginning of the end of local broadcast service started in the 1980s when the Federal Communications Commission approved Docket 80-90.”
Mr. Meyer went on to explain to the FCC, how that many communities “on paper” had a local radio station that actually was nothing more than a transmitter being fed from another location tens of miles away. Mr. Meyer went on to say:
“I don’t think this is the best way to promote local radio service. From what I have seen through my personal experience, as soon as a hometown studio is closed and relocated, the local service is relocated as well.”
(I’ve edited his comments. The full text can be found HERE)
What do you think?
DickTaylorBlog 
Let’s see: Eliminate Main Studio rule. No operator on duty required. Increasing the number of stations owned by one company. And on and on it has gone. Almost every FCC rule change was designed to allow radio to better compete in the marketplace. The reason given nearly every time was that this rule change will give the radio industry a chance to invest more dollars in serving their local communities and compete against the various digital options. How’s that working out?
IHeart obviously feel that local radio has no future in their company. So they cut local clusters to the bone and will operate locally with the bare minimum necessary to remain within the rules to hold onto their licenses.
The long range outlook on this is that every large corporate company is going to watch this move carefully. If it benefits IHeart financially how many more will follow along?
The good news is there are still very good, creative and innovative broadcasters doing great local radio. Let’s hope they will continue to thrive in this ever changing media landscape.
Lastly, I know of one major radio company that put out a memo to all employees that basically was highly critical of the IHeart move and proclaimed their commitment to local radio. Two days later they called in the sales people in at least one market and cut sales commissions. Now that’s commitment.
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Mike, Thank You for sharing your perspective.
The writing has been on the wall for what was to come for decades. What’s happening in broadcasting has been happening in virtually every other industry. We’re creating a world that no longer needs people to keep it running and no one has thought through the implications of that.
-DT
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Very sad for me. I’ve been out of radio for years but still listen to local radio stations a great deal. Today I approach radio in a very nostalgic way. I grew up listening to full service WGY serving the capital district in upstate New York. I remember the local Hudson, New York radio station broadcasting from the county fairgrounds over Labor Day weekend. It was an indespensible part of my life growing up and my early career. Sadly that’s radio industry I remember is mostly gone except for a few ownership groups.
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You’re not alone in those feeling Keith.
Thank You for stopping by the blog today and sharing your perspective.
-DT
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Dick Taylor, yet another excellent message. The term
“Economic dislocation” is actually old enough that I learned it studying toward an MBA in the 1960s, when I too started in radio. Professional jargon in public parlance usually has the effect of obfuscating what it means [de Chardin], as it does re “reduction in force” (RIF). Also in the 60s, I studied toward a Masters in Communications taught by former FCC Chairman Fred Ford, whose course centered on the Communications Act of 1934. As the FCC succumbed to lobbyists, the tenants of broadcasting have been whittled away one by one. And we are left on a melting iceberg.
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Everything old is new again. Thanks for giving the historical perspective to the term “economic dislocation” Robin.
Everything that’s changing in America today, didn’t happen overnight but has been decades in the coming.
In our hustle-bustle world, no one pays attention until it impacts them personally and then they start asking questions. But by then it’s too late.
Thanks for sharing your thoughts on today’s blog.
-DT
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Well a lot can depend upon what happens in the next few elections. Say for example a real radical like Bernie Sanders gets elected. His FCC would be the most likely to put in stricter ownership caps, restore main studio rules and do other “turn back the clock” kinds of regulations. The worst-case scenario for the IHM’s, Entercom’s and Cumulus’ of the world would be new lower ownership caps and reimposing main studio rules. This would crater the value of their properties (esp small markets) and cause a wholesale “fire sale” of those properties. The regulators in DC would likely see that as a good thing because it would mean more diversity of ownership and more “mom & pop” owners and supposedly better local service and more jobs. However, everything else the red brigade would do to the nation’s economy would wreck many economic growth vehicles and cause massive problems throughout. So yes you could see big companies have to shed radio stations, but there may be few people either capable of or wanting to buy those stations. Point is: there really isn’t an easy or non-messy way to put toothpaste back into the tube
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Mark, the last sentence you wrote says it all. You can’t go back. But you can work today to create the future.
-DT
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We live in a modern world. Technology is more reliable than 1972, when I started out. 80-90 put a glut of frequencies in markets, where today you’ll find religious groups taking over, after commercial radio could never survive. Today I see a group of local owners, now aged 75-82 that don’t have a White Knight to save them, nor a bank willing to lend. It’s about to get worse, before it stabilizes, I suspect.
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Mark, I sense you have it right.
The main reason religious radio and public radio are doing well, is they operate with a different business model and they are focused on their listeners.
Commercial radio needs to understand where its bread is buttered and change. HINT: It’s not being focused exclusively on the stakeholders.
-DT
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“However, iHeartMedia says in their statement “we will continue to serve every local community in which we operate just as we always have.”
That statement is probably just a nod to regulators that even they know isn’t true. “Live and local” sounds good but the growing podcasting business suggests otherwise. Maybe it’s because of that legacy local service requirement that radio operators are less open with their employees than their newspaper counterparts who have told their employees for many years that the business is in decline and has to be managed that way.
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Jerome,
You’re so right about newspapers handling it differently.
Here’s a LINK to an article about the Orlando Sentinel: https://www.orlandosentinel.com/opinion/scott-maxwell-commentary/os-op-tribune-buyouts-why-im-still-here-scott-maxwell-20200117-g4g2irkopnbjfj3jzvy4nzg2iq-story.html
Thanks for adding your thoughts to today’s blog.
-DT
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if we got an Amazon book, ,shopped at Walmart, then we are not local and this should not be shocking….
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Ralph, you make a good point. There are many factors contributing to the downward spiral of our advertising supported media world.
Thanks for bringing that up.
-DT
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I stand by my original comments. Since I made them I have seen a lot more instances of communities losing their local service. Absentee owners give lip service to the concept of local service from afar but, if you aren’t really part of a community, it’s difficult to serve it properly. Out of sight, out of mind applies here. I’m still in small market radio, over 50 years now, with no retirement plans! Keep those blogs coming Dick, they’re always a good read.
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Hi Maynard,
I knew the first time I read your comments to the FCC you hit the bullseye.
You were right when you said them and history has proven you more correct each and every day since.
Thank YOU for stopping by the blog today and for adding your voice to this topic, again.
And THANK YOU for the kind words about my blog, they are VERY MUCH appreciated.
Keep broadcasting the way radio was meant to be!
-DT
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To present an analogy. A local pizza restaurant was the most popular in town. Everyone loved their pizza. The owners’ accountant suggested they cut back on the amount of some of the more expensive toppings..instead of 25 slices of pepperoni and sausage they use 15 pieces and spread them out. They did and made more money. Nobody really noticed. The owners were pleased and pocketed more of the profits. After a short time they decided to use less cheese..most didn’t notice and again more money for the owners..eventually they stopped offering pizza with your choice of toppings..several people noticed but because it was habit a few kept patronizing the restaurant. Eventually sauce was cut back..more noticed and more went elsewhere. It wasn’t long before the formerly successful pizzeria was selling a piece of plain crust..Everyone went to other places for pizza..The restaurant went out of business and eventually sold their ovens, and recipes..to try and pay the vendors they owed but it wasn’t enough. The owners were desperate. It all went up to auction and was bought by two of the former patrons..who began selling the best pizza in town again..and soon the restaurant under new owners flourished.
Maybe there’s hope
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Jeff,
A great parable with a hopeful ending.
Thank You for sharing it here on the blog.
-DT
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I disagree about Pubic Radio catering to their ‘local audiences’ – In most markets I hear the exact same programming with very little local influence. As I travel I am looking for local influence and insights. My favorite public radio station is WAMC in Albany/Schenectady/Troy.
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At the Public Radio station in Kentucky, run by the university, they had the largest radio news team, they had programs that featured local music and things to see and do in the area and could tap the expert across a variety of field via the university’s teaching staff for a more local in depth report.
The rest of the time they broadcast NPR, PRI etc programming that was in high demand.
They didn’t need to cover the stories NPR etc covered, freeing them up to cover the local news, culture and happenings.
It’s the first time I ever lived in an area that had a 100,000-watt Public Radio station that you could hear everywhere. In fact, when you added in their other transmitters and repeater FM signals, the covered two time zones and learned to program so everything could be heard at the proper time in both.
-DT
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All we need is radio gaga. Radio goo goo. Radio ha ha.
– Queen
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Unfortunately Dana, it’s not 1985 any more.
-DT
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Well said Dick. I fought the dismemberment and starvation of radio as a manager of single stations and then clusters of stations. Many of us fought the good fight until there was little left of some legendary stations. After the fat was gone, the meat was taken from the bone to feed distant diners at a restaurant called “corporate.” We were told it was our fiduciary responsibility to the shareholders. Many of those shareholders were left with nary a bone.
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Thank You Charlie for adding your perspective to this discussion. I’m sure more Clear Channel Alumni could tell similar stories about their markets and their stations.
-DT
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“The National Association of Broadcasters lobbied for the elimination of the Main Studio Rule, and its then executive VP of communications Dennis Wharton said “We’re confident that cost savings realized from ending the main studio rule will be reinvested by broadcasters in better programming and modernized equipment to better serve our local communities.””
Wow- I didn’t realize that. What does that say when your industry association lobbies to pull the rug out from local radio? I was in radio in HS and College, but these days follow from the outside looking in. It’s a sad, different industry than it was even 10 years ago…?
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Thank You Eric for sharing your perspective. I hope you will continue to share your thoughts on future blogs.
-DT
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