Tag Archives: Telcom Act of 1996

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.

 

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Automation Killed the Radio Star

BugglesRemember when the rock group, The Buggles, introduced a new cable TV channel, MTV (Music Television) with the song “Video Killed the Radio Star?” That was August 1, 1981. Here’s how Mark Goodman introduced the channel over 37-years ago. CLICK HERE 

What Killed MTV?

By the early 90s, MTV was looking to boost its audience ratings and introduced a trivia game show called “Remote Control.” It attracted more viewers than its music videos, so MTV created “The Real World” in 1992, television’s first unscripted reality show.

These new programs were attracting a new generation to MTV and also dooming the channel’s original concept of 24/7 music videos.

So, MTV didn’t kill the radio star, but something else did.

Consolidation, Computers and Cash

Ironically, it would be the radio industry itself that would kill the radio stars. Those talented men and women that made a couple of turntables, a few cart machines and a microphone work together and created real magic. What many liked to call radio’s “theater of the mind.”

After the passage of the Telcom Act of 1996, a massive and swift consolidation of the radio industry took place. Radio was very attractive to Wall Street due to its fat bottom line and year-over-year revenue growth.

They say you make money in radio station ownership at the time you buy the station, not when you sell it. In other words, the die is cast at the closing of the purchase. Consolidators were so eager to buy up radio stations, they over-paid. iHeartMedia and Cumulus, two of the country’s largest radio owners are poster children for this practice as they work their way out of bankruptcy.

In an attempt to mitigate this problem, computers and voice tracking were introduced across these radio station empires allowing them to drastically reduce their air staffs. The very people that were the bridge to the listeners and advertisers were the first to go.

All in the name of sending more cash to the bottom line and paying down crippling debt.

What Radio Stations Promoted BEFORE Consolidation

WHDH Radio PersonalitiesRadio used to really promote its greatest asset, its radio talent. WHDH in Boston promoted itself as having “New England’s Finest Radio Entertainment 24 Hours Every Day!” The “Big 5 on 85” print ad featured Jess Cain, Fred B. Cole, Hank Forbes, Bob Clayton and Norm Nathan, as their air staff, and never mentions what kind of music they play, or news they featured or anything else the radio station did. WHDH was not alone in doing this. Every radio station promoted its talent line-up. Radio air talent WAS the reason people listened.

George Johns recently wrote that when he bought his first radio station (K103 in Portland, OR) that he knew he had to have Craig Walker as his morning man. Unfortunately, Craig was already on the air in Portland at the #1 radio station, KGW. Geo pitched Craig a job with K103 for more money and said he was willing to wait out his one-year noncompete contract to get him. George Johns said his financial partners thought the deal was too expensive and so Geo took out a mortgage on his Coronado, California home to guarantee the money personally.

Did George Johns gamble pay off? Yes. On day one. Craig Walker premiered at #1.

Can you feel the love radio once had for its air talent?

Non-Competes

Which brings up another radio industry problem, the non-compete contract. Have they hurt the radio industry’s growth and innovation?

Boston’s Route 128 corridor used to be the center of technology in the 60s and 70s. In the 1990s, California’s Silicon Valley took over that title from Massachusetts.

Why did Boston’s tech companies lose to those in the Silicon Valley?

Boston was a collection of high tech companies, like Wang, DEC and Data General competing against one another. They kept everything in-house and were vertically integrated. They had employee non-compete contracts. If you left your firm, you were looked upon with great disdain.

Silicon Valley, on the other hand, built an ecosystem. They shared everything. People were free to move between companies, and did. And everyone was still considered part of the family.

Value Chains versus Ecosystems

The radio industry operates like a value chain. Radio’s big consolidators are driven by efficiencies.

Accenture Strategy published a study that found that ecosystems are a “cornerstone” of future growth in a 21st Century world, a way to increase revenue. Ecosystem companies thrive on making connections, lots and lots of them.

The broadcast industry has pushed away from so many chances to collaborate and in so doing lost a competitive advantage.

What is Radio’s Most Valuable Asset Feeling?

Don Anthony’s Morning Show Boot Camp (MSBC30) collaborated with Jacobs Media Strategies to produce the first ever “Air Talent Questionnaire: How Radio DJs View Their Industry.” Some of the takeaways were disheartening to hear. Such as:

  • Most of the shifts where DJs got their first jobs are disappearing

  • Many DJs are not air checked and that lack of attention appears to impact attitude

  • Many DJs have feelings of angst & insecurity; many others are struggling financially

If radio connects with listeners through its air talent, then just these three items ought to give every radio station operator pause.

How to Win the Triple Crown

Diane Lane with Secretariat

I just watched the movie “Secretariat.” In 1973, Big Red, as he was nick named, became the first Triple Crown winner in 25-years, at a time when many thought there would never be another. “His record-breaking victory in the Belmont Stakes, which he won by 31 lengths, is widely regarded as one of the greatest races of all time,” writes Wikipedia.

What struck me, was what Secretariat had, that the other horses did not, a loving caretaker, a loving trainer, a loving jockey and most of all, a loving owner. Big Red was surrounded by people who genuinely loved and believed in him.

Great radio stations are filled with people like that.

I’ve always believed that what happened in the halls of my radio stations were transmitted out, over-the-air, to the listener. We transmitted so much more than just the music we played, the news we delivered, and the entertainment we provided. We transmitted an intangible spirit that was contagious and attracted loyal listeners.

And we do that when we love, appreciate and take care of our most valuable radio asset, our air talent.

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“Corporate FM”

corporate fmKansas City Filmmaker Kevin McKinney originally released his movie “Corporate FM” in 2012, but unless you lived near a community that was screening the film or attended a film festival where it was being shown, you probably never saw it. Or even heard of it.

Amazon Prime

After re-editing the film in 2015 to reflect updates and changes in commercial radio since 2012, McKinney decided it was time to let more people access the information he covered in the film and just released it on Amazon Prime. (Here’s the LINK ) “Corporate FM” explores the consolidation of radio after the Telcom Act of 1996 and how big corporations with the help of Wall Street and private equity firms swallowed up the radio industry in America.

February 1996

I remember the day that President Bill Clinton signed the Telcom Act of 1996 into law. Clinton signs Telcom Act of 1996It was supposed to provide competition between the phone companies and the cable companies with the goal to increase services and reduce prices to the consumer.

Inserted into the bill at the 11th hour were two paragraphs that would change the radio industry forever.

In the film, Robert McChesney, Professor of Communication Studies, University of Illinois points out that commercial media lobbyists, without a single public hearing or any public debate, would insert these paragraphs and open up the consolidation floodgates for radio/TV. Politicians would later say they didn’t know what they were voting for. Even President Clinton would say that he didn’t know that those two paragraphs had been added before he signed the bill into law.

Cumulus and Clear Channel

As the McKinney film told the story of the rise of Cumulus and Clear Channel, it reminded me of my time with both of those companies.

In Waterloo, Iowa I was running the #1, #2 and #3 radio stations. When Cumulus took them over, John Dickey showed up at the stations and proceeded to tell all of us gathered in the station’s conference room what our new logos would look like, what our new jingle packages would sound like, who our new station voice guys would be, how our playlist would be compiled, who are new consultants were etc. To say we were all stunned would be an understatement.

Then later when I was working for Clear Channel (after the Bain/Lee takeover, but before it became iHeartMedia) in Sussex, New Jersey, we received a survey from corporate asking us how local decisions were made about branding, marketing, promotions, music and the like. I assume a similar survey was sent to every market cluster inside Clear Channel.

When the results were tabulated at HQ, we then received directives that no longer would those types of decisions be made on the local level. Local radio had changed.

Local Bands

Growing up, local radio was a way for local bands to get exposure and grow their audience. “Corporate FM” tells the story of how Jewel became a national artist being discovered by local radio and played on-the-air in San Diego.

In fact, it was seeing a drop in attendance at live shows that got McKinney to wondering what was happening, and giving birth to his movie about the consolidation/corporatization of the radio industry.

I know a local band here in Winchester, Virginia “Sons of Liberty.” They play all over the Shenandoah Valley and beyond. They have a CD that Rob McKenzie of Fireworks Magazine spoke glowingly about. Where you won’t hear the “Sons of Liberty” music is on the radio.

Oh, they’ve been heard on an FM radio station (98 Rock) out of Harrisonburg, Virginia on their Sunday night “Wet Paint” show that starts at 11pm. But as “Corporate FM” points out it takes repetition to have an audience become familiar with anything, and for someone to decide they like it, or don’t. Radio used to provide that type of exposure and then monitor audience reaction to see if the record was a hit or a miss. (Remember features like “Champ & Challenger?”)

Sneak Preview

ABC Radio Networks used to air a feature hosted by WABC’s Chuck Leonard called “Sneak Preview.” The network would call affiliates of the ABC Contemporary Radio Network to get their hottest new song and then play it to a nationwide audience. I remember being at WBEC in Pittsfield, Massachusetts when we told Chuck that our hottest new song was “Tracy by The Cufflinks.” He told us he had a terrible time trying to find a copy of the song in New York City.  But Chuck Leonard did find it and it played over the ABC network to a national audience. That was how radio made the hits.

Fifty to Six

“Corporate FM” tells how in the 80s ninety percent of mass media in America was owned and controlled by about fifty different companies, but after the Telcom Act of 1996 it was down to just six corporations.

“Most radio studios are completely empty after 7pm and for the entire weekend.

They set the phone lines to “busy” so callers will believe that someone is there.”

-Slide shown in film

Big N Rich

The popular country recording artists “Big N Rich” addressed the FCC in Memphis, Tennessee. They told the commissioners that one person in a corporate office today can dictate what 35, 55, or 100 stations play.

“Let’s say an artist puts out a song with a political viewpoint and that corporate person says I don’t believe in that position so we’re not going to play that record (Dixie Chicks?). One guy can affect what 30 million people get to hear.

That’s censorship.”

-John Rich

Fatherly Advice

Dick Fatherly says “the broadcasters have become the victims, and the winners are – who do you think? -Goldman Sachs.”

Josh Kosman, who wrote the book “The Buyout of America” put it this way: “Private equity took the radio business that was doing pretty well and gutted it.”

Josh has studied how private equity has impacted all industries in America. He used a simple example to explain the difference between you or I buying a house and a private equity firm buying a business doing a leverage buyout (LBO).

When we buy a house, we put down say 30% as a down payment and then take out a mortgage for the 70% balance.

When private equity buys a radio station, they make a small down payment and then the radio station they’re buying takes on the debt for the balance, leaving the radio station with crushing new debt.

The private equity companies then charge management and other fees, making back their down payment money, and a whole lot more. So, it’s zero risk to them.

It reminds me of the guys on the Atlantic City Boardwalk who used to entice you to let them guess your weight and if they got it wrong you won a prize. The only way those guys lost is if you didn’t pay them to guess your weight. For if they got your weight right, they gave you nothing and if they got your weight wrong, they gave you a prize that was valued less than what you paid them to play the game.

“Financial deals allow the corporate owners to keep their stations after bankruptcy.

This prevents local owners from reviving local radio.”

-Slide shown in the film

For those who hold out hope that if/when the big corporate entities fail, and it will return radio to local operators once more, that slide should send a chill down your spine.

America’s bankruptcy laws now favor the debtor in the corporate world.

Conclusion

This is probably a film that many will miss and that’s unfortunate. It’s only a little over an hour in length. It’s well worth your time.

For this is a film not just about what happened to the radio industry but what is happening to our way of life, in industry after industry. This modus operandi is being repeated today.

The people in the film offer their ideas for making radio great again.

I won’t spoil that for you, so you’ll have to watch the film.

Some of the statements made by various participants have since been proven wrong from the time the film was shot. Some of the statements are also inaccurate in terms of how today’s FCC license renewals can be challenged.

In all fairness, many people are still believing that the way it was, is the way it still is. Only it isn’t. Those laws have been changed by corporate lobbyists too.

I hope you will watch the film “Corporate FM” and then post your comments here on DickTaylorBlog dot com.

Note: Don’t have Amazon Prime, you can rent this movie for $2.99

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Fail. Forward. Fast.

Success FailureIf there is one thing that both college professors and college students have in common, is that they both hate to fail. Professors never want to see their students fail. And students fear failing on many levels.

But failure is a necessary part of success.

Tom Peters

In my sales classes, I showed a short video clip of Tom Peters sharing his favorite slide from his huge slide deck. It reads:

Fail. Forward. Fast.

(“Reward Excellent Failures, Punish Mediocre Successes.”)

Nobody wins by playing it safe.

Nobody learns either.

Woody Allen

Woody cut his creative teeth during the Golden Age of Television writing for Sid Caesar’s “Your Show of Shows.”

Woody learned “if you’re not failing every now and again, it’s a sign you’re not doing anything very innovative.”

Radio Innovation

When I was growing up, the radio dial was a cornucopia of innovation.

Every radio station was original and unique.

Sunset would open up the skywave for AM radio listening and I would tune in great radio stations like WKBW from Buffalo, WLS & WCFL from Chicago, CKLW from Windsor-Ontario, Canada and many, many more.

Each of them was unique, a part of their community and provided great companionship.

Then radio began to copy one another.

Imitation, while maybe the sincerest form of flattery, lacks innovation.

Best Practices

With the passage of the Telcom Act of 1996, the radio industry began to rapidly consolidate.

The concept of “Best Practices” would further stifle experimentation and failure by trying to lay a safe, secure foundation for every radio station in these expanding companies to follow.

The new publicly funded corporations quickly learned that funding, not innovation was the way to grow larger. Money gets invested in business models that are familiar.

That’s why the movie industry cranks out so many sequels when they find a hit film.

Failure leads to Innovation

Thomas Edison when asked how it felt to fail 1,000 times inventing his light bulb responded “I didn’t fail 1, 000 times. The light bulb was an invention with 1,000 steps.”

Walt Disney is said to have gone bankrupt a couple of times before he became a successful innovator.

In other words, we can learn, grow and become better from our failures.

Radio’s New Heroes’

I’m confident that new blood is flowing into the radio industry that will quickly discard things that aren’t working, try new ideas, innovate and fail, forward, fast.

Everything in life brings risk.

It’s true that you risk failure if you try something bold

because you might miss it.

But you also risk failure if you stand still and don’t try anything new.”

-John C. Maxwell

 

 

 

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Live & Local ?

Stuck in a Time WarpI’ve been attending a lot of radio meetings these past years and one refrain I’ve heard over and over and over and over is that the power of radio is it’s “live & local.”

This week, the FCC voted along party lines 3 to 2 to eliminate the Main Studio Rule.

1934 Congress Establishes the FCC

The first regulatory body to oversee radio was the Federal Radio Commission (FRC) that was established by the Radio Act of 1927. The FRC was created to, among other things, insure that the public airwaves of America were used in the “public interest, convenience and/or necessity.” The FRC was given regulatory powers for licensing all radio stations and insuring the airwaves were assigned to broadcasters capable of providing quality broadcasts. The amateurs were assigned to another piece of the broadcast spectrum which today is known as Amateur Radio Service or Ham Operators.

Amateur Radio like AM/FM radio is regulated by the Federal Communications Commission which was established by Congress with the Communications Act of 1934.

Main Studio Rule

So, this week when the FCC voted to end the Main Studio Rule, what did that mean according to the FCC’s regulations that have been in place in 1934 (and per Gregg Skall) updated in 1988 to make them clearer? FCC attorney Skall wrote back in 1991 in his “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.

LIVE RADIO

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.

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 and so it was the exception for something to have been recorded.

Today, it’s more likely what you are listening to is not live but syndicated, voice-tracked and pre-recorded.

LOCAL RADIO

With the Main Studio Rule, the goal was at least 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 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 has been lobbying for the elimination of the Main Studio Rule, and its 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.”

Brick & Mortar Presence

FCC attorney Scott R. Flick said that the Main Studio Rule was really a government mandate for radio to have a brick-and-mortar presence in an internet age. “Its existence hindered stations from evolving and adapting to the rapidly changing business strategies of their many non-broadcast competitors.”

It’s ironic that the biggest online retailer, Amazon, is now in the process of acquiring a brick-and-mortar presence as the radio industry appears to be moving in the opposite direction.

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 a Black Swan event. Will radio be ready for a Black Swan?

Today’s Big Regulatory Difference

The big difference I see today for radio versus its toddler years is how it is regulated. The Radio Act of 1927 provided the foundation for all broadcast regulation right up until today. While more Acts were passed and made law over the years, the basics remain much the same as when they were first made law.

Some of the key provisions in the original Act that we’ve deviated from today are:

  • Limiting the number of broadcasters to foster higher quality radio broadcasts versus having more stations of poor or mediocre qualities
  • Radio broadcasters would operate in the “public interest, convenience and necessity”
  • Radio would be a regulated medium to assure high quality and operating in the public interest
  • Radio would be commercial and privately owned (a condition that made radio broadcasting in the USA different from every other country in the world)

Those who complain that radio isn’t like it used to be only need look at how broadcast regulations have been changed over the past century; the biggest change being the Telcom Act of 1996.

Make Radio LiVE & LOCAL Again

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.  He told them (I’ve edited his comments. The full text can be found here. )

“Localism in radio is not dead, but it is in dire need of resuscitation in many areas.  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 many communities that “on paper” had a local radio station actually found that the transmitter was 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.”

What do you think?

 

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Is Your Iceberg Melting?

94This past week was another tough one for the wonderful people who work in radio. Most people who get into radio do it because they’ve caught the “radio bug” and the work becomes their life’s passion. I know that’s how it is for me.

When I caught the “Radio Bug”

From my earliest years, I knew what I wanted my life’s work to be. I built a radio station in my parent’s basement and broadcast to the neighborhood (about a 3-block radius) on both the AM and FM bands using transmitters I bought from Radio Shack.

When I started high school, I earned my 3rd Class Radio/Telephone Operator’s License, Broadcast Endorsed from the Federal Communications Commission in Boston. I wasn’t old enough to work, so I had to get a Massachusetts Work Permit. They didn’t have a category for disc jockey, so they branded me as “talent.” (I never told them I had to take meter readings every half hour in front of a transmitter that put out 1,000-watts of electromagnetic power. If I had, they would never have given me my work permit.)

College Radio

In college, it was radio that paid for my bachelors and masters degrees. I took my college’s carrier current radio station, got an FM broadcast license and was the first general manager.

Radio was in my blood.

RIF’s

After the Telcom Act of 1996, radio began its road down the consolidation path funded by Wall Street. It was during this period of time a new acronym would come into radio’s every day lexicon, RIF’s, or Reduction In Force. In other words, people were being terminated in huge numbers.

This past week, I sadly read about another round of RIF’s taking place among our country’s biggest owners/operators of radio stations. It breaks my heart.

RIF’s from the Manager’s Perspective

We all feel sorry for those that have unexpectedly lost their job. What we often don’t read about is the perspective from the other side of the desk, what the management is going through when these decisions are made at corporate.

I lived through it in 2009 as a Clear Channel Market Manager.

It’s NOT FUN.

With each corporate meeting, I would come home with a flash drive that could not be opened until a specific date/time with who I would have to RIF next.

I RIF’d my entire news and promotions departments.

I RIF’d DJ’s and PD’s.

I RIF’d my national sales manager, my director of sales and local sales managers. With each round of RIF’s I got more hats to wear. The work still needed to be done, it didn’t go away with each round of RIF’s.

I hated my job.

Then my regional manager showed up unannounced and RIF’d me.

His manager showed up after he had RIF’d all of his designated market managers and RIF’d him.

The company president RIF’d the senior regional managers.

Then the CEO RIF’d the president.

It was not a happy time, but believe it or not, being RIF’d to me was better than being one of those that found themselves with more and more hats to wear, with more and more responsibility, without a penny more in pay.

There were many folks who told me to find another line of work, but they didn’t know that broadcasting was the only thing I ever wanted to do.

Except for one other thing, teaching and mentoring the next generation.

My education was in teaching. Both my bachelors and masters degrees were in teaching.  My best teachers were those who worked in the field first and then came into the classroom to teach.

Paying It Forward

My long term goal was always to one day teach at a college or university the very things I had done all of my professional life.

My big opportunity presented itself at Western Kentucky University’s School of Journalism & Broadcasting in 2010.

When I was RIF’d by my regional manager, I had met or exceeded every goal I had been given and was paid bonuses for my accomplishments. I was even named one of radio’s Best Managers by RADIO INK magazine. The issue of the magazine with me in it came out almost the day after I was RIF’d. Funny how life is: good things happening at the same moment as bad.

One Door Closed, Another Door Opened

When my last management job came to an abrupt end with Clear Channel, my broadcast professorship door opened at WKU.

Let me tell you, going from being a radio market manager to broadcast professor is a steep learning curve. But with the help of Charles H. Warner at NYU, John Parikhal of Joint Communications and others, I successfully made the transition and became successful at teaching. In fact, my new broadcasting educational work branch opened my eyes to all kinds of new and exciting learning opportunities.

I started this BLOG and a column for RADIO WORLD magazine during this time.

Those have lead to numerous invitations to appear on podcasts, Vlogs, articles, and broadcast interviews with others sharing stories of my work and experiences.

I’ve done research on the radio industry and their employment needs in the 21st Century. I’ve presented panels every year at the national conference in Las Vegas as well as been an invited broadcast expert on many panels at both BEA and NAB.

I’ve presented seminars at state broadcast associations and done training sessions for broadcast companies.

In short, I’ve been more active in broadcasting on so many levels than I ever was as a radio manager.  And I’ve loved every minute of it.

But I’m not going to candy coat what’s happening, not only in radio but in all ad supported media. It’s a revolution.  Not an evolution.

In revolutions the first thing that happens is destruction of the old. We’re still living through that period right now and it’s not fun. I get it.

Our Iceberg Is Melting

Back in 2008, many people picked up a copy of Ken Blanchard’s book “Who Moved My Cheese?”  I know I did. It’s a great read.

But maybe the book everyone in broadcasting should be reading today is “Our Iceberg Is Melting” by John Kotter. Kotter is an award winning author from the Harvard Business School.

Like Blanchard and Johnson’s Cheese book, Kotter writes a simple 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 – and it’s melting away.

It’s a story that will resonate with anyone in broadcasting today.

Read about how the penguins handle their challenge a great deal better than many broadcasters are doing today. Kotter’s book walks you through the eight steps needed to produce positive change in 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

When corporate, middle management and all employees are on the same page with regards to change, it is amazing what can happen, despite adverse conditions.

These are lessons for people who already are in broadcasting, for broadcast students, enlightened colleges are already teaching the concepts, skills and providing the tools that will be needed going forward. My students know that the future is not bleak. They understand the history of broadcasting that brought us to where things are today and they are as pumped as you and I were when we were their age to craft the future of broadcasting in the new century.

I’m excited.

They’re excited.

The best is yet to be.

 

 

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The Question Radio Itself Has Yet to Answer

86That was the subject of an email I received from a reader of my blog recently. The writer went on to eloquently state why he felt the way he did, even citing articles on the topic. He had my interest and I asked him if we could speak on the phone.

The BIG Question

This reader’s (who asked to be kept anonymous) big question was “What can radio do that other media can’t?”

And it’s a very good question.

In 2017 when many are using the internet for things that only radio could provide in the past, is radio’s future being the poor man’s smartphone, tablet or iPod when it could be more?

“NPR and SiriusXM, in addition to the new exploding podcast marketplace, have had no trouble creating personalities and programs,” but my reader writes “why does FM commercial radio continue to stick with playing the hits, past and present, at the expense of personalities, thinking it will make them money when the biggest radio companies have trouble paying off debts on the stations they seem to have paid too much for?”

Well it was a well-known fact all of my radio life that you make money in radio at the time you buy a radio station. Buying it right makes all the difference. And those big radio companies went on a buying spree using other people’s money (Wall Street) and it’s much like student loan debt, no one worries how much debt they’ve accumulated until they are asked to replay it.

Is Local Radio Local Anymore?

My reader quotes Westwood One’s Chief Insights Officer Pierre Bouvard from an AdExchanger interview as saying “A local radio station gives you traffic, sports, weather, great music, funny DJs and talks about your town,” he said. “Spotify has these robotic music playlists, which are awesome, but there’s no one telling you what happened at the Giants game last night.”

My reader says Pierre (who was my first Arbitron representative back in the 80s) makes a good point, but wonders if Pierre ever took the time to hear what passes for much of local radio these days. My reader feels that much of today’s FM radio stations do a combination of great music and robotic, Spotify-ish playlists, and relatively little in the way of “traffic, sports, weather…funny DJs and talk about your town” stuff.

Sadly, I’ve heard similar things said at radio meetings where the person starts off by saying “now don’t quote me on this, but…”

TELCOM Act of 1996

It was President Bill Clinton who signed the Telcom Act of 1996. That act was supposed to bring competition to the phone and cable television industries thereby lowering costs of each to the consumer. While that didn’t happen quickly (some might wonder if it ever did) it did cause the quick consolidation of the radio and TV industries. We went from a country where the largest radio operator could own 12AM-12FM-12TV stations to virtually whatever their pocketbook could afford. And with Wall Street Bankers waiting in the wings, what a company could afford was a lot.

Low Power FM & Translators

For the non-radio folks who read this blog, Low Power FM signals and Translator signals are virtually the same thing, with the exception being that Low Power FM stations originate programming and translators don’t. Both are received over the air on the FM radio dial. Both have increased the number of FM signals on-the-air in America today.

The latest FCC (Federal Communications Commission) report as of the end of December 2016 shows that there were 4,669 AM radio stations on the air in America. Over on the FM dial, 16,783 signals now beat the airwaves (FM, FM educational, translators and low power FM).

To put things in perspective, at a time in America’s radio history when the number of FM signals equaled the number of AM signals on the air, 75% of all radio listening was to FM. So you can only imagine what it’s like today.

93% of Americans 12+ are reached weekly by AM/FM radio says Nielsen.

So while the Telcom Act of 96 caused radio to consolidate under fewer owners who own more stations, adding to the signal overload was the advent of low power FM and translator signals. So much to program and no one home to do the work.

Enter computers, voice tracking, and syndication. This is same computer technology that is employed by Pandora, Spotify, Radio Tunes, SoundCloud and many others.

When TV Challenged Radio

In 1952 TV was born again. It was birthed just before World War II but the war years put broadcast radio/TV development on hold. After the war ended, things began to ramp up quickly for TV.

In 1953, Elmo Ellis was hired to fix 750AM – WSB in Atlanta. Ellis would write about “Removing the Rust from Radio Programming” for Broadcasting/Telecasting (now called Broadcasting and Cable magazine).

One of the points Mr. Ellis made was that a stack of records and a turntable do not a radio station make, though many broadcasters persisted in that very belief.

It was the very same philosophy I employed when I launched a “Music of YOUR Life” radio station. I felt that to be successful, you needed more than just Al Ham’s music list, you needed the personalities that complimented the music.

Both my reader and I are in complete agreement in that a radio station is more than just a song list.

Less Is More

The problem today is that with the “land rush” by broadcasters to own as many signals as they can, we have seen our country’s biggest broadcasters put themselves into a debt situation they cannot get out of and smaller broadcasters have signals and streams to manage but not the revenues to properly execute them.

If we go back to the beginning of broadcasting in America, we see that the FRC (Federal Radio Commission) that predated the current FCC felt that quality over quantity of radio stations should be the rule of measure. By limiting the number of stations, the FRC was attempting to insure the content of those stations on the air would be of the highest quality and also by limiting the number of stations; the advertising revenue that is the life blood of free over-the-air radio could be sustained.

What Can Radio Do That Other Media Can’t?

This brings me back to the question my reader originally posed and asked me to answer.

But before I do, I’m going throw that question out to my other readers – to date over 80,000 from all over the world – to weigh in with their thoughts.

What do you feel radio can do that other media can’t?

Is any radio station you know of doing it right now?

Is this a sustainable future for over-the-air radio?

I’m looking forward to reading your thoughts.

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