Tuesday, October 6, 2009

Dispirit of Radio

Part Two: Deregulation, Lowry Mays and the Clear Channel Empire.
(You can find Part One here, Part Three will appear on Friday, October 9)

By the mid 1990s, local rock stations with devout followings like WBCN in Boston were being devoured by large media companies. Ownership regulations were loosened so drastically by the Telecommunications Act of 1996 that companies could now own up to eight stations in a single market. And one company seemed particularly hell bent on pushing these new allowances to the limit; Clear Channel Communications.

Clear Channel Communications was founded by a Texas investment banker named Lowry Mays. In 1972, Mays was talked into investing in a struggling radio station in San Antonio. Not knowing anything about radio, he turned to another friend - a used car salesman - to help him turn the station around. Mays and his business partner spent the next two decades buying up radio stations that were operating in the red and making them profitable. By 1995, Clear Channel owned 43 stations. In 1996 – when the Telecommunications Act passed - they purchased an additional 49.

And by 2001, they owned a staggering 1200 stations worldwide.

Local artists and small radio station managers quickly found themselves losing airplay opportunities and creative control with corporate programmers now at the helm. Most rock radio DJs had always been given some degree of latitude by management to take chances and break local artists. Now, they were tied down by stringent, mind-numbing play lists from outside programmers hired by media companies and influenced by major record labels. Many in the music industry saw it as a sort of modern-day, but legal Payola.

In late 2002, an artists’ advocacy group called The Future of Music Coalition released a scathing 160-page study decrying the effects of radio deregulation. FMC spokesperson Jenny Toomey delivered a statement during a January 2003 Senate Commerce Committee hearing on media ownership and radio.

The broadcast industry defends the radical restructuring by pointing at other entertainment industries and saying, “We’re not as bad as those guys,” Toomey said. “But they aren’t “those guys”. Radio is not a private property but a public resource regulated by the government on behalf of citizens. For decades, it was based on a model of local ownership.

Mays himself later testified to the committee espousing the benefits of deregulation.

“Deregulation has benefitted listeners as well as owners,” Mays insisted. “Study after study demonstrates that consolidation has led to increases in the diversity of formats available to listeners in local markets. Owners with several stations are better able to diversify their programming to serve the variety of demographics that are present in the market.”

Mays' testimony was a complete sham. He even admitted as much in an article Fortune Magazine ran less than two months after the Senate hearing. "If anyone said we were in the radio business, it wouldn't be someone from our company," he said.

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.

Listeners agreed. And they tuned out in droves.

1 comment:

  1. Satellite radio could be the answer to all of these problems, but it needs more exposure, and a way of presenting it to people as being the same as their AM/FM radio purchased at Circuit City in 1997.