On Monday, July 12, Future of Music Coalition submitted comments to the Federal Communications Commission in its media ownership rules review. Although this proceeding takes into account the whole range of American media — newspapers, television, etc. — we focused on station ownership consolidation in the broadcast radio market, because that’s what impacts musicians and fans.
Every four years, the FCC reconsiders its media ownership rules, focusing on whether the media marketplace is serving the public interest. Specifically, whether the current framework (which include the caps on the number of radio stations a single company can own) is in line with the Commission’s goals of localism, competition and diversity. FMC has frequently weighed in on this issue because musicians depend on radio as a platform to reach potential audiences — especially listeners in their own backyards.
Why is broadcast radio so important?
In our comments, we ask the FCC hold the line on further radio consolidation, expand and protect community radio, and eliminate structural payola. Each one of these requests would have a tremendously positive impact in terms of localism, competition and diversity. It would also help radio compete in the internet era, by focusing on its unique strengths — namely, a geographically limited broadcast signal. The ultimate and most unique value of terrestrial radio centers on its ability to provide free, local content. To survive, commerical radio has to start paying attention to its immediate surroundings. That would definitely be good for music scenes across the country.
But with the massive popularity of web services like Pandora, why should anyone even care about commercial broadcast radio? Well, even faced with competition from television, the Internet, and print media, radio reaches 90 percent of American adults every week, regardless of their background or economic status. Radio is still incredibly vital, which is why we really, really need to make it work better.
Changes in the radio landscape
Since the passage of the Telecommunications Act of 1996 — which ushered in the era of megabroadcasters like Clear Channel — commercial radio has become increasingly bland and formulaic. These changes have also weakened competition in the marketplace and made it harder for independent and local music to crack playlists. Clearly, this does not reflect demand: independent bands regularly debut in the BIllboard Top 10 and can be heard in TV shows, advertisements, movie soundtracks and more. But they’re not typically played on commercial radio. What gives?
The ‘96 Telecom Act removed the cap on the number of stations a single owner could control nationally and eased the restrictions on local ownership. Almost overnight, a formerly robust landscape of local broadcasters disappeared, along with important outlets for regional and niche music. A rash of radio mergers kept the consolidation train rolling. By 2001, Clear Channel and Viacom alone controlled 42 percent of radio listeners and 45 percent of industry revenues.
At the time, the story was that the Telecom Act would create efficiencies and inspire more competition in the radio marketplace. As it turns out, the legislation had the opposite effect. The restructuring of radio has led to a severe reduction in competition and the homogenization of radio formats — changes which plainly undermine the FCC’s primary goals of competition, localism and diversity. It hasn’t been good for employment, either: local DJs and program directors have been replaced by regional directors, or even by voice-tracked or syndicated programming. This has led to a marked decrease in the number of jobs in the radio sector. Bet we could use some of those gigs right about now.
Dialing it in
The situation has also been a breeding ground for institutional payola, in which major labels offer enticements to programmers through paid middlemen. Under this system, creating playlists isn’t about popularity or artistic merit, it’s about greasing the right palms. Check out our Payola Education Guide for more info on this sorry business.
There have been well-inentioned attempts at preventing the payola problem through “voluntary agreements” between the FCC and the four major broadcast groups caught with their hands in the cookie jar. Unfortunately, the vagueness of these agreements means that nothing much has changed since the parties came to the table back in 2007. Our “Same Old Song” report shows that commercial radio playlists are still incredibly narrow and overwhelmingly favor major label content. Radio is kind of shooting itself in the foot here, given the number of online outlets with a wider range of listening options.
Consider this: local and independent record labels are responsible for over 80 percent of the music released in this country. Although the evolution of internet-based services has played a big role in the increased market share for indies (now up to an estimated 30 percent of all sales), many artists and labels complain that access to commercial radio playlists is essentially nonexistent. We happen to think radio is missing out, big time. Unfortunately, so are its listeners.
It’s common for commercial broadcasters to claim programming diversity by pointing to all the different formats on their stations. This is highly misleading. FMC has actually examined the playlists within many of these supposedly distinct formats, finding up to 80 percent overlap in terms of the songs played. That’s like a grocery store claiming that that it has incredible variety because the canned goods all have different labels, but inside it’s all the same goulash. Hey, maybe we’ll name our next study “All the Same Goulash.”
Radio has historically been a vital communications platform for a targeted local audience — a service unmatched by cable television or the internet. But increased consolidation and cost reduction have led stations to cut back on local programming. The result is a “national jukebox” that doesn’t necessarily reflect the desires of local communities. This is why FMC supports initiatives to expand non-commercial radio, such as Low Power FM service.
Lastly, we believe that, the impact of consolidation on radio serves as a clear warning to the FCC as it considers policies that could impact other communications platforms. You know, like the internet. We sure would hate to see a similar scenario play out online.
So what should the FCC do?
Barring a return to pre-1996 ownership caps for radio, we think the Commission should simply hold the line on further consolidation. We also believe that the FCC could do a better job of understanding what’s actually happening out there, by examining who owns what in which market and taking a hard look at its relicensing requirements for commercial broadcasters — which at this point are largely a formality. We make a few other recommendations, too, which you can see in our comments.
Bottom line: the FCC has a responsibility to ensure that its media ownership rules truly reflect its goals of promoting competition, localism and diversity on the public airwaves. And if it happens to give a boost to the music community, even better!