This post was co-authored by FMC Policy Consultant Adam Holofcener.
Here at FMC we’re pretty keen on technology. But we still have a spot in our hearts for old(er)-school media like over-the-air radio. We’ve been touting the virtues of the original spectrum-based platform since we launched this org more than a decade ago. Unfortunately, there are still those who don’t understand why a diverse, competitive radio marketplace is a good thing.
Just yesterday, two of the biggest radio chains in America — Clear Channel and Cumulus — announced a major workforce reduction. Of course, they didn’t put it quite that way. Check out this artcle in Radio Ink to see the response from the broadcast community (spoiler alert: it isn’t pretty).
Executives we spoke to yesterday also said they understand Clear Channel is trying to restructure its debt but nobody knows where that stands. For now, many radio employees are simply working in fear. They wonder if today will be their last day and they even wonder if their immediate supervisor will throw them under the bus to save his or her own skin. Of course, at the end of the day, aside from the unfortunate reality that the radio road is being littered with dead bodies today, the big question is will the listeners notice and do the advertisers care. Does live and local even matter anymore to the listener in the age of the PPM and Pandora?
We can easily answer that question (hand raised and flapping madly). “Live and local” is what can help terrestrial radio compete in the internet era. Oh, and we hate sounding like a broken record, but for we’ve been talking for years about the impact of ownership consolidation on jobs. In fact, our 2006 report, False Premises, False Promises lays out the case explicitly.
The commercial radio business model — buy up as many stations as possible and play only safe-as-milk music — is clearly broken. Instead of including more independent content and focusing on local communities, however, the radio bigwigs want to gobble up more stations. But with massive debt burdens, they only end up firing people and making playlists more restrictive.
What can be done? Well, for one thing, the Federal Communications Commision (FCC) needs to put the kibosh on further consolidation in the radio marketplace. Especially since Clear Channel is currently pushing for more consolidation even as they lay off hundreds of employees.
The time is now to tell the FCC that more consolidation would be terrible for radio. Every four years, the Commission conducts a review of its media ownership rules as mandated by Congress. Why does this matter? Because the Telecommunications Act of 1996 eliminated the caps on how many radio stations a single broadcast entity could own. Almost overnight, radio went from a thriving medium with a strong local and regional identity to a homogenized national jukebox with next to no diversity in playlists or station ownership. The fact that the FCC is in the process of examining its rules means that it has the opportunity to prevent further consolidation.
We’re happy to say that because of our work (along with that of our musician and public interest pals) we’ve thus far prevented radio from being completely steamrolled. But the fight isn’t over. Now, Clear Channel wants to eliminate the “subcaps” on AM/FM station ownership.
The subcaps are important because they limit not only the number of stations that a single corporation can own locally, but also how many of each kind (FM and AM). The implications of the caps are both cultural and technological. AM stations traditionally broadcast at a lower fidelity than FM stations, meaning a lower market share of listeners but with lower operating costs. These stations are among the few remaining points of entry for minority and female station ownership. This diversity, which generally coincides with greater diversity in programming, is crucial to maintain in an already consolidated radio space.
With the next rule review underway, Senators Amy Klobucher (D-MN) and John Thune (R-SD) have submitted letters to the FCC advocating for the removal of the FM/AM subcaps. Their arguments echo Clear Channel’s claim that digital technology has leveled the playing field for FM and AM stations to the degree that subcaps inhibit competition between equally situated broadcast bands.
Quite simply, we disagree.
FM and AM radio each have unique community roles and broadcast qualities that have persisted despite new technologies. Without the subcaps, the price of AM stations will rise, making it even more difficult for diverse voices to secure a spot on the dial. We’ll say it again: consolidation in station ownership is bad for music lovers and local communities, and will only frustrate employment and opportunity.
Just ask those workers who just received their walking papers.
FMC has already gotten involved in the FCC’s quadrennial review process. We’ll be sure to keep you updated on all our efforts to ensure a diverse, competitive and local radio landscape.