Update to May 2002 Statement on Issues in Radio

In May 2002, a broad coalition of music industry and advocacy groups released a Statement on Current Issues in Radio. This update to that statement is signed by key organizations that represent musicians, singers, retailers and performing artists.

Although we are pleased that the issue of media consolidation is receiving national attention, we are concerned that many of the problems caused or exacerbated by radio consolidation have yet to be resolved. We therefore collectively reiterate our call on the Federal Communications Commission and Congress to ensure that radio serves the public interest. In this document we revisit our positions on vertical integration of radio ownership, payola, radio ownership consolidation and low power radio.

Vertical Integration of Radio Ownership with other Entertainment and Media Enterprises

The leverage and control exerted by radio group owners that are also vertically integrated companies has continued to increase. Pollstar’s Online 2003 Mid-Year Top 50 Promoters chart shows that Clear Channel Entertainment has sold more total tickets than promoters numbered 2 through 30 combined[2]. Clear Channel continues to have a direct economic interest in promoting its own concerts and tours on its numerous radio stations. It also has an interest in limiting the promotional support of bands and artists who are performing for non-Clear Channel companies, at non-Clear Channel venues or under the sponsorship of non-Clear Channel stations.

Once again, we call on the FCC to investigate whether an artist’s choice to play or not to play certain venues or to use or not to use a certain promotion company impacts that artist’s position on or removal from radio station group play lists. We also call on the FCC and Congress to protect artists from being required or pressured to do free concerts or concerts at less than market rates at any venues owned by a radio station licensee in order to protect or enhance their ability to receive airplay of their music. We also request that the FCC and Congress protect an artist’s right to negotiate fairly with companies like Ticketmaster that dominate the market and have exclusive contracts with the majority of performance venues.

Payola

Our May 2002 Statement called attention to de facto systems of payola under which programming decisions are influenced by varied forms of paid consideration and business relationships, rather than the merits of recordings. In our view, payola of this type has not abated. We reiterate our view that payments made or consideration provided to radio stations to influence playlists — other than legitimate and reasonable promotional expenses — must be prohibited, unless such payments are announced over the air. This includes payments made through independent radio promoters and considerations like free concerts or other services provided to radio stations.[3]

Our May 2002 statement focused on independent radio promotion as a disguised form of payola. We are gratified that, since the release of that statement, radio station owners Clear Channel and Cox Communications have announced that they will sever ties with independent radio promoters. However, Clear Channel’s decision to abandon the increasingly controversial practice of independent radio promotion does little to protect artists and the public from future forms of payola. To the contrary, a recent press release by the company suggested that rather than using independent promoters, Clear Channel will now partner directly with labels to create in house promotional activities like “group-wide” contests involving artists.[4] This new promotional strategy does nothing to address our payola concerns and strikes yet another blow to localism. Since Clear Channel is a national radio group, their description of “group-wide” contests implies that they and other consolidated radio chains will very likely program from a centralized location and focus on artists with group-wide, i.e., national, appeal at the expense of artists with local appeal. This practice ignores the FCC principle that individual radio stations in radio groups are licensed to serve local communities. Furthermore, this practice, if implemented, will continue to harm local artists, making it nearly impossible for them to use their local popularity to garner local airtime and denying even the most successful local artists legitimate access to a local audience.

We are also worried that other in-kind exchanges may replace independent promotion and that radio stations will continue to select recordings for play lists based not on the merits of the recordings but on what the station “receives” in exchange for playing the song. These in-kind exchanges are more difficult to track but include a range of possibilities including artists playing for free or for a reduced rate at concerts promoted by the radio stations, or playing only at venues owned by the radio station’s parent company in order to receive a coveted spot on the playlist. These new partnerships may obscure pay-for-play exchanges and temporarily protect the radio companies from payola allegations, but they do nothing to protect the public or insure artists’ access to the public airwaves.

Widespread Radio Ownership Consolidation

A November 2002 study conducted by the Future of Music Coalition confirmed that radio consolidation has resulted in a loss of localism, less competition, fewer viewpoints and less diversity in radio programming in media markets across the country.[5]

We therefore reiterate our request that the FCC investigate the consolidation of radio ownership in light of the public interests that radio stations are charged to serve. The FCC must examine how consolidation affects the choice of music played on the radio, investigate the existence of national playlists, and clarify the role that consolidation has had on the skyrocketing costs of radio promotion.

Low Power Radio

Low Power FM stations are community-based, non-commercial radio stations that operate at 100 watts or less. Adopted by the Federal Communications Commission in January 2000, the Low Power FM service is designed to provide broadcasting outlets for local organizations – churches, schools, community groups, and unions – as an alternative to the many current centrally-programmed commercial stations that exist across the country.

Low Power FM stations can provide programming to meet the needs of specific and underrepresented groups including minorities, religious and linguistic communities, and can provide a much needed forum for debate about important local issues. LPFM stations strengthen community identity in urban neighborhoods, rural towns and other communities that are currently too small to win much attention from “mainstream,” ratings-driven media.

Recording and performing artists, in particular, can benefit greatly by the creation and expansion of Low Power FM stations, giving them more outlets for airplay, especially on a local or regional level, or in genres that are currently under-represented on commercial radio.

In 2000, Congress directed the FCC to hire an outside entity — the MITRE Corporation — to conduct field tests to resolve the issue of Low Power FM’s potential for interference with existing radio stations. In July 2003, the MITRE Study was released and the results concluded that the interference feared by incumbent broadcasters was not an issue. It will take congressional action to put Low Power radio back on track for serving a greater portion of America’s cities. As artist advocates, we support the expansion of Low Power FM stations, and see this service as one of the antidotes to the effects of media concentration.

Conclusion

As advocates for artists and creators, we remain concerned about the problems that are caused or exacerbated by radio ownership consolidation and vertical integration in the radio industry. Some radio group owners may have severed ties with independent promoters, but other forms of payments and consideration are likely to develop if they are not checked by appropriate oversight and rules. Clear penalties must be established for radio station licensees who attempt to use their leverage to force artists to perform for free, to perform at less than market rates, or to perform in specific venues that are more beneficial for the licensees. Furthermore, we call on Congress to examine whether radio stations are serving the public interest by contributing to localism and independence in broadcasting – an issue that the FCC failed to address in its recent media review – and to ensure that the FCC has regulations in place that will uphold the public interest. Finally, we urge Congress to vote to reauthorize the FCC to relax their overly stringent interference protections and allow Low Power radio stations to be licensed in more densely populated areas.

Respectfully submitted by the following organizations:

American Federation of Musicians (AFM)
American Federation of Television and Radio Artists (AFTRA)
Artist Empowerment Coalition (AEC)
Association for Independent Music (AFIM)
Future of Music Coalition (FMC)
Just Plain Folks Music Organization (JPF)
Music Managers Forum (MMF)
Nashville Songwriters Association International (NSAI)
National Association of Recording Merchandisers (NARM)
Recording Artists’ Coalition (RAC)

Notes:

1. Joint Statement on Current Issues in Radio, May 24, 2002. http://www.futureofmusic.org/news/radioissuesstatement.cfm

2. Pollstar’s 2003 Mid-Year Business Analysis, July 2003 http://www.pollstaronline.com/my2003biz.asp
   The charts displaying the top 50 promoters are available to Pollstar subscribers only. http://www.pollstaronline.com/PSOHome.asp

3. Eric Boehlert, “Pay for Play”, Salon.com, March 14, 2001. http://dir.salon.com/ent/feature/2001/03/14/payola/index.html
   Eric Boehlert, “Will Congress Tackle Pay for Play?” Salon.com, June 25, 2002.
   http://archive.salon.com/ent/feature/2002/06/25/pfp_congress/
   Eric Boehlert, “Radio’s Big Bully”, Salon.com series on Clear Channel, radio, and pay for play. Salon.com, 2000-2002. http://archive.salon.com/ent/feature/2002/06/25/pfp_congress/

4. “Clear Channel Cuts Ties with Independent Promoters”, April 9, 2003. http://www.clearchannel.com/documents/press_releases/20030409_Corp_Indies.pdf
   Greg Kot, “We haven’t seen the last of pay-for-play”, Chicago Tribune, April 13, 2003. http://www.chicagotribune.com/features/arts/chi0304130407apr13,1,668938.story
   “Clear Channel Appoints In-House ‘Format Liaisons’: 12 Programmers Will Work Directly With Labels, Artists On Group-Wide Promotions”, Friday Morning Quarterback, April 15, 2003.

5. Future of Music Coalition, “Radio Deregulation: Has It Served Citizens and Musicians?” November 18, 2002. http://www.futureofmusic.org/research/radiostudy.cfm

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