Thursday, April 29, 2004

Keep an open mind when you read the next sentence. Is Clear Channel ruining radio?

To many, the answer is obvious. The word “duh” may have just reached the tip of your tongue.

The charges leveled against the San Antonio-based broadcast giant are well-known, even by educated worrywarts who don’t listen to commercial radio.

Clear Channel is a “bully.” Worse, a “monopoly.” Its programming is lousy, its playlists are narrowly predictable. Its executives are in the back pocket of the Bush administration.

Music video director Stephen Marshall (Eminem, 50 Cent) says the company is part of an authoritarian media-industrial complex. The liberal-leaning Web site devotes a chunk of its real estate to negative stories about the “gluttonous” Clear Channel.

Lately, the company is in the news a lot because of the federal government’s crackdown on indecency. It dumped Howard Stern from six of its radio stations. It fired Todd Clem (aka “Bubba the Love Sponge”) in South Florida.

Salon watchdog Eric Boehlert once said Clear Channel was willing to “burn animals alive” if it meant higher ratings. Now his beef is that the company is clamping down on free speech.

Clear Channel is being sued by the Denver-based Nobody in Particular Presents, a competitor in the concert-promotion business. The case, based on a claim that Clear Channel shaves airplay for artists who tour with other promoters, is on its way to a jury trial this summer.

The company was Public Enemy No. 2 — President Bush took top honors — at the Tell Us the Truth concert tour that stopped at the 9:30 Club last year. It was emceed by comedian Janeane Garofalo, who now hosts a show on the liberal network Air America.

Pop quiz: Who owns the station that broadcasts Air America in Portland, Ore.?

Answer: Clear Channel.

Ironic, isn’t it?

Why does Clear Channel have so many hands wringing?

After talking to Clear Channel executives based in the Washington area as well as competitors in both broadcast and satellite radio, I’m beginning to think the case against the company is so much hysteria.

If you’re a Clear Channel hater, I wonder if you’re also a Wal-Mart hater. I’ll bet you are.

I’ll bet, furthermore, that if you were honest with yourself, you would see that the reason you hate both companies is because you’re a snob.

Hey: I asked you to keep an open mind, remember?

It all goes back to former President Bill Clinton. Presumably, Clear Channel is not in his back pocket.

A 1996 reform of the telecommunications industry that he signed into law relaxed limits on TV, radio-station and newspaper cross-ownership.

Hello Rupert Murdoch, hello Clear Channel.

While we’re talking about Clear Channel, let me be specific about how the reform affected radio: In markets with 45 or more stations, a company was — is — permitted to own up to eight stations, five on the FM band and three on AM.

Why did the government think it was necessary to tinker with radio regulations in the first place?

Simple: The industry wasn’t all that healthy before the ‘96 overhaul. In the late ‘80s, radio stations started losing cash. Mass Media Bureau, a division of the Federal Communications Commission, reported that profits for half of all radio stations fell in 1990.

Even after the recession, hundreds of stations were shuttering.

Hence, the deregulation law.

After ‘96, the Texas upstart Clear Channel scooped up too many stations too fast, critics say. It owns about 1,200, more than any other media conglomerate with radio industry interests.

Using the District as an example, Clear Channel is maxed out here. It owns eight stations, including WWDC-FM (DC 101), WIHT-FM (Hot 99.5) and WTEM-AM (Sports Talk 980).

Is that too many?

Not if you consider the big picture, says Clear Channel general counsel Andrew Levin. There are about 13,000 radio stations across the country, and Clear Channel’s share shakes out to about 9 percent of total ownership and 18 percent of total revenue.

“The radio industry is the least concentrated segment of the media industry,” he says.

In fact, it’s a highly competitive market. Not only does Clear Channel compete with companies such as Citadel and Cumulus Media, it also competes with advertising billboards and, increasingly, Internet and satellite radio networks.

The District-based XM Satellite radio, with close to 2 million subscribers paying $9.99 monthly for commercial-free listening, is ready to pounce in the new high-tech environment.

“People are clearly willing to pay for choice and quality,” says XM Vice President Chance Patterson.

Here are some raw numbers to chew on: The top 10 cable TV operators earn 88 percent of all TV revenue. The top five record labels account for 84 percent of all music revenue.

The top 10 radio owners? Forty-four percent.

“That does not a monopoly make,” Mr. Levin says.

OK, what about the charge that Clear Channel uses its muscle to bully competitors and corner the market on concert promotion?

Here’s what Joel Oxley, general manager of Arlington-based WWZZ-FM (Z104), which is owned by Bonneville International Corp., says: “I don’t see that in this market.”

With eight stations compared to Bonneville’s three, Clear Channel “has some advantages in going after advertising business,” he says, which is hardly shocking.

The idea that Clear Channel is out to punish bands for touring with, say, Concerts West?

Let’s use another local example. Has Bennett Zier, Clear Channel’s regional vice president based in Rockville, ever gotten a call from someone at the Clear Channel-owned Nissan Pavilion asking him to suppress airplay on the stations he manages?

“I’ve never even been in a conversation like that,” he says.

Even if you don’t believe him, ask yourself why Clear Channel would try to squeeze money from one end of its business to boost revenues on another end, essentially robbing Peter to pay Paul.

“It’s against our business interests,” Mr. Levin says. “If I call you up and say, ‘I wasn’t able to get Britney Spears. I want you to reduce spins of Britney on your station,’ you’re gonna say, ‘The heck with you. I’m not gonna stop playing a popular artist.’”

Ah, stop right there.

Does the phrase “popular artist” grate on your ears? If it does, your problem isn’t with Clear Channel; it’s with the ordinary people who listen to Clear Channel stations, perhaps on their way to Wal-Mart, and like what they hear.

Stop harping on media consolidation for a moment. What really bothers you about Clear Channel?

Shrinking playlists? Mr. Zier says his stations have expanded the size of theirs over the past two years.

Lack of choices? Radio stations come in more varieties than ever. Thanks to FCC engineers who found ways to increase bandwidth, there are more radio stations — 3,000 more than there were just 10 years ago.

“If you look at radio overall, there’s never been a time when there were more choices,” Mr. Oxley says. “If you look back at the FM dial 30 years ago, there wasn’t much on it.”

What big radio companies such as Clear Channel have done is geared radio to a mass audience. It conducts sophisticated market research. It polls listeners over the phone.

Clear Channel succeeds because it has mastered the game of ratings; it simply plays what people say they want to hear.

News flash: College radio and National Public Radio are subsidized by taxpayers for a reason.

Commercial radio is not public radio; bottom lines are the bottom line.

Clear Channel has the same problem Wal-Mart has.

It is hated by elites because too many people, too many ordinary people with ordinary tastes, shop there.

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