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4.26.02
Politics and Economy:
Transcript: Virtual Radio
More on This Story:
T Bone Burnett

Transcript

BILL MOYERS: We begin with the shrinking world of the mass media. Twenty years ago there were fifty owners of America's major media outlets. Now there are six. How a handful of companies came to exercise such control over the media is one of the astonishing stories of our time. And one of the most unreported. Big companies don't encourage the journalists who work for them to write about them. So while two thirds of today's newspaper markets are monopolies, you don't find many newspapers writing about....monopolies. But there are real consequences to what's happening...real consequences for democracy and consumers. Let's take just one slice of the media world — let's take a look at what's happening to radio. The music and news delivered to over half the radio audience is controlled by 4 giant corporations. Does it matter? Here's our report, produced by NOW's Brenda Breslauer and reported by NPR's Rick Karr...

RICK KARR: After twenty six years behind a microphone Becky Wight has arrived in the future of radio. Start with her job title, for instance:

BECKY WIGHT, DJ: Well they don't call them deejays anymore. They call them air personalities.

KARR: Becky and her colleagues don't pick the music they play anymore. These days, it's all done by consultants, committees ... and computers..

WIGHT: Radio doesn't play records anymore. Radio doesn't even play CDs anymore. Radio stations run generally individual files in a computer for each song.

KARR: Today's technology also lets Becky create an illusion — that she's not in her Dallas studio ... but rather that she's actually local ... in Topeka ... Omaha ... Cleveland ... Elkhart, Indiana ... Rochester, New York ... Montgomery, Alabama ... and Hilo, Hawaii. There ... and in a couple dozen other cities across the country ... listeners are supposed to think she's right in the neighborhood.

The technology's called voice tracking. It lets Becky record her voice ... then mix it in with music, commercials and jingles.

WIGHT: It gives the local stations the opportunity to literally turn the computer on and lock the front door and go home for the weekend.

KARR: This is the future of radio: Quirky, live, and local D-Js ... giving way to stations on autopilot ... and "air personalities" turning out "virtual" programs on an assembly line. Critics say a medium that used to operate in the public interest ... is becoming bland ... and even misleading.

The Telecommunications Act of Nineteen Ninety Six ended more than sixty years of limits on how many radio stations one company could own: It used to be four stations in a market; now it's eight. It used to be that a company could own a total of no more than forty; now there's no limit. The result: A handful of large firms have been able to buy up hundreds of local stations. Critics say that while many listeners may not have noticed ... deregulation means they're getting less music ... less news ... and less local flavor.

In Denver, for instance, four companies now control nearly three quarters of the radio audience. Some of those Denver stations still make radio the old-fashioned way:

They are, to use the industry jargon, "live and local". That means, in effect, that there're real D-Js ... spinning real records on the air ... and taking real calls from listeners.

Cat Collins is program director at a pop and hip-hop station in Denver. He says "live and local" simply makes for better radio.

CAT COLLINS: So that when you listen to my station, KS 107.5 from 6 am to midnight, you hear somebody that's in the studio, playing records at that exact moment, taking phone calls from my audience.

KARR: And they're actually in Denver?

COLLINS: Yeah, they're actually in Denver. What a concept, you know?

KARR: But Collins says consolidation is killing off the live, local D-J ... and giving big radio chains an incentive to save money ... with voice tracking and similar technology.

COLLINS: I think that deregulation means less choice for the consumer and I think it means more commercials which they don't like ... less local personalities on the air.

KARR: Cat Collins admits that the company that owns his station — Jefferson Pilot Communications — uses some voice tracking at its seventeen stations. Even he runs his overnight show from a computer. But he's proud that for the most part, the stations' live and local

At the number one radio company across town ... it seems there's a lot less live and local programming.

Clear Channel Worldwide owns eight stations in Denver. NOW's Sarah Dalsimer called request lines at five of the company's pop and rock stations there.

She called the Top Forty station ... the Alternative Rock station ... and the Hard Rock station ... She never got through to a real human being.

Clear Channel is by far the largest radio company in the nation. The firm got its start in nineteen seventy-two, with one station in San Antonio, Texas. By the mid nineties, it'd grown to forty-three stations. But after Washington relaxed ownership limits in nineteen ninety-six, it grew to more than twelve hundred stations. Its closest competitor owns fewer than two hundred.

You can listen to Clear Channel from coast to coast: in Los Angeles ...in New York City ...and in Denver. In all fifty states, in fact.

Forty seven of Clear Channel's stations are known as "KISS F-M". It's part of the company's vision of creating a national radio franchise.

Clear Channel spends a lot of money promoting the KISS FM brand identity. That's because the company sees it as being akin to say, McDonalds. Anywhere you go in the country, you know what to expect on a McDonalds menu. Likewise, in 47 cities where Clear Channel owns stations, you know what to expect from KISS FM.

That's part of the business appeal of consolidation: Advertisers can buy radio ads in bulk.

Now, radio is only one part of the Clear Channel conglomerate. While you may not have noticed the name, it's all over the place: The company owns billboards and other outdoor advertising ... television stations ... a concert promotion firm — it's even into Broadway shows: It's co-producer of the hit musical THE PRODUCERS.

This is what a business school prof might call "synergy": Clear Channel can use its taxi-top ads to promote its Broadway shows ... and its billboards to promote its radio stations.

Just how big is Clear Channel? Well here in Denver, if you want to listen to pop and rock, there's 93.3—Clear Channel; 95.7 KISS FM—Clear Channel, too; 97.3—Clear Channel; classic rock from the Fox, another Clear Channel station; and 106.7—Clear Channel.

Five stations — that's most of the pop and rock on the air. And that ... is a problem, according to Jesse Morreale: He's a concert promoter in Denver. So is Clear Channel.

JESSE MORREALE, CONCERT PROMOTER:They own the most radio stations ... They're the biggest concert promoter in the country by far. They did 70 percent of ticket sales last year.

Two years ago, Clear Channel bought the nation's largest concert and event promoter. Since then, Morreale alleges, Clear Channel's been trying to put him out of business.

MORREALE: This is a microcosm of what's happening around the country.

They control the programming for uh, all the radio stations that any of the people in this demographic might listen to.

And it's not unbiased information that is being given out – the songs aren't being played because they're the best songs. The concerts aren't being talked about because they're the best , most important concerts.

It's all based on this financial interest this company has in the concerts that they are promoting.

KARR: Morreale's firm — Nobody In Particular Presents — sued Clear Channel last year. The suit alleges that in Denver, "synergy" ... really means monopoly; it charges Clear Channel with "unlawful, anticompetitive and predatory" practices.

According to the suit, Clear Channel refuses to play certain acts' music on its radio stations ... unless those musicians book concerts with Clear Channel.

Morreale says he's stuck: Clear Channel won't promote his shows ... and he can't afford to buy a radio station on his own.

MORREALE: Play for our promoter or you won't get airplay ... Anticompetitive.

KARR: Clear Channel officials deny the charges in Morreale's suit ... but they declined our interview requests. Instead, they sent us this statement: — "Clear Channel's sheer size isn't what makes us a formidable competitor. It's our excellence in understanding the needs and wants of consumers .... In order to do so, we compete hard but fairly and within the rules."

In the past, the head of the company's radio division, Randy Michaels, has been more outspoken — even flamboyant: He showed up at a 1999 broadcasters' conference in the fashion of an ancient Egyptian noble. His entrance was a gag, but his message was serious:

RANDY MICHAELS (TAPE FROM 1999 CONFERENCE): My personal opinion is that this consolidation, the collision of deregulation and technology is going to create the most powerful and the most positive change for radio.

KARR: Michaels told his audience that anybody in the industry who wasn't headed into the future of radio ... was gonna have a hard time staying in business.

MICHAELS (FROM TAPE): Wake up — WAL-MART is open people!!!

KARR: Like Wal-Mart, Michaels said, big radio chains are good for almost everyone.

MICHAELS: We've created lower cost to the consumer and at the end of the day the standard of living in this country is rising in direct proportion to efficiencies we are creating. You got the same thing going on with broadcasters.

BARRY FEY, ROCK PROMOTER: When Congress deregulated the radio business, I'm sure they didn't have this in mind. This is just deregulation on steroids.

KARR: Barry Fey helped create the rock touring business; he's been promoting shows in Denver since the mid sixties. Fey says Clear Channel has actually increased prices for consumers. He believes the company is using its deep pockets to outbid competitors — like him and Jesse Morreale — and try to price them out of the concert business.

FEY: You're the little guy in the poker game. You got a limit. Some guy keeps on raising. And he has no hand. Pretty soon, you got to drop out, because you don't have any money left.

KARR: Fey says that means consumers pay more for tickets. For instance, he says he bid against Clear Channel for an upcoming Denver concert.

FEY: We sent in our offer, for Bonnie Raitt ... $100,000. That's what the agent asked for. Our ticket price was $30.

KARR: According to Fey, Clear Channel countered with an offer of a quarter million dollars.

FEY: Now here that extra $150,000 is gonna be borne by 9000 people paying $15 extra.

KARR: Bottom line here is Clear Channel came in, outbid you, and consumers pay 50% more for the tickets?

FEY: That's correct. Correct.

KARR: Were consumers willing to pay that much?

FEY: Well they don't know they're paying 50% more, they don't know I was going to charge them thirty and they're going to have to pay forty-five.

KARR: Barry Fey says of course Clear Channel has the right to outbid him. And of course Bonnie Raitt was right to take the higher offer. But a windfall for the artist, he says, is bad for consumers: Tickets went on sale two weeks ago ... and Barry Fey's prediction was right on the money.

KARR: If consumers are willing to pay that much, who's hurt?

FEY: The consumer. There's not an infinite amount of money. Clear Channel makes you believe there is, but there's not ... people budget, and perhaps they would have bought two shows at thirty each, but now they're only gonna buy one at forty-five.

KARR: The dispute in Denver isn't the first time Clear Channel's found itself under legal scrutiny: Two years ago, Florida's attorney general accused a Clear Channel station of deceiving the public during an on-air contest:

RADIO SHOW: Be the 25th caller right now and win an instant 10 grand — it's easy....

KARR: But it wasn't as easy as listeners may've assumed: The station never mentioned that the contest was running nationwide....

RADIO SHOW: Oh my God, Thank you.

KARR: So listeners had no way of knowing that their odds of winning were a whole lot smaller. Clear Channel didn't admit to any wrongdoing ... but it settled the matter by contributing eighty thousand dollars to Florida's Consumer Frauds Trust Fund.

Meanwhile ... in Waco, Texas ... Clear Channel's been accused of effectively controlling more stations than Federal law allows.

GARY MOSS, RADIO STATION OWNER: My argument is that they are illegally running a station, and by them doing this, they have an unfair advantage in Waco, Texas against the other independent guys in the market.

KARR: Gary Moss owns two of the thirteen commercial radio stations in Waco; Clear Channel owns the top four. Earlier this year, Moss filed a petition with the Federal Communications Commission ... alleging that Clear Channel illegally runs a fifth station in violation of federal antitrust rules.

Two years ago ... the Justice Department ordered Clear Channel to sell off that fifth station ... because the company controlled too much of the market. In his petition ... Moss alleged that while on paper Clear Channel sold the station to a firm called Chase Radio ... in reality nothing changed: He says the station's still in this building, along with the rest of Clear Channel's ... and that it's still run by Clear Channel.

MOSS: Well, I'm saying that Chase Radio, as well as some other corporations were put together, to get Clear Channel obvious penetration in markets, and fly under the radar of the Justice Department. This was a tactic to get around the laws. So that they can control markets.

KARR: Moss says Clear Channel's size gives the company an unfair advantage.

MOSS: I am locked out of ... of media buys, by national advertisers. Because Clear Channel can cluster their stations together, and add up all of the Arbitron ratings, and go to Mr. As a result and say look, we've got, you know, 65 share in the market. Or 70 share in the market. Or 80 percent share in the market. And you don't even go shop anywhere else.

KARR: Clear Channel has captured eighty percent of the ad spending in Waco, according to Moss. He says that's put the squeeze on him and the city's other independent broadcasters.

MOSS:... ever since Clear Channel came into the market ... everybody's staffs have dwindled down. As well as news staffs. Today, we no longer can support a news staff. We don't have anybody on the street covering any of these events. City Council meetings, school board meetings ... ... election returns. Things of that nature. Nor does Clear Channel. I think that hurts the public.

KARR: Clear Channel says it's arrangement with Chase Radio is legal: A spokesperson told us the company works within the rules of the system ... and does what's best for its advertisers, listeners ... and shareholders.

But Representative Howard Berman of California has misgivings: In January ... he asked for an investigation of Clear Channel. Berman wrote that he was concerned that the firm was using "shell companies" to flout radio ownership limits in Waco and eight other cities.

Legal and regulatory questions aside ... what's the impact of all this deregulation on our culture?

T Bone Burnett may be the hottest record producer in the world right now — no thanks to radio:

T-BONE BURNETT: Radio in the last ten years certainly hasn't been a friend of music. It hasn't been helping to spread or build community or any of the things that we thought it did in the past.

KARR: Burnett put together the rootsy, even old-fashioned music on the soundtrack to the film O BROTHER, WHERE ART THOU... which won five Grammy Awards this year. He says the record's sold five million copies because the film was a great ad for the music. None of the thanks go to radio.

KARR: Why didn't it get played on the radio? I mean why didn't the radio stations play it?

BURNETT: Well, I mean, the reality is it didn't test well.

KARR: The Future of Radio is tested on consumers like any other product — say, toothpaste ... or soft drinks. Burnett says marketing consultants play snippets of songs for potential listeners in focus groups. They're looking for music that won't prompt anyone to change the station ... and miss an ad. Music that's safe. And once they've found it, they put it on the air in heavy rotation from coast to coast. There's no room for experimentation in the Future of Radio. (No room for local flavors.)

BURNETT: We have given in to some sort of notion of, you know, like sanctioned music. So we're selling them red jelly beans, and green jelly beans, and black jelly beans, and blue jelly beans. Yes. They're all jelly beans, you know? We're interested in a cheeseburger. You got any cheeseburger? You know? "No. We don't."

KARR: Burnett says radio still helps sell millions of pop records. That may be good for the music industry, he says, but it's terrible for music: Some performers have started to second-guess their muses ... and try to make their music safe enough to fit into the formats ... on stations owned by Clear Channel and other big chains.

BURNETT: You start using these words like "programming" and "formatting" and demographics and all that stuff. And you get really far away from what we all liked about music in the first place, which was you hit that string and it made a crazy sound, you know,? It's a very primal.

KARR: Burnett wonders what happened to that old idea of the airwaves as a public trust.

BURNETT: The FCC is supposed to insure that radio broadcasting and television broadcasting are governed in such a way that the public's interest is served.

Well, I think the FCC has its work cut out for it then. You know? Because that is not happening. If I may be so bold as to say that the public's interest in not being served by the modern day radio establishment.

KARR: If T Bone Burnett has his way, fans will challenge the idea of "sanctioned" music. But, like other critics of deregulation, he worries that it may be too late to save radio. That as consultants, committees and computers come to control more radio programming ... consumer choice and public service ... will be as endangered as live, local D-Js. We'll hear fewer voices ... and they'll just speak to — and for — the bottom line.


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