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The 'REAL' Problem with Clear Channel & Radio
By Eric de Fontenay (Founder & Publisher)
(more articles from this author)
2003-04-17
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Clear Channel announced that it would no longer work with independent promoters, due primarily to Congressional concern that the practice actually what was a pay-for-play scheme, often referred to as payola. The announcement is, of course, significant and was welcomed by several music organizations from the American Federation of Musicians to the Recording Academy. But as both noted, this was but a first step in achieving "equal and fair radio airplay practices."

While I certainly applaud Clear Channel's decision, I seriously doubt that it will have a significant impact on how the playlist of radio stations are determined. While "pay-for-play" skews access to the detriment of certain artists and genres such as Jazz & Classical, the growing consolidation of stations under a small number of radio groups permitted by the 1996 Telecom Act has posed a far greater threat to the industry as a whole, especially for new & local artists.

I'm not faulting groups like Clear Channel. Centralizing all administrative functions and decisions, supported by extensive market research that no sole stations could afford, helps drive efficiency and therefore profits. This also enhances their advertising revenue by specifically targeting desired demographics on a national scale through its radio network. Nor are they alone in pursuing this strategy that's been emulated by companies like Viacom, or even the major labels in centralizing the administration of ever-growing catalogues. It just makes good business sense, at least in the case of Clear Channel.

But radio groups are in a particular situation as they are using the public airwaves to reach their audience, not a private distribution system such as a cable network. They are building a very profitable business by piggy-backing off a public good with no commensurate compensation for society. I know I've never received any royalty or commission for their use of my part of the radio spectrum, nor would I expect to. What I do expect is that profit motive be balanced with the public good, at both the national level that the groups operate as well as the station's local level.

This balance has traditionally been promoted in part through media ownership rules, since a competitive marketplace is more likely to fulfill the public good objectives of diversity and choice. The elimination or even deterioration of these rules by the FCC risks therefore to negate any positive impact Clear Channel's new policy may have on radio playlists.

Thankfully, Congress appears to be keeping the pressure on the FCC, with a recent bi-partisan letter from 15 senators to FCC Chairman Michael Powell calling for "full disclosure of any proposed changes before they are made final."

"Dramatic changes in the structure of our media marketplace could have long-term consequences on the diversity of voices and free expression in our nation. Given the gravity of this proceeding, we are puzzled as to why the FCC would not insist on having a thorough discussion about any proposed changes before these would take effect."

Considering FCC Chairman plans for the media marketplace, I'm not a bit puzzled.

- BIPARTISAN LETTER FROM 15 SENS. TO FCC CHRMN. POWELL REGARDING MEDIA OWNERSHIP RULES

- SEN. HOLLINGS' LETTER TO CHRMN. MCCAIN REQUESTING COMMERCE HRG. ON MEDIA CONSOLIDATION

Related News from Mi2N:
» Radio Revenue Up 7% In February


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