Why Things Suck: Radio
By Brendan I. Koerner Email 01.18.08 | 6:00 PM
Unless you enjoy hearing the same insipid Fergie song a dozen times a day, chances are you loathe mainstream radio. And for good reason: The FM band between 92.1 and 107.9, where commercial stations reign, is mostly a desert of robo-DJs and pop pabulum.
The sad decline of conventional radio is an Econ 101 lesson in the consequences of artificial scarcity — and a B-school case study on the limits of scientific management. The scarcity is the fault of the Federal Communications Commission, which decided in the mid-1940s to confine FM broadcasting to its current frequency range, roughly between 88 and 108 MHz. The FCC's spectrum-allocation rules, designed to prevent station signals from interfering with one another, further limited the number of broadcasting licenses it granted in any one market.
By the '70s, thanks to a fecund period in popular music, a generation of audacious DJs, and cheap radios, FM had become wildly popular. That made stations valuable properties — so valuable, in fact, that only large companies could afford to buy and manage them. "The legal cost alone of getting on the air is enormous," says Jesse Walker, author of the radio history Rebels on the Air. The government could have eased this situation by allocating more spectrum for radio use and increasing the number of licenses, Walker argues. Instead, Congress chose to relax the rules regarding the number of stations any one entity could own.
That's where the scientific management comes in. The biggest barriers to building a radio audience are the polarizing power of music and the plethora of choices on the dial. So, when corporations like Clear Channel started buying up stations in the late '90s, they set about building a lowest-common-denominator product that would be attractive to the most listeners. "There's this idea of the perfect playlist," Walker says. "Find it with research and attract the perfect audience." But it turns out that the most lucrative audience is really just "people who will not change the channel during the ads." The result: watered-down programming designed primarily not to offend.
So bored consumers are just tuning out. Listenership among 18- to 24-year-olds is down 20 percent over the past decade. Stations have responded not with bold programming but by cutting costs. They've also expended considerable resources to squelch competition from low-powered FM stations and Internet radio. Not that it has helped — 85 percent of teenagers now discover new music through sources beyond the FM dial. Even the biggest radio fans envision a grim future for the medium. One bright spot: The inevitable shift to digital radio could create more room for more types of content.
