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Conspiracy Theory

Thanks for the correction, Rox. I knew it was billion. I should have checked my spelling. Either way, it's a lot money that's being taken out of our pockets every time we stop to full up our tanks. I drive a four cyclinder Ford and take mass transit to work three days a week. I can't imagine driving one of those tugboats they call RV's. Yikes. Remember when Flying-A, Sunoco, Mobile and Shell used to advertise on radio? I guess those oil companies don't need to advertise on radio these days.
 
In the short term, fuel prices will drop until Recession fears come true or subside. In the long term, it's nothing but UP UP UP for dirty energy. Buy on the dip and hold.
 
I think to begin to answer Sir Rox's question we would have to ask a "what if" question.

What if the old limitations on the number of stations any one company could own in any one market still existed and Clear Channel was not allowed to acquire the 1200+ stations it did? Would we still have the same sorry condition we find radio in today? Maybe, but I don't think it would be anywhere near as bad as it is. Yes, technology (iPods, cell phones, etc.) would diminish radio's usage and influence to a degree but no one company would be allowed to rape, pillage and, in general, deform the radio landscape the way Clear Channel has done and is doing.

The few times I've talked to someone at the FCC, I get the impression that they are perfectly content rearranging the deck chairs on the Titanic. By that I mean there doesn't seem to be any conspiracy to subvert radio broadcasting as we know it. In fact, the lack of any sound plan for broadcasting's future on the part of the Commission, I think, is at the heart of the problem here. They live by their little rules and regulations on a day-to-day basis, handing out fines and admonitions as if nothing's going to change (one FCC lawyer told me they don't see any difference between AM and FM. It's all broadcasting and it's value is equal. There's no such thing as the AM band dying in their view).

Having said that, the FCC is well aware of the money they are raking in on this 700 Mhz auction, 12 billion and counting. It has surpassed their expectation by 2 billion and it isn't over yet. So, will they look longingly at the existing AM/FM band with a desire to carve it up and sell it off? I'm sure they will. But the FCC can't do anything without letting the public know by way of a rulemaking and period for comments. And they certainly can't do anything without the permission of Congress.

db
 
The FCC is, was, and baring any changes, will be complicit in the ruination of radio brought on by the greed of the Clear Channels and other companies that have run roughshod over the AM & FM band since 1996.

I was talking last week to a CPA who also is a professor ("Professor Z") of finance and government. I like to ask him about the stock market and finance. He likes to pick my brain about broadcasting. Funny, how this guy with three degrees enjoys talking to a radio dork like me who barely made it out of a SUNY college with a BA. Yet we struck common ground when I asked him about the sub prime mess, the decline of the stock market, the imminent recession and broadcasting stocks in particular. Professor Z likened what's going on in radio to the Enron debacle a few years back. Keny Lay lives on in Mel Karmazin and John Hogan. Greed is good. "It's a house of cards built on false (inflated) valuation and unrealistic projections that cannot be reached. Regulators looked the other way while the foxes were raiding the hen house."

dbdigital said:
...the FCC is well aware of the money they are raking in on this 700 Mhz auction, 12 billion and counting. It has surpassed their expectation by 2 billion and it isn't over yet. So, will they look longingly at the existing AM/FM band with a desire to carve it up and sell it off? I'm sure they will...

I agree. All in the name of technological advancement and progress. BTW, all the money goes into the government's general fund so that $12 billion will come in handy to cover the Iraq mess at least for another year.

-9-
 
Element9 said:
The FCC is, was, and baring any changes, will be complicit in the ruination of radio...

And wasn't that 'ruination' largely brought about by President Bill's deregulation of the broadcasting industry?

Hmm... worth some thought in this highly politcal year, don't ya think?

Kal
 
Kal said:
And wasn't that 'ruination' largely brought about by President Bill's deregulation of the broadcasting industry? Hmm... worth some thought in this highly politcal year, don't ya think?
Yes. Plenty of blame to go around. But as you know, Congress initiates legislation and the Exective branch approves or vetoes. Think Bush the elder or any other Repub would have done otherwise? Prob'ly not. Money talks. David, Joe, Jeff, Farid and Mel eat cake. Guys like us get crumbs.

-9-
 
Wow. This thread is one of the smartest I've seen on this. Anonymity is a wonderful thing.

I'll add this. Some industries NEED to die. Clearly the Record Business in its present form, for example, needs to be replaced. There is usually a point in time where visionary leadership could take the challenge of a changing marketplace and get out in front of it. They either do or don't, based on short term profits vs long term development. Radio and Records failed miserably here.

I think politicians were enabled by the weakness and short term greed of broadcasters, and deregulation was the result. Remember that they too are served by booms and short term gains while they are in office. Hardly anybody ever figures out the true cause of recession. They just blame the sitting leaders. Clinton handed the Dot Com bust, the Osama problem, Media Empires, and nothing done about energy to a Republican oil man president. Was that good stewardship? Republicans may get their revenge this coming January. "Here's the keys to the country, sorry about the damage!"

Yes, plenty of blame to go around, if you believe in that sort of thing. I don't, really. Actions have consequences, and most people can't see that far in front of their faces. Those who are gifted and smart and have vision can take advantage at will. To what end though? A huge pile of money, or to leave the world a better place? For many, human instict takes over and greed is rationalized. Others grow and mature like Bill gates and decide to leave the world better off. Was it worth the pain he caused Netscape investors to wipeout childhood disease? Who can answer that?
 
John, you've contributed some thoughtful analysis to this board and your ongoing WCMF debate with Sir Roxalot made many of us think. I've disagreed with your opinions in some cases, but always found them well thought, directive, of value and certainly well stated.

Regarding the Telecom Act, Bubba, Congress and the cast of characters in the radio business, I'll stand by my initial statement. There most assuredly is plenty of blame to go around. There is, however, a paucity of accountability.

The NAB essentially wrote the Telecom Act of 1996 and pushed the legislation through the pipeline by way of its lobbying arm. The House and Senate were only too eager to be influenced, buy in and get bought out. William Jefferson Clinto was only too happy to sign the bill in the name of progress and advancing the marktplace to accomodate and spur "new technologies."

Gahhhh!

For the record, let me state that I'm not a William Jefferson Clinton sycophant, but I'll readily concede that he's far sharper than the current resident of 1600 Pennsylvania Avenue.

A few years back, I read an interview wherein Mr. Clinton, discussing the consolidation of the media and the Telecom Act, was asked to comment on the growth and seeming monopoly and irresponsibility of Clear Channel, CBS, Entercom et al. Mr. Bill, perhaps owing to the interviewer's lack of chtuzpah and/or academic acuity, blustered and said (paraphrasing), "I thought this bill was designed to open up and advance the cell phone companies... I had no idea it would turn the radio business upside down..."

What tripe. A man who is conceded as having one of the sharpest legal minds and political savvy of his generation, pleading ignorance or misinterpretation of the law?

BTW, this has no relation to parsing the meaning of the word "is" and DNA evidence. Let's just leave that out of this discussion.

If only the media, especially the electronic media (the one that swallowed Yellow Cake, Biological Warfare Capabilities and WMD's hook, line and sinker) had the nads and brains to write, produce and report objectively and accurately. If only they paid attention to and revealed the man behind the curtain. Thank God for NPR and PBS, McClatchy and Knight Ridder Newspapers.

Now then. To your post. You say, "Some industries NEED to die." How painfully and to what effect on those who make a living working in those industries do those industries need to die? Yes, I'm aware of your buggy whip analogy. It was a fine metaphor.

Perhaps you meant some industries need to re-invent or revive themselves to be relevant in the new millenium and " take the challenge of a changing marketplace and get out in front of it," as you say. No doubt. But how? And when? I recall in your debate with SR, you intoned something to the effect of "if I had the answers to the questions, I wouldn't be posting on message boards."

And what of that splendid WCMF debate which you and Sir Roxalot engaged. The theory put forth by SR that Entercom might possibly be euthanizing WCMF... and your rebuttals to the contrary. Perhaps WCMF needs "to die" as you say. Or more clearly, needs to adapt, re-inventing itself to accomodate the changes now and to come.

Just asking. No savant am I, although I have plenty of opinions which are based on my ever growing awareness of the business, the situation at hand and reading the commentary from sage posters such as you.

I'd offer that radio has become, like those 99 dollar VCR's made in China, ever so disposable. It's an "industry" (a misnomer if ever there was one), let's say "business," that makes nothing. Not widgets, not bearings. Once a business that encouraged creativity, showmanship and personalities, showcased music and without argument dedicated to sales and advertising, it's now more concerned with producing disposable formats, disposable personalities and disposable clusters.

But please, let's not mention Wease in our further discussion. Good as he is, was and might still be, he's disposable and apparently Entercom is prepared to prove that point if Mr. Levin doesn't come to terms. Perhaps at any price.

-9-
 
JohnGault said:
Actions have consequences, and most people can't see that far in front of their faces.

This has always been my take on human nature as well, that people (whether in high or low positions) can't see beyond their noses. If this were not the case, would the Telecom Act of 1996 have passed so easily?

Nowadays it's all about damage control instead of planning for the future.

The Clear Channel sell off is all about damage control; the Mays family getting out while the getting is still good and before an industry, they helped destroy, goes totally in the toilet. Unfortunately for Bain Partners, it seems they just realized that fact.

db
 
How painfully and to what effect on those who make a living working in those industries do those industries need to die? Yes, I'm aware of your buggy whip analogy. It was a fine metaphor.

We agree on just about everything you wrote Element9. So I will try to clarify a few things. First, there is pain in all business. There are winners and losers. That's our system.

I wonder if anyone on this board could relate a "what if" scenario involving Kodak? Eastman Kodak hit is peak stock price in Jan of '97 at about 86.75. What has followed is a steady decline. It trades somewhere around 20 bucks now. Who is to blame? No doubt there are more photos being taken than ever before in history. Could Kodak have seen it coming? What should they have done? We are in a golden age of Photography. Why is the stock down? The distribution model for photography used to be 100% film. Now it is digital bits. Same goes for Radio, Records, Newspaper and TV.

When a rapidly changing landscape catches an industry or company past a point of no return, it will wither. Traditional entertainment companies did not plan for this day, and most are up the creek without a paddle or a buggy whip. They knew it was coming, but did nothing. Many at the top made windfall dollars, while investors who bought their line are left holding the bag. Today very few radio groups are really trying to innovate, though they will pay lip service to the concept. They are working short term to stop the bleeding for their stockholders.

Case in point. I have a subscription to both satellite services. XM and Sirius. I RARELY listen to the commercial free music stations. 1. They are boring and have no excitement, and the sound quality is horrendous. Not as good as Ipod. Ouch!. 2. There are music formats like terrestrial, but each one is diluted in an effort to make it broader, and I have to keep changing the station. More is Less here! 3. Stern is sometimes interesting, but the other talk is pedestrian. Satellite is just old radio with a bill. In short, it feels like an automated service someone put together to raise investment capital. I wonder why?

We are not making any new stars.

Last night my son and I started talking about cool music he likes. We fired up limewire and spent 2 1/2 hours sharing songs with each other. I heard Better Than Ezra, Mika, The Eels, the Raconteurs and more. He got turned on to Joni Mitchell, Cat Stevens, Yes, and Tull cuts that he never heard. You can't program a station like that, but imagine if you had a star radio performer who took you on a journey.... We do, of course. His name is Jack, and he is a corporate shill. But what if it was a real human being? What if every city had 50 interesting real people with freedom to entertain? They will. Online.

Interestingly, I think many on this board have seen only one side of my argument for talent. I think part of the reason that name brand unique talent (on a local level, all the way up to Stern, Rush, and others) have such leverage is that the owners of radio stations failed to develop anything for the future since 1996. While I argue they have leverage, I also think the lack or real competition is a shame.

Perhaps you meant some industries need to re-invent or revive themselves to be relevant in the new millenium and " take the challenge of a changing marketplace and get out in front of it," as you say. No doubt. But how? And when? I recall in your debate with SR, you intoned something to the effect of "if I had the answers to the questions, I wouldn't be posting on message boards."

That's exactly what I meant of course. Thank you for phrasing it right. "How" is the easy part. Invest in the future. It's the "When" that is tricky. Ask anyone on Wall Street.

One retraction. I might still post on message boards. I have been in this business for a long time, and never did post until recenty. It is addicting, even if it is a small audience. That feeling of being heard, being thought about, making a connection... even pissing someone off.

Isn't THAT the business we're supposed to be in?
 
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