FCC & Radio Ownership Limits

[Kent]

I think what people are thinking of is the brief moment in the early 70s when FM radio was a bit more adventurous and experimental. That lasted a very short time, and really wasn't very successful. Then a bunch of consultants came in to make rock radio more commercially viable. It worked. Until the end of the 80s. That's when the music became more individual and no longer fit into formats.

I was around during part of that era, but I was too young to have any interest in radio. I do know, however, that consolidation didn't kill that the 70's era of radio. Like you mention, that model of radio wasn't very successful, and, as more people had access to FM in more places, those stations started trying to appeal to the masses.

If that many stations weren't "profitable" how did they stay on the air? I maintain a lot of that was because of independent owners where they didn't show "profit" because they paid a livable salary to the party that owned them. It's all in how it was documented. If they truly were failing to that degree, there'd have been far fewer stations long before now.

While some of those operations may have engaged in creative accounting, keep in mind that radio stations were often loss leaders or served another purpose for the people and companies who owned them. I know we've talked in other threads about insurance companies, car dealers, and oil companies owning radio stations. Radio was merely one arm of the business. As you use a handle that came from WKRP, you might remember the episode when WKRP toyed with changing formats to easy listening. The staff couldn't believe it because the station was finally making money, and either Arthur or his mother explained that Carlson Industries had its hands in multiple businesses, and WKRP existed specifically to lose money so it could be written off on taxes. While that was probably a bit of a characature, radio was frequently allowed to lose money if it added value elsewhere in the company.

Don't forget, also, the sunk cost fallacy. Some of the people who ran radio stations had plenty of money and were able and willing to hold on until they could recoup their losses. Selling or signing the station off simply meant the money was lost.

People can trash the system in Canada, the UK, Europe. But at least they didn't over license the stations. Call it anti-capitalism? The small businesses and "corporate" broadcasters did very well under those systems and kept a lot of people employed.

Actually, they didn't, at least in Canada. In 1990, roughly half of US commercial stations were losing money. In Canada, it was more than 60%.

They also had regulations where, instead of letting SoundExchange neutralize a ton of potential growth in streaming, they have systems where you can be an "indie" or small station and still NOT lose money streaming your signal! In the UK and Europe, they managed DAB transition so nearly 50 percent of listening now is on DAB, which is linear professional radio! And they also provided a much more straightforward community radio service. Did you know in NZ, you can buy an approved transmitter and serve your neighborhood on a specific frequency without a complicated engineering process? Did you know at least two of those brands started in people's spare rooms became national brands? Sounds to me like a culture that supports entrepreneurs.

I have my share of problems with the royalty structure of streaming. I'll admit it's been 15-20 years, but, last I'd heard, the UK's royalty structure for streaming was actually more oppressive than the system here. Canada's, while cheaper than here and in the UK, wasn't necessarily cheap either, and that doesn't include the royalty Canadian stations pay for the over-the-air product. Again, I don't follow the system there regularly, but I seem to remember it being in the 6-8% range in 2010. The average profit margin of the radio industry in the US isn't even that high.

I have never thought the US is as business friendly or as entrepreneurial as it likes to tell itself and the rest of the world either. That's a discussion for another day, though.

The continued mentality of too big to fail. I say let them. Let stations go off. Let idealistic people get in for less. None of these companies lobbying for loosening of restrictions were denied the chance to do the things that could have put them in a better position. Let the values fall, the new people try, and maybe they'll fail too. But at least we didn't just sign off the last of what's supposed to be a public interest, the broadcast spectrum, go to prop up someone's executive compensation plan (to offload it to someone else, also too big to fail.)

If you want to let stations go off, that would be one way to solve the problem of too many stations. I can respect that. The audience, on the other hand, has already spoken and has made clear it likes more choice. Don't forget, also, that the way new licenses are awarded now is by auction. Idealistic people aren't likely to get in at all, let alone for less.

Let's put a stop to the pretense and the nonsense. Maybe out of the ashes will rise some innovators. In the meantime, I'll be listening to the ones who, today, are actually making it work by doing all the things that are supposedly out of date and no one cares about because TikTok, or whatever. Here in the real world.

The innovators aren't going to be using old technology to innovate. Maybe one or two would try it, but, by definition, innovators are looking forward, not backward. Right now, there's nothing stopping anyone who wants a radio station from starting one on Live 365 for an affordable fee.

 

[TheBigA]

While some of those operations may have engaged in creative accounting, keep in mind that radio stations were often loss leaders or served another purpose for the people and companies who owned them. I know we've talked in other threads about insurance companies, car dealers, and oil companies owning radio stations. Radio was merely one arm of the business.

That, to me, was what led to the problems in radio, not when companies could own more stations. What happened was those big multi-faceted companies got out of radio. Then thanks to big investment companies, you had radio-only companies. THAT to me was the big mistake. Radio by itself didn't have the revenue streams necessary to get it through lean times. That's why companies had trouble. I wonder if any of those insurance companies or electronics companies would have stayed in radio if they had been allowed to buy more stations. By putting a cap on ownership, it made radio less interesting to national companies like Nationwide, General Electric, and others. Of course, now the technology makes radio less appealing.

 

[K.M. Richards]

While some of those operations may have engaged in creative accounting, keep in mind that radio stations were often loss leaders or served another purpose for the people and companies who owned them. I know we've talked in other threads about insurance companies, car dealers, and oil companies owning radio stations. Radio was merely one arm of the business. As you use a handle that came from WKRP, you might remember the episode when WKRP toyed with changing formats to easy listening. The staff couldn't believe it because the station was finally making money, and either Arthur or his mother explained that Carlson Industries had its hands in multiple businesses, and WKRP existed specifically to lose money so it could be written off on taxes. While that was probably a bit of a characature, radio was frequently allowed to lose money if it added value elsewhere in the company.

You have the details wrong, but the underlying concept was correct.

The format change was supposed to be to a talk format; easy listening was what 'KRP had been before Andy (the character in the show, not the poster here) changed it.

And it was Mother Carlson who explained the financial reality; Arthur was the one who claimed he was punished for being a success, which his mother had always pushed him towards.

The situation was not as much a caricature as you believe, though.

 

[davideduardo]

That, to me, was what led to the problems in radio, not when companies could own more stations. What happened was those big multi-faceted companies got out of radio.

Excellent point. Think of all the insurance companies, electronics companies and other non-related businesses that were in radio and TV but later dropped out due to lack of growth possibilities well before ownership limits changed in the 90's.

Then thanks to big investment companies, you had radio-only companies. THAT to me was the big mistake. Radio by itself didn't have the revenue streams necessary to get it through lean times.

Another good point. In poor economies, the first thing businesses cut is advertising. It is easy to reduce or eliminate that cost, and nobody has to be fired nor do stores or plants have to be closed. Just cancel the contracts.

That's why companies had trouble. I wonder if any of those insurance companies or electronics companies would have stayed in radio if they had been allowed to buy more stations. By putting a cap on ownership, it made radio less interesting to national companies like Nationwide, General Electric, and others. Of course, now the technology makes radio less appealing.

I remember when Welch was CEO at General Electric, he said that if any division could not be #1 or #2 in its field it was not worth having. Because the FCC regulations at the time would not allow GE's media division to be big enough to matter, they dropped out.

Similarly, the insurance companies that owned stations found that the investment was too limited due to ownership limits, and eventually they all sold out. My family was friends with Herb Evans, the CEO of the Nationwide radio group. I had the opportunity to meet with him in 1963 and, even then, there was an awareness that radio had limitations for the large parent company because of ownership limits.

 

[Delete My Account]

While some of those operations may have engaged in creative accounting, keep in mind that radio stations were often loss leaders or served another purpose for the people and companies who owned them. I know we've talked in other threads about insurance companies, car dealers, and oil companies owning radio stations. Radio was merely one arm of the business.

Fair. But stations did fail and get bought by others, or go off the air, or get moved. I still am skeptical of the idea that the bulk of the stations licensed prior to consolidation were losers. Someone kept them on the air for some reason. Either as a part of a broader set of companies, an individual mom and pop (can think of many examples, ones I worked for) or because for whatever reason, the person who owned it could afford to keep them going. I think it's overly simplistic to claim that without accelerated consolidation, radio writ large was losing money.

Actually, they didn't, at least in Canada. In 1990, roughly half of US commercial stations were losing money. In Canada, it was more than 60%.

Imagine how bad it would have been if they'd licensed more. At least they didn't flood the zone, which to me is still a point in their favor. The American approach has its flaws.

I have my share of problems with the royalty structure of streaming. I'll admit it's been 15-20 years, but, last I'd heard, the UK's royalty structure for streaming was actually more oppressive than the system here. Canada's, while cheaper than here and in the UK, wasn't necessarily cheap either, and that doesn't include the royalty Canadian stations pay for the over-the-air product. Again, I don't follow the system there regularly, but I seem to remember it being in the 6-8% range in 2010. The average profit margin of the radio industry in the US isn't even that high.

I don't gather that it's worse for smaller operators, most of the ones on DAB also stream and have healthy followings and I hear very little "we can't make money on streaming" - which I know is the case in the majority of cases for small American operators. We actually lose money on streaming. That's what I referenced earlier with Soundexchange. Radio had that opportunity and got screwed by record companies, yes - but other regulatory structures didn't create that problem for radio. It's better in other nations, where they can at least make some money on it. The more popular my station's stream is, the more I lose money. Not very competitive and small business friendly.

I have never thought the US is as business friendly or as entrepreneurial as it likes to tell itself and the rest of the world either. That's a discussion for another day, though.

One I'd likely enjoy having. I'll simply add that it depends on what sort of business and who one's friends are, from my POV. I'd also add that to borrow from the CCR classic, a lot of people want to make their business "look like a rummage sale" when it comes to regulation and taxation responsibilities, and how we define "small" business in America has caused some issues. That might also be why we perceive so many stations as "not profitable" even when they've been sustained by their owners for many years.

If you want to let stations go off, that would be one way to solve the problem of too many stations. I can respect that. The audience, on the other hand, has already spoken and has made clear it likes more choice. Don't forget, also, that the way new licenses are awarded now is by auction. Idealistic people aren't likely to get in at all, let alone for less.

What's left in the potential auction pool isn't exactly prime real estate. I'd venture that of the few viable facilities, they're in places where only those idealists, connected to their communities and wanting to serve them would be wise to attempt it. I don't know what the iHearts and Audacys of the world would even want with them. EMF might, though.

The innovators aren't going to be using old technology to innovate. Maybe one or two would try it, but, by definition, innovators are looking forward, not backward. Right now, there's nothing stopping anyone who wants a radio station from starting one on Live 365 for an affordable fee.

Sure, anyone can start an internet station. FM still serves local communities, free of charge. No fees, no personal data collection. No wading thru directories of shoddy hobby stations created by someone to impress 5 listeners with AOR deep cuts. FM still has access and legitimacy, and works for advertisers. It's a mature medium. I, for one, think it's one of the best. Social media and endless options are distracting and noisy. Radio at its best is run by professionals and not by algorithms. The best podcasts are, in general, radio shows, or at least owe them a debt of structural influence. A good radio PD like KM Richards is better at presenting and rotating an 80s music experience than the anonymous person or machine behind Spotify.

I referenced the missed opportunities. Here's one. Higher end cars (especially in Europe, but some available in the states) have tech that can, when properly set up, switch from your on air signal to your stream. Seamless transition. How many US companies were aware of, and lobbied for that?

I don't deny that you can't put the genie back in the bottle. But the other platforms aren't there yet. They're not "better" than FM. They're simply carving up the pie. That license still has significant audience, credibility with the community and advertisers, and is foundational. Core to a good business. If you're running it right.

 

[K.M. Richards]

Radio at its best is run by professionals and not by algorithms. The best podcasts are, in general, radio shows, or at least owe them a debt of structural influence. A good radio PD like KM Richards is better at presenting and rotating an 80s music experience than the anonymous person or machine behind Spotify.

I sincerely thank you for that compliment. Your points echo what I have said here and in other threads.

 

[TheBigA]

How many US companies were aware of, and lobbied for that?

Lobbied for what? A government mandate? Really? The radio industry couldn't get the FCC to mandate HDFM.

 

[Delete My Account]

No, lobbied for it to be in more models of cars, with the auto industry. It's limited to very high end models but more common in Europe. It isn't mandated there, either.

 

[TheBigA]

No, lobbied for it to be in more models of cars, with the auto industry. It's limited to very high end models but more common in Europe. It isn't mandated there, either.

As you know, radio companies have very little influence over auto manufacturers. It's up to car buyers.

 

[Theater of My Mind]

The radio industry couldn't get the FCC to mandate HDFM.

Maybe there wasn't enough rightwing talk programming for them to care. They're close to getting their AM radio mandate, though.

 

[Kent]

Fair. But stations did fail and get bought by others, or go off the air, or get moved.

Absolutely. Plenty of operators figured they could do it better or that the people who went broke didn't know what they were doing. In the 80's, the number of stations roughly doubled while the local advertisers that were radio's bread and butter were getting run out of business at a rapid clip by the big box retailers. That wasn't a formula for success.

I still am skeptical of the idea that the bulk of the stations licensed prior to consolidation were losers. Someone kept them on the air for some reason. Either as a part of a broader set of companies, an individual mom and pop (can think of many examples, ones I worked for) or because for whatever reason, the person who owned it could afford to keep them going. I think it's overly simplistic to claim that without accelerated consolidation, radio writ large was losing money.

If you want to argue consolidation didn't have the intended effect, I can't find a good counterpoint. Sure, I can find a few operators who became more successful by clustering up, but, when the four largest radio companies have had bankruptcies, those smaller operators can't overshadow that. Consolidation may have been better than the alternative, but, if the largest consolidators filing bankruptcy is a success, I don't want to hear what's considered a failure.

Imagine how bad it would have been if they'd licensed more. At least they didn't flood the zone, which to me is still a point in their favor. The American approach has its flaws.

Yes, Canadian stations probably would've been worse off if the CRTC had decided to hand out licenses like Halloween candy. Having said that, I think it was Sean Ross who said Canada's regulations on radio, "made sure no one bothered with the radio." Maybe that was a little oversimplified, but advertisers didn't seem to bother with it much. Not sure what it looks like now, but, in the aftermath of consolidation in Canada, it had a higher rate of consolidation than radio in the US.

I don't gather that it's worse for smaller operators, most of the ones on DAB also stream and have healthy followings and I hear very little "we can't make money on streaming" - which I know is the case in the majority of cases for small American operators.

I don't know what it's like now or how it worked out, but I remember the broadcasters in the UK were really up-in-arms about the streaming royalty rates there when they were first announced.

We actually lose money on streaming. That's what I referenced earlier with Soundexchange. Radio had that opportunity and got screwed by record companies, yes - but other regulatory structures didn't create that problem for radio. It's better in other nations, where they can at least make some money on it. The more popular my station's stream is, the more I lose money. Not very competitive and small business friendly.

No doubt the current system has problems in the US. From what I understand, the large broadcasters are making money off of it, but I don't think the margins are very large. I don't know how much, if any, my former employers made on streaming, but I wouldn't be surprised if they lost money. It wasn't a cheap service. I know a couple of them were at least able to trade their bandwidth out. In the 2000-05 range, bandwidth was more expensive than the SoundExchange royalties, or so one of my old bosses told me, but streaming had yet to hit critical mass, and most areas have more bandwidth providers than they did back then, which has driven down the cost.

What's left in the potential auction pool isn't exactly prime real estate. I'd venture that of the few viable facilities, they're in places where only those idealists, connected to their communities and wanting to serve them would be wise to attempt it. I don't know what the iHearts and Audacys of the world would even want with them. EMF might, though.

That has been the case for a long time. 107.9 in Sacramento was probably the last auction allotment that was worth much. Most of the Docket 80-90 stations weren't worth much either. Albuquerque/Santa Fe saw its station count go way up, and I can remember my first semester of college in Memphis when a new sign-on arrived. Pretty sure it was running NOAA weather radio the entire time I was there, but it eventually signed on as a modern rock/alternative station. In the 6-8 months after I left, a couple other station signed on, neither particularly strong signals, but they they were adequate. Those, however, were the exceptions. While I realize new operators, small businesses, and first time bidders can get credits in spectrum auctions, one of the few good things that might've come from the law requiring spectrum auctions was that they generally require bidders to have their finances in order and have their business plans ready. Some may slip through the cracks, but, if you're bidding, you have to know how much you can spend before you start. Just handing out licenses that weren't likely viable in the first place didn't make for successful radio stations.

Sure, anyone can start an internet station. FM still serves local communities, free of charge.

FM isn't free to those who are operating the stations.

No fees, no personal data collection. No wading thru directories of shoddy hobby stations created by someone to impress 5 listeners with AOR deep cuts. FM still has access and legitimacy, and works for advertisers. It's a mature medium. I, for one, think it's one of the best. Social media and endless options are distracting and noisy. Radio at its best is run by professionals and not by algorithms. The best podcasts are, in general, radio shows, or at least owe them a debt of structural influence. A good radio PD like KM Richards is better at presenting and rotating an 80s music experience than the anonymous person or machine behind Spotify.

I tend to agree with you here, though, when I told my ex-wife that was one of the reasons I preferred radio to our Apple Music subscription, her response was, "I'm creating my own radio station based on my feedback." Personally, I don't have time for that. I might've enjoyed it when I was a kid, though. I made mixtapes like most Gen-X teenagers did.

I don't deny that you can't put the genie back in the bottle. But the other platforms aren't there yet. They're not "better" than FM. They're simply carving up the pie. That license still has significant audience, credibility with the community and advertisers, and is foundational. Core to a good business. If you're running it right.

When it comes to the advertisers, you've probably seen me mention the acquaintance of mine who cut his online advertising spending by more than 90% and saw no change in business. Radio might not get the results it used to, but online never has gotten results like that.

 

[TheBigA]

If you want to argue consolidation didn't have the intended effect, I can't find a good counterpoint.

Try this: Consolidation DID have the intended effect for ten years. Then came the crash of 2008. Radio didn't cause the crash of 2008, but it was a casualty. Consolidation wasn't supposed to overcome huge worldwide financial disasters. It was just meant to operate in the status quo.

Don't blame what happened to radio 25 years later on consolidation. There were lots of other things going on in the world. The total destruction of local retail, caused by the two-pronged effect of big box stores and internet sales. How does an industry built on local retail survive when its entire revenue base disappears? Then you have a worldwide pandemic that shuts down business.

People act like nothing changed in the music business. The two biggest record labels in the world were bought by foreign conglomerates. At the same time, their business model shifted from hard product to internet streaming. They no longer depended on radio to drive retail sales. They were now focused on streaming, because they received royalties there, and not from broadcasting. You think that didn't have an effect on radio? It may not be as obvious as the loss of local retail, but it definitely changed the playing field as far as music radio is concerned.

I can go on about all the changes that have happened since 1996. I can tell you the one thing that HASN'T changed, and that's FCC regulations. It's insane. To force radio to operate like it's 1995 is insane. Especially while everyone else is operating without any restrictions at all.

 

[TexasTom]

You're entitled to your opinion - but as a consultant and broker, I have a whole portfolio of moves and deals in the works that are now completely stalled out for as long as the shutdown lasts. It's damaging my finances and my relationship with my clients.

Just another perspective.

I can sympathize, as I had a small version of that experience 30 years ago when Newt Gingrich got in a pissing match with then President Clinton that resulted in a government shutdown.

I had filed an application for a new FM station earlier that year. In those days, the FCC set a filing window and I and one other entity (the owner of a competing station in the same market) had filed for the station. So at the time of the shutdown, I and that other entity had filed a settlement agreement with the FCC, and we got that agreement in shortly before the shutdown. So I was waiting FCC action on an agreement that would have netted what was for me at the time a significant amount of money -- and then things just stopped. Newt Gingrich loudly proclaimed that no one would even notice that the government was shut down, but waiting on FCC approval of that agreement I most definitely did notice. It was just one more reason for me to despise Newt Gingrich...

So all of this is a reminder that while we may not care much about what happens to the big companies in the radio business, there are some small guys who get caught in the cogs too.

 

[TexasTom]

In an era where running an hour of generic public affairs programming at 6:00am on Sunday appears to fulfill the Commission's concerns about serving the public interest, I'd rather do that than pay some exorbitant amount for a "free of regulatory concerns" license.

Especially since the generic PA shows these days come with a couple of minutes of local commercial avails, where I run PI spots and occasionally make a few bucks as a result.

Burying public affairs programming in graveyard time slots is not new, although it sounds like the caliber of those public affairs programs has probably sunk.

Back in the 70s and early 80s, the FCC did have "guidelines" for how much public affairs/news programming radio stations should carry. And one time when I had to get up really early in the morning because we were about to go on a lengthy family road trip (I was 17 at the time) I found out when my favorite radio station at the time filled its public affairs obligation. My clock radio went off at the god-forsaken time of 4:30 AM, and sure enough, they were running public affairs programs on that station (which otherwise was automated adult Top 40 from the "TM Stereo Rock" format). Apparently, they had a 90 minute block on weekdays from 4:00 AM to 5:30 AM. They finally got back to the music at 5:30, just as we were ready to leave...

But on the subject of radio ownership limits, I really doubt it will make much of a difference. I frankly don't see much good coming from the big companies that own a bunch of radio stations getting even more stations -- it's not like they're doing much to inspire a revival of radio with the stations they now have, and I don't see that changing if they get more. But the flip side of this is that there's not exactly a line up of people who would love to buy radio stations and use them to implement exciting new ideas if only they had the opportunity. I honestly wish it were otherwise, but things are as they are and not as we wish.

 

[TheBigA]

But the flip side of this is that there's not exactly a line up of people who would love to buy radio stations and use them to implement exciting new ideas if only they had the opportunity. I honestly wish it were otherwise, but things are as they are and not as we wish.

You're right, and the reason is there are a lot of other platforms where you can implement exciting new ideas that don't cost as much to operate.

The thing about radio is it only made sense when it didn't have any competition. Then people had no other options and stations could charge whatever they wanted for advertising. When that changed, the whole house of cards fell down.

There was a time when the only way to release music was to get a record deal. There were only a few record labels, and they only signed few artists. That limited the music people heard, and kept it under the control of the labels. When that changed, the house of cards fell down.

Notice the similarities?

 

[davideduardo]

There was a time when the only way to release music was to get a record deal. There were only a few record labels, and they only signed few artists. That limited the music people heard, and kept it under the control of the labels. When that changed, the house of cards fell down.

But, particularly in the 50's well into the 80's there were at times hundreds of independent labels.

It was not just the Sun Records in Memphis or Capricorn in Macon... it was also the case of groups and artists that set up their own label. Some were local; I remember a Pittsburgh label in the later 60's that released a local hit on their own label, and once it got KQV airplay, it got picked up by a larger label.

Anyone could start a label, just requiring doing a distribution deal with a bigger label or a distributor. In part, a lot of the regional hits of that era came from indies who first worked a cluster of nearby markets and then pushed their songs nationally by signing with independent promoters.

 

[K.M. Richards]

And one time when I had to get up really early in the morning because we were about to go on a lengthy family road trip (I was 17 at the time) I found out when my favorite radio station at the time filled its public affairs obligation. My clock radio went off at the god-forsaken time of 4:30 AM, and sure enough, they were running public affairs programs on that station (which otherwise was automated adult Top 40 from the "TM Stereo Rock" format). Apparently, they had a 90 minute block on weekdays from 4:00 AM to 5:30 AM. They finally got back to the music at 5:30, just as we were ready to leave...

That doesn't work with the bartered PA shows every station in the country seems to run now. The affiliate contract specifies that the shows must run between 6:00am and midnight, because they carry national advertising which they don't want running in graveyard.

 

[TheBigA]

But, particularly in the 50's well into the 80's there were at times hundreds of independent labels.

Most of them had very limited distribution and no promotion. Buddy Holly's music wasn't heard outside of Texas until he signed with Decca.

It was not just the Sun Records in Memphis or Capricorn in Macon...

Capricorn quickly tied in with Atlantic. Sun, on the other hand, was very small and no promo budget. That's why Elvis went to RCA and Cash signed with Columbia.

Anyone could start a label, just requiring doing a distribution deal with a bigger label or a distributor.

That's what Stax did. They signed with Atlantic, until they got too big and Atlantic stole their artists and shut down their distribution. That almost put them out of business. Some of the former Stax artists actually signed with Capricorn when they got picked up by Atlantic. Phil Walden managed Sam & Dave and Otis Redding.

 

[davideduardo]

Most of them had very limited distribution and no promotion. Buddy Holly's music wasn't heard outside of Texas until he signed with Decca.

Many of the local labels worked with artists who commissioned singles and albums that, mostly, they sold at area shows and venues... or did promotions with local radio stations.

I even saw a case like that around 1981 where one of the bands we used at WHTT in Miami did their own record and sold it at our events. They eventually got picked up by a major labels under the name of Miami Sound Machine.

Capricorn quickly tied in with Atlantic. Sun, on the other hand, was very small and no promo budget. That's why Elvis went to RCA and Cash signed with Columbia.

But both artists had early hits on Capricorn. Remember, Capricorn Sun was also one of those places where you could record a message for a loved one and get it on a disk you could send away to them!

Remember, too, that the earliest Beatles release was on Vee-Jay records, as the Brits did not think the sound would work in the U.S.

 

[TheBigA]

But both artists had early hits on Capricorn. Remember, Capricorn was also one of those places where you could record a message for a loved one and get it on a disk you could send away to them!

You're talking about Sun. That's how Sam Phillips discovered Elvis. Elvis recorded Blue Moon of Kentucky for his mom in his studio, and Sam signed him to a record deal. Phillips ran a recording service where people could walk in off the street and record anything and get it pressed on a record.

Capricorn was started by Phil Walden, who was a high powered artist manager.

The key thing for both radio & records was control over distribution. That went away when the internet came along.