Less stations, better business?

[johnbasalla]

In major markets, if there were less stations on-the-air, would that help the business of those that remain? Potential advertisers would have less places to go to buy ad time, and stations/companies would have less competition in selling the ads.

 

[TheBigA]

Absolutely. The biggest mistake made in this country was the over-saturation of the airwaves. If you go back 25 years, there were about 8,000 radio stations. Now there are over 14000. It's like putting too many Starbucks in the same neighborhood. There are too many radio stations, too little money and talent, and the result is what we see now.

However, neither the Congress nor the FCC agree with this. They feel the more licenses there are, the more democracy there is. They don't care if the stations make a profit.

 

[12 In a Row]

Just about every industry has overgrown, with the car business at the top.
The slice of the pie keeps getting smaller. Time to thin the herd.

 

[SirRoxalot]

If there are "too many radio stations", why do they sell for such inflated prices? Why do owners keep trying to move stations from their original COL to barely legal locations where they can "rim-shot" larger markets, then drop all local programming in favor of programming for the larger market? More often than not, they're used as "flankers" to protect a bigger signal from competition, or try to chip away at a competitor's big station.

I don't think that it's a problem of "too many radio stations". I think that a weak FCC has allowed stations to degrade local service beyond all recognition. One solution would be deny renewal to stations that constantly fail to turn a profit. Let them go to local and/or community groups who will program for underserved audiences. Another issue may be reallocation of signal allocations to reflect shifts in population over the last 50 years.

 

[TheBigA]

If there are "too many radio stations", why do they sell for such inflated prices?

Right now, they're not selling at all. At any price.

Home prices go up. The housing market is glutted. Prices are now going down. Although not everywhere. Find a house on a beach, and the price isn't going down. It's all about perception.

I think that a weak FCC has allowed stations to degrade local service beyond all recognition.

OK fine, the FCC did many things wrong. And other governmental agencies have also changed the playing field. In any case, owners play the cards they're dealt.

One solution would be deny renewal to stations that constantly fail to turn a profit.

There is no legal precident for such a rule. That is not the basis under which stations are licensed. And you can't legislate a profit. The government itself has been unwilling to pass its own balanced budget amendment. So they're in no position to mandate a profit.

Let them go to local and/or community groups who will program for underserved audiences.

Where would the community groups get the money to operate them? Do you realize how much it costs to operate a radio station? Even if they get the license for free? I worked at such a station, and it's not as easy as you seem to think. Especially if the programming is aimed at underserved audiences.

 

[pocket-radio]

“They feel the more licenses there are, the more democracy there is.”

Dude, the FCC governs the frequency not the amount of stations or democary for that matter.

You apply for a license and submit your research; the FCC will look at the feasibility study and technical aspects. 60 or 200 stations in a market or helping deomcarcy isn’t a concern.

 

[SirRoxalot]

One solution would be deny renewal to stations that constantly fail to turn a profit.

There is no legal precident for such a rule. That is not the basis under which stations are licensed. And you can't legislate a profit. The government itself has been unwilling to pass its own balanced budget amendment. So they're in no position to mandate a profit.

In the past, the FCC has had fiscal requirements. It can be argued that a station that fails to make a profit fails to serve the "public interest, convenience, or necessity". Stations for years have argued that entertainment programming must be seen as serving the "public interest, convenience, or necessity", so the inverse must also be true. There is also the issue of control of the channel by the licensee. If the licensee isn't making a profit, do they have sufficient means to retain control of the license, or might an investor be able to exercise de facto control through the exertion of financial pressure.

Let them go to local and/or community groups who will program for underserved audiences.

Where would the community groups get the money to operate them? Do you realize how much it costs to operate a radio station? Even if they get the license for free? I worked at such a station, and it's not as easy as you seem to think. Especially if the programming is aimed at underserved audiences.

Note that I said local and/or community groups. Community groups vary in their ability to finance a broadcast station. Local investors don't need to be community groups. If a station license is available for whatever reason, I'm suggesting that local ownership be give preference over out-of-town owners when the FCC considers awarding a license. Providing proof that they have sufficient means to operate for the majority of the license period seems to me to be something that the FCC should consider during license deliberations.

What I - and many others - object to is rubber-stamping the licensing of frequencies that don't serve the public. Instead, they're used to protect the economic interests of other properties. If the signal isn't viable, reallocate it to a community where it is viable.

 

[Oldbones]

In the past, the FCC has had fiscal requirements. It can be argued that a station that fails to make a profit fails to serve the "public interest, convenience, or necessity". Stations for years have argued that entertainment programming must be seen as serving the "public interest, convenience, or necessity", so the inverse must also be true. There is also the issue of control of the channel by the licensee. If the licensee isn't making a profit, do they have sufficient means to retain control of the license, or might an investor be able to exercise de facto control through the exertion of financial pressure.

The FCC doesn't have the resources to enforce laws already on the books, what makes you think they'll have the time or staffing to enforce a completely frivolous law such as you propose?
What about stations that are essentially "hobby stations" for the owner? Someone who has an independent source of income sufficient to subsidize an unprofitable radio station they bought just because they wanted to have their own radio station. Stephen King owns a couple stations in Maine. From what I've heard, as long as they don't lose too much money he doesn't mind. Obviously, not many can afford to do that.

 

[SirRoxalot]

The FCC doesn't have the resources to enforce laws already on the books, what makes you think they'll have the time or staffing to enforce a completely frivolous law such as you propose?
What about stations that are essentially "hobby stations" for the owner? Someone who has an independent source of income sufficient to subsidize an unprofitable radio station they bought just because they wanted to have their own radio station. Stephen King owns a couple stations in Maine. From what I've heard, as long as they don't lose too much money he doesn't mind. Obviously, not many can afford to do that.

Why should anybody be automatically granted a renewal for a "hobby station"? The airwaves belong to the public, not the licensee. If the "hobby station" serves the public interest, convenience, or necessity, fine. If not, and another group files for the frequency, I believe that both applications should be weighed equally and the application that is more in the public interest should be given priority.

That's not so different from the procedures that were in place prior to 1996.

 

[TheBigA]

It can be argued that a station that fails to make a profit fails to serve the "public interest, convenience, or necessity".

Huh? That would disqualify all non-profits from becoming licensees.

If the licensee isn't making a profit, do they have sufficient means to retain control of the license, or might an investor be able to exercise de facto control through the exertion of financial pressure.

You have never owned stock, have you?

If a station license is available for whatever reason, I'm suggesting that local ownership be give preference over out-of-town owners when the FCC considers awarding a license.

I believe that idea has been bounced around. I know that Clear Channel has purposely sought local ownership in the sale of its small market stations around the country. For the most part, they have been unsuccessful in finding local groups with the backing to finance the sale. In those markets where they were successful, there was no change in operations after the local group took control. They staffed and programmed the same way, because it had been successful.

What I - and many others - object to is rubber-stamping the licensing of frequencies that don't serve the public.

Have you ever challenged the license of a station? I have. You need to be very clear when you make charges about "serving the public."

 

[TheBigA]

The airwaves belong to the public, not the licensee.

The courts have ruled that licensees ARE members of the public. So they should not be treated differently.

That's not so different from the procedures that were in place prior to 1996.

I'm not sure what you're talking about. That's not the procedure now or before.

 

[SirRoxalot]

That's not so different from the procedures that were in place prior to 1996.

I'm not sure what you're talking about. That's not the procedure now or before.

Renewals prior to 1996 were quite different from the current procedure. Challenging a renewal was also considerably easier. License terms were also shorter.

There's a HUGE difference between "non-profit" and "not-for-profit". Non-commercial is NOT "non-profit". Tax exempt corporations are "not-for-profit", not "non-profit", so they would not be excluded.

BTW, I have owned, and do own, stocks, bonds, and several other financial instruments.

There are issues with broadcast station ownership that relate to the control of a corporation that holds a broadcast license. You can't relinquish control, or have majority ownership change hands without filing with the FCC and getting FCC approval. Otherwise, you may forfeit the license, and be subject to FCC fines and further legal action.

 

[TheBigA]

Renewals prior to 1996 were quite different from the current procedure. Challenging a renewal was also considerably easier. License terms were also shorter.

Also a lot fewer radio stations. You're asking a very overworked and underfunded agency to do more work. They can't do it. And given the state of the federal government, it's unlikely they will get a funding increase soon.

There's a HUGE difference between "non-profit" and "not-for-profit". Non-commercial is NOT "non-profit". Tax exempt corporations are "not-for-profit", not "non-profit", so they would not be excluded.

Why? I know a non-profit radio station that, as their funding dropped, their operations became more spotty and the license itself became disputed property among members of the Board of Trustees. Very ugly situation. These things happen in all forms of business.

You can't relinquish control, or have majority ownership change hands without filing with the FCC and getting FCC approval. Otherwise, you may forfeit the license, and be subject to FCC fines and further legal action.

Uh huh...so what? Those kinds of things happen regardless of whether or not a company is making a profit.

 

[SirRoxalot]

Renewals prior to 1996 were quite different from the current procedure. Challenging a renewal was also considerably easier. License terms were also shorter.

Also a lot fewer radio stations. You're asking a very overworked and underfunded agency to do more work. They can't do it. And given the state of the federal government, it's unlikely they will get a funding increase soon.

The government can certainly add funding to the FCC if they wish, and charge broadcasters, applicants, and violators more to help pay for it. Not only that, but the FCC brought BILLIONS into the Federal government with its bandwidth auctions. It's not money that makes the FCC ineffective. It's a political laissez-faire policy toward the broadcast industry. There's enough noise in Congress that I expect changes at the FCC. The latest (politically motivated) "report" about a "dysfunctional FCC" should clue you into the idea the changes are coming.

There's a HUGE difference between "non-profit" and "not-for-profit". Non-commercial is NOT "non-profit". Tax exempt corporations are "not-for-profit", not "non-profit", so they would not be excluded.

Why? I know a non-profit radio station that, as their funding dropped, their operations became more spotty and the license itself became disputed property among members of the Board of Trustees. Very ugly situation. These things happen in all forms of business.

Correct. These situations DO happen in all forms of business. The bottom line is that a frequency should not be left to rot if a licensee is unable or unwilling to operate it in the public interest. If it's not making a profit over a significant period of time - say half the license term - it's apparent that there isn't enough public interest to make it worth continuing with the current licensee.

You can't relinquish control, or have majority ownership change hands without filing with the FCC and getting FCC approval. Otherwise, you may forfeit the license, and be subject to FCC fines and further legal action.

Uh huh...so what? Those kinds of things happen regardless of whether or not a company is making a profit.

Correct. The point is that an entity may try to exercise control over a radio company by buying up enough stock to gain control of the company - either directly or by shifting power on the board of directors. Companies that are not making a profit are far more vulnerable to manipulation than companies with a strong fiscal footing.

 

[pocket-radio]

Why should anybody be automatically granted a renewal for a "hobby station"? The airwaves belong to the public, not the licensee.

Wrong, the airwaves belongs to big business.

 

[TheBigA]

The latest (politically motivated) "report" about a "dysfunctional FCC" should clue you into the idea the changes are coming.

The report is a waste of time. Martin will be leaving next month. I've been reading the blogs of the people Obama has picked to advise him on the FCC and their main interests are the internet and cell phones. Not broadcasting.

The bottom line is that a frequency should not be left to rot if a licensee is unable or unwilling to operate it in the public interest. If it's not making a profit over a significant period of time - say half the license term - it's apparent that there isn't enough public interest to make it worth continuing with the current licensee.

So you're judging public interest based on profit? Really? Wow! That's a pretty interesting definition. You might want to rephrase that.

Companies that are not making a profit are far more vulnerable to manipulation than companies with a strong fiscal footing.

I think you're on tilt. How do you make a profit? By cutting costs and driving up revenue. The exact things you seem to dislike.

 

[SirRoxalot]

I've been reading the blogs of the people Obama has picked to advise him on the FCC and their main interests are the internet and cell phones. Not broadcasting.

If you don't think that the Internet and cell phones aren't interested in offering "broadcast" services like music and information, you're not paying attention.

So you're judging public interest based on profit? Really? Wow! That's a pretty interesting definition. You might want to rephrase that.

No, I don't want to rephrase that. As I've said, in the past the FCC required licensees to demonstrate the means required to broadcast. Broadcast channels are too valuable to the public interest to be given away as "hobby" stations or "flankers". Increased competition will either bring about better programming from the current owner, or transfer the license to new owners. If the signal isn't viable, nobody will apply for it. Take it dark, and allow others on the frequency to expand their reach in markets where the frequency is viable. We have huge disparities in frequency allocations based on population densities that have shifted dramatically in the last 50 years. This would allow the marketplace to reallocate frequencies.

I think you're on tilt. How do you make a profit? By cutting costs and driving up revenue. The exact things you seem to dislike.

No, companies make a LONG TERM profit by offering products with predictable quality at a fair price. SPECULATORS cut costs - and usually quality - to drive up short-term revenue, then try to get out before the bottom falls out of a market. The exception is if they can create a monopoly.

Radio companies have been "cutting costs" by cutting talent - their very means of production. We'll see how their revenue does as they offer inferior product. Throw in increased competition from other media, and the "cost cutters" will be looking to get out.

 

[Goat Rodeo Cowboy]

Broadcast channels are too valuable to the public interest to be given away as "hobby" stations or "flankers".

This logic still ends up painting ourselves into a corner.

Making more money is the hobby of the wealthy class.

Thus, in one way or another, all stations turn out to be hobby stations. :

 

[TheBigA]

If you don't think that the Internet and cell phones aren't interested in offering "broadcast" services like music and information, you're not paying attention.

What does that have to do with licenses and serving the public interest? They're offering broadcast services on non-regulated platforms.

Increased competition will either bring about better programming from the current owner, or transfer the license to new owners.

You're putting the FCC in a position of making subjective programming decisions. That is not now, nor has it ever been their role. You don't want the federal government getting into the content business. That opens the door for propaganda. It's why the law prohibits the US gov't from owning domestic radio licenses.

Throw in increased competition from other media, and the "cost cutters" will be looking to get out.

So what you're saying is regulation is unnecessary, since they current owners will be selling anyway.

 

[gr8oldies]

What is a legal definaition of "public interest, convenience and neccessity"? There isn't one. Who says that flanker isn't? If it brings a format that isn't in the market otherwise, who is saying that isn't in the public interest, as opposed to a diferent owner programming the third country or fourth A/C station in the market?