The Radio Industry I left Behind

[moohead]

When Clear Channel purchased Majac in 2000, I was shocked that anyone could believe the stations justified the price.

Now we see what has become of our whole economy...one based on speculation instead of productivity. The unfortunate shareholders of Clear Channel purchased our stations. I doubt Lowry Mays and his people have suffered any more than AIG corporate types. The shareholders lost their asses. Clear Channel traded at $95 a share in 2000. Why? Speculation. The same reason house values doubled and bogus loans were made to unprepared owners.

It does not please me that the stations in Binghamton (not just CC, but Citadel as well) have suffered. It appears darker days lie ahead.

For the record, I made a very serious inquiry 2 years ago to buy back the Majac group, but was rebuffed by corporate to provide the very same detailed financials that I had provided them 6 years earlier. Profit and Loss statements were loaded with trades, auction revenues and discontinued one time only event revenues.

Again, for the record, NTR was nothing more than corporate double talk. In every case I have seen, this "non traditional" revenue cost as much as it made, and did nothing but artificially pump up the top line revenue figures.

I sit here and see the debris that was once local radio, and I see the same misinformation and greed that I see in our banking and lending institutions. At the time I sold the group, I wondered how CC could possibly make out. Now I know who really footed the bill. And for that I am truly sorry.

Had our government not allowed the corporations to take over our small and medium markets, there would still be a place for good people to work in the industry. Well funded local owners could weather tough economic times without carelessly firing people.

While my wife, dog and I are at peace in our little bubble in Florida, we now are seeing what the country has reaped from the seed planted so long ago. You wanna talk special interest groups and lobbyists? Look no further than the corruption in the FCC that allowed the monopolies, and forced people like me to sell prematurely. I was 43 when I was forced out. I did what I had to do for myself and my family. But it should never have come to that.

The days after the sale, as Bob Dunphy and his hack cronies told our staff that "Marc's days in radio are over", little did they know how right they were. Despicable men like these destroyed the entrepreneurial spirit of local radio, and created a financial den of iniquity.

This is not a sentimental recollection of radio the way it used to be. This is a personal indictment against the people who have destroyed something I loved very much. May the golden parachute boys in San Antonio and others like them rot in hell with their public money scam and their dependence on government handouts. That was the only way they could gain a foot hold and wrestle properties away from good local owners.

Marc Steenbarger
Not dead, not buried
Rendered insignificant by a government that caved to special interests

My sincerest best wishes to Thunder, as well as the many who have been eradicated by corporate malfeasance.

 

[Element9]

A fine perspective from somebody who's seen the war from the battlefield.

You're one of the few lucky ones. Hope you got cash and put it under your mattress, rather than shares in CC. The communications business is a friggin' mess, a veritable stinkin' pigpen. And it's bound to get stinkier. The 4th quarter looks dismal. Can you imagine what the 1st Qtr of 2009 is going to look like? Wonder how long the Route 81 cluster in Elmira-Corning is going to rot in the hands of investment bankers, W-S?

Many (not all) of the suits running half the radio corporations are criminals and deserve the same fate as the boys who ran Enron. Remember "Kenny Boy" Lay? Some of these guys bought radio properties like kids on a sugar high at a birthday party. Gotta have more cake!

Where was the adult supervision?

But, and there's always a "but," we get the government we elect... or in many cases, the government we DON'T elect. When only 53 per cent of the registered voters drag their asses to the polls on election day and make their decisions strictly along party lines, when citizens don't know who their Congressmen/women and Senators are (let alone state representatives), when people can't identify the three branches of government (Executive, Judicial and Legislative) and their roles in governance, when people buy a $250 thousand home when they can afford only a $100 thousand home, and when lending institutions "give" these people to money to buy that home, what's to be expected? Where's the accountablility?

The answer? Exactly what we're experiencing now.

Moohead, you're lucky. And from what I read on these boards, probably pretty damn smart. And you probably worked your assets off. You got out alive. Maybe you'll be able to buy back in at ten cents on the dollar.

Send your post to the Binghamton papers and post it on the national board here. Some people still know how to read. Maybe your post (a damn fine one at that) will help them get the message.

-9-

 

[amfmxm]

Early this year--on the heels of the release of "Clear Vision" & "Right of The Dial"--the two misleading or misguided books on Clear Channel--I began to write a book about what really happened to our radio industry, that is, the inside job Lowry Mays pulled from his perch at the NAB writing degregulation legislation giving CC an enormous headstart on its rape of radio. Three chapters into it I passed the draft past some respected radio friends and an attorney. All advised me that without quitting my day job (running media properties) and/or hiring a research team to verify it all, I'd be facing lawsuits until my dying day.

Moohead, it's not all that far from Enron. If there's an enormous difference, it may be in the way that the operational methods used by the Big Players to game Wall Street filtered quickly down to the smaller companies--most likely because of Clear Channel's immediate presence in more than two-thirds of radio's 300 rated markets--all the way to the Caspers & Cookevilles of the radio world. So the damage wasn't limited to just one out-of-control company--it infected the entire industry.

I'll agree with Element9, you may still have opportunity to revisit your radio roots. Radio is too omnipresent (still with more than 90% reach, despite all of this) to just disappear. But it will take years of rebuilding to bring the industry back to a relative measure of good health.

 

[Element9]

It occurs to me that the radio bandits are envious of the banking thieves who got a $700 billion bailout. That's $700,000,000,000 or as the Brits like to put it, 7 thousand million. So, radio was the precursor to the real estate and banking debacles.

Radio! Once again setting trends and leading the way. Only this time, in the wrong direction.

I fear we're headed for a deep recession. It may be that radio will be one of the first victims. If (when?) national and local advertising fall off, layoffs will follow. It won't be the exception, but rather the rule, to have one jock voice tracking across three stations within the cluster: Stations signing off at midnight or 1 a.m., signing back on at 5 or 6 a.m; AM stations within the cluster being totally brokered or going dark and in extreme cases, AM stations turning their licenses back in.

This is ugly. Whoda thunk 1995 would be viewed as "the good ol' days."

 

[moohead]

Even if I had the opportunity to get back in, the landscape has changed. Internet Radio, satellite radio. The whole thing has been spread thin, and terrestrial radio was bastardized. Who knows how much listenership has been forever lost?

Not to mention the recession, local ad agency revenues declining, and national revenue gone.

It all started with bogus "double minority applications" for 80-90 frequencies that turned out to be the big boys in disguise. They are without ethics. And the damn NAB sat and let it happen and recommended to broadcasters that 80-90 was designed for diversity.

All in all, I should be happy I am rid of this slime.

Moo

 

[amfmxm]

It all started with bogus "double minority applications" for 80-90 frequencies that turned out to be the big boys in disguise. They are without ethics. And the damn NAB sat and let it happen and recommended to broadcasters that 80-90 was designed for diversity.

Hey, I'm just glad to see that someone else recognizes this. While all this was going on--from the 80-90s to LMAs to Telecom 96--I was telling anyone who would listen that we were being scammed. But there always seemed to be a feeling among most practitioners--those of us who do radio on a daily basis--that we would somehow benefit, and so the scam was not just tolerated but admired. I still cringe to open "Radio Ink's" annual "Most Powerful" issues to see Lowry's idiot kids idolized as "industry leaders." Sort of like building a statue to honor Atilla The Hun for destroying your village...

 

[The Voice of Reason]

My friends the chickens have come home to roost. What radio is experiencing is the fallout from corporate greed. The victims, unfortunately, are those hard-working individuals who devoted many years of their adult lives trying to eek out a living, only to find themselves pushed out the front door because owners and managers wanted to increase their bottom-line.
I'm a capitalist; but also believe in the theory that having dedicated workers is what makes, or breaks, a company's future. Once a company starts cutting to the bone, you end up with a skeleton.
What is truly unfair is how a select few have managed to destroy a industry (broadcasting) while lining their pockets.
Someone on here once wrote that radio is dead. It might not be dead yet...but the Medical Examiner's office is standing by.

 

[TheBigA]

Had our government not allowed the corporations to take over our small and medium markets, there would still be a place for good people to work in the industry. Well funded local owners could weather tough economic times without carelessly firing people.

Another approach would be to say: Had those smaller local owners not sold out to the big corporations....

A few did not. Country star Buck Owens sold KNIX in Phoenix to Clear Channel. But he kept KUZZ in Bakersfield for himself. The money he got from the Phoenix station allowed him to hold on to the smaller stations for emotional reasons.

Lots of small companies were simply looking to get out. This was a trend that began in the mid-80s that involved many of the founding companies that owned radio stations in the 20s. Why? For a number of reasons. But in many cases, it was obvious that the days of smaller, more localized radio was over. The number of stations in most markets had more than doubled, increasing the level of competition. In an effort to cut costs, small local radio stations were outsouricing their engineering. This was the start of cluster operations, long before the 96 Act.

One other mistake made was when the government reinstituted the cross-ownership rules that prevented newspapers from owning radio stations in the same town. Lots of radio stations had been offshoots of their local newspapers. They were forced to sell, and often to people or companies that weren't as committed to local service. When you consider who in a local community is best suited to run a radio station, the obvious one is the local newspaper. But for 30 years, they've been prevented from owning local radio. That has hurt both the newspaper and the radio industry.

It's easy and convenient to blame corporate greed. But there are a lot of former radio owners living in luxury right now because they sold when the prices were high, and got out before the new technologies came in and took over. Who really is the greedy one? The buyer or the seller? I often read how their former employees wish for them to come back, buy back their stations at fire sale prices, and return radio to its former glory. I have no reason to believe anyone is going to do that.

But let's examine one well funded local owner, and see how he runs his radio stations. Dan Snyder owns the Washington Redskins. He also owns a number of Washington area radio stations. He has been cycling employees through them like water, hiring and firing GMs, OM, and on-air people. He recently fired a popular talk show host because the host was often critical of the Redskins. THAT is what you get from well-funded local owners.

The fact is that most of the corporate owned radio stations are for sale right now. You may not know it, but you might be able to buy a few at a good price. The bad news is that when you take ownership, you'll find yourself with many of the same problems that the previous owners had. Because the operating environment has changed greatly in the last ten years. Great programming and lots of local involvement is not the attraction it once was.

Ask yourself what you would be doing if you didn't own a computer and this message board didn't exist. The answer is you'd be listening to the radio. The reason radio is in trouble is not because of the owners, the programming, or the government. It's because we have other things to do with our time.

 

[SirRoxalot]

A? As in corporate Apologist?

Ask yourself what you would be doing if you didn't own a computer and this message board didn't exist. The answer is you'd be listening to the radio. The reason radio is in trouble is not because of the owners, the programming, or the government. It's because we have other things to do with our time.

Actually, I'm on this message board, AND listening to radio. Why? Because there's great locally programmed music on that I like a lot. It's a Blues show - on the local NPR station because no local commercial station would ever host it. It gets great numbers - mostly from 35+ listeners who go out of their way to listen to it because it's not the pre-packaged corporate pap that we get served by most commercial stations.

The reason radio is in trouble is because corporations cut locally-produced programming and replaced it with generic crap that sounds the same in market after market after market after market. There are very few "oh, wow" moments outside of the morning show - typically the last bastion of locally produced programming.

PS - Dan Snyder is hardly a typical "well-funded local owner".

 

[TheBigA]

Re: A? As in corporate Apologist?

Actually, I'm on this message board, AND listening to radio.

There's always an exception to the rule.

The reason radio is in trouble is because corporations cut locally-produced programming and replaced it with generic crap that sounds the same in market after market after market after market.

And yet for some reason, those shows tend to be the ones that get the ratings.

And at the same time, locally produced programming has simply not been a consistent ratings winner.

Once again, I'm sure you'll bring up one or two exceptions, and that's wonderful. But if you study the entire country as a whole, looking at the top-rated stations, formats, and approaches to radio, you will see that there is a good reason companies are doing what they're doing, and it's not simply to save money.

PS - Dan Snyder is hardly a typical "well-funded local owner".

You can't vote on the people who own broadcasting as though it's some kind of reality TV show.

 

[SirRoxalot]

Re: A? As in corporate Apologist?

Actually, I'm on this message board, AND listening to radio.

There's always an exception to the rule.

No, most studies show that radio listening is not an "exclusive" activity. Most of us listen to the radio while doing something else. The last time people pulled up chairs and stared at "The Magic Eye" was around the time that Fran Stryker was writing "The Lone Ranger".

The reason radio is in trouble is because corporations cut locally-produced programming and replaced it with generic crap that sounds the same in market after market after market after market.

And yet for some reason, those shows tend to be the ones that get the ratings.

And at the same time, locally produced programming has simply not been a consistent ratings winner.

Once again, I'm sure you'll bring up one or two exceptions, and that's wonderful. But if you study the entire country as a whole, looking at the top-rated stations, formats, and approaches to radio, you will see that there is a good reason companies are doing what they're doing, and it's not simply to save money.

Ain't necessarily so. It's more common that the stations with the MOST locally produced content are the winners. It's usually the also-rans and "flankers" that resort to many hours of syndicated crap.

PS - Dan Snyder is hardly a typical "well-funded local owner".

You can't vote on the people who own broadcasting as though it's some kind of reality TV show.

And you can't pick a seriously atypical owner and present him as representative of "local ownership".

 

[TheBigA]

No, most studies show that radio listening is not an "exclusive" activity. Most of us listen to the radio while doing something else.

I wasn't speaking in generalities. I specifically mentioned computer message boards. Stick to the point.

It's more common that the stations with the MOST locally produced content are the winners. It's usually the also-rans and "flankers" that resort to many hours of syndicated crap.

Care to back that up with some examples?

If it wasn't for syndicated talk programming, the AM band would be filled with brokered religious programming. Which is the way it's going anyway..

In Washington DC, syndicated host Steve Harvey is the #1 show in morning drive. Kicking the pants off of locally-produced shows featuring veteran hosts who make 6 figure salaries. And Harvey's success follows through for the rest of the day. And Harvey's station, WHUR, isn't owned by Clear Channel or one of the big media companies. It's owned by Howard University.

And you can't pick a seriously atypical owner and present him as representative of "local ownership".

I wouldn't call him "atypical." He's rich, he's local, and he owns several radio stations. That makes him a well-funded local owner.

 

[SirRoxalot]

Big A indeed

People spending time on RADIO message boards don't listen to radio at the same time? Puh-lease.

You want "local content" winners? How about Kiss FM, Lite FM, WBLS (yes, with Steve Harvey originating his syndicated show from there), and WINS all in NYC.

Want someplace smaller? How about St. Louis, with KMOX mostly live and local (3 hours of Limbaugh in mid-days), or KEZK - live and local all day, with Delilah and Tesh at night on a soft-rocker, or WIL, or KTRS - both live and local all day.

In Buffalo (market #52), the winners are WBEN - live and local except for the interruption of Limbaugh in mid-days, WYRK - live and local from 5:30A - 12 midnight, 97-Rock, live and local 5:30A - 12 midnight, and Kiss - which is about to give up 3 hours of local programming to bring in Seacrest.

YOU'RE speaking in generalities when you say that syndication "wins". There are LOTS of AMs with live, local talk show hosts doing very nicely with little or no syndicated content.

The typical local owner does have a couple of billion dollars to throw around. Dan Snyder owns radio stations to promote the Redskins and his other properties. He has a reputation of being a big, billion-dollar baby. Typical local owners don't have his money, and don't treat the income from their radio properties as chump change.

 

[TheBigA]

Re: Big A indeed

People spending time on RADIO message boards don't listen to radio at the same time?

OK...so they're on the air, monitoring their own show while they're on message boards.

YOU'RE speaking in generalities when you say that syndication "wins".

I never said "syndication wins." But it isn't the loser you seem to think it is.

 

[SirRoxalot]

Re: Big A indeed

People spending time on RADIO message boards don't listen to radio at the same time?

OK...so they're on the air, monitoring their own show while they're on message boards.

WTF? Now you're just being stupid. Nobody said anything about posting while "monitoring their own show".

YOU'RE speaking in generalities when you say that syndication "wins".

I never said "syndication wins." But it isn't the loser you seem to think it is.

Hey, you're the one who brought up the Steve Harvey show as an example of syndication "kicking the pants off locally-produced shows". That sounds like "winning" to me. In DC, WHUR has had a good run at the top as an Urban AC. Their association with Howard University helps them with an Urban audience. 'MMJ (with Tom Joyner syndication in the morning) and 'PGC (live and local) are creeping up on them.

Syndication often wins because it's the only alternative for a particular segment of the audience - not because it's better programming. In Buffalo, for example, 'BLK - which is the only Urban station in the market - does very well in the morning with Tom Joyner. The biggest reason? They're the ONLY Urban in the market. There's no direct competition for the format.

In the long run, syndicated programs will be availble directly from the source, without the need for a local station. When that happens, there are going to be a lot of local stations in the "Howard Stern" situation - a syndicated show leaves, and the listeners follow. That leaves the local station with a hole to fill that never would have existed if there hadn't been any syndication in the first place.

Radio is doing a great job of promoting content that won't need radio when wireless Internet, cellular Internet, and other technologies become cheaper and more widespread. Talk about shooting yourself in the foot...

 

[TheBigA]

In the long run, syndicated programs will be availble directly from the source, without the need for a local station.

That's the case now. But I think these shows benefit by the association with the local station. And vice versa.

Radio is doing a great job of promoting content that won't need radio when wireless Internet, cellular Internet, and other technologies become cheaper and more widespread. Talk about shooting yourself in the foot...

Nothing is cheaper than free. I don't expect any other system of distribution to be cheaper than radio. And I expect rights fees on digital servives to limit their growth. At least in regards to music.

Everyone expected network TV to die when cable became popular. Even after 25 years, the lowest rated network TV show gets more audience than the highest rated cable show. I think that analogy will apply to radio.

 

[SirRoxalot]

Nothing is cheaper than free. I don't expect any other system of distribution to be cheaper than radio. And I expect rights fees on digital servives to limit their growth. At least in regards to music.

Everyone expected network TV to die when cable became popular. Even after 25 years, the lowest rated network TV show gets more audience than the highest rated cable show. I think that analogy will apply to radio.

You have to remember that the younger generation looks at 24/7/365 access to communcations as necessary to everyday life. The telecommunications companies are moving toward cheap, fast, wireless access as a revenue stream that will eventually replace landline phones and wired Internet access. With the changeover to IP phone service, they're in the data business - whether that data is a phone call, a music stream, an Internet page, or a text message.

Look at the iPhone and other "smart" devices. They already switch over to WiFi where its available to save money for users. Wireless access won't be free, but it will be a utility that most folks will already be paying for, and using it for access to music streams won't mean any extra expense - which in relative terms makes it "free".

Local radio stations carrying syndicated shows may add enough promotional value, or awareness of the product to offset distribution costs, but the restrictions of broadcast radio may also be perceived as a limit on the content, ala Howard Stern. With a digital stream, you can easily set up ways to block content for some users. That's not possible with over-the-air analog radio.

TV is facing its own challenges with Tivo, DVRs, and downloadable programming. Local stations are facing competition from cable ads that can be micro-targeted to a very specific audience. In case you hadn't heard, all broadcasting revenue - not just radio - has generally been stagnant, if not declining, since 2001. IPTV is the next challenge that coming to local stations, who are already upgrading their web capabilities and seeking a return from the cable, satellite, and other aggregators for the content that they provide.

 

[TheBigA]

The telecommunications companies are moving toward cheap, fast, wireless access as a revenue stream that will eventually replace landline phones and wired Internet access. With the changeover to IP phone service, they're in the data business - whether that data is a phone call, a music stream, an Internet page, or a text message.

And most of the major radio companies are already offering their content on them. CBS and Clear Channel most notably.

Wireless access won't be free, but it will be a utility that most folks will already be paying for, and using it for access to music streams won't mean any extra expense - which in relative terms makes it "free".

I wouldn't base the future on how things are now. Comcast has already put limits on the amount of bandwidth they permit under their plan. That limit could change or there could be a tiered pricing system depending on the amount of bandwidth a person uses. SoundExchange is forcing content users to increase revenue with more advertising and membership fees. Soon, all the complaints consumers have with terrestrial radio will apply to online. Once that happens, free radio will be on more level ground.

 

[SirRoxalot]

The telecommunications companies are moving toward cheap, fast, wireless access as a revenue stream that will eventually replace landline phones and wired Internet access. With the changeover to IP phone service, they're in the data business - whether that data is a phone call, a music stream, an Internet page, or a text message.

And most of the major radio companies are already offering their content on them. CBS and Clear Channel most notably.

Yeah, but most people don't have wireless Internet with them 24/7/365 yet.

Wireless access won't be free, but it will be a utility that most folks will already be paying for, and using it for access to music streams won't mean any extra expense - which in relative terms makes it "free".

I wouldn't base the future on how things are now. Comcast has already put limits on the amount of bandwidth they permit under their plan. That limit could change or there could be a tiered pricing system depending on the amount of bandwidth a person uses. SoundExchange is forcing content users to increase revenue with more advertising and membership fees. Soon, all the complaints consumers have with terrestrial radio will apply to online. Once that happens, free radio will be on more level ground.

Comcast is also under fire for limiting bandwidth. The infrastructure build-out is designed to accomodate all-you-can-eat plans, and that'll be the favorite option of younger users. If on-line "radio" has less advertising content than radio thanks to subscriber fees that provide a wealth of other services as well, they still win.

Radio can compete, but only if they provide content that relates to LOCAL listeners. There's a reason that people live outside major metropolitan areas - they LIKE it there. I could care less about Lindsay Lohan's latest media run-in. It'll get plenty of coverage on the magazine shows, Internet gossip sites, and a lot of other places that I routinely ignore. I do care about what's going on in MY town. Give me that content and I'll be listening, no matter what the platform.

 

[TheBigA]

If on-line "radio" has less advertising content than radio thanks to subscriber fees that provide a wealth of other services as well, they still win.

Only a small minority will pay for something they can get for free. That's the lesson of satellite radio. The cost of internet advertising is so small, they have to run five times as many ads to make the same amount of money.

I could care less about Lindsay Lohan's latest media run-in. It'll get plenty of coverage on the magazine shows, Internet gossip sites, and a lot of other places that I routinely ignore. I do care about what's going on in MY town. Give me that content and I'll be listening, no matter what the platform.

I think you're trying to take what you like, and tell me everyone likes what you like. Sorry, but not everyone thinks like you.