Having read through many of the messages in this board I am struck by one recurring theme. Deregulation seems to have been the primary cause for our current state of affairs. My question then would be...Would bringing back the regulations we had prior to the deregulation era help radio regain its dignity? I can't help but think "maybe so."
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The return of REGULATION!!!
- Thread starter Surfer
- Start date
I guess it depends what kind of "regulation". The problem is, as high-minded as it may sound to "give the audience what it needs, not what it wants", it may be possible to require radio stations to air certain programming (unpopular music forms or individual songs, "fair" talk shows determined by government, requiring music stations to break format for interview shows in drive time) but what you can't do is require anyone to listen to it. Now, more than ever, the audience can turn on a CD, internet stream, change the station or whatever. It's not 1967 anymore with only a handful of choices, now, high-minded as it might be to require certain programming, the audience can turn it off much faster than you can say "public interest, convenience and neccessity".
You Want Regulation?
The primary regulation that I'm in favor of when it comes to ownership is preventing a single owner from controlling too big a share of the market. I'd cap it at 25%, less than the FCC's current standard, in order to promote real competition. That would put an end to markets with only one real news station, radio stations being programmed as low-cost "spoilers" to chip a share or two away from a market leader owned by another company, and stations programmed as tax write-offs because their programming protects a market leader owned by the same company.
How would we achieve such a cap? Easy. Each radio station would have to stand on its own billing. Any station that lost money for 2/3 of its license period would be deemed "not serving the public interest, convenience, or necessity", and the license would not be renewed. The license would then be auctioned to the highest bidder, and the original owner would compensated for the fair value of the hardware and real estate. BTW, unpaid advertising ("bonus spots") would have no value.
Non-commercial stations would be exempt, with the exception of religious broadcasters. The separation of church and state deems that they should be treated like any commercial owner if they carry ANY programming that solicits funds, or if they carry any paid religious programming that isn't LOCALLY PRODUCED.
There would be no return to the Fairness Doctrine, because there is no reasonable way to determine fairness. If you feel that your point of view isn't being represented on the radio, create or contribute to a company that can create programming you approve of, and purchase either radio stations or airtime to disseminate your point of view. If you're successful, more people will join your crusade, and you'll be able to purchase even MORE airtime and/or radio stations. That's called competition.
The primary regulation that I'm in favor of when it comes to ownership is preventing a single owner from controlling too big a share of the market. I'd cap it at 25%, less than the FCC's current standard, in order to promote real competition. That would put an end to markets with only one real news station, radio stations being programmed as low-cost "spoilers" to chip a share or two away from a market leader owned by another company, and stations programmed as tax write-offs because their programming protects a market leader owned by the same company.
How would we achieve such a cap? Easy. Each radio station would have to stand on its own billing. Any station that lost money for 2/3 of its license period would be deemed "not serving the public interest, convenience, or necessity", and the license would not be renewed. The license would then be auctioned to the highest bidder, and the original owner would compensated for the fair value of the hardware and real estate. BTW, unpaid advertising ("bonus spots") would have no value.
Non-commercial stations would be exempt, with the exception of religious broadcasters. The separation of church and state deems that they should be treated like any commercial owner if they carry ANY programming that solicits funds, or if they carry any paid religious programming that isn't LOCALLY PRODUCED.
There would be no return to the Fairness Doctrine, because there is no reasonable way to determine fairness. If you feel that your point of view isn't being represented on the radio, create or contribute to a company that can create programming you approve of, and purchase either radio stations or airtime to disseminate your point of view. If you're successful, more people will join your crusade, and you'll be able to purchase even MORE airtime and/or radio stations. That's called competition.
More than likely, even under rules like that, there would not be two news stations. Markets I'm familiar with with three or four major owners don't have them. I don't know how you'd have a standard of each station "standing on its own billing", most could be made to show a profit unless you had some way to determine that if a station stood alone (had to have an independent sales staff, receptionist, bookeeper, etc.) the station could survive on its own. You might well go back to money-losing "format-of -the-month" club stations like we had in "the good old days". Forget about a standalone doing some obscure format.
gr8oldies said:
It's easy. There is a separate set of books for each radio station. If an advertisement is going to appear on a station, then it must be paid for with a check from the client. If a client buys three stations in a group, they send three checks. If a broadcaster sells spots for very little money, political clients will be all over that station wanting the lowest rate they've used in the past.
The days of "Buy the winning station at this rate, and I'll bonus you some spots on our losing station" will go away as soon as the client has to write a check to PAY for spots on a station that he doesn't care about.
Re: You Want Regulation?
It is so unlikely that any market could support another news station that I think we could say that this would not happen under any ownership scenario. Thee format is ageing, declining in many markets, and very, very expensive. Several news stations, like KNX, are transitioning to news blocks with talk stations, in fact.
You contradict yourself. Billing is gross income, before expenses. Profit is net after expenses.
In any case, since historically about half of US radio stations have not been profitable, this would cause a huge churn in ownership to no positive end. You would have to factor in the viability of the signal, the economic conditions and all kinds of subjective variables. For example, a station might have made money in Flint for the last 40 years, and with the closing of auto factories and a tailspin in the local economy, maybe nobody could make money for many years. Is that the operator's fault?
This would be a self-defeating situation. As a station approached the make or break year of the license period, if it had not been profitable, then everyone might know that it would be ending in a few more years... nobody would want to work there and it would deteriorate and operated really badly for many years. And the auction process could be appealed, causing the facility to operate under interim operators (a la KRLA) or go dark. This would be a disaster for the listeners and the staff.
SirRoxalot said:
It is so unlikely that any market could support another news station that I think we could say that this would not happen under any ownership scenario. Thee format is ageing, declining in many markets, and very, very expensive. Several news stations, like KNX, are transitioning to news blocks with talk stations, in fact.
You contradict yourself. Billing is gross income, before expenses. Profit is net after expenses.
In any case, since historically about half of US radio stations have not been profitable, this would cause a huge churn in ownership to no positive end. You would have to factor in the viability of the signal, the economic conditions and all kinds of subjective variables. For example, a station might have made money in Flint for the last 40 years, and with the closing of auto factories and a tailspin in the local economy, maybe nobody could make money for many years. Is that the operator's fault?
This would be a self-defeating situation. As a station approached the make or break year of the license period, if it had not been profitable, then everyone might know that it would be ending in a few more years... nobody would want to work there and it would deteriorate and operated really badly for many years. And the auction process could be appealed, causing the facility to operate under interim operators (a la KRLA) or go dark. This would be a disaster for the listeners and the staff.
While deregulation has had an influence on the business, it would be utterly impossible to go back to the previous ownership restrictions, or even come close. I do find a few comments disturbing here, though.
“Real competition”? Don’t we have that now? In a capitalist economy, I don’t think you can restrict ownership of a market and call it “real competition”. Sounds more like you’re promoting a Marxist idea.
I’m afraid not. With radio, it’s all about the content, the stations that have the good content get the ratings, those that don’t are forced to be brokered talk stations or change their formats/sell the station, etc. Example: Why in the world would I try to start a news/talk station in Phoenix when KFYI and KTAR control the vast majority of the audience, have the content that brings listeners in (including owning most of the quality news/talk syndicated programming that gets ratings) and have the top dollar advertisers and can burry me easily. Now you might be saying, “see! This proves that we need regulation!” Unfortunately, there’s one fatal flaw… you can’t force listeners to change the station’s they’re already listening to, you cannot force stations to give up their content or have some talent lottery to give everyone a chance at having the quality shows that already get ratings. Besides, companies, like Clear Channel, Citadel, CBS Radio, et al, would use every dollar and piece of influence they have in congress to prevent such a move.
Dose of Reality
The reason that I advocate limits to the number of stations owned in a market is simple:
There are a limited number of channels available for broadcast radio, and they're owned by the public.
If there were an unlimited number of broadcast channels available, I'd be happy to allow anybody to own as many radio stations as they wish. Since there's a limit to the supply, I'm opposed to de facto monopolies owning the majority of premium signals in a particular market. Let them keep the ones that they run profitably, and let the ones that they can't make a profit with go to other owners.
If you're not making money with a radio station, why should you continue to own it? Why shouldn't it "churn" to another owner, who might do a better job of serving the public, if you haven't been able to show a profit during 2/3 of the 8 year license term? Perhaps, some "rimshot" owners might even go back to serving their city of license in order to turn a profit.
BTW, I understand that "profit" is "billing minus expenses". I don't see how my previous post contradicts that.
I don't really expect that my thoughts would be welcomed by large corporations, or will be enacted by the FCC. I do expect that the issue will be moot within the next 10 years anyway, as most population centers delelop widely-available high-speed wireless Internet access and IP radio (and TV) appliances become both available and inexpensive. Unless they screw up Internet radio, terrestrial radio may be redundant outside rural areas.
That being said, please feel free to continue the discussion. I just threw my .02 in as an intellectual exercise, not as a position that I feel the need to defend or continue to advocate.
The reason that I advocate limits to the number of stations owned in a market is simple:
There are a limited number of channels available for broadcast radio, and they're owned by the public.
If there were an unlimited number of broadcast channels available, I'd be happy to allow anybody to own as many radio stations as they wish. Since there's a limit to the supply, I'm opposed to de facto monopolies owning the majority of premium signals in a particular market. Let them keep the ones that they run profitably, and let the ones that they can't make a profit with go to other owners.
If you're not making money with a radio station, why should you continue to own it? Why shouldn't it "churn" to another owner, who might do a better job of serving the public, if you haven't been able to show a profit during 2/3 of the 8 year license term? Perhaps, some "rimshot" owners might even go back to serving their city of license in order to turn a profit.
BTW, I understand that "profit" is "billing minus expenses". I don't see how my previous post contradicts that.
I don't really expect that my thoughts would be welcomed by large corporations, or will be enacted by the FCC. I do expect that the issue will be moot within the next 10 years anyway, as most population centers delelop widely-available high-speed wireless Internet access and IP radio (and TV) appliances become both available and inexpensive. Unless they screw up Internet radio, terrestrial radio may be redundant outside rural areas.
That being said, please feel free to continue the discussion. I just threw my .02 in as an intellectual exercise, not as a position that I feel the need to defend or continue to advocate.
As I said, I fear that an idea such as yours leads us on a slippery slope where more government involvement leads to interference in other aspects of commerce. Give the government an inch and they'll want 30 miles of regulation.
Another problem with your idea is that it will lead to even more chaos in the industry. A radio station knowing that they're license may be sold to another company due to poor or mediocre performance would cut as many corners as possible, including firing just about everybody so that they could show a small profit. The turnover in the industry is bad enough as it is, but think of what would happen if the aforementioned scenario were in play. I can also anticipate that the quality of radio would diminish even further--hard to imagine terrestrial radio getting much worse, but I could see it in your scenario.
Again though, this is all a moot point because you are absolutely right that the increasing amount of wifi and demand for such technologies, internet, satellite, etc will have it's own correction on the terrestrial radio market over time.
I understand, I enjoy your posts--even the ones I disagree with are generally well thought out, we all have our ideas as to how to improve an industry that most of us enjoy (in one aspect or another).
Why does it matter if the station loses money?
I was thinking about what I'd do if I won the $240 mil lotto jackpot last week. I picked out 4 class A FMs to buy. Each of these FMs is part of a cluster, and I would be surprised if any of them are profitable.
Considering my relative lack of experience in sales and management, I would be rather surprised if I made money for quite a spell. For starters, I'd need to hire at least three air personalities and a handful of salespeople. Then I'd go on an engineering rampage, likely building a new tower for $100k+ and a new studio for $40k+.
If I had that $240 mil, why would I raise spot rates?
This obviously doesn't work for publicly traded companies, but there are plenty of smaller companies run by independently wealthy business people.
I was thinking about what I'd do if I won the $240 mil lotto jackpot last week. I picked out 4 class A FMs to buy. Each of these FMs is part of a cluster, and I would be surprised if any of them are profitable.
Considering my relative lack of experience in sales and management, I would be rather surprised if I made money for quite a spell. For starters, I'd need to hire at least three air personalities and a handful of salespeople. Then I'd go on an engineering rampage, likely building a new tower for $100k+ and a new studio for $40k+.
If I had that $240 mil, why would I raise spot rates?
This obviously doesn't work for publicly traded companies, but there are plenty of smaller companies run by independently wealthy business people.
PTBoardOp94 said:
Since the 50's, first in the obligatory FCC annual licencee financial reports, and through to the 90's with NAB surveys, about half of all radio stations in the US are not profitable.
Of course, some small market ones give the owner a nice salary, and the station itself has no profit... but that is guaranteed employment, not a "get rich quick" system.
Good luck. The last studio we built cost more than $40 k just in LED lighting.
Re: Dose of Reality
Am I to assume that this rationale applies to satellite radio as well? Since they use RF spectrum, by your definition they belong to the "public". I'd guess that a good number of channels on either service are poorly listened to.
Trouble is, Iit's the privately owned stations that are generally the least profitable, which kind of goes against your theory. What does "serving the city of license" mean anyway? Airing lost dog reports & covering school board meetings in some bedroom community that 95% of your listeners don't live in or especially care about?
The government meddles in broadcasting enough as it is...why give it an excuse to meddle even more.
SirRoxalot said:
Am I to assume that this rationale applies to satellite radio as well? Since they use RF spectrum, by your definition they belong to the "public". I'd guess that a good number of channels on either service are poorly listened to.
Trouble is, Iit's the privately owned stations that are generally the least profitable, which kind of goes against your theory. What does "serving the city of license" mean anyway? Airing lost dog reports & covering school board meetings in some bedroom community that 95% of your listeners don't live in or especially care about?
The government meddles in broadcasting enough as it is...why give it an excuse to meddle even more.
If I follow the thread correctly here's what I've determined...
1) Radio costs too much to operate so avoid it.
2) Radio can't program to make money because listeners are fickle.
3) Radio needs to be turned off and the FCC put away before we all wind up as part of a vast government conspiracy.
Yes, some of my answers are a bit "over-the-top" to say the least but the point I'm trying to make is this. Everywhere on this board I read about the "good old days" of radio and how we catered to listeners, made money, trained new talent and had a blast! Now I read how nothing is as it used to be. According to most of the posts, radio will only recover when we eliminate the technology and laws that got us here. Progress is highly overrated and usually means more work for less money. Maybe getting rid of vinyl records was a bad idea. Maybe Howard Stern is right to move to satellite. And maybe...just maybe the main reason radio has such a difficult time surviving is because the majority of people who work in the business today only care about the money. Until that changes, nothing else will. 'Nuff said.
1) Radio costs too much to operate so avoid it.
2) Radio can't program to make money because listeners are fickle.
3) Radio needs to be turned off and the FCC put away before we all wind up as part of a vast government conspiracy.
Yes, some of my answers are a bit "over-the-top" to say the least but the point I'm trying to make is this. Everywhere on this board I read about the "good old days" of radio and how we catered to listeners, made money, trained new talent and had a blast! Now I read how nothing is as it used to be. According to most of the posts, radio will only recover when we eliminate the technology and laws that got us here. Progress is highly overrated and usually means more work for less money. Maybe getting rid of vinyl records was a bad idea. Maybe Howard Stern is right to move to satellite. And maybe...just maybe the main reason radio has such a difficult time surviving is because the majority of people who work in the business today only care about the money. Until that changes, nothing else will. 'Nuff said.
You all think that no one got fired in radio before 1996? There were plenty of satellite and automated stations going back years. Automated reel to reel formats were popular in the 60s and 70s. yeah, blame Bill Gates. If we still had vinyl records, a warmj body would have to be in the studio. We just wouldn't have the internet to bitch about it!
Re: You Want Regulation?
The seperation of church and state is about the freedom of religion, not freedom from religion. Seperation would seem to require commercial stations to be treated as commercial stations and non commercial as non-commercial no matter what the format. Example Bonneville Broadcast (LDS owned) stations are commercial and taxed as such. Brigham Young University (LDS owned) are non-commercial and treated as such. They both carry some religious programs and much non-religious programming. The treatment of each doesn't change during religious programming.
SirRoxalot said:
The seperation of church and state is about the freedom of religion, not freedom from religion. Seperation would seem to require commercial stations to be treated as commercial stations and non commercial as non-commercial no matter what the format. Example Bonneville Broadcast (LDS owned) stations are commercial and taxed as such. Brigham Young University (LDS owned) are non-commercial and treated as such. They both carry some religious programs and much non-religious programming. The treatment of each doesn't change during religious programming.
How about a return to the regulations that were designed to insure that owners were making a committment to the community when buying a radio station. The 3 year rule required three years before a station could be sold. Limits on the number of stations one could own in a market work better than restrictions on size of audience. The audience size rule inspires mediocrity. When they could only own 1AM 1FM and 1TV in the market stations fought/worked harder both in programming and sales. I'm not saying we should go back that far but some roll back might be called for.
And how about the regulations on the back of the Third Phone...transalted "No Swearing" and intelligent humor that goes beyond fourth grade sex giggles.
And how about the regulations on the back of the Third Phone...transalted "No Swearing" and intelligent humor that goes beyond fourth grade sex giggles.
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