http://www.chicagotribune.com/business/chi-0410070304oct07,1,7739835.story
Radio facing music of change
Consolidation stirs competition


By Leon Lazaroff and Maureen Ryan
Tribune staff reporters

October 7, 2004

Radio listenership is down, revenue growth is anemic, and complaints about programming are omnipresent.

But the radio industry, said Stephen Soboroff, owner of KCJJ-AM 1630, a 10,000-watt independent station in Iowa City, has only itself to blame for its many troubles.

"Consolidation killed local radio, it dumbed down content, stripped news departments and eliminated the diversity that once made it such an enjoyable medium," Soboroff said. "Big Radio has made it worse."

When Soboroff talks about Big Radio, he's referring to the handful of companies that purchased hundreds of stations following passage of the 1996 Telecommunications Act. That landmark law eliminated caps on the number of stations a company could own in a single market.

As a result, Clear Channel Communications Inc. owns more than 1,200 stations nationwide, including 19 in Iowa and nine in Illinois. The nation's No. 2 radio station owner, Atlanta-based Cumulus Media Inc., owns 305. Infinity Broadcasting, a unit of Viacom Inc., owns 185 stations.

Executives at Clear Channel and Infinity would not comment for this story.

Howard Stern's announcement Wednesday that he plans to jump to Sirius Satellite Radio illustrates the problems confronting the radio industry. Though still in its infancy, the success of satellite radio reveals that a growing number of listeners are willing to pay a monthly fee for programming that can't be found on traditional airwaves.

In just two years, Sirius has attracted 600,000 subscribers. Its main competitor, XM Satellite Radio, has 2.5 million subscribers.

Satellite radio companies point to Clear Channel's recent efforts to negotiate reduced commercial airtime with its advertisers as a sign that mainstream radio is feeling pressure from satellite.

Clear Channel wants to cut down on ad length as well as make them more entertaining. The San Antonio-based company seeks to reduce commercials to the industry average of 15 minutes per hour--one magazine said some stations average 22 to 24 minutes--and not play more than six consecutive spots. Long commercial sets, its station managers say, prompt listeners to turn the dial.

"You're talking about a business that over the last 30 years plays fewer and fewer songs. There are more and more commercials, there's less and less diversity," said XM spokesman Chance Patterson.

"Clearly, there's been an awakening, where music fans and listeners across the country have said, `Wait a minute, Why are the songs always the same? Why are there so many commercials?'"

Satellite radio remains tiny in comparison with broadcast radio. While 280 million Americans listen to broadcast radio each week, there are just over 3 million satellite radio subscribers, said Inside Radio magazine's Tom Taylor.

Satellite radio, said Sean Ross, an industry analyst with the Edison Group, is one of many problems affecting the radio industry. Radio professionals, he said, "view satellite radio as competition, but they view other stations in their market as competition, they view the iPod as competition. Satellite has just been one piece of that."

For the past three years, revenue in the radio industry has grown at a paltry 1 percent to 3 percent, according to Smith Barney Citigroup.

Furthermore, radio listenership is off 13 percent over the last decade, according to Arbitron, which monitors ratings.

Another issue is that more people are tuning in to Internet-based stations and visiting Web sites for downloading music.

One panacea for the radio industry may come as stations migrate from analog to digital technology. By going digital, radio stations can offer listeners higher quality sound and, more important, transmit multiple stations on the same frequency.

Listeners will need to buy new radios to hear the crisper sound, but as digital radio becomes commonplace, they could choose from a far greater number of stations.

"That will certainly give radio companies more revenue sources," said Michael Bracy, policy director for the Future of Music Coalition. "The question remains whether that will improve quality and allow for the type of innovative programming that will attract listeners."

Bracy argues that the radio industry must be compelled through regulation to guarantee local programming and content diversity.

Another piece of the puzzle for the music majors. Something they simply don't want to hear. The listening public is fed up and they are leaving the medium in droves.

With that comes less and less listening to the majors wanna be "hit tunes" (call it parade or whatever). Oh how the majors want control of the internet (add technological changes, satellite, and whatever into the mix).

It isn't p2p that is killing them. It is their own business practices. No one can change that but them. They have to convence the public their music is worthy and they have been failing at it miserably. Solution? Sue the customer. Right!

Even shutting down the internet, putting it all in their hands to control isn't going to fix the problem of lost listeners.

This monster they created to control the development, distribution, and public display to hear this has bitten them on the tail. The stations that play what they want for a price (payolla) want increasing more money for this er, service. It is such a drain that now the poor RIAA wants an investigation into it. Funny, they started it, kept it fed and alive, and it has grown to bite the hand that feeds it.

The ease at which they turned to blame p2p for all the woes of their industry shows that it isn't change they want. They want business as usual. Times have changed and so has the method of choice and what listeners think is quality music. Solution? Change the laws. Right!

No amount of changing laws is going to change the listeners taste or what they have come to expect as the norm. Plastering the radio with more and more ads, playing the same songs over and over, and driving your potential customers away by sueing them isn't going to bring them back either.

Nor is drastically altering copywrite laws going to help this.

The music industry is reeling from its own bad business models, now becoming hopeless outdated, and looking to our lawmakers to bail them out.

In otherwords, you and I though taxes should help them. Right!

In the UK commercial radio exists but we do have alternatives through BBC radio. Funded by the public (Although I believe it's too much and spent frivolously) we have a wide choice of alternative programming. The amount of adverts on UK commercial radio is FAR less than in the US also.

American radio has officially become so bad that, even though it is free, we are willing to pay to NOT listen to it.

I understand commercials are needed to pay for whatever... but, I almost no longer listen to the radio... 1 of 2 reasons...

1 I have an MP3 CD player
2 I am sick of commercials... I will turn the radio of and wrather listen to nothing then the 10 mins of commercials played.

40 mins of non-stop rock... my ass... in between each song... here's band X, brought to you by some car dealer...

Even though it isn't a full 30 second commercial, I am still getting this shit rammed down my throught.

And, now that I am started... slightly off topic, but what about movie theaters? I paid like $9 a ticket last time I went (Like Shrek2 or something like that)... sure prices are expensive ($5 for a pop you can get for $.65, $5 popcorn)... but, they have commercials IN THE THEATER. As the movie starts... it SUCKS.

"...sure prices are expensive ($5 for a pop you can get for $.65, $5 popcorn)..."

The MPAA wonders why rental videos are doing so well compared to showings in theaters also. Of course they also blame p2p for the problem. Wonder what would drive away customers and lower their sales?

If I pay to see a movie, did I pay a licensing fee? Then, because I paid my licensing fee, can I not download it from the internet?

Media (music and video) is becoming more like software licensing.

Like, I bought Metallica the Black Album. On tape. Then, CD. Then, it got stolen or lost. So, I got it again on CD. THEN I bought the DVD audio version of it (like 3 years ago). Should I have to keep paying? If it was "licensed" to me... can't I call Electra Recordings or whoever and request the new form of media?

I know that above was off topic...

I am at that point to pay for satellite radio, just to not listen to commercials... and, to listen to variety. On broadcast radio... they have 10 songs... just enough to fill their top 10 of the week!

I have Sirius on my DishNetworks... I listen to it at home when I need ambient backround noise... may get it for the car.

With the advent of Stern going to satellite radio which publicized the disgrace of public radio even further..in addition to the major records being scrutinized even further with Ashley Simpsons blunder and the increasing need for more music choices in iTunes, Live365, etc....the possibilities for independent music are getting stronger.
This is indeed is a good thing going in the right direction.

"Clearly, there's been an awakening, where music fans and listeners across the country have said, `Wait a minute, Why are the songs always the same? Why are there so many commercials?'"

It has been that way (but HAS gotten increasingly worse) for as long as I can remember... and I started listening to radio as a child in the late '60's/early
'70's. But by about 2000, radio became so bad, I just go to the Internet for music entertainment and diversity.

RADIO IS DEAD FOLKS! (Radio coulda been/once was a good thing, but it was killed off by the infestation of corporate greed which ruins most things, including our beloved nation.)

"Listeners will need to buy new radios to hear the crisper sound, but as digital radio becomes commonplace, they could choose from a far greater number of stations."

But watch out for broadcast flags, DRM and barriers to local and independent music... (which the industry does NOT want you to hear.)

Shmoo, of Electric Gypsy
Support Local and Independent Music!

dmannjr, don't be surprised if after paying to listen to music on satellite radio that you'll soon be paying to hear commercials, too. They'll say that it's neccesary so that your subscription price stays at whatever per month...but don't doubt that Sirius or whatever satellite radio service will soon eagerly taking advertising money. However, this time, you simply can't just turn it off, because you'll be paying for it anyway. It is sort of like the old AOL scenario..they were supposedly against spam, but sold it's member's email addresses anyway to get more money.

Better to have a mp3 player and have your own control.

Personally, I think paying for music through satellite radio is playing into what the RIAA wants...pay per play.

"Personally, I think paying for music through satellite radio is playing into what the RIAA wants...pay per play."

Nail ...right on the head pinemikey! You smacked it good and hard with an aim that was true!

www.bbc.co.uk/radio4/ - streaming available.

Internet radio is the only way to go,

My radio station plays the best in classic rock from the 60s to today and ads can only get in once an hour and only two small ones then, but sadly not available in your car "yet" but they are working on it.


www.live365.com/stations/ukonline