The Death of "Local Radio." - companies are buying radio stations

Washington Monthly, April, 1999 by Lydia Polgreen

In the last three years, corporate America has gobbled up much of the dial. But there's a way to take it back

THE 1996 TELECOMMUNICATIONS Act was one of the most lobbied bills in history. Telecom and media interests spent $34 million on campaign contributions for the 1995-96 election cycle--almost 40 percent more than the previous election. The Telecom Act was chock full of goodies for the industry, from cable TV to wireless phone service providers, from television stations to long distance telephone companies. The bill covered so much ground that the quiet but revolutionary changes it made to the rules governing the ownership of radio stations went practically unnoticed.

Until 1996, a company could own no more than 40 radio stations nationwide, and no more than two AM and two FM stations in a market, regardless of the market's size. The Telecom Act removed all restrictions on national ownership, and greatly relaxed the rules on how many stations a company could own in a particular market. In a big market, a company can now own as many as eight stations, and in smaller markets, between five and seven. In smaller cities, it is now possible for two companies to lock up the entire market.

Predictably, these new rules triggered a feeding frenzy. One third of all radio stations in the United States have changed hands since 1996. In 1996 alone, 2045 radio stations were sold, for a total of $13.6 billion. Of the 4992 stations in the 268 ranked markets, almost half are now part a "superduopoly," that is, they are owned by a company that has three or more stations in the market. In 1996 the top ten radio companies controlled only 600 or so radio stations. Today, the four biggest companies--Chancellor Media, Infinity Broadcasting, Clear Channel Communications, and Jacor Communications, which Clear Channel is currently buying--control nearly twice that number. If you live in a major market, chances are there isn't an independent commercial radio station on your radio dial. There are 1,000 fewer station owners today than there were in 1995.

The Bland Band

What commercial radio broadcasters sought--and got--in the 1996 Telecom Act was the ability to create huge national media companies that could put radio on the national advertising map. They could pitch their stations to local and national advertisers alike. If Ford wants to sell cars in Cincinnati, it can deal exclusively with Jacor Communications, which controls eight stations in the city with a range of formats. It can target the 25-54-year-old soccer moms who might buy Aerostar minivans on Adult Contemporary station WVMX, tempt 18-35-year-old males with Mustangs on Rock station WEBN, and peddle Tauruses and Explorers to 35-54-year-old males on news/talk station WKRC.

Ohio-based Jacor was one of the earliest and most aggressive consolidators. In 1995 Jacor had 25 stations, by late 1996 it had 64 stations, and it currently owns 240 stations in 53 mid-sized markets. Pam Taylor, a spokesperson for Jacor, describes its operating strategy as a "hub and spoke" system: "At a small station in a small market, it costs a lot to have a live, local person on the air even 12 hours of the day. If you limit on-air live time to morning and afternoon drive, you can get the rest of the day's programming from the hub." New satellite and internet technology allows a technician at a small station literally to cut and paste bits of local news, weather and chatter into piped-in programming with a click of a mouse on a computer screen. Stations can even apply this technology to listener requests and call-in promotions, by simply clicking and dragging bits of dialogue into the appropriate places. The computer wizardry makes the broadcast seem local, and in many cases, it is hard for listeners to know they are hearing something shipped in from out of town.

For listeners, the most important result of consolidation has been that playlists are strategically selected by teams of market researchers who often live and work hundreds of miles away from the people that will actually hear the music. What you hear has been carefully crafted to appeal to targeted demographic groups. "Jacor is nothing if not shameless in taking what works at one station and applying it to others," says Pam Taylor. DJs at corporate stations have little discretion in what they play; it becomes unlikely that something new and untested will get on the airwaves. A recent story in The Washington Post showed a compelling link between the corporatization of post-deregulation radio and the greater difficulties facing new artists trying to get record deals and get their music played on radio stations.

Changes in any realm are usually cause for nostalgia, and so it has been with radio deregulation. It is easy to forget that radio has always been in thrall to the top 40, and the notion of the mythic, music-loving DJ who plays whatever strikes his fancy is mostly fiction. But consolidation has made it even less likely that you'll hear something new, different, or even slightly out of the ordinary. On an oldies station, probably the most heavily researched and systematized format in radio, you'll hear the Beatles' "Hey Jude" and "In My Life" practically every day, but more obscure songs like "I Need You" and "I'm Only Sleeping" get little or no play.