http://www.nytimes.com/2006/10/26/business/media/26clear.html?_r=1&dlbk&oref=slo gin

I keep telling you guys, licenses are a corporate asset to be bought, traded and sold. Broadcasting continues to fall into the hands of money people whom have no real connection to the industry other than big enough coffers to gobble up all the assets at once. The sad part is that there is always a group of people that think they can take over a huge conglomerate and squeeze more profit out of it to satisfy stockholders. More jobs lost. Soon there will be 12 computers in one location providing 12 format streams being rebroadcast on every one of their stations around the country. Local staff will be reduced to 2 salespeople and one public relations person. GM's will be replaced by a few key regional managers. You can all laugh now, but don't say I didn't warn you.

And to think the FCC is still considering letting them own more station.

Clear Channel said they want all the stations they can get.

> I keep telling you guys, licenses are a corporate
> asset to be bought, traded and sold.

For living proof of this, see the recent posts on the KOHI thread. Even the license for that radio station has a considerably higher value than all of the station's equipment! This is for a signal that is "bounded" to the St. Helen's area.

It is a sad commentary on the disasterous 1996 decision on how it has not panned out well for radio.

Had the FCC NOT done this, the weak stations would be gone, the strong stations would have had to compete more--not less and the band would have been better for the plurality of ownership.

Now we have the remains being sold like scrap metal.

I don't think the weak stations would be gone. They'd just keep changing hands until their worth was greatly diminished.

.....Soon there will be 12 computers in one location providing 12 format streams being rebroadcast on every one of their stations around the country........


HEY! THAT'S MY IDEA! Darn, now everybody knows!

Crap, now just like my idea for the toaster oven someone else will implement it and I won't see a cent.

:-)

Actually might be too harsh of a viewpoint Andy, but, sometimes, it sure seems like Radio is headed down that road.

Isn't this natural evolution of busnisses?
Other businesses have similar cycles.
If some industry works with many small independent owners competing against themselves, some of the better ones will decide to grow by buying up the lesser ones, thus reducing competition, and becomming more efficient, and some of the competition will give up because they can't compete. Then biggies get bigger by going national with more mergers and aquisitions, then ratchet down quality. This happens with resturants, barbershops, automobiles, newspapers, software companys, etc.
Then some will do fancy financial deals like management buyout, or convert to a franchise model in order for owners to pocket some of the proceeds, and reduce operating hassels. Also, if some pieces stop making profit, they are shut down or sold. Finally they might decide to liquidate eveything!
Should the Feds regulate how many coffee shops Starbucks can build?

It's different with radio in that not everyone can broadcast, where everyone can sell coffee if they are so inclined. (and part 15 just does not count)

That's the little "public interest" part forgotten in recent times.

The feds can and should regulate radio in this way, otherwise we will end up with the least content and the most ads and the fewest owners possible.

Missing kskd always fills in the blanks and brings something to the table. I like the fact that he does that with some of our longwinded posts.

62kgw said: "Should the Feds regulate how many coffee shops Starbucks can build?"

Starbucks is not using the public airwaves.

>>>"Starbucks is not using the public airwaves."

CC isn't using them very well.

There are only a limited number of streetcorners on the PUBLIC streets to put coffeeshops at.

CC is USING the public airways (i.e. to maximize profits).

Even if there as a limit of one radio station per owner, what would stop syndicated franchise network McProgramming at lower cost than locally generated programming, thus you eventually still wind up with one room with 24 computers generating all of the content for everybody. ?

If they reduce transmit bandwith to +/- 2.5 khz on the AM band, you can quadruple the number of stations.

If Starbucks were to get large enough to put most of the competition out of business, the government probably would step in. I'm a laissez-faire proponent to a point, and that boundary is when you you have so few players that quality expectations can be managed down or prices can be fixed. Then you have the scenario that Lilly Tomlin used to satirize, "ha ha ha ha--snort--we're the phone company!"

Compare broadcast news coverage today, especially on radio, even to that of ten years ago, and you will see that the expectations have been managed down. Evening drive news hours? Gone! Investigative reports? The last ones that I heard were on KPAM, and those are gone.

"If they reduce transmit bandwith to +/- 2.5 khz on the AM band, you can quadruple the number of stations."

Since it's mostly talk radio on AM, that would make it sound like a telephone call.

More seriously, though, I don't enjoy beating up on the state of the industry today, but TV never and radio no longer operates as a public "trustee." I understand 62kgw's comment about the logical maturation of business in a capitalistic society, and that ties the growth of Starbucks to mantra but we still see Jane's Coffee House popping up in locations where demand is exceeding supply. I think it's a little over the top, however, when you walk downtown and can see 3 Starbucks within a few blocks radius. Applying this to radio, the big mistake the government made was loosening in market ownership limits. This makes it near impossible for a small company to compete with its single license against 3 or 4 major companies with 5 or 6 licenses in the market. These big companies could still be big and own hundreds of stations countrywide, but letting them dominate lucrutive large markets is wrong ... and in so allowing them to do that, eliminate the manpower needed to keep them operating. You could still have corporate programming (gag) with centralized purchasing and marketing, but we wouldn't end up with just a few people running a bunch of computers covering the needs of 7 stations at a loss of over 60% of the positions for people to work if those 7 stations were independently operated. This minimization of players in a
market is OK for cell phones or cable, where the infrastructure construction costs are so huge that small players really have an insurmountable barrier to entry, but radio waves travel through the air and listeners can buy a radio or tv pretty cheap.

With the growth of alternative media delivery, the very capitalistic mantras that fill the corporate pigs pockets will be their undoing. Consumption will grow, but traditional delivery will have to share it with the new players. This has already begun. One thing I learned after 25 years in broadcasting is that never ever believe what the industry marketing people speak. Do your own research. And never trust a politician from Texas.

[What about McProgramming?]

Love that phrase, BTW.

It's different in that having many different owners presents a scenario where they will want to differentiate between themselves.

Corporate clusters need only do this in relation to other clusters. This demands scale that makes the McProgramming viable.

With more owners, there is less overhead, a significant chance that they would be privately held, thus some potential for profit with people involved and some potential for longer term investments to build the business instead of dividends being paid and profit numbers being posted.

If "bob" owns a coupla stations, "bob" is really interested in making money, but also very interested in keeping the value perception surrounding his investment as high as is possible.

When not dealing in tons of licenses, the value of each license becomes more about the community surrounding it (connections between staff, listeners and local business) than it does the actual technical attributes of the licnese.

Big corporate radio has devalued itself with all the brand anf format homiginzation (however you spell that). Of course they want to own more stations.

They can strip them down, show some additional magic value from the difference as profit. Never mind the fact that the loss of the connections really is a loss of longer term value.

Growth does not come from cultivating ties between their stations and listeners and the market they serve in general. It comes from the gobbling up of properties, then the effort to strip them for higher value perception.

It's all gonna bite them in the ass someday.

62KGW's business model analogy is exemplified in the beer business.

By the 1980s there were 5 companies making almost all the beer in the US market. The big 5 cheapened the product to the point that one could really not tell the difference between the competing brands, it was all about selling "image" over distinction and quality.

That scenario made the consumer ripe for the Micro Brew industry to develop and thrive. Craft brewing was started by individuals dissatisfied by the corporate offerings.

Interestingly we now see Budweiser owning part of Redhook and Widmer.

There are a lot of parallels with the radio industry.

The radio conglomerates may eventually be broken up.

Look at AT&T which was broken up years ago by the Feds, and now we're getting to the point where every company is swallowing up another and so forth, and growing into the same giants that were broken up in the first place.

I posted this thought here about two years ago, and nobody took it seriously. I think I'll try again.

Years ago, when Bud Paxton was building his big Florida radio group, eventually sold to Jacor, then absorbed by CC, he spoke of "accumulating bandwidth", inferring it might someday have other uses. I still believe these big companies are thinking ahead to a day when all RF bandwidth will be "re-farmed" for digital products.

Anything that can be transmitted digitally, including video, can now be compressed to fit in less bandwidth than an analog FM stereo radio signal. And...there is nothing which cannot now be transmitted digitally.

If you start from this assumption, the behavior of the big groups all makes sense. If the "digital convergence" will eventually make all bandwidth fungible, and you're a big corporate owner who really believes it, then you strategically accumulate analog bandwidth, and do whatever it takes to make fast money with it now, while it lasts. In fact, if you believe its digital future is more valuable than its analog present, you have an incentive to hasten its demise!

This light bulb came on for me a couple years ago, but I never thought we'd see it happen this fast. IBOC HD Radio is promoted now as "the stations between the stations." Sooner than you think, the tail will wag the dog, the analog signal will be thought of as the subcarrier, and that bandwidth will be "re-purposed" to mobile digital communications of all types.

The day your internet show gets sent to a car on the carrier of what used to be a radio station that employed you, in a way, you'll have your old job back!

If you find that day bittersweet, we'll all understand.

Prepare now. Remember that old cliche about the makers of horse-drawn buggies when the automotive era dawned? The ones in the "horse-and-buggy business" were doomed. The ones in the "transportation business" had a future.

If you're nearing retirement age and have been smart with your money, maybe you can hold on and ride it down. If you need to survive long-term, you need to get out of the "radio broadcast" business, and get into the business of using media, specifically some medium over which you have control, to entertain and/or inform people.

Repeat after me: "I am not a radio broadcaster. I am an audio content provider".

This is a solid speculation, IMHO.

It does explain a lot, but for one element: risk.

Should radio get devalued enough to really marginalize itself in the face of new tech, they run the very serious risk of having to repurpose yet again. If that happens the cost could be really high with only incremental gains to be had along the way.

A secondary problem is that radio becomes mere infrastructure, unless they can somehow carry the branding to the new digital devices to come.

"This video brought to you by KDMS, please visit us online and your nearest digital receiver for more!"

To date, infrastructure has been brutal where big profit is concerned. That's why we keep seeing legislation after legislation aimed at propping up the value artifically.

Think of it like this. DirectTV is the infrastructure. They try to make themselves look cool and appear like a venue of sorts. Smart actually, but they are really infrstructure and most people know it.

The cool lies in the various channels. To some MTV is cool. They don't care how they get it, they just want it. Radio could easily be in the "don't care how they get it catagory", if it follows this path.

In either case, your mantra at the end is a solid one. If people get into new media now, and establish their "cool" there, where the actual radio industry goes will not impact them quite so much.

A friend and I have been doing talk shows on a new media venture called talkshoe. It's cool. People can call in to the show, having reviewed a schedule of shows they would be interested in. Others can simply "tune" online to the live show, or listen post show to a podcast with an ad inserted. (We point ours to a website that is updated with relevant content daily, that references the shows frequently.)

The host gets an online display of callers questions and thoughts via a threaded chat system where conversations and questions are happening with the live show.

Host can choose any of the "callers" that have dialed in, give them the floor and handle them much like a traditional talker does today.

With very little effort, a solid program of this type could end up on a radio broadcast with the host being producer, host and screener all in one. Host can be anywhere they want to be, as no serious studio is required.

That's one example of new media evolving at a pretty fast rate. If it takes the majors 5 years to get these digital signals refined enough for use on devices, they start their growth from there.

Could easily be behind before they really get started.

On the other hand, if they continue with the venue aspect of radio, there is a growing pool of new media content just waiting to be tapped, aggragated by topic and demo. Lots of "new" stuff to broadcast and very little investment beyond some sharp people to present it to their current audience.

To a point, this idea does make a lot of sense. Consider Qualcomm's "Media Flo" multimedia-on-cellphones. Qualcomm bought a nationwide license to the spectrum formerly occupied by UHF channel 55.

The question now becomes, how will this banwidth accumulation plan play out? The obvious part is that the bandwidth will become a commodity to be sold or traded, and once the new services come in, non-conglomerate broadcasters will either have to pay to be carried on the new multiplex systems or go out of business. But, what about the details? Will the broadcast conglomerates sell off their bandwidth one day to an "infrastructure" company? Will they spin off "infrastructure" companies? More importantly, will the result to consumers be one receiver that uses the entire 88-108 MHz broadcast spectrum, or will this band be cut up into parts used by different infrastructure services with proprietary equipment? What about the AM broadcast band? Could there even be wideband digital transmissions on shortwave some day?

With the advent of direct broadcast satellite TV, satellite radio, and Media Flo, I could very easily see that all or at least a large portion of the broadcast spectrum will one day belong to subscriber services. I can only hope that somebody in power has enough sense to leave at least some of the spectrum open to non-subscriber broadcast services.

88-108 will be divvied up to the appropriate needs of the technology which is granted its use.

This is nothing new. The current spectrum is all divvied up ... it may be a difficult concept to accept infotainment being delivered in a yet to be finalized technology broadcast at a yet to be determined place on the spectrum, but it's destiny.

That's why I keep saying that licenses are just a commodity.
Licenses = bandwidth

In 40 years you won't recognize it if you are lucky enough to still be alive.

Andy--I'm afraid that you're right! That's why I said above that I hope that some people have their heads on straight enough to recognize that no matter what happens, there should be some place for broadcasts which are free to listeners and viewers.

I can't think of any part of the spectrum ever becoming obsolete; it may just be used differently. 100 years ago, what we think of today as LF and VLF were home to spark gap transmitters and Alexanderson alternators. These frequencies are still in use today, but the types of signals found there are different.

I like this line of reasoning. Signals become non-relevant after a time.

Changing from the spark-gap to the means we have today was necessary from a quality and practicality stand point. Also the amount of effort required for the change was not so high as to make the change itself not worth it.

Todays radios are everywhere. They are cheap and effective. The movement toward choice means we've not a quality incentive to migrate the signals to a new form.

That leaves choice in my mind. It also speaks to relevancy as well.

If the owners of radio want it to become less relevant it's slowly gonna happen. That will diminish the returns enough to justify a signal migration.

However, I've not seen any clear evidence that the listening public wants the same change.

There is a strong case for the industry making it's own reality for it's own ends. There is lots of money to be had tying their signals to different sources of revenue. Data transmissions and infrastructure have less overhead than serving the public interest does.

Stable monthly revenue comes from radio being treated like bandwidth, but it does not support the idea that the listening public wants to trade their radios for a lot of services, each attached to some sort of recurring fee.

IMHO, these moves are an attempt to further monitize the public spectrum. The "benefits" pitched to us are the same trinity of: better sound, more choice and more convience.

Your average radio is dead simple, lasts for years, is open such that any of us can simply make one if we want to, and lacks service fees other than power to operate it.

None of these options coming down the road, are on par with the simple utility of the radio.

This makes all of this mess a forced move for dollars that is highly likely to result in a loss for us in general. If asked, the majority of people do not want that.

Any evolution that comes to the existing spectrum is for dollars period. That goes with the de-evolution too.

Not to diminish, but in reality when it comes to mass communication creation, marketing, and delivery it is more about the consumer electronics manufacturers than the bandwidth lessee (i.e. TV, radio, cell phone license holders). The folks that make and sell the gadgets really have the stranglehold on emerging technologies. David Sarnoff, a truly overrated character in broadcast history (he invented nothing, but learned how to use technology to further business interests) had that part exactly right. It's about building the "receiver" and getting it into the hands of the consumer. These days, the computer revolution has upstaged radio and tv and taken control of all video and audio entertainment development and is closing in on delivery, not to mention personal communications like the phone.

Agreed.

Which makes me wonder why Radio is so quick to devalue itself to a mere content carrier means.

Radio has rock bottom cost, ubiquity and low cost of ownership over all of these new devices.

Perhaps, that's why Ibiquity is doing what it's doing where receiver licensing is concerned. They want a piece of the disposable receiver market.

Still I think it's a bad trade. If they wanted to, they could continue to remain relevant, thus making money on both ends of things. Also they could then continue to apply pressure on the receiver makers as well. More defensible position, IMHO.

Either way, we shall see huh?

Consistently, those who have tried to depart from established protocols have been the loser. In transceiving and recording technology, for example, we have seen the failure of:

Quad FM
Dolby HX
AM stereo
FM-x

IBOC is really a failure too, but it's better to see it as a bridge to digital. When the radio dial drops analog, we may or may not see a different set of digital protocols.

Successful changes include:

Color TV
FM stereo
Cellular 2way radiotelephone

Recent losers:

MP3-Pro

Why did the losers fail? Lack of support from the receiver manufacturers.

I believe the big broadcasters consider the nature of their delivery system to be a trump card. The holy grail right now is getting broadband data into cars. Once you make the decision to change, it becomes a small matter to "cellularize" a broadcast signal. Instead of one big transmitter up on Sylvan, you'll see sticks all over town with smaller transmitters.

As far as risks, it's not hard to project instant demand upon announcement of the capability. This will be a slam-dunk compared to the scenario under which XM and Sirius got started. It will be more like the start-up of FedEx, which brought a startling new capability to the marketplace, and saw instant demand.

As far as radio becoming just a "venue", the way DirecTV is, the big broadcasters are already doing it. Homogenization of content is making the local station's identity secondary. If you take a road trip, you can dial up CC's AM stations in 15 different markets, and as long as Rush is on, you have to pay attention to tell it's not KEX.

XM and Sirius are already struggling to differentiate themselves, fighting the tendency to think of them as venues, with no unique artistic identities. I have to hand it to Mel Karmazin...he knew that getting Howard Stern would be a great tool in the fight to brand Sirius. Even people who haven't looked into getting satellite radio know Howard's there, and most know he's on Sirius.

Not everyone guessed early on that the satellite radio providers would choose the route they did. In 1995, when Cox took over WMMO/Orlando and I found myself displaced from the PD gig, I presented a proposal to the three direct satellite TV broadcasters operating at the time. They all had some form of "Music Choice", a multi-channel music jukebox. I tried to make the case that they should make these soul-less music channels unique, branded "radio stations from space", (hire me as ops manager,) provide them to anyone with a dish at no charge, and create brands which they could later sell to XM or Sirius, which were then just announcing their business plans.

None of the sat-TV companies even wanted to discuss it. XM had implied it would create its own brands, and the sat-TV guys swallowed it. I could not imagine how either XM or Sirius could afford to create 50 or 100 successful, branded channels each, on top of their start-up infrastructure costs. I figured they'd be foreced to bring existing brands on board, whether from terrestrial radio or other media. I was right in the end, but to be fair, I'm not sure XM or Sirius would have bought any of the brands I wanted to create on sat-TV audio, either. And the sat-TV guys probably made more money competing with Muzak.

There will probably always be a place in the post-digital-convergence world for free, advertiser-supported audio program streams. If nothing else, it will be a sales tool for the receivers. But, if the only people listening are those who can't afford paid content, what agency will want the demographics?

There will be one opportunity for revenge by former jocks in this future world, however...the local radio sales managers and their staffs will be replaced by an automatic spot-placement service from Google!

Very interesting... and I think I agree.

I still think local stations acting as venues for their particular community will have more than token value however. New content comes from small scenes where new ideas can gestate. All of this capacity will still need filler, IMHO.

We may find interesting people among the "not gonna converge" demo. Those folks, having not tapped their monthly entertainment budget on subscriptions and devices may well be solid spenders in other areas. (Home improvement, hobbies, eco-tech, travel, etc...)

By Andy_brown on Thursday, October 26, 2006 - 1:04 pm:
"Soon there will be 12 computers in one location providing 12 format streams being rebroadcast on every one of their stations around the country."

I think there are words of truth in this. It makes huge business sense to do this. Just look the the "Movin" "Jack" "Charlie" formats currently in operation. I gotta tell you though this listener will not tune to those stations who do not employ local talent to host their programs. I enjoy a solid show from an intertaining local DJ just as much as the music. Voice over DJ's are getting harder to differentiate from local talent but after a short time it becomes painfully obvious. In my opinion a good show is when you can call the DJ with requests or for programs like "Connect the Classics". These truly make the listener group feel involved and catches there interest in trying to have there favorites aired. It's kind of like dollars and sense.....but in some cases trying to get those extra dollars just makes no sense! Leave it to the suits to mess up a good thing for everyone in the pursuit of the almighty buck.

McProgramming is happening in Spanish programming too, just look at what Bustos is doing. He did it when he owned Z Spanish Radio and is doing it again. Would you like fries with that Big Mac? Si

By Radio921 on Thursday, November 02, 2006 - 3:18 pm:
"Would you like fries with that Big Mac?"

No...you got it wrong....thats what the CBS PD said to the CC PD after consolidation and assuming their new duties!!! LOL

R&R is reporting that Google may be interested in buying Clear Channel -- to gain access to the local market ad inventories.

http://www.radioandrecords.com/radiomonitor/news/business/top_news/article_displ ay.jsp?vnu_content_id=1003349771

Google Channel?

"I still think local stations acting as venues for their particular community will have more than token value however. New content comes from small scenes where new ideas can gestate."

Missing, value to the listener, yes. But value to the big companies? I'd point to their recent records on recognizing community distinctions, or providing creative space or the funds for ANYTHING to gestate, especially local music.

"I gotta tell you though this listener will not tune to those stations who do not employ local talent to host their programs."

Joamon, the fact that you're on this forum makes you atypical of normal listeners. Most couldn't care either way.

Even CC's cheapest-to-run FM format, Smooth Jazz, will now be served by a Jones-style network, handled at stations by Otto. Up until recently, the Smooth Jazz consulting firm, Broadcast Architecture, had been operating in-house at CC. B.A. was broken off to run independently just before it launched the new Smooth Jazz network. Coincidence? Hmmm...

"Google Channel?"

Craig, don't be silly man. It's "Cloogle!"

Broadcast Architecture's website still shows it as a division of Clear Channel Radio-- just as it has been for years. (The website also shows that they are about to launch Hispanic "networks" in addition to their Smooth Jazz network.)

Joamon4sure......LOL!!

Paul, of course that's not their mindset. It's unpredictable and does not always scale. Bad for McBusiness.

Somebody is going to tap this. If it's not radio then it will be something else and that's where some market pressure comes in. With Internet making people powered media a reality (assuming we don't get the tubes legislated in a non-neutral way), corporate radio will make this investment only to see it's value marginalized by other venues more capable of delivering "cool", not just "new".

I've a hunch this is a huge part of what the non-neutral net is all about. Since I've been watching these things evolve, time and time again the majors legislate rather than innovate.

Sadly, they've gotten away with it enough times to make me think you are right in your analysis...

By Paulwarren on Thursday, November 02, 2006 - 10:36 pm:
Joamon, the fact that you're on this forum makes you atypical of normal listeners. Most couldn't care either way.

What can I say...i'm abbynormal!

I listen all day long at work and on both drives. If I did not have a good station to listen to every day at work I think I would go nuts...wait...already am....but would be nuttier....is that a word? Anywho I think more listeners should sound off as to what they like on radio and then maybe these corporate types would take notice. I like old radio with DJ's with personalities....not this OTTO crap on the air on some stations. I have my own CD collection if it comes to that.

I am trying to stay out of the politics of radio these days and just express my point of view as a listener. In a previous life I went down that road and spoke out of place and out of line. To those who knew me then all I have to say is sorry for my foul mouthed temper!

Nuff said.....have a good one!

Joamon4sure = 3 weeks on the board and 284 posts. That's so far beyond atypical/abbynormal that you can't even see atypical from there.

Most of them over on the "Dark side of the Board"
The political and other!

Cross back into the light side once in a while!

And your style (and useless postings of stupid links) outs you again Jackel-Gracie-Joamon4sure.

Hey...i'm open these days to critisism....I started a thread over that that is just links to funny commercials. I don't think I use them routinely in threads I post in. If you say I do then I will try to remember to be more aware of that for the future. TY

Gotta go now.....they want me to take my MEDS!!!

Later

Joamon = Gracie Jack Mehoff7?

No way! Have you read the automotive posts on the other side?

Just scrolled through some of my posts and found one thread "Why we cant win" that had some links not right for it....what others out of curiosity did you find inappropriate? Will review them so as to not repeat it in the future.

My political stance is that I do not really like "Left Wing" or "Right wing" politics...more of a Breast man myself! LOL

Sorry bout that, just a little humor there.

I am just a centerline voter that will vote for the issues and not for the party. By that the person who is best for the job is best for the vote!

greed.