Originally created 08/25/02

Trouble on the airwaves



As with most baby boomers, the soundtrack of Bruce Stevens' youth was broadcast in mono over AM radio waves.

But he was more than just an avid listener. He landed his first radio job while still in high school. By 1975 he was program director for WBBQ-AM, which, at the time, was one of the nation's most influential Top 40 stations.

Today he's an independent record promoter, paid by record labels to get their artists radio exposure.

How ironic for Mr. Stevens that his teenage children and their friends rarely turn on a radio. The soundtrack for the next generation of music fans is more likely to be heard via downloadable digital music files or commercial-free satellite radio.

"I have kids in my neighborhood who say they never listen to the radio," Mr. Stevenson said.

It's not just his neighborhood. Listeners nationwide are tuning in less. Last year the average listener had a radio on for 20 1/2 hours a week, down 2 1/2 hours from 1993.

For girls age 12-17, the radio is on 16 hours a week. For boys, it's 12 1/2 hours.

Some attribute the decline to the proliferation of competing music distribution mediums, such as Internet radio and commercial-free cable music channels.

Others point the finger at the radio industry itself.

IT HAS BEEN MORE than 20 years since Elvis Costello first sang that "radio is in the hands of such a lot of fools." But with today's ultra-tight playlists, research-driven formats and a lowest-common-denominator approach to programming, critics of commercial radio think the lyrics ring truer today.

Some trace the industry's current woes to a 1996 law that deregulated radio and opened it to large corporate ownership. Before the law was enacted, a company could own no more than four stations in a single market and no more than 40 nationwide.

Control quickly shifted from the vast number of independent, and often quirky, local station owners to a smaller group of large and medium-size corporations.

In the Augusta-Aiken area, for example, three companies - Beasley Broadcast Group Inc. of Naples, Fla.; Clear Channel Communications Inc. of San Antonio; and Radio One Inc. of Lanham, Md. - control 90 percent of the airwaves.

Across the nation, radio companies improved efficiencies and slashed expenses by centralizing programming decisions, advertising sales and promotions. The result has been cookie-cutter formats, predictable song schedules and a reduction in local on-air talent in favor of "voice tracking" technology, which enables a radio company to record and rebroadcast one DJ's show to other company stations that have the same format. The show is then passed off as live and local.

Although Clear Channel has been a pioneer in voice tracking, the company does not use the system in the Augusta market. However, its adult R&B station, WKSP-FM "Kiss 96," is one of 47 Clear Channel stations using the "Kiss" brand nationwide.

The industry bristles at the notion that commercial radio has become homogenous, citing growth in talk-radio formats and niche-music stations that appeal to an increasingly fragmented audience.

"We strongly disagree with some of the contentions out there that radio has become less diversified," said Dennis Wharton, senior vice president of corporate communications for the National Association of Broadcasters. "We think the radio industry has never been more diverse in terms of program formats."

Radio stations make money by giving customers what they want, and, to the chagrin of hard-core music fans, most customers want hit music played in repetition.

So why is listenership going down?

A recent phone survey by the Future of Music Coalition, a New York music industry public-interest group, found that most respondents were becoming fed up with the current model of commercial radio.

"It's a house of cards," said Michael Bracy, the group's legislative director.

In the coalition's survey of 500 listeners, 76 percent said station DJs should be given more freedom to play music they believe would appeal to their audiences; 52 percent said they would rather see more new music and less repetition; and 75 percent said they would like to see more low-power FM stations offering more diverse formats.

The coalition is one of several groups contending that corporate cash plays too big a role in what is played over public airwaves.

Although paying promoters to push records on radio stations is nothing new, 1960s-era "payola" laws banned the practice of paying stations to play music without proper on-air disclosure.

However, the record labels and radio corporations have found a way around those laws.

UNLIKE THE "PAY FOR PLAY" scandals of Alan Freed and Wolfman Jack, in which record company reps slipped cash and promotional goodies to DJs and program directors, the new system is handled at the corporate level. The money changing hands, as much as $300 million a year by some estimates, gets reported as "nontraditional revenue."

The record-label money is funneled to radio groups through independent record pitchmen, known in the business as "indie" promoters.

There are two types of promoters. The first are those who work on retainer. The record companies pay them to send out promotional CDs, make contact with program managers at stations across the country and report whether the record was added to any playlists.

"We're just trying to promote the music honestly," said Mr. Stevens, who has worked as an indie promoter since leaving WBBQ in 1999.

The second type, who have exclusive arrangements with certain radio companies, play an instrumental role in the so-called "legalized payola" system.

Here's how it works: The promoter bills the record company for promotional services but in reality is serving as a conduit to the radio company, which takes the money as a type of kickback for access to playlists and programming decisions. Some indies with exclusive deals receive fixed monthly payments.

"Before, it was record labels hiring indie guys to pay off the stations," said Ann Chaitovitz, national director of sound recordings for the American Federation of Television and Radio Artists, a union more commonly known as ASTRA. "Now it's the stations hiring an exclusive promo guy who says you have to pay me to get played on these 1,200 stations."

Although the indie system was created by record companies to skirt the 1960s-era payola laws, the recording industry has grown weary of the system because costs have escalated as the radio industry has grown stronger.

"From (the recording industry's) perspective, it's gotten out of hand," said Peter Hart of the New York media watchdog organization Fairness & Accuracy in Reporting. "Ten years ago, before consolidation, the stakes were much smaller. Now the indie promoters are much more powerful, and the stations are more powerful. And there's a lot more money involved."

Clear Channel and Radio One reportedly have exclusive arrangements with indie promoters. Beasley Broadcast does not.

The broadcast companies refuse to discuss their policies regarding indie promoters. Corporate officials from major broadcasters - including Clear Channel, Infinity, Emmis Communications, Entercom Communications, Cox Radio, Saga Communications, Radio One and Citadel Broadcasting - either declined to comment for this story or did not respond to repeated requests for interview.

Critics of the major radio groups liken the system to extortion and say it is responsible for the lack of diversity on the airwaves.

"The best isn't being played anymore. It's who can pay," Ms. Chaitovitz said.

Artists such as the neo-hippie band Phish, which has managed to build a strong following despite limited airplay, have long spoken out against corporate radio's creative dearth. But even polished, well-financed artists are starting to join them.

Superstar Britney Spears made headlines earlier this year when she claimed that Clear Channel reduced her airplay time after her management refused to book her tour schedule through Clear Channel's concert promotion subsidiary, Clear Channel Entertainment.

Clear Channel has never issued a statement on the matter, but a company executive, speaking on condition of anonymity, said the allegation was ludicrous.

"If there is any reason Britney Spears is getting less airplay, it's because her career is on the way down," he said.

ALLEGATIONS OF UNFAIR and anti-competitive practices in big radio have caught the attention of U.S. Sen. Russell Feingold, D-Wis., who introduced legislation in June that aims to rein in the radio industry by reinstating ownership caps.

The senator and a coalition of artists, record companies and unions that support his legislation argue that four radio groups control 63 percent of the 41 million top-40 listeners nationwide.

Clear Channel has been singled out because it is the largest of the four groups. Mark Mays, the company's president and chief operating officer, said in a lengthy statement issued the day the Feingold bill was introduced that radio is a relatively free industry compared to other mediums.

He said that five major record labels account for 84 percent of album sales and that the 10 largest movie studios account for nearly all of that industry's revenue.

"Even Clear Channel, the largest owner of radio stations in the country, owns only 11 percent of the stations," he said. "So the notion of a few large corporations controlling the majority of the radio industry is not only incorrect, but is actually less of a factor in radio than in most other media and entertainment industries."

He also said if record companies are concerned about escalating promotional costs they can stop paying indie promoters.

Hilary B. Rosen, chief executive of the Record Industry Association of America, the lobbying organization for the major record labels, did not respond to repeated phone messages and e-mails seeking a response to Mr. Mays' comments.

While the Feingold bill is backed by a coalition of artists, record companies and unions, it so far has made few waves on Capitol Hill. Some in the industry believe it will die from lack of interest.

"The odds are that nothing will happen," said Lew Dickey, CEO of Cumulus Broadcasting in Atlanta, which owns more than 250 stations. Cumulus is the former owner of Clear Channel's Augusta station cluster.

Even if the Feingold legislation passes, or the Federal Communications Commission launches a probe, some believe that the record and radio industries would eventually find a new pay-for-play system.

The airwaves may belong to the public, but the sounds you hear over your radio will always carry some sort of price tag, says "Heavy" Lenny Bronstein, a Los Angeles indie promoter since 1970.

"It's product placement," he said. "At the grocery store, it's common for companies to pay to have their products placed on the shelf. So why is it that what is a common business practice anywhere else is looked at like taking an Uzi out at a McDonald's?"

Reach Damon Cline at (706) 823-3486 or dcline@augustachronicle.com.

AUGUSTA CORPORATE RADIO

CLEAR CHANNEL COMMUNICATIONS

HEADQUARTERS: San Antonio

2001 SALES: $7.9 billion

EMPLOYEES: 35,700

LOCAL STATIONS: WBBQ-FM, WBBQ-AM, WEKL-FM, WGUS-AM, WKSP-FM, WLOV-AM, WPRW-FM, WXKT-FM, WZNY-FM

LOCAL MANAGER: Tim McFalls

PROFILE: The nation's largest radio company (it owns or programs 1,200 stations) also owns TV stations, billboard companies and concert venues. It entered the Augusta market in 2000 by purchasing the station cluster owned by Cumulus Media. It is currently No. 2 in revenue in the Augusta market.

RADIO ONE

HEADQUARTERS: Lanham, Md.

2001 SALES: $243 million

EMPLOYEES: 1,550

RADIO STATIONS: WAEG-FM, WAEJ-FM, WAKB-FM, WFXA-FM, WTHB-FM

LOCAL MANAGER: Dennis Jackson

PROFILE: The largest company serving black audiences, Radio One came to Augusta in 2000 by acquiring the station cluster formerly owned by Davis Broadcasting. Its rap, R&B and contemporary hit music stations compete directly with Clear Channel's Augusta cluster.

BEASLEY BROADCAST GROUP

HEADQUARTERS: Naples, Fla.

2001 SALES: $115.2 million

EMPLOYEES: 669

RADIO STATIONS: WAJY-FM, WCHZ-FM, WGAC-AM, WGOR-FM, WKXC-FM, WRDW-AM, WRFN-FM, WSLT-FM

LOCAL MANAGERS: Kent Dunn/Coni Sansom

BACKGROUND: One of the nation's smaller radio companies, Beasley is the No. 1 revenue cluster in Augusta and has owned area stations since the 1970s. Its talk radio, modern rock and country/western stations are without direct competition.