Radio’s Death Throes and its Hopeful Rebirth – Kindness, Happiness and Joy (KHJ)

By Steve West
Founder, Airchexx.com
January 18, 2020

As I sit here contemplating the hundreds of incredibly talented people just forced out of the industry they loved, it’s hard to find words as the thoughts swirl inside my head. In view of the massive layoffs at iHeart Media this past week, one might wonder when the next shoe will fall.

Some may call me a dreamer. In reality, I’m a realist. Because of that, this article might be difficult to read. Unfortunately, someone has to be truthful no matter how much it hurts and that might as well be me.

I thought about beginning this article by going back to the storied days of Top 40 radio. A time that we took a little transistor radio to bed with us and tuned around, straining our ears to catch every note of our favorite songs and hear what our favorite Deejays would say next. Yep. It was a magical time. Unfortunately, that was a LONG time ago. So long, in fact, most of us who are old enough to remember having a transistor radio are over 50. That’s what this website is for. But that’s another story. No. I decided that to be appropriate this story must begin in 1995. In 1995, the National Association of Broadcasters (NAB) was lobbying Congress to pass a bill that would de-regulate the radio industry, primarily, among other things, to lift the ownership caps that had been in place for the previous 10 years (and before that, the limits were REALLY restrictive – One AM, FM and Television station per market). Only, in 1995, the NAB wanted the limits mostly removed entirely. In 1996, President William Jefferson Clinton granted Broadcasters’ wish and signed the Telecommunications Act of 1996. I could break down that piece of garbage legislation one character at a time if we liked, but you’d be reading all afternoon.

I would like to share with you, a piece re-posted by one of my friends and a (recently) former boss, Marsh Walzer who is now retired. He reposted on Facebook something written by one of his friends in 1995. This posted just two days ago and since it already appeared online I’d like to re-post it here for reference. This man’s name is Edward Fritts and he wrote to the NAB after receiving tons of fax material urging him to lobby Congress to pass Telcom ’96.

Mr. Edward O. Fritts

NATIONAL ASSOCIATION OF BROADCASTERS

1771 N Street, N.W.

Washington, D.C. 20036

Dear Mr. Fritts:

My fax machine and now my telephone are under what seems to be hourly assault by representatives of NAB. Every call and every fax seems more urgent than the one before. In no uncertain terms, I am being called upon to contact my congressman and anyone else I might know in Congress to urge them to pass a bill that will, among other things, lift national radio ownership limits.

The language is very interesting. In word and in tone it clearly implies that radio as an industry might not survive if this legislation is not passed.

The young man who just called me said that for radio to remain competitive, “it is vital that we get this legislation passed.” Remain competitive?

Pardon me if I seem cynical but I don’t believe that those in our industry who are promoting this legislation (and I have close observation of two of the major proponents, the Hicks family and the Mays family) are really concerned at any core level with competitiveness.

Hicks and Mays are, at their roots, investment bankers. And I believe that they – and others – are promoting the lifting of ownership limits in order that sufficient numbers of radio properties can be aggregated quickly in order to get revenues above a practical floor for going public.

It is the desire to get to the public money trough that is driving the Hicks’ and the Mays’ and the Karmazins et al. to support this legislation. It is not their concern for the competitiveness of the industry.

Please understand that I am a spirited capitalist. I don’t begrudge anyone a profit. I don’t begrudge a huge, obscene, make-me-green-with-envy profit – so long as the making of that profit doesn’t do damage to the marketplace in which it was made.

Mr. Fritts, I agree that radio broadcasters need some relief on ownership limits. The current limits are antiquated. I support modifying the ownership rules. I support modification to the national ownership limits.

But totally lifting national limits goes too far. If enacted, this legislation is going to set off a “land rush” that will ultimately harm the industry. The law that brings the changes that NAB so fervently supports is going to be accompanied by another law — the law of unintended consequences.

Yes, a lot of good and deserving radio broadcasters will do very well financially. There is nothing wrong with that.But the industry will be forever changed. And changed, in my opinion, largely for the worse.

Here is what I see happening.

* When the gates are thrown open nationally, a handful of companies will set out to buy as many stations as they can as quickly as they can. Companies will be formed for the express purpose of either being sold or going public. And because it’s just the way things work, some company will set out to be the first to own a thousand stations nationwide just for the bragging rights. A thousand stations!

* Prices for radio stations will go sky-high. There will be a market “bubble” for radio stations.

* A lot of good broadcasters will succumb to the extraordinary offers and sell and quit the business.

* Radio stations that have been operated for decades by operators hoping to build successful businesses for the long term will be in the hands of people who are concerned exclusively with current-quarter results.

* The hyper-focus on short-term operating results will bring about a Draconian focus on costs. Operating expenses will be pared to the bone. Risk-taking and product development and innovation will practically cease. Dayparts that can be automated or delivered by satellite or handed over to syndication or some just-over-the-horizon technology will be so consigned. Entire radio stations will be operated with no local air staff. And not just in small markets, but in New York and Chicago and Dallas. Technology will be seen as the answer and technology will be over-exploited in the drive to eliminate living, breathing human beings that give radio its unique ability to connect on a local basis.

* Related to the point above is management. Management absorbs a disproportionate percentage of payroll costs so managers will be called upon to manage many more radio stations than they do now. Lots and lots of management jobs will disappear. The resulting dilution of management attention to any single radio station’s operation will result in an overall degradation of the quality of what goes on the air and what goes on the street.

* Again related to driving down costs to make the Wall Street and investment bank-types happy, lots and lots and lots of radio programming jobs will be permanently eliminated, too. This will bring about an irrevocable talent exodus. Radio will be left with a small cadre of very highly paid morning shows and major market marquee’ names and very little in the way of “up and comers” to take their places a generation from now. Radio is going to do what baseball would never do – eliminate the farm system.

* With dramatically fewer employment opportunities in the business, it will be exponentially more difficult to attract bright and talented people to the industry.

* With hundreds or maybe thousands of radio stations concentrated in the hands of just a few companies, there will be fewer decision-makers left. In the unrelenting drive to cut costs, decisions to buy (or more likely not buy) a new jingle package or a great syndicated promotion idea will be retained at corporate and not left to the discretion of station management. This will serve to kill off a large number of the promotion companies, jingle companies, etc., etc. who serve to bring fresh ideas to the industry. It is likely that some radio companies will come to believe that they can vertically integrate such functions as research, promotion syndication or even audience measurement. The talent pool that sits and serves just outside the radio industry’s front door will permanently shrink.

* Most chilling from your perspective, the very people I describe in the paragraphs above are the ones who attend your conventions. Who will attend when they are gone? Who will attend when corporate, once again driving down costs, refuses to let local market program directors and engineers and general managers go the Radio Show? Today there are thousands of individual decisions made as to whether or not to attend industry meetings. When one company owns hundreds – maybe even a thousand – radio stations, convention attendance will be a corporate decision. And I’ll bet you lunch that the decision will be “no” a whole lot more often than “yes.”

Mr. Fritts, we have never met but I’m certain that you are an intelligent, thoughtful man. And if I said that radio is a content-driven business, I’m certain that you would agree with me.

Have you thought of these things? If so, I would love to hear your thinking. Because I think that we are about to deliver a hammer blow to the content side of our business.

I believe that what NAB is supporting goes too far. I wish we could all just take a step back and consider this legislation from a longer perspective.

If you are going to inundate me with faxes and phone calls, I would appreciate someone addressing the concerns that I set forth in this letter.

Thank you for your time.

Sincerely,

Paul L. Gleiser

Incredibly insightful, don’t you think?

If hindsight is 2020, the story of the de-volution of radio is crystal clear. We can easily look back and see where it all went wrong. Make no mistake, this is indeed a biased opinion column. I make no apologies for my feelings on this matter. Number one. Greed. That is the main reason for the condition of what used to be the most exciting and vibrant industry in America. However, it’s not just greed, but corporate greed led to a number of other things happening that helped speed the demise of our beloved industry.

You have probably asked yourself, what is the point of this article? Isn’t this pretty much what everyone else is saying? And, you’d be correct in thinking that. Re-hashing what most of us in the industry have thought for the past 25 years as we watched it evolve over the years can be tedious, but I have to point things out because an examination of the scene of the crime will reveal to us the solutions.

Let me cut to the chase. Radio is DEAD. The body is cold and all it’s waiting for is the monitors to show that there’s no more brain activity. Radio is suffering from terminal cancer. And, while it’s not my desire to hurt anyone’s feelings while they mourn the loss of their profession, it has to be said. Radio in its present form can not continue. It MUST die. Completely. And I’ll tell you why.

While we know the problem at iHeart that prompted the layoffs of this past week was debt elimination (and that’s going to continue), the entire radio industry is in the toilet. Partly because of acquired debt, but partly also because radio missed the bus when internet audio technology arrived over 20 years ago, then evolved to something people could stream. This radio industry all but buried its head in the sand as internet radio was born, just as it did when Pandora and Spotify came along, Apple music and all the other apps out there, not the LEAST of which is YouTube, offering premium music streaming. For radio, it’s answer to this was to continue doing business as usual, confident… almost arrogant as it stated time and time again, “radio has more listeners than any other media”. “More people consume radio every day than…. ” blah blah blah. Sure. Stations got into streaming. A nice, half-hearted attempt at duplicating its over the air content on platforms that sometimes worked, and often didn’t. But the youth knew where to get music.

What I’m saying here is, RADIO should have been on the CUTTING EDGE of internet ‘radio’ development, not on the hind end of it after watching internet stations come along, and premium streaming services. And while we’re at it, radio fell asleep at the wheel when the record labels came calling demanding huge royalties that put most of the early independent stations out of business, but allowed the premium services to survive and learn to create a subscription business model which today is worth BILLIONS. Without the baggage of transmitters and paying people to jockey ‘discs’ or the baggage of Federal regulators at the FCC. Did radio put up a fuss about royalties?  Not really.  Just enough to make it look good. Did radio try to develop unique content for the web? Well… they tried, in a radio, sort of way. But really, radio left it to rank amateurs to figure out how to beat radio at its own game instead of embracing that technology early and RADIO being the entity to master the internet of stations with wholly unique content, using talent that it already had on the payrolls. Now, in a stroke of irony, every song that the radio industry allows to air on the internet is worth royalty gold to the labels. Those same labels that were PAYING Deejays and radio stations to play those songs 50 years prior. So WHAT if iHeart has an app. I’d argue that Pandora and YouTube Music way outpace iHeart’s app.

And that’s just ONE area that radio left on the table for others to develop, while radio was busy thinking that Ibiquity’s “In Band On Channel” “HD” Radio was going to solve listener problems.

And since we’re on the technical end of radio, lets talk about what listeners actually hear in their cars. IF they bother to tune to a radio station at all.

Most new cars sold today have a smart, connected dashboard. Some of the high-end vehicles come already connected to the internet and that will trickle down to lower priced models. Soon, internet connectivity will improve to the point where there will be very few places in the United States that aren’t within range of a wifi signal. But lets not get too far ahead. What’s already happening? Well, there IS a “radio” on the connected dashboard. Increasingly, that radio is an FM only receiver. Okay, it has “HD” technology so you can hear those digital sub channels. But AM? What’s AM? If there’s no receiver to pick it up, it doesn’t exist! So, as for AM, its time has come and gone. Turn off the transmitters. No amount of ‘saving’ is going to help when the manufacturers refuse to include it in their receivers. What the dashboard DOES have is: SiriusXM. Pandora. iHeart. “Aux”. Bluetooth. That last one is the kiss of death for radio. Why would any music lover bother with radio that cuts in and out (and I haven’t even got to the point about what FCC and the industry have done to the FM band to ruin listenability yet) bother with FM where the music stops for commercial breaks that last over 10 minutes long and people talk all over it? Don’t deflect that point or defend it.  And if that wasn’t enough, Neilsen (radio’s ratings service) developed that Portable People Meter and a digital signal that superimposes itself on top of a station’s signal so it can identify what station a listener is hearing… that God-awful tin sound gives people like me a headache!  Especially on talk formats where one can’t get that tin can noise out of their heads!

I’ve never been asked to do radio ratings.  Not even when it was Arbitron and they used paper diaries.  How did they know I was a radio guy?  Who wears those PPMs?  Next comment.

I could go on and cite numerous examples just like those above as to how the leaders of our beloved radio industry dropped the ball. And even there, I don’t think they dropped the ball. They did not even TRY. Because since 1996, the only thing the so-called, alleged ‘leaders’ of radio wanted to do was extract every penny of worth from every radio station they got their hands on. This is why stations that were worth GOLD in the late 1990s in the heady days of consolidation – meaning prices for stations were off the scale, worth many times what they were bringing in – those same stations are being unloaded today for less than the property value that the transmitter and tower sit on.

This is beyond a bubble burst. In 1998, two years after Telcom ’96, someone with a good amount of foresight could see what was happening. In 1998, for the most part, stations still had full sales departments with a product to sell and the internet was still in its infancy. Streaming was a very rudimentary art, with the few trying it using the old Real Player technology (remember THAT?) and was not even on radio’s radar. Today, I don’t have to tell you, most stations.. and I do mean MOST outside of the top 3 markets DO NOT have much of a local sales team – if even one salesperson. 4-6 or more regional stations comprised of as many communities and or two or more counties all share studios and automation in the same building. Sometimes the same ROOM with each one’s format just a different playout player connected to the same router and server. And it’s only going to get worse. Thanks to hypervigilance by environmental groups, even the land upon which station transmitters sit is worth less than it was, comparatively speaking, in the 1990s after the Telcom mergers started.

So it is, that iHeart isn’t lying to its employees when it says it needs to restructure or die. It’s at a point where there’s not much left to sell off to generate cash; many of its stations got rid of their own transmitter towers, sold off the land and hitched their transmitters to a cell tower somewhere that they don’t own but rent space on. There’s a BILL, not an asset. The computer hardware is obsolete a year after installation and increasingly, stations are relying on a corporate system to generate playlists – hell, AI (artificial intelligence) is doing the playlists now at corporate in lieu of human beings. (as a side comment, no damn WONDER we can’t get any Rock onto CHR playlists anymore). They cut to the bone and the only thing left to cut now are the people that they no longer need… or apparently want.

I can’t tell you how sad it is to write this. However, I did state above that radio needs to die. And I emphatically implore the powers that be to KILL IT OFF as soon as possible.

You see, there are a few problems that cannot be repaired without the whole industry going through a metamorphosis. Just as a caterpillar goes into a cocoon, radio must, as well. All activity (or most of it) has to cease and the medium die before it can be reborn. Here’s what I’m getting at.

There are TOO MANY RADIO STATIONS, and too many of them duplicating the same programming. There are too many radio signals available. In this case, more is and was never better. You can only split the pie into so many pieces before nobody can make a profit. That was the case in the 1980s. It’s even MORE of a case today, with all the alternate entertainment choices available right in your hands. There is TOO MUCH INTERFERENCE. Perhaps this isn’t the case in the midwest and out in the western states, but along the Eastern Seaboard, oh. It’s definitely the case. ONE. Translators literally cut a lot of station’s useable signal range in half. TWO. IBOC (HD Radio) cut a LOT of adjacent station’s useable signals. THREE. AM is DEAD. Turn off MOST of the transmitters and keep every AM frequency that’s left as a “clear channel” frequency. Furthermore, if they want to implement ‘HD-only’ on AM, fine. Take half the band and designate it for digital-only and move the surviving analog stations to the other side. Then… (HERE’S WHERE I WANT THE FCC TO READ THIS, THEN STAND UP AND TAKE ACTION)

Are you reading, FCC?

YOU MUST MANDATE THAT EVERY SINGLE MANUFACTURER OF RADIO RECIEVERS IN THIS COUNTRY INCLUDE HD TECHNOLOGY FOR AM AND FM.
YOU MUST MANDATE THAT EVERY SINGLE MANUFACTURER OF RADIO RECIEVERS IN THIS COUNTRY INCLUDE HD TECHNOLOGY FOR AM AND FM.

and in case you didn’t hear me…

YOU MUST MANDATE THAT EVERY SINGLE MANUFACTURER OF RADIO RECIEVERS IN THIS COUNTRY INCLUDE HD TECHNOLOGY FOR AM AND FM.

Remember C-Quam AM Stereo? GREAT system. Only thing is, most people couldn’t experience it because the FCC dropped the ball and said: “let the market decide”. Well, just as in the case I outlined above where I said there are too many stations and too many slices of the pie, there are too many pieces of listening technology out there for listeners ears for the Commission to take a “head in the sand” approach and “let the market decide”. The market already decided. Radio is DEAD. Or, more properly, radio is a terminal cancer patient on life support. IF you wish to revive and revitalize the AM band then you must do the above. Or legislate the band out of existence and put the owners out of their debt-laden misery.

Here, FCC. Here’s something else you need to do. Send auditors to every radio station in this country. Those that are sound can remain on the air. Those not, revoke the license and revoke the channel allocation. You wanna help? Thin the herd. That way, those that are left can remain competitive. Maybe radio will stand a chance.  Didn’t President Roosevelt do something similar in the 1930s when he was first elected?  Yeah.  It was the “Bank Holiday”.  We need a bank holiday (don’t get me started about when this economic bubble bursts… you think RADIO has it bad?)

For the on-air people. Do your best work. Be ready and willing to work 12+ hours a day and be worth more than just your voice, train yourself for IT work. Get an engineering degree (you’ll enjoy your craft so much more, too!). In some cases, get a lawyer. Somebody’s gotta knock those at the top down, it might as well be you. Somebody find a lawyer specializing in class-action suits. I’m no lawyer, but something stinks to high heavens here. We’re a sue-happy society in 2020. Go for it. You got my vote and support. And lastly, get to a studio or hire someone if you have to, to create the best demo showing off your best, most creative work. Hell. I’ll help you. For a nominal fee, that is (and I JUST thought of that, that wasn’t the point of this article). If all else fails, then you will have to do what tens of thousands of displaced radio people have done since 1995. Do something else for a living, no matter how distasteful that is to you. Although… I know more than a few radio people who have moved on and say it’s the best thing that ever happened to them.

Let radio die. And then, perhaps, between the very technology that has it on the ropes now, and new blood and a new vision, perhaps radio can reinvent itself. It did before, in 1955 when radio with pictures did it in. It could happen again. But through it all, my prayer is for everyone in our industry, that they may find Kindness, Happiness and Joy (KHJ). God bless you all.

Steve West
Beacon Falls, CT.