Wednesday, July 21, 2004

Musical Interlude Part 2

As a follow up to my earlier Musical Interlude, I would like to take some of the comments made by loyal TIA reader Mike and expand on them. Mike said, among other things:

-New York radio is the worst. There is one classic rock station (q104.3) and their library consists of about 50 CDs, 5 of which are Meatloaf and Journey. And this is the best New York has to offer! For those with Long Island ties, 92.7 has recently switched to a Spanish format. Thank God. What had been the alternative station was alternating Madonna with the Smiths. WDRE/LIR had run its course. RIP.
I think Mike is on to something, but apparently his critique of the local NYC area radio programming and MTV was really just the tip of the iceberg, and he is less alone in his angst than he might think.   The New York radio microcosm is actually indicative of a nationwide epidemic that has so weakened the afflicted patient known as broadcast radio, that the death o fthe infirmed may be imminent.

Barry Ritholz at the
Big Picture, points to the fact that fewer and fewer Americans are listening to broadcast radio, the erstwhile engine of the American recording industry, one of our most successful exports and cultural contribution to the world since the mid-20th Century.

Why the adandonment of radio? Ritholz echoes some of Mike's observations:

Stations which were once a way to discover new music have become bland sources of uniform playlists. At present, the heavy emphasis (or over-emphasis) is on hip hop; This comes after a long dalliance with insipid boy bands. Listeners left in droves.
So Mike and Ritholz agree, but who is to blame? Whose hand is on the trigger of the smoking gun aimed at the five toes of radio? Why none other than the avaricious juggernaut of consolidation Clear Channel.

Clear Channel's fastest growth is behind it. When they were early in the process of consolidating and homogenizing U.S. radio, they had a huge growth curve ahead of them. At an earlier point in their growth cycle, Clear Channel was able to wring out massive cost savings as they consolidated their network. That phase is now over.

This efficiency, cost cutting, and uniformity came at a cost: Clear Channel wracked up big margins with their streamlined McMusic programming, but they ended up driving away listeners, also.

Consider the state of radio before Clear Channel was given the greenlight by Congress to consolidate: There were many hundreds of local radio stations -- which required 100's of station managers, 100's of musical programmers, and many 100's of DJs. Across the U.S., you could hear music with a more local flavor. In cities, as you scrolled across the radio dial, you could hear a broad variety of songs, bands and musical genres. Even the same radio format -- classic rock, alternative, pop, etc. -- there were diverse playlists within each genre.

It may not have been "personalized" just for you, but the diversity of musical sources meant that there was likely something on the dial you wanted to listen to. No matter how obscure your musical tastes were, odds favored that there was at least one station worthy of being put into your car radio's presets.

Clear Channel replaced most of this unique programming with a handful of their own "talent." Depending upon the format the mega-station decided upon, they could simply plug in an existing show from their.
As Ritholz notes, what is in one sense a brilliant strategy from a business point of view, does not always translate into the world of art and music. The uniform, bland, playlist mandated pop perpetuated by Clear Channel is eating itself. It has become so large and centralized that its radio empire is collapsing under its own weight. And it has come to this:

So it was with no small amount of amusement that we heard yesterday that radio giant Clear Channel (CCU) was announcing they were cutting back the amount of ad time they would sell on the radio each hour, to a mere 15 minutes per hour, starting January 1, 2005.

The "spin" was that the largest radio player in the U.S. Would be able to use this "enforced scarcity" to raise the value of each spot.

The reality was -- ahem -- somewhat different.
In reality, Clear Channel is having a very difficult time selling ad space because there are fewer listeners to attract advertiser dollars. But this media consolidation shipwreck doesn't end with the listing hull of broadcast radio. Others are being dragged down by the undertow:

Clear Channel didn't only hurt radio -- they drew first blood from the recording industry also. Music fans only buy what they hear; Less music on the radio meant decreasing purchases of CDs. I'm convinced that the ever shrinking national radio playlist caused by radio consolidation is one of the key factors in the declining CD sales nationwide.
So what are folks like Mike to do? Aside from burrowing deep into your own record collection or relying on the ephemeral word of mouth transmission of recommendations, there are other formats that have arisen to serve the market.

Filling the void: The market abhors a vacuum, and in my opinion, a combination of 4 alternatives stepped into the void created by lack of Radio diversity:

1) Internet;
2) Satellite Radio;
3) iPods;
4) P2P
In some ways this story offers a parable for the excesses of the de-regulation/cult of consolidation paradigm. Yes de-regulation and consolidation can cut costs by streamlining operations and centralizing production, which eliminates duplication and redundancy, but is this always the most efficient model?

The answer is obviously no, especially in the creative fields, where diversity, flexibility, and sensitivity to local tastes that are prone to quick moving evolutions demands a more decentralized and leaner corporate animal. Diversity is the lifeblood of creativity and artistic expression. This represents a victory for the resilience of individualism in the face of aesthetic tyranny (excuse the hyperbole), that the population will not simply accept what it is force fed, and will instead go in search of new and tantalizing dishes. This development is an encouraging sign amidst a sea of pop culture uniformity. Long live Rock.

The warning is actually more germane, but for slightly different reasons, for the spector of media consolidation, an examination of which I discussed
here but will not explain now, since this is a music issue.

[Update: So I lied. I couldn't resist the urge to address the media consolidation epidemic. Here is a quote from an
opinion piece penned by Ted Turner via Just A Bump In The Beltway that is relevant to the above discussion of radio and consolidation:

In the media, as in any industry, big corporations play a vital role, but so do small, emerging ones. When you lose small businesses, you lose big ideas. People who own their own businesses are their own bosses. They are independent thinkers. They know they can't compete by imitating the big guys--they have to innovate, so they're less obsessed with earnings than they are with ideas. They are quicker to seize on new technologies and new product ideas. They steal market share from the big companies, spurring them to adopt new approaches. This process promotes competition, which leads to higher product and service quality, more jobs, and greater wealth. It's called capitalism.

But without the proper rules, healthy capitalist markets turn into sluggish oligopolies, and that is what's happening in media today. Large corporations are more profit-focused and risk-averse. They often kill local programming because it's expensive, and they push national programming because it's cheap--even if their decisions run counter to local interests and community values. Their managers are more averse to innovation because they're afraid of being fired for an idea that fails. They prefer to sit on the sidelines, waiting to buy the businesses of the risk-takers who succeed.
On the frightening pace of media consolidation:

To get a flavor of how consolidated the industry has become, consider this: In 1990, the major broadcast networks--ABC, CBS, NBC, and Fox--fully or partially owned just 12.5 percent of the new series they aired. By 2000, it was 56.3 percent. Just two years later, it had surged to 77.5 percent.

In this environment, most independent media firms either get gobbled up by one of the big companies or driven out of business altogether. Yet instead of balancing the rules to give independent broadcasters a fair chance in the market, Washington continues to tilt the playing field to favor the biggest players. Last summer, the FCC passed another round of sweeping pro-consolidation rules that, among other things, further raised the cap on the number of TV stations a company can own.
This should rile any person who holds freedom of the press in any type of regard.]

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