Once upon a time no company could own more than 20 AM and 20 FM stations nationwide. Then came the Telecommunications Act of 1996, which removed any national restrictions on radio station ownership. In a recent edition of our podcast, Paul Riismandel and Eric Klein sat down with Dr. Christopher Terry at the University of Wisconsin-Milwaukee to learn exactly how the “Clear-Channelization” of radio (so to speak) happened, and how it led to radio announcers who couldn’t even pronounce the names of cities to which they broadcast. I thought the discussion was significant enough to produce a partial transcription:
Christopher Terry: I think that from a radio perspective [the Telecom Act] fundamentally changed the radio industry. The removal of the 20/20 rule in favor of a market based cap in which the largest markets could be eight stations under one ownership fundamentally changed how radio operated as an industry. It’s important now 20 years later as the FCC is still wrestling with this issue and is set to go to court here again in just a couple of months on the fundamental issue of media ownership as a regulation issue; it’s really important that we take a look at the last 20 years and that we understand that we made some mistakes and don’t make those mistakes going forward.
Paul: What does it mean to say that it changed the radio industry?
Terry: It took radio’s most important character out of the equation. Radio from its very inception was a local based media system . . . ‘Mom and Pop’ operations were the face, the design of the radio system. It was how it was implemented. It was how the system was supposed to work. And after consolidation that came with the 1996 Telecommunications Act it turned it into a nationalized industry where instead of 100 different stations producing content for each individual market, you had essentially one or two big producers and the same content, same music, same playlists, same voice tracked announcers, same everything, going out to stations all across the United States. Radio was not the same afterward.
Paul: Why did this have to happen?
Terry: As groups started consolidating, they started buying everything up in sight. Lots of mom and pop operators just sold out because it was a seller’s market. These companies that were absorbing stations at a rapid rate were paying top dollar for stations to grab all they could. It took a lot of the individual players out in favor of much larger companies that had plans to nationalize content.
Eric: . . . which meant people at these individual stations very quickly losing the work.
Terry: Part of the whole idea of consolidating stations was economy of scale. You take two individual stations and put them together as one group, you don’t need the extra secretary, you don’t need the extra engineer, you’ve got people there in the morning who can do the news in the afternoon. You can start getting rid of people. You are instantly making the station more profitable by cutting down on the labor costs. You take that, you do that a couple of thousand times, and all of a sudden you’ve got a ton of stations under one roof with lots of people out of work.
Eric: How did this affect the listener?
Terry: Programming wasn’t being done at the local level now. It was being done at the regional and the national level. Let me give you one example. The station I worked for in Milwaukee, we got rid of our news people and we were producing news through a Clear Channel news room in Cleveland, Ohio. So our newscasts at the top of the hour weren’t even being produced by people in Milwaukee. This generated a hilarious result. We tried to watch people from Cleveland, Ohio say all the Indian names for towns and stuff in the immediate area. It was painful. You took that local element out of radio and by nationalizing the programming they made it cheaper to operate, the profits went up, but they lost radio’s character.
Amen to all this. One format that took a uniquely royal beating from the Telecom Act was classical radio. Check out the rest of the interview here.
