Does Radio Need More Deregulation (Part 2)

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All week long we’ll be interviewing radio CEOs to get their thoughts on whether or not they believe ownership caps at the FCC need to be changed, eliminated, or whether they are fine as they are now. The NAB is working with broadcasters to come up with a plan to present to the Commission next month. Our second interview features JVC Media CEO John Caracciolo

Radio Ink: Are you in favor or against lifting ownership caps?
John Caracciolo: Definitely in favor of modifying the caps as well as many of the archaic rules imposed by the Commission that unfairly limit our ability to compete in this high-tech communication industry. A lot has changed since the 1960s; unfortunately the Federal Code of Regulations part 73 and 74 is not on that list.

Radio Ink: Do you have a specific number in mind?
John Caracciolo: There should be no caps at all. Why limit the ability of any business to compete and succeed in their home market?

Radio Ink: What are you hearing? Is there a consensus among owners as to what should be done?
John Caracciolo: The large group owners that have already achieved market dominance obviously don’t want it. Small and midsize cluster owners are looking for the ability to level the playing field.

Radio Ink: What do you say to the broadcasters who say the first round of deregulation ruined radio?
John Caracciolo: Deregulation didn’t ruin radio, radio broadcasters ruined radio. We did it! We went crazy with consolidation and ruined the local livelihood that made our medium so special. We consolidated and destroyed the very essence of our business by limiting local and live content, getting rid of locally produced shows and staff, and decimating promotion and public service. What we did is like buying a high-end successful steak house and walking in day one and cutting the quality of the food, limiting the portions, and getting rid of most of the help and thinking these moves are going to make us more money. Shame on us for what we did with the first round of deregulation. We cut the product, we cut content, we got rid of great people.

Radio Ink: We’ve heard the argument that caps need to be lifted in order to compete with FB and Google and other big unregulated digital companies.
John Caracciolo: True. They are getting more and more ad money, but do you really think that argument is going to fly?

Radio Ink: Radio stations in nearly every market are playing so many commercials every hour, yet the revenue never grows. Isn’t the issue really a rate issue?
John Caracciolo: Caps need to be lifted to make our business locally produced once again. Yes we need to raise rates but we do that by not competing against our own medium. We need to take on FB and Google, but we also need to stop dropping our pants every time a competing radio station comes in with a lower rate. By giving a group more dominance in a market the hope is ownership will invest in good local content that will drive listeners back to their hometown stations and we will have the ability to maintain rates, monitor commercial load, and produce a quality product once again. Reinvestment in content, product, and people is the key to this round of deregulation working.

Radio Ink: Right now, in a lot of markets, owners that have multiple stations throw in the weak ones at no charge, killing the average unit rate and devaluing the product. How would being able to own more stations make that better and not worse?
John Caracciolo: Hopefully, if an owner has more stations and can fight off some of the FB, Google competition, they can find a happy balance to enforce rate integrity since they will not have to worry about protecting their flank on the digital side. I think what happens now is a large group in a market can HD three or four of their stations, find three or four translators and put them on at low cost with no local content or programming and just let them run. With fill-in translators at 250 watts and an unlimited height, you can have signals as good, if not better, than some class A stations. Under today’s rules, a well-positioned cluster with HD and good translators can have nine to 10 signals on the air. Are they giving the translators away at no charge? Are they using the translators as competition busters and really don’t care about monetizing them? My hope would be an elimination of caps would put the medium back into the control of real broadcasters that understand rate integrity, local programming, and good content.

Radio Ink: Is it true iHeart is basically the only holdout against lifting caps?
John Caracciolo: I have heard a lot of rumors of who wants them and who wants to keep things the same. If I had to guess, I would say iHeart would be a holdout. Let’s face it, they dominate a lot of markets now and under their current financial limitations they would be hard pressed to go on a buying binge now.

Radio Ink: Look into your crystal ball. What do you think will happen in June?
John Caracciolo: I think we see some modification of the caps, unfortunately I don’t think they will be eliminated altogether. I don’t think anyone at the Commission has the guts to do that, I wish they did. Looking into that same crystal ball a little further down the road, I think once all the dust settles with iHeart and Cumulus, and the FCC modifies the market caps, a new radio landscape will emerge where separate radio groups will be successful large-market companies and separate groups will be excellent mid-market operators and you will have a third level of ownership groups of small-market stations. Radio is and always will be best live and local. Radio is not a national platform; leave that for satellite and Pandora.

Radio Ink: Do you know any broadcasters opposed to lifting the caps?
John Caracciolo: I do not. I surround myself with owners and operators that love this business. They don’t negative sell against the competition, they care about the content, the programming, and the people. And most of all they care about the community. These are the real radio broadcasters that will do whatever it takes to succeed and prosper.

17 COMMENTS

  1. So is RadioInk going to interview listeners or broadcasters instead of bean counters?

    Is anyone going to explicitly state that ‘deregulation’ is what started the problems and doing more of what destroyed you is NOT a solution to the problem? No in this direction lies madness. We need STRICTER regulation not less!

    But the bean counters will never get that. And since the current FCC is controlled by money, we’re going to get deregulation and Radio will implode maki g us all just a little poorer.

    But the fat cats WILL get fatter!

  2. When was the last time that radio tried to come up with a new invention that will revolutionize how radio is perceived by people?

    When Steve Jobs came up with the idea to create an storage device to replace the CD, he saved Apple from bankruptcy when he invented the ipod. When he came up with the idea to create a phone with the features of a computer on your hand, He revolutionized and changed the telephone industry for ever! But, when was the last time that our FCC came up with some thing similar for the good health and future of radio? When ibiquity came up with their lousy digital radios that no body knew and no one liked, nothing happened! But, it was the latest intent of the industry to come up with some thing that was a horrible bust!

    Really? Does the FCC really thinks Its ibiquity bull shit is the route to go? When you buy one of their over priced transmitters, you will sign up all of your broadcasting rights to their invasive Trademarks!!! This is like placing huge chains on the already troubled broadcasting industry in exchange for: NOTHING because an analog transmitter sounds as good as a digital ibiquity one on the air, but if this is the Monopoly created by the FCC and their band of bandits, how can we spect them to take wise decisions about the future and faith of radio when they love to sell their butts to the devil to the guy in the corner with more millions on their pockets!

    So, Knowing that the lazy butts of the FCC will never come up with some thing that will really get the wheel of radio going to the next level of our time, I decided to come up with a list of crazy ideas who are nothing else then just crazy ideas that may or may not work to revive and save our failing radio industry from its digital competitors. I warn you: This are some times crazy and extreme ideas.

    This is what I would do if I could have a magic bar to revolutionize radio bureaucratically and technologically speaking.

    1.-Invent a Radio Device that will improve the quality of life of the user. A Radio device that will act as a Car key opener, as an smart phone, as a free internet provider, as short way radio, you name it! Invent some thing that in will offer some thing of value to the user. This is how radio was born originally when they were trying to sell radio devices but instead, they created the radio industry.

    2.-Create a Radio Device that if people tune to your specific radio frequency, it will give the user automatic Wi-Fi. Wi-Fi is one of the most desired things right now among every one. If the radio industry ask the FCC to allow them to have some kind of this High Frequencies, so they can became internet providers them selves for free use for their listeners, it will really make terrestrial radio very popular in an instant. i know is crazy, but I am just brain storming, so any thing is possible!

    3.-Instead of more dummy translators who only help the big guys, create and License a new set of COMMERCIAL Low powers with 10, 25, 50, 100, 150, 200, and 300 watts of power. This licenses may only be owned by micro-casters who may have no other interests or investment on any other radio group. The limit will be 1 Radio station per market per person. NO major group, Radio owner, or investor will be allowed to any of this signals. War veterans, People with disabilities, and Minorities will be the only ones who may apply for this new commercial licenses. Religious Groups Won’t be allowed. They are too greedy, and they may want to own all of them. Again, I am just brainstorming.

    4.-Migrate all the AM unused Signals to a new higher Bandwidth allotment, and invent a new radio device, so it will serve this new Band Creation while all the old unwanted and unused AM’s can be sold or donated to Non commercial non profits, schools, colleagues, and government municipalities. Again, Religious groups will be excluded. They are too greedy, and they already own too much Radio Infrastructure.

    5.-Only the Radio station owners Commercial or Non Commercial who can prove that they are providing content with at least 8 hours per day of programming with live people on the air, will be allowed to renew their licenses. This will force the radio owners to invest in local talent for local services to the communities.

    6.-All the Translators Broadcasting in more then 300 fits of the above average terrain will have to come down and adjusted, so they can leave room to more signals on their freed up coverages. Many translator could feet in a market if they knock down the ones who are placed in top of high mountains and who cover as much terrain as full power FM stations. Translator were not meant for that.

    7.-Car Manufacturers and Telephone producers who don’t include an AM, FM button on their devices, won’t be licensed by the FCC.

    8.-The radio industry need to create a real live and effective way to monitor and see how many people really listen to their radio venues, so they can sell advertising accordingly to this new data.

    9.-Radio stations may own as many newspapers as they want knowing that the newspaper is a dying Media.

    10.-The radio industry may create their own social media platform like facebook where the radio industry will have the option to also sell digital ads, so they could compete agains google and facebook as a joined force where the revenue generated by the sell of digital ads, will be distributed among the new social media radio owners and only them will be allowed to own stock in this new social media platform.

    Yes, I know, this may be crazy and radical ideas, but what the heck, if are just day dreaming! We are just brainstorming and in our imagination every thing is possible!!!

    So, put your lazy asses and brains to brainstorm and lets come up with more ideas to keep, save, and revolutionize the radio industry who is in a danger of disappearing if we don’t try to reinvent it!!

    Thanks!

  3. I think he hit it right on the head with this comment “Yes we need to raise rates but we do that by not competing against our own medium” In most small markets the competitor cuts rates and promises the moon virtually everyday rather than hold the line and put value back in our product. A consolidation of all stations in smaller markets would end that practice and provide more revenue for better local programming and public service.

    • The one who puts the value to your product its not the radio owner, its the customer under the law of Offer and demand. If there are too many apples offered in your town, the apple’s value will go down. Which is good because then the apples will compete in price with other products like the oranges, the grapes, and the other fruits of the season.

      If there are very few apples during the harvest season, the price of apples will go up and that’s not good thing neither because if some thing is very expensive, people may opt out to buy some thing more affordable like in the media world, when radio stations are over rated and no one can afford them, people go to social media or other alternative venues.

      When a single company controls the market, it will never yield good results to the customer, never.

      In politics, when the Democrats of the Republicans control the Entire political system like the Congress plus their president is of their own party, you end up with some thing almost compared with a dictatorship.

      The same thing happens in Radio. It is proven all over the place, when a company controls the market, it tends to get lazy, increase prices, and care little about the customer because they have no competition.

      Examples: Excell Energy in Colorado. Lousy service, poor infrastructure, and terrible high prices increased at will.

      Comcast: Very poor service, horrific customer service, and huge prices.

      American Tower: Very Arrogant company with very expensive prices and very poor customer service.

      This are only 3 examples of how too much power and little or no competition can yield to atrocities on the people’s side.

      Owning too many radio stations to control the market, to eliminate the competition, and to govern the prices, historically has never yield to good results for any industry who has succumbed to this practices.

      Competition is good because it will wake you up, and it will make you better!

      The Days of Radio, Tv, and Newspapers being the solely way to advertise are over. Now, all this traditional outlets will need to reinvent them selves with better products at better prices, so they could compete with the digital world who is yielding huge and better results at a fraction of the price of all those 3 media outlets COMBINED!

      If your apples don’t sell as good as the oranges and the grapes because your apples are routined and grossly overpriced, produce better apples and don’t sell shit that no body wants.

      The internet is the biggest curse for radio, but in the same time, the internet its the most importance invention, so radio can reinvent it self. How, THINK!!! The possibilities are endless! But Think! And stop crying with the FCC for more concessions when more concessions will benefit just a few, but it wont fix the root of the problem.

  4. If will give you an example: Lets imagine that Radio Stations are pieces of Candy. So far, the person in charge of those candies, they have allowed two fat kids to eat a lot of those candies until they got diabetes as the result of too much candy (Debt). But now, The rest of the kids who have been always thriving for an endless appetite of candies, they want no one to restrict them on the amount of candy they can eat despite risking sickening them selves of dangerous killer diseases like diabetes!

    Its like on the halloween holiday, when you give each kid one candy at a time, the candy is managed better, and it last longer, but if you give any kid the green light to grab as much candy as he can with his own hands, he will jump right into the pot in order to get as much candy as possible.

    The same thing will happen if the FCC lifts the already weakened and flawed ownership caps rules. More Clear Channels, and Cumulus Merges will arrive and More Media Consolidation will pop up all over the nation where most of the candy will be in the hands of the stronger bullies of the group. This is very dangerous terrain knowing that even foreigners can buy radio stations if they want. You may fight and competer with a radio group who’s owner may be a member of a terror organizations, and if they got money, they may buy all the radio stations available to disrupt how the Americans listen to their terrestrial media.

    The Digital Media is just an excuse to ask for more when like this guys admitted, the Broadcasters, were the ones who screwed up every thing. If too many candies are making your kids sick of diabetes why in the hell are you giving them More!! Are you nuts? !!

    Wake UP Radio broadcasters! Don’t Be fooled by the Elite on the FCC, protect the American Assets of the threat of no ownership rules and restrictions! This is a very dangerous attack to the American Freedom Of Speech!

    This is what i think: Is just a theory, They will lift the ownership CAP rules, so many radio owners will get in debt to buy more properties, then they will crash the market, like they did it with the real state market, and out of no where there will be Greedy investors from the Middle east buying all those foreclosed Radio Properties for pennies on the Dollar exactly like the bubble burst of the Real State collapse of 2008. But who is behind it? Well, don’t forget that we are under the control of a President who has been making his fortune in this way from the profits of some body else’s losses, and the FCC chairmen Mr. PAI is part of his clan. So, This Deregulation is a very, very evil move, but Like the Candy Example: Do you think a kid will ever find out that he may be kidnapped when his kidnapper is luring him by offering delicious and tasty candies and saying: Take as much as you can get?

    In Mexico, Our corrupt President and his clan on congress, they not only deregulates the Media, They deregulated every thing. The Mexicans call this privatization. Privatization is the rape of the laws that prevent tremendous amounts of wealth to be transfer from the common people to the hands of a few elite evil monsters!

    I may be wrong, but I think very evil interests are behind this Des-regularization scam here in the USA.

    Protect the American Rado io Assets! NO one outside The American Soil should have part on any ownership on the American Media!! The American Radio Spectrum belongs the the People Not to the ELITE!!! The FCC is there to advocate for the best interest of the American Public and not of the American elite!!

  5. Before deregulation you would have to go out of your way to LOSE money in the industry stated Jon Mandel in the 2003 Senate hearing on media ownership. Of course the industry will yell WE NEED MORE stations that’s nothing new. The problem the GREED that is associated with the shell game of “buying and selling” stations (Private Equity). History show us that an unlimited amount of stations owned by a corporation is/was a mistake. Nobody in radio cares about the public interest and or localism. Folks are trying to build it up to sell it. The public got shafted on radio even before the telecom act was signed. Good radio comes with multiple OWNERS not the same 7 or 8 rich guys who don’t care about radio. The solutions are the Digital Audio Band or more LPFM’s so that people can have more choices people are running from radio because it the SAME OLE STUFF.

  6. “Deregulation didn’t ruin radio, radio broadcasters ruined radio.” hey paisan, I lost it when I read this! you need to rearrange this statement & your complete logic on deregulation. “radio broadcasters ruined radio BECAUSE of deregulation”. whataya think woulda happened if dereg HADN”T happened?? I know, and you do to IF you’re COMPLETELY honest..

  7. Don’t like advertising on our Rock station in this market? How about our Sports station? Our Talk station? Our Country station? Our Classic Country station? No? How about our Hip Hop station? Classic hits? Pick one. We own all of the stations in the market… Our listeners? Who cares if they’re sick of the same 100 songs day after day after day? We have all the stations!

    And that’s how consolidation killed radio. Now, remove all caps and then just burn the corpse.

    • PS:

      Oh, and we don’t need to have any studios in the market anymore, either! There goes that really annoying payroll! More money for us in upper management! YAY!

  8. “Caps need to be lifted to make our business locally produced once again.”

    That may be one of the dumbest things I’ve ever heard. If the caps are lifted, does he honestly believe that the local players who are already priced out of the market are magically going to be able to play?

  9. I know and like John, but there’s mention of what happens to AM stations within those large competitive markets. I can see many owners with AM stations , basically giving those properties away and moving the formats to the new FM’s they can purchase. I think that would be another death stroke for AM radio.

  10. “Deregulation didn’t ruin radio, radio broadcasters ruined radio. We did it!”

    So he admits the inmates ran the asylum, and now they want more.

  11. This is the exact kind of thinking that is killing creativity and success in the industry. Another salesman selling high level snake oil.

  12. Why have limits? Because there are only a certain number of frequencies available to an area. With no limits you could create a nice monopoly. It’s bad enough as it is.

  13. John Caracciolo: There should be no caps at all. Why limit the ability of any business to compete and succeed in their home market?

    John’s logic is deeply flawed. How could he even be in business when a deep-pocketed giant could come in and buy up everything, and put your stations in a difficult spot — resulting in their sale to said giant?

    Plus, it is anticompetitive. One radio owner in Nassau-Suffolk? Why not have one owner in New York? It’s just crazy and not the same as saying it levels the playing field against digital.

    The solution is multiple voices, good local programming, good local sellers and less reliance on efficiencies that make your product lifeless and generic.

    • “The solution is multiple voices, good local programming, good local sellers and less reliance on efficiencies that make your product lifeless and generic.”

      The problem is all of that costs money, and when your business is based on advertising, the size of the platform matters. You can’t afford to pay local talent & staff without money.

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