Not Buying The Facebook, Google Argument

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(By Kevin McKinney) The notion that Facebook and Google are stealing ad revenue from radio is completely false. Radio is giving revenue to Google and Facebook. Nobody is stealing. So why do consolidators claim this? They use the Internet as an excuse to convince legislators to allow them to gobble up more stations. The horrible irony is that the more they consolidate, the more they push revenue to Facebook and Google.

If radio is to compete, it has to be unique to each region. However, consolidation stamps out local flavor when companies downsize to show profit. That’s the only way they know how to profit: to buy, gut, and sell. It’s bankers and high finance elites who are pushing for consolidation because they are the only ones who benefit. The winners make money off of the financial agreements and management strategies. The quality of the product is irrelevant so long as they can collect their management fees and interest.

Twenty-two years ago consolidators went to Congress with an urgent message. They said they had to consolidate radio because cable TV was threatening their industry. The notion is laughable. Cable TV never did threaten radio, nor did color TV, black & white TV or…the latest boogie man, the Internet. The medium of radio is only threatened when radio pretends to be live with phoney voice-tracking and absentee programming. No human would choose to play the endless loop of corporate music and commercial marathons that listeners are served.

Consolidators are also wrong to refer to the Internet as broadcasting. Broadcasting implies it is cast for a broad audience. The Internet is a packed menu of narrowcasting. There is no regulation to ensure that the content is family friendly or any market pressure to give the best content per hour. It’s just a library with social media attached to it. Radio, on the other hand, could have the advantage of being local and thoughtfully curated for the maximum relevance for the largest regional audience. Only people in Cleveland want to hear about Cleveland charities, and small Cleveland bands that they might see at small local clubs. Sadly, Cleveland will have to go to Google and Facebook because radio is not serving them anymore.

I remember when rampant consolidation made radio stop playing local bands in rotation. I looked everywhere for an option to replace what I’d lost. Eventually, the Internet came along to provide some solace. What I miss, though, is finding that content at the same time as everyone else. I miss being able to sing new songs with strangers. We can all still sing Queen together but there’s no critical mass discovering the same song at the same time for podcast listeners.

The loss of that critical mass is a loss for our economy. Shame on consolidators for robbing communities of their ability to hear themselves en masse. Consolidators are begging for competition to go away. Which is confusing because they got rid of competition 22 years ago with the Telecom Act of 1996. What they really want, is an excuse to fire even more staff and claim those savings as a short-term profit. They know they’re lying to us about their motives. But are we awake enough to see through this?

Competition makes great businesses thrive. Competing radio stations try to outdo, one-up, outperform, out-cool, and be more connected to the listener than their rivals. Once upon a time, the world culture was the beneficiary of the competition in hundreds of American cities as local DJs became ambassadors for local music movements, cultural developments, and local businesses and charities. The thirst to be #1 is what spurred stations to introduce the best bands to audiences.

There is still a glimmer of hope for radio. Let’s start by asking what is good for the consumer rather than what is good for radio. It’s by serving the customer that radio can be relevant again.

The consumer is not asking for more cookie-cutter format-copied radio. They are not asking for radio to pretend that it’s Twitter or anything on the Internet. Radio is an analog technology in a world full of people trying to escape a digital world. The future of radio would be bright if there were live DJs who were allowed to play the music they wanted to and speak about what they wanted to. Radio would shine as the most powerful communications medium on the planet if there were locally run, live, spontaneous communications occurring over it. But that’s not the case. And so we may pass the time on Spotify or doing one of the zillion things that social media is urging us to do or react to. I don’t know about you, but I want my local radio back for my sanity as well as the health of my city. It’s time for media policy to be taken back from Wall Street and given back to the citizens of this country.

Kevin McKinney is the Producer and Director of the documentary “Corporate FM” which you can watch on Amazon Prime HERE
He can be reached at kev@fmfilm.com

37 COMMENTS

  1. As someone who has been in radio some 46 years now, it has NEVER been easy for a local group to get airplay. I come from an area where there were some notable groups that had legitimate major hits in the 1960’s and 70’s and I can count them on my fingers. And RKO General was a “corporation” which owned many very successful Top 40 stations then. So I’m not sure the problem is corporations in general, rather than how individual clusters are operating them or being required to do so.

  2. Why don’t you libtards admit it–you want the gov’t to give you all the radio stations so you can cram your weirdo Rotting Scabs, Festering Boils and DJ La-Z Bum down the throats of the majority, along with your Communist propaganda and homosexual perversity. Guess what, Communist homosexual–AMERICA IS A REPUBLIC, NOT A DEMOCRACY! And REPUBLIC means MAJORITY WIN, MINORITY LOSE! And the MAJORITY doesn’t want to hear your weirdo crap. They want to hear TODAY’S LITE ROCK WITH LESS TALK! TODAY’S HOT NEW COUNTRY! TODAY’S HIT MUSIC AND MORE OF IT! GOOD TIMES, GREAT OLDIES! CLASSIC ROCK THAT REALLY ROCKS! And NEWS-TALK THAT SUPPORTS OUR PRESIDENT AND AMERICA, NOT THE COMMUNIST HOMOSEXUAL DEMOCRAT PARTY! YOU LOSE, MINORITY! Why don’t shut the hell up and give the public what it wants or GET THE HELL OUT OF MY AMERICA NOW AND GO SEE LITTLE ROCKET MAN IN KOREA?

    • I am perfectly willing to admit it. You are absolutely correct. This country is just absolutely filled with morons like you and we must program to them. You are one of the majority (and don’t kid yourself, it is the majority) of this country that is either too stupid, too biased and/or too intimidated you are okay with having a fraud as President.
      This country is a big ship and no one man, even the Reality Show Con Artist, can sink it. But the weight of the barley sentient people like you that actually think this fraud has “beliefs”, “policies” or an “agenda” other than to grift rubes like you, has this country listing.
      And compared to you, I am elite – thank you very much.

      • At least I work for a living while you’re a tenured college professor sponging off the taxpayers and your rich parents instead of working for a living. I bet you can’t even recite the PLEDGE OF ALLEGIANCE but can recite THE COMMUNIST MANIFESTO and HEATHER HAS TWO MOMMIES! RECITE THE PLEDGE NOW, LIBTARD!

        • I think Elitism Fighter is parodying people who say those kinds of things. But it is so hard to tell these days. Poe’s Law rules

  3. Okay, it’s back-to-basics time!

    Read or reread “Something in the Air: Radio, Rock, and the Revolution That Shaped a Generation” by Marc Fisher (serious history), “The Birth of Top 40 Radio: The Storz Stations’ Revolution of the 1950s and 1960s” by Richard W. Fatherley (serious history with some fun) and “The Hits Just Keep On Coming: The History of Top 40 Radio” by Ben Fong-Torrez (just plain fun to read). All three are great works that show the highs and lows of broadcast radio from the end of World War II to the present, and how the low points were overcome by clever innovation by forward-thinking people in the radio industry many, many times over.

    People in radio management today most likely have never delved into the history of radio broadcasting since the end of World War II to study what caused successes as well as failures in the past within the industry. Some of it, but not all of course, is still relevant today. And, it gets your mind working on the possible modern innovative applications of past successes.

    “Those who cannot remember the past are condemned to repeat it.” George Santayana, The Life of Reason: The Phases of Human Progress (1905-1906)

  4. “The future of radio would be bright if there were live DJs who were allowed to play the music they wanted to and speak about what they wanted to. ”

    I have never read a more ludicrous statement in my life and that includes the tweets coming from the grifter in chief.

    • what are the reasons for your statement. Have you watched Corporate FM? Do you work in the radio business. Why do the people with the strongest negative opinions not use their real names in posts like this?

  5. “Radio would shine as the most powerful communications medium on the planet if there were locally run, live, spontaneous communications occurring over it. ‘

    Funny…if the author just looks around, he’ll find locally owned and run radio stations at the lower end of the FM band. The non-commercial stations, either college stations or LPFMs. Lots of them that are all local, depending on local listeners for their funding. No advertising. Listener-supported radio. That’s how the people take back the airwaves. Except the people don’t want to pay for radio. They want someone else to pay for it. I know because I ran one of those stations. The music lovers all praised us, but only a handful sent in checks. If corporate radio is the problem, then the people have to support locally run independent radio. They have to be willing to spend their own personal money to keep it alive. How many commenters to this thread have sent a check to an LPFM lately? Be honest. Tell us your experience.

    • The Author is not talking about LPFM, he is talking about 5,000-100,000 watt stations that have the ability to reach enough people in any given market to make a substantial impact. Non com LPFMs and College stations don’t really qualify as they don’t reach enough people (LPFM) or have rules, limits and restrictions and unreliable volunteer staff (College and most Non Coms) so it is very hard to organize these stations or groups, to be consistent in programming and general business structure so as to make any real impact.

      • I understand that. But he really doesn’t want consistent programming at all. He wants DJs to do whatever they want and play whatever they want. He wants “spontaneous” programming. I saw his movie. Only a small handful of progressive rock stations in big cities had that freedom, and they died a long time ago. He doesn’t want a consistent business structure, because that’s what corporate radio is. So what he wants is LPFM or college radio, like WFUV. Good luck to him.

        • There is nothing in Corporate FM that says DJs can do whatever they want and play whatever they want, nothing about“spontaneous” programming. That is what Pacifica stations do and they lose money and listeners every year because each DJs shows are substantially different than the show before and after. It is not a successful format. The plan is to have a consistent business structure, that give the DJs some leeway to play songs and programming they like and that they think the listeners would also enjoy, but there needs to be a solid format, like Rock, Pop, Active Rock, Alternative so there are similarities and a standard theme that runs through every DJs show, but that gives the DJs the ability to take phone calls, have on air guests, live performances, etc

          • Read the last paragraph of Kevin’s article above:

            “The future of radio would be bright if there were live DJs who were allowed to play the music they wanted to and speak about what they wanted to.”

            Look, there are lots of individual radio owners out there. The big corporate owners only own 15% of all radio stations. As I said, lots of big powerful FMs have been sold lately to EMF. If new owners want to buy stations, there are lots of properties available. But if you think the federal government is going to repeal the 96 act, you’re dreaming. It ain’t happening.

          • This last paragraph does not say every DJs can do whatever they want and play whatever they want all the time and nothing about spontaneous programming all day and night every day nor does it say there shoudn’t be a proper business structure, it just suggests a few ways to make substantial changes, many of which are tried and true but have been left my the wayside on the corporate quest for larger and quicker profits, which never came and wont with further deregulation.

          • It’s obvious you aren’t interested in actually buying radio stations. Unless you own a station you won’t be able to make the change you want. No one is going to just give you a radio station to do whatever you want. That has nothing to do with deregulation. It has to do with taking action and putting YOUR money where YOUR mouth is. It’s not that hard. I did it. So can you. But the government isn’t going to repeal the 96 Act. So start working on plan b. And you better start quickly.

    • I am not willing to take advice from someone who doesnt use their real name in posts like this. You obviously made up your mind a long time ago and/or have an agenda as nothing you have said makes sense. You keep mentioning you own or owned radio stations in the past but you wont say which stations, during which time period, what the format was or anything except your opinion with no back up. Watch Corporate FM again if you want to have an informed discussion. I am in Corporate FM, here is my website tabconcerts.com. I would be happy to send you my resume, so you will know who i am, what my background is and why my statements are reasonable.

      • I have no agenda. I just have a lot of experience in radio, and don’t share in your opinion. You’re welcome to continue to hate corporate radio. If you really want to make a change, buy a station and show us what you can do. In the meantime, I have an actual job in radio.

  6. And now for a contrasting point of view: Consolidation was necessary for radio to survive. Period. Without Telcom 96 the economics don’t work. Those are the facts. Consolidation has allowed us to consolidate physical plants, and design in efficiencies of scale necessary to compete in a more competitive media environment.

    Yes, there have been abuses, but in my market, I could not exist with only one or two stations. That’s reality of the economy in 2018.

    Consolidation doesn’t mean mediocre. That’s a function of a few big nationals screwing up the concept.
    We don’t use consolidation to cut back. We utilize the economies of scale that multiple ownership rules allow to give us economic breathing room to do 14 hours of local Talk every day. We use it to hire a full time meteorologist, who’s in house. We use it for public service campaigns and community outreach, and yes, we do voice track. It works because all our VT jocks live here. You cannot tell a difference any more than whether Fallon is live or on tape.

    As to local music. You’re kidding right? Radio isn’t supposed to break local bands. Where did that notion come from? Radio is supposed to reflect local taste. We’re an advertising medium. As broadcasters, our job is to serve the audience. They want to hear Imagine Dragons and/or Lady GaGa. There is no data to support the notion that the mass-audience wants to hear obscure local bands. Frankly, that is something the internet does better. And, if one of these local bands hits a resonant chord with the audience, we’ll play them. We are in the advertising industry, using entertainment to generate mass audience. And, radio is till unequalled in that regard.

    Oh, and as an owner/operator I certainly don’t want a DJ screwing with my multi-million dollar investment by playing the music THEY want. No business works like that. This is a business that survives on meeting audience expectations. As a business we have a pretty good idea what will work with our listeners.

    And finally, I could make the case for my being able to own every station in my market. If I was the Tzar of Radio here, I’d eliminate duplication of formats, and open up the band for more diverse options. No need to have 3 Country stations. Two would do just fine. #3 could be Oldies, or Jazz, or Clasical. Reduce fomat redundency would result in more options for the listener. That would be in the public interest.

    Not going to convince any of you jocks of the rational behind my position, and you certainly are not wrong about how mediocre some of the “nationals” stations sound. Big corporations can always be counted on to take the quick buck. But, don’t paint with such a broad brush. It’s insulting to those of us who fight the good fight every day.

    • Hi Rick.Your note completely leaves out the beauty and magic of a properly run radio station. You don’t talk about music, DJs, fans, sponsors, mission statement, connection to the community or any of the things that make radio special and unique, except to throw negativity their way and blame them for the problems. This is all corporate business attitude, structure, talking points which is a big part of the reason for the poor state of the radio business. You seem to be angry at the DJs who would prefer to be paid and who want to choose some of the music they play, saying if you did this it would have a huge negative financial impact on you. I have heard what you are saying by almost everyone in the corporate radio business but the problem is, it has been proven not to be true just like being told again the windfall from trickle down economics is actually going to get to me this time. Radio pre 1996 was booming, at the peak of its creativity and profitability. The majority of Clear Channels 1600 stations that were amassed starting in 1996 were profitable when purchased, so how did Clear Channel (now IHeart) merge 1600 mostly profitable stations and loose over 21 Billion Dollars in 20 years? 5 years ago, i was asked to participate in a documentary about the consolidation of radio called Corporate FM. I was asked because i was a artist/music producer manager and concert promoter/venue owner who had worked with radio stations in the US, before and after the mergers.The film has multiple stories that feature many different people who lived radio all their lives and how the mergers affected them, their families, the listeners and the city. If you have time to watch, please do. It is only 65 minutes, a great story and film. I think if you give this 65 minutes of your time, we could have a structured intelligent discussion about this. Here is a link and password. Thanks https://vimeo.com/146066361
      Password: local radio now

      • “The majority of Clear Channels 1600 stations that were amassed starting in 1996 were profitable when purchased”

        That’s absolutely not true.

        • please show your proof of this. Most of the first 1000+ station they bought were big market, profitable stations, but after a few years, they decided they wanted everything and with their unlimited line of credit, they made many unwise purchase decisions but for the most part, they bought profitable stations and the purchasing of unprofitable stations is their own fault but even if they never bough a unprofitable station, they still would have lost over 10 billion dollars in a short 20 year time span and would still have ended up in bankruptcy.

          • It’s a very long answer that I simply don’t have time for. Right now, even in bankruptcy iHeart owns many of the most profitable stations in radio. They’re also among the highest rated stations. The mistakes this company has made is not in programming but in business. They made terrible business decisions that drove them into bankruptcy. But it isn’t because of bad programming. And even if they were forced to sell every one of their stations, I doubt very much the new owners would change the programming.

        • I call BS on you BigA. It is not that you don’t have time, it’s that you cant honestly reply as you don’t have the facts to back you up. You are an argumentative corporate shill whose only reason for posting it to disrupt and co- opt the discussion to inject your extremely questionable opinions. I bid you good day, sir. I say I bid you good day!

          • Why so angry? I have the facts, starting with the fact that CC never owned 1600 radio stations. You’ve made loads of claims with no facts here. Then you demand others post facts. As I said, you’re welcome to your opinion, but there are a lot of us who still have jobs in this business, and our experience is different from yours. Have a nice day with your movie.

  7. The premise of this article is that radio has to be unique to each market. The problem with that is the business in each market is dominated by national chain stores. Local businesses have been destroyed by WalMart, Home Depot, McDonalds, GEICO, and Macys. Every possible business category you can think of is dominated by national chains. Those chains don’t buy local ads. They buy national platforms. It would be nice to turn back the hands of time and bring back local retail. Then local radio would have a chance. But when the only possible local advertisers are lawyers and doctors, that’s all you get on the radio. The reason why radio wants a bigger national platform is because that’s what its advertisers are demanding. This is not about programming. It’s about advertising. You can’t have local programming without local advertisers. Unfortunately, in most small towns, there isn’t much local business.

    • yes you are right, the collapse of local retail is a big problem for local radio. Ford, Chevy, American Express and other big companies that buy nationally will not buy locally unless the station is a success. Many Urban and Hispanic stations still have low enough priced ads for local businesses, auto, Barber shops, smoke shops, skate/surf, restaurants, concerts, bars and many other small businesses still advertise. But not much on Classic and Alternative, Mainstream Country, etc. And yes you are right, this is not about programing, but about advertising, which is backwards because the quality, uniqueness and community connected programming is what brings in the listeners, the listeners are what bring in the advertisers so the reality is the artist/content creators are at the top of the triangle as the most important part and hardest to replace, followed by the fans, who are fickle and who the artist/content creators have to treat with great respect, then the business people and advertisers are at the bottom, being the least important part of this puzzle and the easiest to replace but for some reason, people keep parroting you have to give the advertisers what they demand. The advertisers should not be in a position to demand anything, they should be offered the ability to purchase spots and have marketing/sponsorship packages created specific to their needs. But the advertisers should not have any say in the programming or anything related to the artistic side of the business. Money is easy to find, advertisers are easy to find, creating and sustaining engaging entertainment then marketing, promoting and making the business part work are the hard parts.

      • I wish what you’re saying was true, but it’s not. Because there are a lot of out-of-work broadcasters who have tried to raise the money and buy stations. Money is NOT easy to find. Advertisers are NOT easy to find. If you want someone else’s money, you have to give them something. There are lots of big powerful radio stations in major markets that have been sold recently to EMF. If money is so easy to find, why didn’t a local guy buy WLUP in Chicago? Are there no rich people in Chicago?

        • pre 1996 it was easy for radio stations to get loans from a bank or financial institution as most were profitable but when government regulation mostly stoped in 1996, with Clear Channel buying 1600 stations and getting very high interest loans (9%-14%) they lost over 21 billion dollars in 20 years, similar with the other major station groups so now no bank or financial institution will touch a loan for any radio related business, but that is because anyone willing to overpay for a radio station with the intention of operating the station like the majors have been operating the last 20 years, is bound to fail and fail big, but with a new business plan, style and format (or like Corporate FM, going back to doing the things that made radio special and unique pre 1996 but also using all new technologies to fund, market, promote and operate the station) there are non traditional ways to get funding, including the current owner carrying the note. There is an urgent and relevant need for community based music and entertainment programming, that includes playing new acts, coupled with all the items that made radio special and unique to each market.

          • “pre 1996 it was easy for radio stations to get loans from a bank”

            That’s not true. Radio stations have never qualified for SBA loans, for example. In the 1980s, when big owners like GE, RCA and others got out of radio, that was when radio owners started turning to investment companies like Hicks, KKR, and Bain, because they couldn’t get bank loans. All this is way before 1996.

            As far as community-based music groups with radio, the best example I know is KEXP-FM in Seattle. But once again, it’s a non-commercial station that gets very low listenership. Still they managed to raise $15 million from their listeners, one of whom was the late Paul Allen. That is really what radio needs: More super rich people like Allen and Bezos to buy radio stations. Lots of properties are available right now.

      • I did not say anything about Small Business Loans. a radio station purchase and set up is not what they are for. Radio stations got bank loans regularly pre 1996, it is just they could not get a loan to buy 100 or more stations based on having one successful station, nor would anyone even think about this pre 1996 as there were federal laws that limited station ownership. But banks pre 1996 may lend you money to purchase and set up one or two more stations, but a bank would not offer a big corporation unlimited money at high interest rates without any oversight as that is a recipe for loosing 10s of billions of dollars, which happened, almost every big media conglomerate that took high interest loans to buy a large number of stations has ended up in bankruptcy or at the least lost an unimaginable amount of money, by pre 1996 standards.

        • You need to spend more time studying the 80s. My company bought stations in the 80s and we couldn’t get bank loans. Sure if you’re buying small stations in Montana, you could get a bank loan. But we bought one station in a Top 10 market in 1988 and we couldn’t get a bank loan. You keep focusing on the 96 Act and ignoring 20 years of terrible legislation that preceded it. You also ignore the fact that before radio consolidation, you had record label consolidation. By 1992, all of the major labels were owned by foreign conglomerates who just wanted to suck money from the US. They killed rock promotion budgets. Don’t blame radio for all the terrible things that happened to the music business starting in 1986. That was not radio’s fault, and those mistakes will never be fixed. All of our greatest music is now owned by the Japanese and the French, and it’s never coming back.

    • Wrong! There is plenty of local business out there. And not just doctors and lawyers. There are restaurants, car dealerships, fitness centers, dry cleaners, auto repair shops, liquor stores, entertainment venues that host various concerts, local banks, landscaping firms, painters, pest controllers, limo services, caterers, plumbers, furniture stores, jewelry stores, local oil delivery businesses, sports bars, local clothing stores, hair salons, check cashing stores, tuxedo shops, local deli’s, etc., etc., etc. Just don’t charge them astronomical rates and they will advertise on your station. Local radio and local radio programming is still important and can still be profitable. When all radio stations start sounding the same and play the same music, that’s when radio will start to decline. There’s nothing worse than a station that sounds like an automated jukebox. Maybe someone should have a talk with the national advertisers and explain to them the importance of local radio and how it is “good” to be associated with it. Radio stations should be localized, at least to some extent. If they all sound the same then they will fall into the category of BORING. What works in Green Bay may not work in Daytona Beach. Broadcasters owe it to their listeners. “Think Local First.”

      • “Maybe someone should have a talk with the national advertisers”

        I vote for you. Give them all a call. Tell them what you think. Let me know what they tell you. Thanks for doing this.

  8. Consolidation is going to happen. The owners need to let their multiple stations in a market compete with each other. Separate sales people selling against each other. Be local, no satellite. Break new music. This article is right on target.

  9. Wow, Kevin. You have hit the nail squarely on the head. There is no way more consolidation is going to help radio compete with Google and Facebook. The cure for radio is to be what Facebook and Google can’t be… local and personal to the community.
    The reason local advertisers use Google and Facebook is that it is immediately measurable and easy to buy. If we can get our “programatic” act together, and find a mechanism to provide immediate feedback (ie: your commercials ran at 7:32am and 12:05pm, and reached 12,351 listeners), we will be able to compete with the “digital” players on an equal footing.

  10. Kevin is right. The Corporate doctrine of erring on the side of caution means local bands CAN’T get played. The logic is “it has to be a hit before we’ll play it” – so there’s absolutely NO shot for a local group. It’s also true that the sheer mass quantity of stations on the air now cannot be programmed live/local all the time. The costs outweigh the benefits – so operators have to choose one, maybe two Big Horses in their stable and run them live 24/7. Corporate stations don’t do that because “it’s a waste of money” then wonder why the home-town operator holds the biggest share in the battleground formats. Sigh….

  11. So. Much. Truth! I hope I didn’t wake up my family at 3:15am this morning when I stood up & applauded after reading it the second time. 👏🏼👏🏼👏🏼

    The main problem here is that the folks doing the whining about the need for more deregulation are the ones with all the money & all the power to fire those who may oppose them.

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