Yesterday we reported about the NAB filing new comments with the FCC asking the Commission to loosen ownership caps for radio. Another filing was made by 10 radio companies, requesting a change in the rules, because digital companies have swooped in and taken 50% of their local ad revenue.
The companies signing on to the latest filing are: Connoisseur Media, Townsquare Media, Mid-West Family Broadcasting, Midwest Communications, the Frandsen family stations, Cherry Creek Media, Neuhoff Media, Eagle Communications, Patrick Communications and Legend Communications,
The group says the current trends unequivocally demonstrate that global tech companies and other out-of-market digital platforms are substantially eroding both radio’s advertising base and its audience share by offering broad and diverse audio products not subject to any regulation. “Already, these digital giants take over 50% of the local advertising revenues in every market – revenue that in 1996 supported local media like radio – and their share of the listening audience, especially in younger demographics is rapidly increasing. Broadcasting needs to be able to challenge the broad offerings made by these digital companies by growing in their local markets.” The group is asking the Commission to significantly relax local ownership rules to “compete effectively with their unregulated adversaries.”
And, they say the decision is clear and the FCC must act quickly. “Failure to provide regulatory relief to allow local broadcasters to achieve scale in their markets will inevitably result in digital media’s irretrievable erosion of local radio’s audience and revenues, as has been the experience of the newspaper industry.”
The NAB’s filing pointed out how radio has lost both significant audience and revenue, blaming big tech companies who’ve been able to chip away at local advertising dollars for years. Those companies provide better metrics and an almost instant way to purchase ads.
This filing by the ten broadcast groups says that the record “unequivocally demonstrates that these digital platforms – and not broadcast radio – are now dominant players in the audio marketplace. Yet, it is only local radio that is shackled by decades old government regulation that inhibits its ability to compete in today’s media marketplace.”
The inability to provide local listeners with local content is also being blamed on the digital competition by these groups. “Broadcasters struggle to maintain their current level of local service as digital media eats away at their audiences and revenues. Radio stations today, especially those in small and mid-size markets, simply do not earn the revenues necessary to support the “high capital and operating costs associated with local news operations”, which has led to a crisis in local journalism. Just as Congress is actively working to provide legislative solutions to ensure communities have access to strong local content from trusted sources, the Commission should provide regulatory relief to enable local broadcasters to leverage the economies of scale necessary to the success of local news.”
The radio industry is not in 100 percent agreement on this issue. There are some broadcasters who believe deregulation in the 1990’s is what led to the problems radio is having now. Also, radio’s biggest company, iHeartMedia is not in favor of lifting the caps any further.
With the FCC only at 4 members, and without a permanent Chair, it’s unclear when this issue will even come up again even through The FCC is mandated by law to review the rules every 4 years. The Commission has not been able accomplish that goal, still discussing the 2018 Quadrennial review. Add to that a Democratic administration, deregulation is not at the top of their agenda.