Air of Indifference
How Clear Channel destroyed its own radio market
By Paul Waldman
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Ayear ago, Atlantic Monthly writer Virginia Postrel, in an article entitled "In Praise of Chain Stores," argued that the homogenization of our commercial landscapes is on balance a good thing. Mom & Pop's Hardware may be charming, Postrel contended, but with the exception of Mom and Pop themselves, most of us will be better off if there's a Home Depot in town. Subscribe Online & Save 33%

But what about the homogenization of our cultural and informational landscape? That, it turns out, is a different story, a part of which Alec Foege attempts to tell in Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio. Though today Clear Channel has fallen from the heights it reached just a few years ago, if you have any opinion about the company at all it is probably not a good one. As it ballooned in size to become the dominant player in the radio industry, Clear Channel came to symbolize for many people everything that's wrong with media today: a rapacious corporation, unleashed by its Republican friends to pillage its way across the American landscape, leaving in its wake hundreds of formerly unique and public-minded outlets, which were suddenly sucked into the corporate maw and spit back on a powerless public, delivering the same soulless excuse for news and culture to every community unlucky enough to suffer under its pitiless rule. Or so the story goes.

Clear Channel began in 1972 when its founder, L. Lowry Mays, cosigned a loan for some associates who wanted to buy an FM radio station in San Antonio. When they ran into financial difficulties, Mays found himself the owner of the station. When Mays and a group of investors bought an AM station three years later, Clear Channel Communications was formed. They chose the name because the AM station had a "clear channel," the term used to denote those stations that had exclusive use of their frequencies during nighttime hours, enabling them to broadcast to most or all of the nation (unlike FM signals, AM signals can travel hundreds or even thousands of miles, depending on the topography and weather conditions).

As it slowly expanded through the 1970s and into the '80s, Clear Channel did something unusual: it ran radio stations like businesses. At the time, the typical station was a poorly managed, family-owned operation whose owners may have had little idea if they were making or losing money. Though its penny-pinching earned it the nickname "Cheap Channel," the company made excellent profits. In 1984, Clear Channel went public, and by the end of the year it owned twelve radio stations—close to the ownership limits of seven FM and seven AM stations the FCC imposed at the time.

The corporation expanded its businesses, buying television stations and, in 1997, a billboard company (or "outdoor advertising"), becoming the dominant player in that sector as well. But what truly transformed Clear Channel was a piece of legislation that passed in 1996. Mays understood that in order to vertically integrate his business and squeeze major savings from economies of scale, Clear Channel had to be big—and the bigger, the better.

It was the Telecommunications Act of 1996 that enabled Clear Channel to become a behemoth. Seldom in the annals of American history has a piece of legislation with such wide-reaching consequences passed with such little public notice, in no small part because the media companies that might have reported on it critically had an interest in not doing so. Newspapers, television, and radio (not to mention the phone companies) all were affected dramatically by the legislation, and all in ways that allowed the largest corporations to grow larger. But none were affected as much as radio, where the ownership caps that had prevented any one company from achieving a dominant position were not just lifted but removed altogether. (There are still some limits on how many stations a company can own in one market, but there is no national limit, as there was before.) Instantly, Clear Channel began buying up stations as fast as it could.

And they were not alone. Literally within hours of the act's passage, the radio industry was overtaken by a feeding frenzy of acquisitions, as upstart corporations moved to gobble up as many stations as they could. According to a lengthy report published in 2006 by the Future of Music Coalition, in 1995 Clear Channel owned thirty-nine radio stations, more than any other corporation in America. Five years later, they owned 1,100. They would eventually own more than 1,200 radio stations, around six times as many as their closest competitor. Clear Channel gobbled up a series of other radio companies, a spree that culminated in its purchase of AMFM, a company owning more than four hundred stations. At $23.5 billion, it was the biggest deal in the history of the radio industry.

Clear Channel's enormous size was enough to make people who care about media diversity nervous. But it was two other factors—the particular manner in which they cut costs and boosted profits, and their conservative political leanings—that gained them a reputation for corporate villainy.

Clear Channel, Foege writes,

eradicated radio's localism, making it more formatted and formulaic, less personalized and more national. The world's biggest radio company deconstructed a medium that prided itself on its intimate connection with its listeners and made it as uniformly bland and anonymous as anyone could bear.

The way they did it was with a now-infamous system known as "voice tracking." Instead of having deejays drawing salaries at individual stations, radio companies realized they could take one deejay, have him spin tunes and deliver patter from corporate headquarters, and feed his signal to as many stations as they wanted. They could even have him record brief bits with local references for each station and integrate them into the program feed, and thereby give the illusion that the program being aired in Minneapolis or Sacramento actually involved a deejay sitting in Minneapolis or Sacramento. Clear Channel didn't invent voice tracking, but they spread it farther and wider than anyone had before.

This practice may make perfect economic sense, but it also reveals at best an indifference, and at worst a contempt, toward the role of radio as a cultural arbiter, the place where people can go to hear new or locally produced music and find the touchstones of their generation.

Foege begins his preface with a story of driving through New England listening to a Clear Channel station, when "for the fourth time in four states, I've unwittingly tuned in to 'Kashmir,'" by Led Zeppelin. Foege may have grown tired of "Kashmir" long before the rise of Clear Channel, but the company, as Foege relates, managed during that time to whittle "a familiar play list of thirty- to forty-year-old rock songs into what sometimes [felt] like the same hour-and-a-half mix played over and over ad infinitum"—and "Kashmir" was in that mix. Because Clear Channel was so dominant in the radio marketplace, everyone was listening to the same music all the time.

Clear Channel's attitude is best summed up by what the head of their television unit would tell the studios that owned syndicated programs. "Programming," Foege quotes him as saying, "is the shit we run between the commercials." The product that media companies like Clear Channel sell isn't the programming; the product they sell is audiences, and advertisers are their customers.

Despite its title (which may or may not, of course, have been Foege's choice), Right of the Dial doesn't spend a great deal of time on the political implications of Clear Channel's rise, or even fully answer the question of just how political the company really is. Was the company's Iraq War boosterism (with pro-war rallies organized by multiple Clear Channel stations), or the fact that a list of banned songs (including John Lennon's "Imagine") was circulated within the company after September 11, 2001, a true expression of a corporate ideology, or merely an attempt to capitalize on the sentiment of the moment? What about the reports of deejays being fired for expressing opposition to the Iraq War, and the company's refusal to place some antiwar ads on its billboards?

These are important and interesting questions, but for the most part the book leaves them unresolved. Foege is more straightforward when relating the kind of hardball tactics—or, as more than a few claimed, predatory and monopolistic behaviors—Clear Channel engaged in while building its business in concert venues. Utilizing their expanding venue holdings and their radio stations as double cudgels, they all but forced bands to book concerts only at Clear Channel sites for fear of being shut out of future concerts and airtime on influential stations. It has used its other holdings in similar ways. For instance, Clear Channel owns Premier Radio Networks, which syndicates some of the country's biggest radio hosts, including Rush Limbaugh and Dr. Laura. In 2001, Premier informed many of its clients that it was pulling shows from their stations and transferring them to Clear Channel-owned stations in the same market, leaving them holding the bag for the efforts they had invested to promote those personalities.

Then there's the question of how Clear Channel treats its own. While Foege interviewed many of the key upper-management players in the company's relatively brief history, other reporters—notably Eric Boehlert in a series of pieces for Salon in 2001—have gotten rank-and-file Clear Channel employees (many anonymously) to talk candidly about the company. The portrait they paint is of an absolutely sinister organization awash in sexual harassment, threats, and intimidation of both competitors and employees. The topic of the company's internal culture could have used further exploration in this book.

In the epilogue, Foege describes Clear Channel as "Colonel Parker without his Presley," good businessmen who built a behemoth on a base of fiscal prudence combined with innovative tactics and extraordinary aggressiveness when circumstances allowed. But they never cared about the culture they were using to sell audiences to advertisers, and that indifference ultimately played a large part in their undoing. Commercial radio audiences have been steadily decreasing, a decline abetted by the rise of satellite radio and, of course, the Internet, which provides people ways to learn about and acquire (legally or otherwise) the music they previously would have discovered on their local radio stations. The Internet, for example, allows people to download a podcast of the influential KCRW Santa Monica music show Morning Becomes Eclectic anywhere in the world, which somewhat obviates the need to have a version of Morning Becomes Eclectic broadcast on your local radio station. This development made the situation for local stations bad enough. But the way Clear Channel treated its listeners—like simpletons who wouldn't mind hearing the same ten songs over and over—made things worse.

There is little doubt that Clear Channel's model of content delivery has contributed to the decline of commercial radio. At a time when—usually, if not always, for the better—technology is diminishing the power and authority of cultural gatekeepers, Clear Channel's homogenized, narrowed slate of offerings becomes less and less appealing. So it shouldn't come as too much of a shock to learn that the terrifying corporate monster is less imposing than it was just a few years ago.

In response to declining profits and listener disgust, the company announced in 2004 that it was cutting back on the number of commercials it broadcast. In 2006, it unveiled Format Lab, a sort of radio think tank, to devise original formats with greater variety and more room for local improvisation. Finally, this January, the FCC approved the sale of Clear Channel to two private equity firms for $20 billion, which took the company private. Alongside the deal, Clear Channel announced it would sell all of its television stations and more than four hundred of its radio stations in smaller markets. Its stock, which neared $100 per share in 2000, has dipped below $30 this year. The company won't be going out of business anytime soon, but with its own missteps—and the possibility of a regulatory environment much less friendly to unlimited media consolidation in the near future—Clear Channel's days of world domination may be over.

   

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Paul Waldman is writer and senior fellow at Media Matters. His most recent book is Free Ride: John McCain and the Media, coauthored with David Brock.  
 
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