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Making Waves The consolidation of radio station ownership is changing the sound of local radio.

Making Waves

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Posted: Thursday, May 13, 1999 12:00 am | Updated: 1:58 am, Sat May 18, 2013.

The radio alarm goes off at 6:30 in the morning, and there you are with sleep still drifting between your ears. You need a high-energy shot of something to get your brain working and your blood flowing and your butt out of bed. Mark and Brian? Certainly their adolescent hijinks are enough to drive you out from beneath the sheets. Mancow? His sex-laced, libertarian show is enough to kick the brain into gear and raise your blood pressure.

And later in the day, there''s Rush Limbaugh to keep your day on track.

Yours and perhaps millions of others. These personalities, broadcasting from hundreds and thousands of miles away, have little connection to Monterey County listeners. They deliver shows that are marketed to national audiences and must stick to formats that appeal to a broad common denominator, whether the listeners are from Pacific Grove or Paducah.

And it''s not just the radio personalities who are affected. As more and more stations are bought by large corporations, they tailor their programming and advertising to mainstream audiences. It''s a trend that may make local radio as obsolete as the eight-track stereo system.

In large part, the trend has been fueled by the Telecommunications Act of 1996, and depending on your point of view, it''s either the best thing that ever happened to radio, or the worst. The bill, which virtually deregulated radio station ownership, made it possible for monied corporations to own an unlimited number of stations nationwide and up to eight stations in any single market.

When President Bill Clinton signed the act into law on Feb. 8, 1996, he said, in part, "This historic legislation, in my way of thinking, really embodies what we ought to be about as a country...This bill protects consumers against monopolies. It guarantees the diversity of voices our democracy depends upon."

In fact, say critics, the bill did the exact opposite. By expanding the number of stations under the same ownership, they say, the industry is becoming increasingly less diverse in its musical offerings and in its regional identities. Supporters counter the argument, saying that corporate ownership, with deep pockets and resources, has done nothing but improve the quality of radio.

Regardless of perspective, however, the Telecommunications Act of 1996 has changed the voice of radio and is affecting the way radio stations do business locally and across the country.

Hear Today, Gone Tomorrow

In the early ''90s, local radio stations seemed to be changing their formats quicker than you could say "war of the words." A short commute time, an oversaturated market and the resulting financial strain led to more than 20 format changes in fewer than five years.

While the Telecommunications Act promises to stabilize the industry, in other regards it''s a mixed bag of blessings and curses.

Although national radio revenues are up--a whopping 16 to 18 percent--from last year, the number of minority-owned radio stations fell 9 percent between 1996 and 1998.

While corporate structuring has allowed stations to streamline their staffs, making it possible to offer higher salaries and more room for advancement within the organization, it has also reduced the number of overall jobs in the radio market. And while the deep pockets of big corporate ownership have made it possible for radio stations to invest in better equipment and studios, it has also increased the demand to generate higher revenues to pay for those amenities.

Locally, the Monterey/Salinas market feels the effects of corporate radio ownership.

Of the 24 stations that have studios in the Monterey/Salinas/Santa Cruz market, half are owned by multi-station corporations. New Jersey-based New Wave Broadcasting owns four (KMBY, KPIG, KCDU, KBTU--formerly KXDC) and has a management arrangement with another (KBOQ); Clear Channel Communications, out of Texas, owns KTOM, KDON, KOCN, KRQC and KTOM-AM, and Buckley Broadcasting Corp., from Connecticut, owns KWAV-FM and KIDD-AM.

Of these corporate owners, Clear Channel Communications is clearly the biggest. In an April 27 press release, the company boasted of record first quarter revenues (up 110 percent, from $53.9 million in 1998 to $113.2 million this year). Since that date, it has also acquired "approximately 230 radio stations in 55 markets, one television station and Premiere Radio Networks.

"Including all pending acquisitions [as of 4/27], the Company operates, or is affiliated with, 625 radio stations, 19 television stations and approximately 302,000 outdoor advertising displays [billboards, etc.] in 26 countries worldwide. The Company also owns 29 percent of Heftel Broadcasting Corporation, the largest Spanish-language broadcaster in the United States."

And, although critics may lambaste the trend toward corporate ownership, the numbers speak for themselves: During the most recent Arbitron rating period in the Monterey/Salinas/Santa Cruz market, these "corporate" radio stations took eight out of the top 10 slots.

Radio as Fast Food

Bigger, of course, isn''t always better. McDonald''s has sold hundreds of billions of burgers, but few would argue that they make the best burger in the world. Corporate standards mean you get the same, dependable blend of lettuce, tomato and meat on every Mickey D sandwich in the world. But if you''re looking for something a little different--say red onion instead of white, or guacamole rather than ketchup--you aren''t going to find it under the golden arches. And that, say critics, is exactly what''s happening in corporate radio: A bland, formulaic, middle-of-the road product is being produced for mass consumption.

"One thing that''s happening is there is much less of a regional difference in the sound of radio," says Alan Schultz, Vice-president and General Manager of KRML-AM in Carmel. "It used to be you''d drive across the country and there would be a change of sound of each station as you drove. We''re losing that identity. It''s only stations like ours that are locally owned that have an identity, that align themselves with a community and really do have a unique sound to them."

"It''s the same advertisers, the same sponsors, the same music because you''re being fed the program from the same entity," says Jeremy Wilker, co-founder of Americans for Radio Diversity, a Minneapolis, Minn.-based information clearinghouse. "If there was only one newspaper for the whole country, you''d think there must be some things that were not being covered. If you have only one radio station, there must be some music that isn''t being played."

Critics charge that many corporately owned stations'' playlists are developed by consultants and then imposed on multiple radio stations--regardless of whether they''re in Salinas, Cincinnati or San Antonio. While station owners argue that their formulas are designed to efficiently and effectively meet the tastes of target audiences, proponents of locally owned radio stations say the practice robs radio stations of local or regional identity.

But Lance Tidwell, program director for Clear Channel''s KTOM-FM, says that isn''t necessarily true. He says that he''s been given wide latitude in developing KTOM''s programming and that when Clear Channel bought the station in October of 1997, it did nothing but improve the station.

"Jim Smith, vice president of Clear Channel, came in and said they appreciate anyone with an entrepreneurial spirit," remembers Tidwell. "He said they would give us enough rope to make a noose or a hammock.

"I can say very clearly that it has only given us more tools to work with."

But Sandy Shore''s experience of a corporate takeover was far less pleasant. Shore was a disc jockey with smooth jazz radio station KXDC and adult alternative station KPIG when New Wave Broadcasting purchased the station (along with KPIG, KMBY, 93.5FM and the management package with KBOQ) from Elettra Broadcasting.

"The minute Charlie [Charles Cohn, president of New Wave] walked in, there was no doubt that he didn''t like KPIG, he didn''t like jazz, and he didn''t like classical," says Shore.

KPIG, which has always had a looser-than-usual format and playlist, particularly seemed to mystify Cohn, according to Shore.

"He''d go around the station asking, ''How do you know what your next song is going to be?''" recalls Shore.

On the surface, at least, her evaluation of Cohn''s feelings seem to have been borne out. In March 1998, Cohn appeared on a KPIG talk show with Travus T. Hipp and mentioned that there would be a format overhaul at the station that would demand a much higher percentage of classic rock ''n'' roll in the programming. Tipped off to the change, listeners mounted a massive phone, e-mail and telephone campaign to express their displeasure. Ultimately, the proposed format change was watered down to the extent that it had little impact on the station.

Smooth jazz KXDC wasn''t so lucky. Perhaps having learned from experience, when New Wave decided to drown KXDC''s format earlier this year, Shore says DJs who knew of the impending change were forbidden to speak of it on the air or to the press. And, although hundreds of letters were written, both directly to Shore and to the station, KXDC went down with little of the publicity or hoopla that attended the KPIG fiasco.

But Terry Gillingham, New Wave''s vice president and general manager for the Greater Monterey Bay Area market, says the decision to fry KXDC had nothing to do with personal likes and dislikes.

"It just wasn''t generating enough of an audience," says Gillingham. "We had to look at another format with a broader appeal. Were there people listening? Yes. Were there enough people listening? No."

Replacing KXDC is KBTU, a Rhythm Adult Contemporary station with no live announcers. Although Gillingham says live announcers will join the station later this month, so far the station has sounded like a McDonald''s hamburger: It''s been a predictable, ubiquitous product that you could find in Anytown, USA.

Hang On to Your Ears

By all accounts, trying to run a successful radio station in Monterey County is a real bitch.

Not only do local radio stations compete with each other for listeners and advertising dollars, they''re also competing with out-of-town radio stations--like KGO from San Francisco. The Monterey market--which also encompasses Santa Cruz--taps its toes to the talk and tunes of 68 different radio stations, stretching all the way up to San Francisco. How does that number compare with other markets? Despite the disparity in population, we''re only slightly behind the Los Angeles market, which swings to the tunes of 69 stations.

The number of radio stations competing for a share of this market means there''s an airwave dogfight being waged for the 517,600 listeners in the total Monterey/Salinas/Santa Cruz listening area--and for the concomitant advertising revenues. But that''s not the only missile that radio managers must dodge when flying sorties through MoCo airspace.

"This market is one of the most over-radioed markets in the country; 40 percent of the listening in this market is done to Bay Area stations, that leaves you with only 60 percent, says KTOM''s Tidwell." "[Besides that], you''re marketing to three very different markets: Santa Cruz, Monterey and Salinas. Those kind of idiosyncrasies in the market are really difficult. You earn every ratings point you get in this market."

Given the intensity of the competition, the stations with the deepest pockets have a distinct edge over their smaller competitors: The big guys can afford to hire more experienced personnel--from their sales staff to their on air personalities, spend more money on marketing, buy better equipment, commission more thorough studies and rely on other resources that are shared between other stations owned by the same corporation.

"There are unquestionably fewer jobs available," says Gillingham, "but people are staying in the industry and we''re getting a higher and higher quality of personnel. We''re not as pressed for finding just anyone; the industry as a whole is getting better and better."

"We have resources and tools to work with that we never had when we were locally owned," says Tidwell. "There''s marketing dollars for billboards, for directing marketing, for paying our people a little bit better, for research, and for the physical properties we work in. We''re moving into a state-of-the-art studio here in Salinas that would not have been possible before."

Morris Rogers, a local co-owner of KISE-FM ("The Eagle"), moved to this area to start the station three years ago. Last month, he sold KISE to Bi-Coastal Media, an ownership group from Florida. Morris, in turn, is working to purchase three stations in Florida. He''s a firm believer in the power of multiple-station ownership.

"It''s just not possible to have a stand-alone, anymore," says Rogers. "Everyone has to get some economy of scale; with multiple stations, you can have one sales manager and one general manager [for example]. Actually, as an owner, I think consolidation is the best thing that ever happened to radio. It reduces overhead, and it improves the quality of radio."

"Obviously, it''s having a tremendous impact," says Gillingham, who has been involved with radio in the Monterey area for more than 20 years as an on-air personality, a salesperson and a station owner.

"There are fewer and fewer chances for ownership, but on the flip side, it stabilizes our industry and is allowing stations to stay in business. If you look back over the years, stations have been bought and sold, sometimes twice a year. For the first time since I''ve been involved, I''m seeing a stabilization of ownership coming."

Agrees Morris, "[Consolidation] stabilizes the industry, and it should provide more opportunities for promotions and other things the public wants."

That is, unless the public wants more diversity in its music.

"[Consolidation] helps the market," says Rogers. "It doesn''t help the variety of music."

This, Too, May Pass

Although large, corporate radio is flying high right now, it may come crashing to the ground in a time not so very far away. The same technology that''s had such a dramatic impact on the way we do business in the waning years of the 20th century may soon alter the way we listen to--and even define-- "radio."

Both Internet and satellite broadcast radio are already taking aim at traditional radio.

Already radio stations are finding it more and more advantageous to "broadcast" on the Internet. It''s a relatively low-cost way of cross promoting their on-air product, as well as providing more content than they offer over the air waves.

As more and more people have computers on their desks at work and in their home, they will have more opportunities to slip on their headphones, go to a station''s Website--whether it''s a local station or one halfway around the globe--and listen to whatever station they want. Radio stations will not only be competing with others in the local market, they''ll be competing with stations around the world. And, to some extent, even with themselves.

Many radio station Websites now offer a visual component that offers listeners a chance to watch what''s happening in the studio or at live events sponsored by the station. Computer "listeners" can also interact, making requests and comments without ever leaving their chairs. These online amenities are already having an impact.

New Wave''s Gillingham says that KCDU (CD93) is the second-most-listened-to radio station around the globe, and another New Wave station, KPIG, receives 150,000 Website hits from separate individuals every month. And for every one of those online listeners, there is one less listener tuning in on his or her radio.

It''s a trend that''s likely to continue and become even more widespread as the auto industry jumps into the act. Beginning in 2000, some cars will come equipped with their own satellite systems, making it possible to get a vastly increased number of stations from around the world and to plug into the Internet while driving. Drivers will have the option of listening to whatever online station they want, further splintering the market and bleeding listeners from traditional radio broadcasts.

But Gillingham doesn''t see the changes as a cause for concern. He points to the fact that the technology will not be widespread for a number of years, and that the industry has time to accommodate the changes. He says that traditional radio is still the most convenient form of listening, "they can go to their bedrooms, or living rooms or garage, where they already have a radio."

"As far as satellite radio is concerned, look at DMX," says Gillingham, referring to the specialty radio stations offered on cable. "Everybody said that was going to wipe us out. But we''re still here. People want to know what''s happening in their backyard. As long as we do that, I don''t think we''ll ever be outdated." cw

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