richard
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Clear Channel taking over the radio world
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Mar 8 06:21 UTC 2002 |
Tell me this isnt scary:
(article reprinted copyright Wall Street Journal):
BY ANNA WILDE MATHEWS
Wall Street Journal
On Feb. 15, disc jockey 'Cabana Boy Geoff' Alan offered a special treat
to listeners of KISS-FM in Boise, Idaho: an interview with pop duo Evan
and Jaron Lowenstein. 'In the studio with Evan and Jaron,' Alan
began. 'How're you guys doing?' The artists reported that they had just
come from skiing at nearby Sun Valley, then praised the local
scene. 'Boise's always a nice place to stop by on the way out,' Evan
Lowenstein said, adding that the city 'is actually far more beautiful
than I expected it to be. It's actually really nice, so happy to be
here.'
Alan chimed in: 'Yeah, we've got some good people here.' Later, he
asked Boise fans to e-mail or call the station with questions for the
performers.
But even the most ardent fan never got through to the brothers that
day. The singers had actually done the interview in San Diego a few
weeks earlier. Alan himself has never been to Boise, though he offers a
flurry of local touches on the show he hosts each weekday from 10 a.m.
to 3 p.m. on the city's leading pop station.
This may be the future of radio. The Boise station's owner, industry
giant Clear Channel Communications Inc., is using technology and its
enormous reach to transform one of the most local forms of media into a
national business. In fact, Boise's KISS 103.3 — its actual call
letters are KSAS-FM — is one of 47 Clear Channel stations using
the 'KISS' name around the country.
It's part of an effort to create a national KISS brand in which
stations share not just logos and promotional bits but also draw from
the same pool of on-air talent. Via a practice called 'voice-tracking,'
Clear Channel pipes popular out-of-town personalities from bigger
markets to smaller ones, customizing their programs to make it sound as
if the DJs are actually local residents.
"We can produce higher-quality programming at a lower cost in markets
where we could never afford the talent," says Randy Michaels, chief
executive of the company's radio unit. "That's a huge benefit to the
audience."
It's also a huge benefit to Clear Channel, which can boast of a
national reach and economies of scale to advertisers and shareholders.
The voice-tracking system allows a smaller station in Boise to
typically pay around $4,000 to $6,000 a year for a weekday on-air
personality, while a local DJ in a market of Boise's size would have to
be paid salary and benefits that might run five times as much.
That's why Clear Channel is developing multiple identities for a
battalion of DJs like Alan, 29, who is based at KHTS-FM in San Diego
but also does "local" shows in Boise; Medford, Ore.; and Santa Barbara,
Calif. Alan does research to offer news items and other details unique
to each city.
DEAL-MAKING FRENZY
The new sound of radio is tied to big changes in the industry brought
on by a 1996 law that got rid of the nationwide ownership cap of 40
stations. The law also allowed companies to own as many as eight
stations in the largest markets, double the previous limit.
The shift sent broadcasters into a frenzy of deal-making, as stations
rapidly changed hands. A fragmented business once made up mainly of mom-
and-pop operators evolved quickly into one dominated by large publicly
traded companies that controlled stations around the country.
No one took advantage of the new law more aggressively, or
successfully, than Clear Channel. The company started out with one FM
station in San Antonio. A relatively little-known firm before 1996, it
rapidly grew into by far the biggest player on the airwaves. Today, it
operates more than 1,200 U.S. stations, compared with 186 stations
owned by its biggest publicly traded rival, Viacom Inc.
Privately held Citadel Communications Corp. has 205 stations, mostly in
midsize markets. Clear Channel has combined its radio clout with a
growing array of other media assets, including the nation's leading
concert-promotion company and a major outdoor-advertising operation.
Now Clear Channel is moving to exploit its size by linking up its
different businesses and wooing major advertisers with the promise that
it can deliver nearly any combination of geography, demographics and
radio format. Part of that effort is the move to create national brands
such as KISS, which can become familiar touchstones for big national
advertisers and, eventually, listeners. While voice-tracking is not a
new practice in radio, Clear Channel is pushing the concept on a far
grander scale than ever, extending well beyond the 47 KISS stations to
encompass most of its empire.
BUCKING TRADITION
Michaels compares his model to McDonald's Corp.'s franchise system. "A
McDonald's manager may get his arms around the local community, but
there are certain elements of the product that are constant," he says.
"You may in some parts of the country get pizza and in some parts of
the country get chicken, but the Big Mac is the Big Mac. How we apply
those principles to radio, we're still figuring out."
Indeed, as Clear Channel has moved to take advantage of its reach, it
has run up against traditional ways of doing things in radio. To create
a national brand based on a federal trademark, for instance, it has had
to mount legal challenges in several markets, chasing off stations that
had been using versions of the KISS name locally. (The U.S. station
that actually has the call letters KISS-FM is an album-rock station
based in Clear Channel's corporate hometown of San Antonio, owned by
rival Cox Radio Inc.) Clear Channel is facing objections from union
locals representing on-air talent, which likely stand to lose jobs as
the company phases in more virtual programming.
The company drew an investigation by the Florida attorney general's
office into whether it was portraying national call-in contests to
listeners as local. Clear Channel admitted no wrongdoing, but in 2000,
it paid the state an $80,000 contribution to the Consumer Frauds Trust
Fund and agreed not to "make any representation or omission that would
cause a reasonable person to believe" that contests involving numerous
stations around the country were actually limited to local listeners.
Michaels argues that much of the static his company hears, particularly
from competitors, is simply a battle against progress. He compares it
with another point in radio's history: when the industry began phasing
out live orchestras and in-studio sound-effects experts in favor of
recorded music.
"The guy making buggy whips and installing horseshoes should have
gotten into making tires," he says. Change, he says, is "inevitable.
All we can do is exploit it."
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