December 23, 2006

A decidedly anti-consolidation crowd showed up to Nashville's Belmont University for an FCC meeting on media ownership on December 11. The panels and public comments left no doubt as to the thoughts of most artists and citizens. They want media ownership limits to hold firm or revert to pre-1996 limits. Most see a direct relationship between media ownership and diversity. In the last ten years, they said, radio playlists have shortened, local artists have been ignored and stations cede decision-making to corporate parents in other cities.

Via StopBigMedia.com, I found some MP3s of (anti-consolidation) panelist testimony. Download testimony by Commissioner Copps (9.8 MB); country legend George Jones (4.4 MB); Rick Carnes, president of the Songwriters Guild of America (5.4 MB) and Bruce Bouton of the Recording Musicians Association (2.1 MB).

Unfortunately, no panelists adequately addressed the media consolidation's effect on radio playlists. We were told of a correlation but were not given evidence of causality. (The public comments had some anecdotal evidence.) An important question that should have been answered is whether or to what degree radio playlists would be any different with less radio consolidation, i.e. are playlists the result of consolidation or are playlists the result of business practices that would exist even with less consolidation? I'm sure some would say, "Yes, of course consolidation has resulted in tighter playlists and homogeneousness across the country" as if this is too obvious to address. It is a question that should be directly answered.

Bud Walters, president of 22-station Cromwell Radio, defended radio practices and emphasized his station's localism. He gave numbers that put ownership into perspective. The top five companies, which receive most media scrutiny, own 2,000 of the country's 11,000 commercial stations. The next 20 own only 1,000 stations, he said. In all, 3,000 licensees own those 11,000 stations. Consolidation has helped, Walters claimed. "In the early '90s, half the radio stations were losing money. Many small-market stations are viable today because of consolidation."

The panelists were absolutely firm in their belief that consolidation has hurt country music, often pointing to the absence of country stations in New York City, San Francisco and Los Angeles. Maybe they were not aware that 540 Country is now serving Los Angeles. Professor Luke Froeb's comments mirror the reality in Los Angeles: Economies have an ability to move resources in and out of markets. "Well-designed laws and regulatory rules have resulted in markets that can quickly move resources into or out of an industry in response to changing consumer demand," said Froeb, a former FTC chief economist and currently a professor at Vanderbilt University's Owen Graduate School of Management. (I took his Managerial Economics course in the fall.)

Most panelists (and public commentators) also ignored the ability of technological changes to change entertainment markets. Only Froeb and Christopher Yoo, a law professor at Vanderbilt, addressed the ability of packet-delivered content (to use a term Yoo used often) to transform how music is delivered to listeners. The panelists, most of them representing content producers, created a choir of radio believers. They did not look forward to other forms of delivery -- perhaps because country music is currently so radio-driven. At times I got the feeling their support of radio was partly driven by nostalgia.

Some panelists and public commentators spoke of the inability of niche stations to get adequate advertising. I would have liked to hear their thoughts on Google's new radio ad service, AdWords, which was also mentioned by Froeb.

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Posted by Glenn at 11:38 AM | |