More Consolidation of Radio

With the new administration taking over Friday, the new Republican-controlled FCC will have a different view of the business aspects of broadcasting. It's predicted that the FCC will lift the restrictions of cross-ownership between radio, TV and newspapers. This will allow newspaper companies to own radio stations and consolidate their news departments.

I also expect that there will be some loosening on the number of stations one company can own in a market. While the limit of eight stations might stay in place, the restrictions of owning no more than five in one band might disappear. That would allow one company to own up to eight FM stations. In reality, this is already happening in some markets, as companies like Clear Channel have been aggressive with the use of FM translators, which are not included in the current eight-station limit. Engineers have found ways to maximize the 250-watt FM signals to get a good city grade signal over the major population areas. Some of the translator signals are actually better than Class A signals in the market, which have height and power limitations.

The new free market approach could help values of radio stations, which have been stagnant and falling for years. There will be more demand for FM signals as a new wave of consolidation will be open, and some groups might be looking to snap up signals or consolidate their group with another one.

We've already seen some loosening of other regulations, such as having to keep copies of every correspondence in the Public File. Gone are the days when every single email sent to the station from a listener had to be kept in the file. And we'll see the hard copy files move more to the digital domain, as the FCC will allow more stations to post their public files online.

The other thing the FCC will address is the increasing RF noise for AM radio. All of the new electronic devices have added more noise to the environment, which makes AM difficult to receive. Stations that have lower power levels are having a hard time cutting through the noise, and the FCC will want to find a solution for those stations. The "AM Revitalization" plan was really the "Clutter up the FM band" plan. The major market FM dial is getting very crowded, as a result of all of the move-ins, all the new FM translators, low power FM stations and the relaxing of the second-adjacent protections. The recent TV auction will open up more bandwidth, and I wouldn't be surprised if some of that bandwidth will be allocated to expand the FM band.

What's been lost since the consolidation of radio is the competitive attitude. One result of the '90s wave of consolidation is that, in many cases, stations that were once fierce competitors found themselves owned the same company. At many clusters, meetings were held to give each station its own identity. Decisions were made to move one CHR in a more Urban direction, or one of the rock stations to harder rock. Sometimes, music libraries were divvied up and songs and artists were claimed for one station or the other. The result was less appealing radio stations. My recommendation my clients is to do what's best for each station. Don't dilute the product to protect another station in the cluster, it only makes your station less appealing and inviting for an attack from another station. 

I have the feeling that it's going to be a wild few years coming up, so hang on.