SENATE TUNES IN
TO RADIO CONCERNS

The hearing, attended by Sen. Russell Feingold (D-Wisc.) and headed up by Sen. John McCain (R-Ariz.) was convened two days after the re-introduction of Feingold’s proposed Competition in Radio and Concert Industries Act, which seeks to curtail further radio consolidation and ban certain corporate behavior deemed anti-competitive and revise current payola law (see story). The bill was first introduced last June.

Mays addressed the committee on several topics, including what he called the benefits of deregulation, the relative concentration of ownership in radio, the idea that Clear Channel has eroded "localism" and whether the company uses airplay to leverage its concert promotion business, Clear Channel Entertainment.

"In the early 1990s more than one-half of the nation’s radio stations were operating in the red," Mays stated. "Facilities modernization grinded to a halt, and many stations were forced to cut their budgets for news and other local programming. With the ability to own more stations after 1996, radio owners created economies of scale and were able to diversify formats. Radio began to compete more effectively with other media for advertising dollars and, in turn was able to modernize facilities, increase and improve local programming and hire more and better on-air talent."

As for ownership concentration, Mays went back to a point Clear Channel has made previously: "The 10 largest radio owners account for just 44 percent of the industry’s revenues, while the top five record companies control 84 percent of all album sales." Clear Channel’s 1,200 stations amount to 9% of U.S. stations, Mays said.

And when Henley alleged that Clear Channel denies airplay to artists who do not use Clear Channel Entertainment to promote their tours, Mays had this to say, according to a Reuters report: "As long as our audiences want to hear Mr. Henley’s music, he has no threat of retribution."

Mays further insisted that airplay is determined only by what pleases audiences. "Britney Spears received 73 percent more airplay on Clear Channel stations when she toured with Concerts West than she received when she toured with Clear Channel," he noted.

According to Reuters, Commerce Committee Chair McCain grilled Mays on some issues and took issue with some of his answers, but did not indicate whether the Committee would pursue the matter further. McCain has been reported as likely to back Feingold’s radio bill, but has yet to sign on.

Elsewhere, RIAA Chairman/CEO Hilary Rosen applauded the Committee for taking up the matter and Feingold for re-introducing his bill. Last May, the RIAA joined nine other trade groups and labor organizations in drafting and signing a Joint Statement on Current Issues in Radio, which asked that Congress and the FCC revise current payola law and look into the effects of radio consolidation.

The statement was a result of the rise of the "tollbooth" model of independent promotion undertaken by several indies who made expensive chain-wide deals with large radio companies (including Clear Channel) and began to bill labels, in increasingly high amounts, for everything going on the air at certain stations.

"The pace and form of some of the consolidation now occurring in the radio industry is a matter of concern for the entire music community, including the record labels," Rosen said in a statement. "Consolidation can have some positive benefits, and as such, we are not opposed to consolidation in and of itself. But it can also produce negative side effects that hurt consumers, artists and record companies, such as the practice of some radio stations, particularly those that belong to a large group, soliciting money through independent promotion. Due to these negative side effects, federal guidance on the conditions of consolidation is warranted."

Remarking on the homogenous nature of big radio today, Rosen further stated, "Record companies, small and large, produce an expansive and varied selection of music releases, supplying fans with more than 30,000 new releases each year with a wide variety of tastes, styles and genres. Unfortunately, most often that breadth of music is not reflected in today's radio playlists."

Of his radio reform bill, which he hopes to see passed this year, Sen. Feingold syas, "I have seen a groundswell of interest both in Congress and among artists, consumers, independent radio stations and local promoters in restoring fairness to radio. My legislation will reduce concentration and crack down on anticompetitive practices."