I find myself explaining Private Equity this way. Many ask “How is this even legal?” The consequences are hidden from the financial reporters (who often report the mergers as a good thing) because the firings happen over time as the debt matures and refinancing and/or reselling become immanent. The more debt there is from the corporate buyout, the more employees that will have to be fired so their former salaries can go toward paying off that debt. For more information watch a short video expert here.
A possible new radio station called “Fayetteville Community Radio” held a screening of Corporate FM to motivate supporters behind the venture. The station is possible because new low power FM frequencies (LPFM) were legalized by bill in congress in 2010. “It fired them up” said organizer Joe Newman about the film. “It was a very good presentation for what we are fighting for. It inspired people to take that extra step”. That evening several audience members, who had left commercial radio, volunteered to help community radio become a reality in Fayetteville Arkansas. Continue reading…
Consolidation has displaced so many DJs from serving their communities. When SHORTY AND THE BOYZ worked at the Cumulus owned VIBE they were prohibited from playing local music or using speech that sounded too “urban” (a code word for black). Now gone from Cumulus, they have begun their own venture. Their internet show does not get broadcast over the entire city, but we can stream it to see that the light of talent burns bright outside the halls of corporate radio. See the video they produced….
Radio used to make money through advertising. Radio stations had a motive to engage the public in order to sell their ratings to the advertisers. “We sold the advertiser [an] audience,” says veteran broadcaster Dick Fatherley. Here capitalism works because the station makes money by being relevant to the audience.
Nowadays radio, like many other industries, makes its money through high finance gamesmanship. Money is made by buying and selling the company rather than what the company produces. In this model it makes sense to cheapen the product for short term financial gains. In other words a station can fire an entire staff and then post the reduced overhead as if it were a profit. This works for a short while till the listener gets sick of automated radio. It works perpetually when they can do it to the entire spectrum because the consolidator does not have to face their biggest fear: competition. The loser is the listener, the community and the radio station employees.
Private Equity firms are not afraid to Continue reading…
No. This is why it is important not to just hate commercial radio and hope for the best. I got an email from a listener who was happy that Corporate radio was dying. He thought that we should “starve the beast”, implying that if it went bankrupt, the rats would jump off a sinking ship and someone who cared about their community would buy the station back. I wish that were the case. The way high finance manages radio stations, allows them to keep them in a zombie state rather than killing them. Even if the station does go bankrupt, the same firm that sucked all the life out of the company can manage to keep the company after bankruptcy. This is called a “pre-packaged bankruptcy”. In such an arrangement, they convince a judge that they are the best ones to manage it, because they obviously know whats wrong now and they promise to pay a percentage back to debtors. The creditors may get 90% of the new company. Who’s complaining? The listener would if they knew about it.
Imagine you were a DJ at Citadel (a radio consolidator) where you watched all your friends get fired and the quality of the programming drop thus driving listeners away. The company is huge, thanks to debt financing and mergers spurred by a private equity firm (Forstman Little and Company). In 2009 when the company is heading for chapter 11 you may think, at long last the CEO Farid Suleman is going to get his comeuppance. Banks keep radio for themselves to trade
Unlike Facebook or web-based music sharing applications, locally owned radio reaches thousands of people across many incomes and ages in a single area at the same time with a message unique to that area. That ability is what once moved entire cities to unite around local bands, local charities, local businesses, and new ideas. The internet may have some advantages, such as connecting individuals over long distances, but it cannot create a vast localized unity the way radio can. The local limitations of a radio tower are actually its greatest asset because the station transmits primarily within a community and is free to everyone inside that community (young or old, rich or poor, educated or not).
The internet is a companion technology not a competing technology. Continue reading…
Some NPR and community radio listeners are happy that commercial radio sucks. They reason that the bland corporate programming drives listeners to them. They couldn’t be more wrong. Crappy commercial radio hurts public radio stations and the whole medium of radio itself. When a shopping mall loses all its best stores except one; there is less reason to visit. That dead shopping mall is now the FM dial.
Imagine a road trip where when as you traveled from town to town you could learn something about each town just by tuning in as you drove through. Now imagine how many people used to find new stations because of…curiosity.
It is normal for the most loyal listeners to switch away from their favorite station when they hear a song that they don’t like and then switch back 3 minutes later. But when those listeners only find crap to choose from on the other stations then it becomes normal just to turn the damn thing off. Where’s that ipod?
Young college students today have no recollection of locally owned commercial radio. It ended before they were teens. Every year more young adults go exploring their world for something new. They try tuning-in to radio until they learn that there is nothing new there for them. These listeners are not abandoning NPR, they are abandoning the entire medium altogether.
FM has become the city of abandoned competition. NPR and community radio may be a bright light in that wasteland of airwaves, but if there is no other engaging option besides those; then I’m going to search a different medium that gives me more choices. A television with 1-2 channels would be equally worthless. In order for radio to still be considered an important medium, there must be valid competition that draws in a diverse audience. Otherwise the entire spectrum may become obsolete, and redistributed to other wireless devices. That would be a grave loss because no other medium is as effective at uniting concentrated populations as radio. It is the only infrastructure that reaches everybody.