future of Music Coalition
endorse the
Frequently Asked Questions
Join the mailing list

Radio Deregulation: Has It Served Citizens and Musicians?


FMC Response to NAB “Fact Sheet”

read NAB's Fact Sheet
download this as a PDF

On Friday, November 15, the National Association of Broadcasters (NAB) released a response to our study, which had not yet been released. The NAB’s so-called fact sheet contains a skewed version of the state of the radio industry. Here we present our rebuttal to the NAB’s claims.

Findings by other researchers

The NAB fact sheet directs journalists to a series of reports with a perspective differing from ours. We encourage reporters to read these studies – while noticing the questions that are absent from the analysis contained in them. These studies never engage the public policy issues that have emerged from radio deregulation.

Furthermore, we would encourage reporters to read the studies of the radio industry by organizations and writers that the NAB failed to cite. In particular, we would recommend the FCC’s recently-released study “Radio Industry Review 2002: Trends in Ownership, Format, and Finance.” You’ll find that our statistical findings about the extreme consolidation now present in the radio industry are consistent with the FCC’s. Unlike the FCC reports, however, our report does not stop short of making policy conclusions. In our report we connect the dots between all the facts we discovered about radio after deregulation.

To make their case, the NAB cites reports by an industry consulting firm, an industry survey firm, and an investment bank. In the wake of Enron and Worldcom, we know we need not caution journalists to read critically when reading the reports of investment bankers.

Listenership HAS decreased: even according to an industry-owned business

The NAB claims that consumers are not dissatisfied with radio and that listenership is still high. It’s difficult for us to determine exactly which industry-conducted studies the NAB is citing to support this claim in their fact sheet, even after a thorough search of both Arbitron and Edison’s list of collaborative reports.

But we have determined that a study by Arbitron/Edison contains some of the findings to which the NAB refers. However, as in other surveys conducted by Arbitron/Edison, this study did not use a “random sample.” Instead, it used a random sample of Arbitron diary keepers. But selections from a truly random sample must be uncorrelated with anything else to meet that definition. In the case of this study, survey respondents were selected based on whether they fill out Arbitron ratings surveys. This means that some demographic groups may have been underrepresented in the survey samples.

We would also note that it’s not surprising that an industry-conducted survey found results favorable to the industry. After all, Dr. Ed Cohen, Arbitron’s Director of Domestic Radio Research, was most recently employed as Vice President of Research for Clear Channel Communications.

What is surprising is that an industry-conducted survey – a different one, cited in the FMC report – found results very unfavorable to the industry. In September 2002, Duncan’s American Radio reported listenership has hit a 27-year low. (Incidentally, Duncan’s is owned by Clear Channel, by far the largest owner of radio stations in the U.S. This makes it hard to claim its findings are biased against the industry.) According to the Duncan’s study, radio listenership has fallen steadily, dropping nearly 17 percent over the last 13 years.

Format variety is stagnant

The NAB cites our study’s finding that format variety increased from 1996 to 2000. We do indeed report this result as a preface for our next conclusion; that format variety is not a substitute for true measures of format diversity. Our study puts this first finding into a broader context. We point out that format variety has been stagnant over the last two years. The other studies of format variety cited by the NAB overlook or obscure the issue. The NAB never acknowledges or responds to this important finding.

Format variety vs. programming diversity

Format variety is a surface measure. It measures the variety of labels on programming – not the diversity of the actual programming content. All the studies cited by the NAB equate variety of formats with diversity of programming. This approach overlooks the major issue of format homogeneity – the overlap between formats. These NAB-cited reports do not recognize that slicing and dicing the same songs over and over again does not increase diversity.

In our study, we focus on the incredibly high level of format homogeneity. Some formats – like Urban and CHR/Rhythmic – overlap by as much as 76 percent according to chart data from Radio and Records. We also note that format homogeneity has either remained high or stayed the same, depending on the formats in question. This finding is consistent with another FCC report, cited by the NAB itself, “Radio Market Structure and Music Diversity.”

The fact that format homogeneity is high and holding at a high level is significant. It exposes the superficiality of using format variety as a measure of programming diversity. What matters for listeners and musicians is the diversity of songs played on the air.

Radio is an oligopoly

The NAB’s claim that radio is less consolidated than other industries is a diversionary tactic. The term “oligopoly” refers to the degree of concentration in a single industry. And according to that definition radio is an oligopoly. Comparing radio to other, extremely concentrated media industries is not an effective way to deflect scrutiny.

The NAB claims that the top 10 owners control only 49 percent of industry revenue. We find that the top 10 firms control 67 percent of industry revenue, based on data from BIA Financial Networks. Calculating market share involves the simple mathematical operations of addition and division. Anyone with the BIA database could reproduce our results. The burden lies on the NAB to explain where their number comes from.

Furthermore, the NAB sites the 4,000 separate companies that own radio stations without mentioning the fact that only 10 control 67 percent of revenue. The number of owners does not counteract the dangerous implications of this level of market concentration, nor does it address the local origins of the medium. Section 307(b) of the Communications Act specifies that radio stations are licensed to particular communities and are charged with servicing those communities. In other words, principles of localism are deeply embedded in the Communications Act. Therefore, any notion that you can improve local service by regionalizing and nationalizing is in many ways fundamentally at odds with one of the basic goals of the communications licensing process.

Radio consolidation is MORE worrisome because other media are more consolidated

The NAB lamely attempts to assuage any worries about radio consolidation because other media are even more consolidated. What the broader media context really tells us is that horizontal consolidation across media has become a pressing problem. Three examples of the Top 10 radio companies – Clear Channel, Viacom, and Disney/ABC Radio – have major holdings in other media and other industries as well. These holdings include network television, cable television, motion picture studios, music recordings, billboard advertising, etc. Horizontal consolidation reduces diversity even further.

Furthermore, many of these other industries do not rely on public spectrum to operate. Haphazardly comparing radio to these other, very different industries blurs the important issue of radio’s democratic ownership. The spectrum belongs to the public, making the consolidated control of spectrum a uniquely public concern.

Not all minorities are well-served by radio

The NAB mentions that more Spanish-language stations exist than existed in 1996. True as that may be, this does not prove that highly consolidated industries serve all customers well. Radio might serve some minority ethnic groups in some ways. But many groups that are in the minority are not being served: those who prefer classical music, those who prefer jazz, those who prefer world music, those who prefer a multiplicity of news sources, and so on.

Our analysis asks the right questions

We asked two objective questions: (1) how has radio consolidation affected consumers? (2) How has radio consolidation affected musicians? If the radio broadcasters don't wish these questions to be asked and don't wish these questions to be answered by anyone besides them, one can understand that – given the overwhelming evidence against their claims. We urge reporters and citizens to inform themselves fully, and not be distracted by industry propaganda.

We used the industry’s own numbers to conduct our research. We played ball on their home field. That the industry’s own data sources implicate radio as an increasingly consolidated and less diverse medium lends even more credence to our claims.

The NAB has claimed that we did “shoddy” analysis and have an “activist” agenda that biased our research. Our study contains extensive in-text and footnotes explanations of its methodology. The report is written so that anyone can re-create and check its results. We stand behind our work.

read NAB's Fact Sheet
download this as a PDF
read full report or supporting documents

 



home | manifesto | resources | press & news | events FAQs subscribe contact us

subscribe

Want to stay on top of music/tech issues? Subscribe to our monthly newsletter! Read the latest edition online here.



up front

Public Enemy Frontman, Production Team and Insiders Discuss Landmark Album
On July 17, FMC and Pitchfork Music Festival will host a free discussion about Public Enemy's It Takes a Nation of Millions to Hold Us Back at Chicago's Cultural Center, featuring Chuck D, members of PE's production team and music media experts.
July 8, 2008
Press release | Event Page

FMC Files Brief to Protect Creative Expression
FMC and the Center for Creative Voices in Media filed a brief at the Second Circuit Court of Appeals, arguing that the FCC's indecency policy has a chilling effect on creativity and expression and deprives the public of access to protected speech.
July 2, 2008
Press release | Indecency amicus brief (PDF)

FMC Files Reply Comments in FCC Localism Proceeding
June 11, 2008
PDF of Reply Comments | Press release

Wilco, Bright Eyes, Aimee Mann & more "Rock the Net" on Compilation CD
Thirsty Ear Recordings to release album on July 29 to benefit FMC's "Rock the Net" campaign for net neutrality.
June 2, 2008
Press release | Rock the Net

Musicians Get the Hint About Health Insurance
Two Raleigh concerts in memory of musician Drew Glackin; proceeds go to Glackin’s family and Future of Music Coalition’s Health Insurance Navigation Tool
April 10, 2008
Press release
FMC's HINT program

New York State Music Education Events Examine Crucial Issues Facing Artists
Forums in Rochester (April 28), Syracuse (April 29) and Albany (April 30) to focus on music, media, technology and policy issues for songwriters, composers and performers from all genres.
March 25, 2008
Event details | RSVP

Pop Rockers OK Go "Tour" Congress in Support of Net Neutrality
Damian Kulash and Andy Ross discuss the importance of open Internet structures to musicians; Kulash testifies before House Judiciary Committee.
March 13, 2008
Press release
Spoken testimony

Written testimony

Rock the Net

New York State Music Education Events Examine Crucial Issues Facing Artists
Kick-off forum in Buffalo on April 2 to focus on music, media, technology and policy issues for songwriters, composers and performers from all genres.
March 7, 2008 | Event details

Philly Bands Rocking for Net Neutrality
February 23 Sugar Town show at Tritone in Philadelphia will showcase lady rockers and DJs, as well as musicians' support for net neutrality.
February 15, 2008

OK Go and Bonerama Rocked DC for New Orleans Musicians
Bands also champion FMC's "Rock the Net" campaign for net neutrality
February 2 benefit show at DC's 9:30 Club raised over $8,000 for New Orleans musicians. Bands played cuts off their new benefit EP, You're Not Alone, available on iTunes on February 5.
February 4, 2008

Upcoming Washington, DC show and benefit EP from OK Go & Bonerama
On February 2, OK Go and Bonerama will play a benefit at D.C.'s 9:30 Club in support of You're Not Alone - an EP to support Sweet Home New Orleans and Al "Carnival Time" Johnson.
January 21, 2008

Successful New Orleans Concerts Aid Big Easy Musicians
Last week, two benefit concerts raised over $6,000 for Sweet Home New Orleans - a coalition of non-profit organizations that helps find affordable housing and provides rental assistance for the city's musicians - and Big Easy music legend Al "Carnival Time" Johnson.
January 15, 2008
Press release | Event details

FMC's Latest Fact Sheets
HD Radio
Low Power FM Radio
Public Performance Right for Sound Recordings
Orphan Works
Traveling with Instruments
Touring Internationally
SoundExchange
Net Neutrality
Full Power Non-Commerical Radio Licenses
Media Ownership

Ann Chaitovitz Appointed
FMC's New Executive Director
A proven leader in musician and public policy issues, Chaitovitz replaces founding Executive Director Jenny Toomey
January 3, 2008

Concerts for New Orleans Musicians Bring Artists Together
Two New Orleans shows and upcoming benefit CD from OK Go and Bonerama
January 2, 2008

FMC's Jenny Toomey Appointed Program Officer for Ford Foundation
Kristin Thomson to Serve as FMC’s Interim Executive Director Michael Bracy to Chair FMC Board of Directors
November 26, 2007

Seattle "Rocked the Net"
Rep. Jay Inslee advocated network neutrality;
joined by rocker Matt Nathanson, Reclaim the Media, FMC and local music business representatives
October 31, 2007

Rock the Net: Campaign for Net Neutrality Rocks Seattle
Teleconference with Rep Jay Inslee on Tuesday, Oct 30. Matt Nathanson performs at Seattle’s Crocodile Café on Tuesday, Oct. 30
October 26, 2007

Future of Music Policy Summit to Tackle Critical Issues at the Intersection of Music, Law, Technology and Policy
Sen. Byron Dorgan and Sen. Ron Wyden to Deliver Keynote Addresses
Mac McCaughan, Bob Mould, Marybeth Peters of the U.S. Copyright Office and More Than 90 Other Panelists Confirmed.
September 10, 2007
Summit home page
Press Credentialing

AT&T's muting of bands points toward a pattern of silencing political speech
Content monitor did not edit out 20 instances of curse words during Pearl Jam webcast, despite AT&T claim it hires monitors to block "excessive profanity".
August 13, 2007

Top musicians, lawyers, technologists confirmed for FMC's 7th annual Policy Summit
August 13, 2007
Press Release
Summit home page
Press Credentialing

FMC Statement on AT&T Silencing Pearl Jam's lyrics during Lollapalooza webcast

August 9, 2007

Registration Opens for FMC's Annual Policy Summit
July 24, 2007
Press Release
Summit home page
Press Credentialing

FMC Files Request for Declaratory Ruling regarding Clear Channel Actions at Federal Communications Commission
July 13, 2007
Filing | Press release

FMC Statement on Federal Trade Commission Report on Net Neutrality
June 29, 2007

FMC files testimony with House Small Business Committee on CRB Webcasting Rates
June 27, 2007
Press Release | Testimony

Clear Channel strips local, independent artists of digital performance royalties

FMC has discovered that Clear Channel's online application for local and independent artists to submit their music for airplay on each of its stations requires the artist to approve a licensing agreement that does away with their digital performance right.
June 22, 2007

Low Power Radio Gets New Push in Congress
Congress introduces bills to create hundreds of new low power FM radio stations to cities and suburbs across the country.
June 22, 2007

FMC Announces Dates for 7th annual Policy Summit
September 17-18, 2007
GWU Betts Theatre, Washington, DC
June 11, 2007

FMC Organizes "Musicians Bringing Musicians Home II"
A Benefit Concert on May 27 at New Orleans' Tipitina's for Sweet Home New Orleans featuring: Indigo Girls, Damian Kulash of OK Go, Jim James of My Morning Jacket, Matt Nathanson, Pamela Z...and special guests
May 23, 2007
Press Release | Details

Congressman Mike Doyle to address conference on music, law and technology
May 2 event will bring together leading experts from worlds of music, law, technology and policy.
April 25, 2007

A2IM Endorses Rock the Net Campaign
American Association of Independent Music urges its label members to join the campaign for network neutrality.
April 17, 2007

Music Mashes with Policy at upcoming Technology and IP Policy Day
May 2 event will bring together leading experts from worlds of music, law, technology and policy.
April 16, 2007

FMC Applauds FCC's Payola Settlement
Payola agreement by FCC and big broadcast chains represents a major - but tentative - step toward once again opening the nation's airwaves to local music and voices.
April 13, 2007

Rep. Edward Markey, Ted Leo kick off "Rock the Net"
Nearly 150 artists and labels have already signed onto campaign for net neutrality
March 27, 2007
Press Release | Rock the Net

Major Artists To Join Launch of Rock the Net Campaign for Net Neutrality
March 23, 2007

FMC Statement on CRB Webcasting Rates
March 19, 2007

FMC Statement on FCC's "Rules of Engagement" On Payola
March 5, 2007

FMC Files Reply Comments in FCC Media Ownership Proceeding
January 16, 2007

FMC Statement on FCC Payola Settlement
FMC's statement on FCC's reported consent decree with the broadcast industry in regards to payola.
January 16, 2007

Radio Station Ownership Consolidation Shown to Harm Musicians and the Public
FMC study shows that the rapid consolidation of the commercial radio industry that followed the Telecommunications Act of 1996 has led to a loss of localism, less competition, fewer viewpoints and less diversity in radio programming in media markets across the country.
December 13, 2006
Press release
Report details

Jenny Toomey Testifies at FCC Media Ownership Hearing, Nashville, TN
December 11, 2006
Read FMC's testimony
Link to FCC webcast

FMC Organizes Musicians Bringing Musicians Home
Benefit concert at New Orleans' Tipitina's on November 6th featuring Steve Earle, Mike Mills, Allison Moorer, Tom Morello, Boots Riley, Corin Tucker and special guests.
October 23, 2006
Read press release
Read press coverage

FMC and AFM File Joint Comments at FCC in 2006 Media Ownership Proceeding

October 23, 2006
Executive Summary
PDF of comments

Job Losses Associated with Radio Consolidation Undermine Localism and Diversity
FMC, Newspaper Guild and Consumers Union urge FCC to take employment effects of their policies into account during upcoming review of media ownership rules
August 9, 2006

FMC Releases Research on Employment and Wage Effects of Radio Consolidaton
August 9, 2006

FMC on Preserving the Dynamism of the Internet
Opinion Piece on ABC News
June 29, 2006

FMC Statement on Senate Commerce Committee Vote in Support of LPFM
June 28, 2006

FMC Statement on FCC Media Ownership Proceeding
June 21, 2006

Indie-rock revolution, fueled by net neutrality
Op-ed by FMC's Jenny Toomey and Michael Bracy
June 13, 2006

Pearl Jam Donation To Help Musicians Help Themselves
Proceeds From Washington, DC Appearance to be Donated to FMC Artist Research Council
May 25, 2006
Press Release

FMC signs on letter to preserve net neutrality
May 17, 2006

FMC Announces Dates for Sixth Annual Future of Music Policy Summit
October 5-7, 2006
Media Advisory May 15, 2006

FMC Urges FCC to Investigate Allegations of Radio Payola
February 15, 2006
Letter to FCC | Press Release

FMC Statement on Release of Feingold's Radio and Concert Disclosure and Competition Act of 2005
November 18, 2005

FMC Sends Letter to Senate Commerce Committee in Support of a Public Performance Right for Sound Recordings
October 19, 2005

Top Names in Music, Law, Technology and Policy Return to Debate Critical Issues at Fifth Annual Future of Music Policy Summit
September 6, 2005
Media Advisory | Policy Summit home page

FMC Announces Health Insurance Navigation Tool
August 9, 2005
HINT Home Page

5th Annual Future of Music Policy Summit Announced
July 26, 2005
Media Advisory | Policy Summit home page

FMC Statement on MGM v Grokster and Brand X
June 27, 2005
Statement | Links to other organizations' statements

FMC Press Release: Music Mashes with Policy at DC Policy Day
April 8, 2005

FMC's Michael Bracy Testifies in front of House Judiciary Committee on "Digital Music Interoperability"
April 6, 2005

FMC files comments at US Copyright Office on "Orphan Works"
Comments also ask Copyright Office to consider status of out-of-print recordings
March 25, 2005

FMC Sends Letter to Senate Stating Concerns about S 193, Broadcast Decency Enforcement Act
March 10, 2005

FMC and artist groups file joint reply comments at FCC on localism in broadcasting, MB Docket 04-233
January 3, 2005
PDF of document