Jen Martensen Writing

Clear Channel is an ironically named $4 billion dollar/year conglomerate with a firm grip on the bottleneck around access to major radio airplay. Just as Bill Gates claims that Microsoft isn't a monopoly because other software companies are free to try to get their products recognized by the software-buying public, Clear Channel can claim they don't control all commercial radio airplay. But the reality is, it is prohibitively expensive and cutthroat competitive for any artist or band to achieve mass radio exposure. And Clear Channel knows it - their ever-expanding jurisdiction and their business practices have had a de facto influence on the current status quo.

Prior to 1996, it was illegal for any single company to own more than two commercial radio stations in any given geographical market, or more than 24 stations nationwide. Since the signing of the Telecommunications Act that year, however, the legal limit was raised to eight stations per market and no national limit. Even in the largest markets, rarely do more than eight significant commercial stations exist. Clear Channel has taken extreme advantage of thislegal shift, and now owns nearly 1,200 radio stations in the United States. Those 1,100+ stations represent only approximately 10% of the 11,000 or so stations nationwide, but they also account for a whopping 60% of all commercial rock radio outlets.

In addition to this enormous hunk of terrestrial stations, Clear Channel also owns the promoter formerly known as SFX Entertainment, acquired in August of 2000 for approximately $4.5 billion. SFX is the single largest concert promotion company in the United States, controlling well over 100 venues worldwide and grossing approximately $830 million each year, which is more than the second-through-ninth largest promoters take in all together. Therefore, with the enfolding of that company into their coffers, Clear Channel wrangled power over the majority of major live music venues as well. This means that Clear Channel receives as revenue a portion of every ticket purchased for a show in an SFX (recently renamed Clear Channel Entertainment) performance space. They establish many of the fees that are built into ticket prices, which frequently add up to more than the base ticket cost itself. It also means that they get a portion of every t-shirt, hat, keychain or other form of band merchandise you take home as a souvenir. The primary motivation for Clear Channel to have steadily increased the built-in fees is to more rapidly and directly earn back the costs of the SFX company acquisition and related venue renovations and upgrades. They're making consumers pay them back for wresting monopolistic control over the live concert space.

Because of this expansive control under Clear Channel Entertainment's umbrella, most managers and booking agents can book a national tour - coast to coast - in all Clear Channel venues. Convenient, effective, and streamlined? Yes. But, if the same managers and agents don't want to accept the artist fee offers and other cost packages extended by the Clear Channel promoters, they may instead be forced to cancel or forego a tour, since Clear Channel prefers the all-or-nothing tour bid and their reach is broad enough that routing around Clear Channel venues may not be an option for a band that wants to perform in all of their major markets.

There are three main ways for music artists to make money: touring, retail and radio - which generates income only by promoting the other two outlets. So far, Clear Channel hasn't acquired any retail chains. But, their lordship over the other two income pipelines is unquestionable, and therefore they can impact a band's success in the store.

The major record labels spend in the neighborhood of $100 million each year on radio promotion. Of that money, at least 50% of it is recoupable - meaning the artists have to earn it back via their roughly 12% of the proceeds from every unit sold. Keep in mind that recording costs, tour support, marketing and publicity costs are all also recoupable out of that same 12%. Artists also receive royalties from airplay, when they can get it. Therefore, Clear Channel has a distinct influence on the financial earning potential of popular musicians.

On average, there are about 30,000 records released by all labels each year. Major commercial radio stations add between 750 and 1000 songs into rotation on their playlists annually. It is seriously stiff competition fighting to land each and every one of those adds. How is it accomplished? Independent promoters.

An old practice in the music business, payola was a significant scandal a few decades ago. Record labels would give special gifts, financial donations or other enticements directly to radio DJs and programming directors, essentially bribing them to play certain songs on the air. Once exposed, several lawsuits resulted, and new federal restrictions were put in place to prevent such outright corruption and keep access to the airwaves more democratic.

To circumvent that new structure, independent promoters came into existence - and soon into prominence - in the labels-to-radio relationship. As the middlemen, they receive contractual payments from the labels to usher certain artists' recordings to radio on a regional basis. For every station that adds a track to their playlist, the indies invoice the label. A portion of the money paid to the promoter by the label gets passed on to the radio stations, as marketing budgets (annual or semi-annual), giveaways and contest prize sponsorships. The labels' money still reaches radio, but a complex routing system ensures everyone escapes payola prosecution. This convoluted diversion of millions of dollars is effectively money laundering between the labels and the radio stations; indie promoters are in place to prevent the correlation of specific label dollars to specific radio stations, to influence the airplay of specific songs.

The most successful independent promoters have developed exclusive relationships with the most powerful radio outlets, an "ownership" of certain playlists. They hold the keys to airplay access on a particular station. This was the first roadblock put in place that prevented developing artists and independent labels from affording to consider radio as part of their promotion plans.

Recently, Clear Channel has conceived of two new alterations to this way of doing business. First, they announced their intent to whittle the number of independent promoters to approximately six, with whom they already enjoyed a simpatico exchange. This gesture would only further constrict the artery of potential airplay access, and the notion seems to have fallen by the wayside under protest of both major labels and the other independent promoters who would have fundamentally ceased to exist under the new plan.

Secondly, Clear Channel concocted an idea by which all independent promoters would be cut from the chain; they announced a theory of selling outro commercial time directly to the labels, a plan that could haul in several million dollars per year. Still bypassing the payola laws, the major labels would buy advertising time directly from Clear Channel, and would produce short announcements, commercials that mention the artist, song, album, label and any other related information immediately following each spin of a particular track on the air. Apparently, though, it would require the prior determination by a Programming Director - by unknown and unchecked means - that the track being advertising is already a "hit" in order for the spot to run. Essentially, commercial radio would become pay-for-play, and the affordable options by which to be heard would narrow further still, as Clear Channel would be setting the rates for this advertising time. Understandably, this has yet to come to pass, and it's uncertain that it ever will, but no qualms whatsoever have been put forth by Clear Channel in announcing their concept and intent.

In general, Clear Channel is trying to homogenize and nationalize radio. In fact, their radio group CEO Randy Michaels has directly stated that "he wants to manage Clear Channel like a McDonald's or a Kroger, bringing quality-controlled, market-tested programming, much of it syndicated, to stations across the country" [Inside, April 2001]. They already engage in a practice called voice tracking, which means that DJ personalities record their shows, which are then simultaneously mass broadcast in several markets, lightly tailored to sound "local." By doing so, Clear Channel is able to supply on-air personalities to several areas for the cost of one crew, while reaping ad dollars on a market-by-market profit structure. While not illegal, this is certainly deceptive and distasteful, particularly considering that the playlists fundamentally follow the same practice.

Some artists have been relatively ingenius in conceiving of other ways to promote their music to the commercial public, largely out of necessity when radio refused to air their new material. Sting formed a relationship with Jaguar, producing a car commercial that doubled as a music video for his song "Desert Rose." Once it aired, his "Brand New Day" album moved significantly higher on the Billboard charts. Almost completely shunned by commercial rock radio at the outset, Moby's hit album, "Play" has now sold over 8 million copies. That status was achieved only after he and his management furtively pursued outside licensing of all 22 of the album's tracks to movies, commercials, TV shows and other sponsorship-related outlets. The dramatic public reaction from exposure to his songs via these other means created a demand for airplay. Some companies whose marketing tactics are very image-savvy, like The Gap clothing stores, are seizing upon this new venue for artist promotion and are featuring several singers - known (like Carole King) and relatively unknown (Cherokee and Nikka Costa) - in their latest TV campaign. Many artists have turned to the internet to reach out to fans and new audiences as well, and are placing hope in satellite radio to be another artery to the listening public.

Possibly the most profound example of Clear Channel's influence - and perceived authority - over the radio waves happened recently, in the immediate aftermath of the September 11 terrorist attacks on New York City and Washington, DC. What originally began as an exchange of emails amongst Clear Channel programming directors evolved into a list of songs recommended for elimination from playlists. The initial intent was clearly to ban these individually selected tracks, though when the list was leaked to the public, the dramatic reaction to such outright censorship led Clear Channel management to backpedal, stating that the songs were simply an incomplete collection of material that may warrant special consideration and sensitivity due to their lyrics. Eventually Clear Channel denied the list altogether, claiming its source was not from within the company.

It makes little to no sense why some of the songs on the list were included; John Lennon's "Imagine," The Bangles' "Walk Like An Egyptian," Simon and Garfunkel's "Bridge Over Troubled Water." The most significant concern is that Clear Channel forged immediately ahead and appointed itself a censoring authority. Considering their "McDonalds" view, this could have posed a very credible threat. Had Clear Channel recommended for Programming Directors and DJs to amplify their awareness of lyrical content of all songs, in light of the events, that would have been understandable and responsible. Instead, by explicitly outlining exact targets of restriction, Clear Channel flexed its radio-controlling muscle. This list poses an ominous warning of the power and reach of Clear Channel air access, while also risking the ire of those who have funneled their millions to appease this radio beast - directly or indirectly.

Some of the listed songs make clear cases for sensitivity, their lyrics may conjure emotional reactions and thoughts in listeners already grappling with an enormous crisis of proportions never before seen or even imagined. However those reactions, while dangerous in some, can be cathartic to others, and our ability to process, cope and grieve should not lay in the hands of a megacorp that thinks it knows what's best for us. Even though some tongue-in-cheek lyrics like those of Queen's "Another One Bites The Dust" may not hold the same humorous pomp and glory now, the more critical lack of humor lies in the realization that America's artists and record companies could stand to suffer financially, artistically, significantly, by any focused ban of airplay instituted on the part of Clear Channel stations.

Such censorship could have impacted one particular band more dramatically than any other on the list. While most artists have one or two songs included for consideration, Clear Channel unequivocably blacklisted the entire catalog of Rage Against The Machine - without explanation, qualification, or examination of their specific messages. Regardless of the fact that these songs were not removed from all airplay rotation, damage has still been done to that band's persona and reputation. Inclusion of their entire body of work essentially amounts to a certain level of libel.

With bravery that so many other artists appear to be inable to muster, Tom Morello of Rage Against the machine shared with me his position on the situation in a phone interview on September 19, 2001:

"In an interesting anomaly from the rest of the list, (Clear Channel) thought they should wipe their channels clear of the music of Rage Against The Machine. RATM, as a band and as people, are totally and diametrically opposed to the kind of violence that was commited on September 11th.... It's frightening that a media monopoly can whip together such a black list. One of the fears of right-thinking people in times of crisis is that some people may use the crisis as a pretext to stamp out dissenting opinions - in art, journalism, etc.

Our deepest sympathies to those affected by the tragedy. If Rage songs are at all questionable, it's because they lead people to question this kind of intolerance, censorship and trampling on first amendment rights. Listing our entire catalog is somewhat telling. Rage is a band which some people consider dangerous, not because we support in any way these sort of terrorist activities, but because it makes peeople think. In times like these, conformity and bloodlust start beating in certain hearts and independent thought is not encouraged. That's a fascist reaction to a very real human tragedy. It is this kind of knee jerk backlash mentality that already has resulted in the erosion of our first amendment rights and can result in the restriction of our civil rights in general."

Representatives for several other artists on the list, including Filter and the Foo Fighters, declined to comment on the list on behalf of their clients, stating in both cases that they didn't feel they could risk publicly stating anything that may offend Clear Channel, as it could risk radio success for their upcoming releases.

Clear Channel also owns companies that monitor airplay and compile all kinds of radio research, magazines in the radio trade, many many thousands of billboards and more than a dozen television stations. For those of you who are thinking that satellite radio and the internet may be viable Clear Channel alternatives, be keenly aware that they have invested $75 million dollars in one of the two primary satellite radio companies, XM Satellite Radio. Also, though Clear Channel President and COO Mark Mays has expressed the opinion that internet radio is "just people goofing around," [Inside, April 2001] they also acquired the web radio company Enigma Digital in February of 2001.

The nutshell message is this: in order to achieve household-name status, acts need to be on the radio, as most consumers are made aware of new artists and releases via commercial airplay. National-level touring brings in far more income than CD sales, and bands need solid promotion and public awareness to sell tickets to shows. Being on the radio is the most effective means to achieve that awareness. Now, if one behemoth controls both of those avenues of promotion, and a band is unable to afford or achieve access, that's crippling to artists. If one monstrosity controls both those avenues of public access to artists and they dictate exorbitant fees, that's also financially damaging to consumers. The economic impact to both parties is a primary concern about Clear Channel, but the larger principle of their exclusive grip on popular entertainment content is even more alarming.

So, you ask, what does this mean to the average person? What can you do? Be aware. Get to know which radio stations and venues in your area are under Clear Channel's jurisdiction (searchable on their web site - www.clearchannel.com). Think carefully about whether you want to patronize venues of a company that acts as Clear Channel does. Weigh your listening options, pay attention to what gets played on the air - or what goes unplayed. Examine in detail what fees you pay for tickets to shows, and question them, evaluate the total fee amount in relation to the ticket face value.

Ask yourself some tough questions about your patronage: are you OK with a faceless conglomerate telling you what you can hear, and then charging you out the wazoo for the privilege of seeing it on stage? How much are you willing to pay to see some cookie-cutter band - regardless of genre? How does it make you feel to pay as much as 120% of the base ticket value in fees to see a live show? Consider the source: how do you become aware of new music, and are there other avenues - aside from commercial radio - to explore for new discoveries? Are you comfortable with financially supporting a company that impacts the potential for independent labels and new, developing acts to break through and succeed in their careers?

Clear Channel thrives on complacent consumer income. It's far from likely that they will cease existence any time in the future. But their predominance may be tempered by awareness and actions, careful decisions and a heightened profile on their current practices and position. They'd be all too happy to continue spoon feeding apathetic customers and reaping significant income from their complacency.

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Other articles on Clear Channel:
Eric Bohlert at Salon.com has written an excellent series of
compelling articles on Clear Channel, examining several angles and
issues:
http://www.salon.com/ent/clear_channel/index.html

L.A. Times on small labels being kept out of radio
http://www.latimes.com/business/la-000074454sep16.story
L.A. Times on Clear Channels and radio promotion
http://www.latimes.com/business/la-000063051aug03.story
L.A. Times on concert ticket fees
http://www.latimes.com/business/la-000058325jul17.story
L.A. Times on Clear Channel's advertising idea to deal directly with labels
http://www.latimes.com/business/custom/admark/la-000020748jul01.story

Or just search "Clear Channel" at http://www.latimes.com