I find that Doug is articulating very clearly a lot of ideas that have also been rattling around my ahead for the last decade or so, but he’s made the effort to research them and flesh them out in print both in his book and in a growing series of columns and essays. What I like about his analytical approach is his willingness to attempt to get outside our contemporary assumptions about daily life and try to figure out when and how something, like the corporation, was brought into existence. I also appreciate that he’s willing to continue prodding at a question even when the answers are murky, showing a willingness to accept there are some apparent conflicts in the messy reality of daily life.

He recently wrote a piece for Publisher’s Weekly arguing that the publishing business is very ill-suited to corporate consolidation. He notes that book publishing is a sustainable business, but not a source of tremendous year-over-year growth of the sort a large corporation needs. But he remains sanguine about the future of publishing because the expert editors, publishers and writers haven’t gone away and are ready to rebuild the industry, perhaps with new independent houses.

I see some parallel with the radio business, although radio has been far more decimated than publishing. The root problem is the same: the large consolidating companies treated radio as a commodities business, seeking unreasonable profit growth that the business could not sustain. Radio differs from publishing in the fact that stations must be licensed and are therefore inherently limited in number, whereas publishing houses can be more easily started with less capital and require no licensing of any sort.

If new independents could start radio stations without having to try and pry licenses away from the likes of Clear Channel and Cumulus, I think we’d already be seeing some innovative rebooting of the industry. Unfortunately, radio is more like a neighborhood where the landowners have all let their properties get run down but refuse to sell them because scarcity still keeps the going rate artificially high.

In some sporadic cases we see innovation happening in public and community radio, where license holders can keep their stations sustainable but don’t have to rake in enormous profits. I just keep hoping that Clear Channel will finally bite the bullet and need to start shedding stations left and right, giving an opportunity for smaller, local and independent owners to get back into the game. Admittedly, it’s a more distant hope than the reinvigoration of the publishing industry, since another smaller consolidator, like CBS Radio, might choose to pack its stables, outbidding smaller players.

That’s the problem with licensing, and, to an extent, why the founding fathers organized against the Stamp Act of 1765. As it was designed, radio pretty much needs to be licensed because it was premised on scarcity partially imposed by the technological limits of 1927. But it’s not necessarily an inherent fact about radio. Perhaps the future of wireless communications will render this period of licensing a short historical anomaly. It’s an open question and no better than a 50/50 proposition right now.

Doug has his own relatively new radio show, The Media Squat, on the great noncommercial station, WFMU. In the interview we talked about his program and our shared challenged of trying to do an original weekly program on a completely volunteer, non-profit basis. That part of the interview will air on the next edition of mediageek. You can listen to it live on Thursday, Sept. 10, at 9 PM Central time on WNUR 89.3 FM in Chicago and online at http://www.wnur.org. Of course, the program will be archived online next week.

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I really enjoyed talking with Jerry. The man has a deep love for radio, but such an instinctive bullshit detector that he can’t also help but see that the medium is on the downslide. You should not miss this interview on June 11.

But first we’ll be laying some of the groundwork on June 4 with an interview with Alec Foege, author of Right of the Dial: The Rise of Clear Channel and the Decline of Commercial Radio, now out in paperback. I’ve discussed Clear Channel quite a bit here on the blog and on the radioshow over the last seven years, but Alec’s research into the history of this once-little Texas broadcast company really helps illustrate the wrong turn the entire commercial radio industry took.

On this Thursday’s show, May 28, I’m glad that Diane Farsetta from the Center for Media and Democracy will be joining me again. We’ll be talking about some of the recent lowlights perpetrated by the public relations industry, and how the industry is salivating at the opportunities it has to take advantage of the current crisis in journalism.

The mediageek radioshow airs live every Thursday at 9 PM Central on WNUR 89.3FM in Evanston-Chicago, IL, streaming live at wnur.org. The program is available every Monday for streaming and download at radio.mediagek.net and is heard on 13 other affiliate stations across North America.

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So, here’s the notes for the April 9, 2009 edition of the radioshow (now online):

Bloomberg – Todd Shields: FCC Head Says Agency Should Reconsider Newspaper Ownership Rule

Huffington Post – Jeff Jarvis To Newspaper Moguls: You Blew It

ArsTechnica – Julian Sanchez: AP launches campaign against Internet “misappropriation”

FCC’s Press Release on National Broadband Plan (PDF).

FCC’s Notice of Inquiry on National Broadband Plan (PDF).

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Indie 103.1 was a commercial alternative rock station that attempted to break out of the typical mold by hiring DJs who actually chose some of the music they played and having close ties to the alt rock community. For instance, former Sex Pistols guitarist Steve Jones had his own show for a while, as did Henry Rollins and Rob Zombie. But the station sort of stuck out like a sore thumb in owner Entravision‘s portfolio, given that the company is a mid-size player specializing in Spanish-language radio and television stations.

I’d listened to the station once or twice online since the format went live in 2003, and I will have to admit that it was refreshing compared to most commercial radio, but hardly freeform or revolutionary compared to most college or community stations. Still, now the dream is over, as the station is off the air and exclusively online.

But the hook that the transition online is some sort of play to preserve the station’s integrity in the face of ratings pressure is pure bullshit. I don’t doubt that ratings played a part in the station going off the air as Indie 103.1, but the reality of the transition to online is that the internet incarnation will bare little resemblance to the FM signal. According to the station’s music director, “None of the primary DJs or music programmers at the station are involved in the website and it’s not being run by people who ran the station.”

That quote was published last Friday, the 16th, and just a while ago on the 19th I checked the Indie 103.1 website and there’s a new message declaring that many of the station’s DJs actually will be doing shows:

In true Indie fashion, these DJs have offered to continue their labor of love and host their shows on-line. …

While some might view that as a victory, resulting from a public relations backlash, I say it’s still an example of consolidation in action. Sure, fans of Indie 103.1 will still be able to listen to some of their favorite shows online, but only while tethered to their computers–not yet on the go, in their cars or anywhere they don’t have a persistent internet connection. Furthermore, on the internet Indie 103.1 simply isn’t that special. The lower cost of entry means there’s hundreds of stations playing eclectic alternative rock that’s got more “integrity” than Indie 103.1.

What made Indie 103.1 special at all was the fact that it survived as an actual broadcast commercial radio station in the nation’s second market playing a less repetitive and not strictly playlisted format that still allowed DJs a hand in picking the tunes. If it had integrity, that’s where it was. There’s no indication that the staff and management were give the choice of go mainstream or go off the air. Rather, they were told they were going off the air, and their only outlet would be online. The whole “maintaining integrity” line is marketing bullshit, pure and simple.

Some commentators say that this is just another example of a dying medium giving way to the superior opportunities the internet offers. My counterargument is that the station at 103.1 FM in LA is not going off the air — it will be back with a new format, probably Spanish-language. Entravision knows that demographic well and I’m sure it’s well prepared to position it with its other two LA stations to consolidate ad sales across Spanish-speaking sub-demographics, Clear Channel style. Entravision will make plenty of money with that strategy, if for no other reason than the likelihood that most of the broadcast day will be automated, syndicated and voice-tracked, free of the higher cost of actual live on-air talent.

This has nothing to do with radio being trumped by the Internet, and everything to do with the short-term profit-maximizing of the Clear Channel era that was brought on with wholesale removal of the national radio ownership cap in the Telecomm Act of 1996. It’s not that radio doesn’t make money. No, it’s hard to make money when you’ve leveraged yourself into oblivion buying up stations as fast as possible, with all your competitors doing the same stupid thing, while also dropping ad rates and firing staff like it’s going out of style.

Consolidation is a failed business model, but one that’s hard to recover from. The stations that once had local DJs, news reporters and management now just have liquidated assets, a satellite dish and an automation system–a hollow shell of their former selves. Before 1996 when you bought a commercial station you were paying for its talent, its audience and its place in the community. After ’96, the strategy was that you were buying a space on the dial that should be programmed as cheaply as possible, with as few employees as possible, so you operate as many stations as allowed, with the bet that you’d retain enough audience to compensate for dropping ad rates to run your competitors out of business.

Of course, that bet hasn’t worked out so well, resulting in a homogenized radio dial that drove away listeners who by 2001 had new alternatives like iPods, internet and satellite (if you also happened to be middle-class). The problem is, the owners don’t have the money to reinvest in radio to make it a competitive commercial medium again, and the down economy means there isn’t a surplus of buyers wanting to get into the business.

As for a victory for internet broadcasting? We’ll see about that. I’ll be surprised if Indie 103.1 online lasts a year with a lineup of live DJs from the station’s broadcast days. Hell, I’ll be surprised if it lasts a year with any live DJs at all.

That’s not to say I have doubts about internet radio, its value or viability. Instead, it’s pretty darn clear that it’s much harder and more expensive to reach an audience online that’s anywhere near the size that Indie 103.1 had with a broadcast signal in Los Angeles. And if it hopes to survive as a commercial station, it can’t avoid the fact that audience=dollars.

The Internet didn’t kill the radio star. The owners did, and the internet isn’t ready to replace it yet.

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