HITS Daily Double


"Competition in Radio and Concert Industries Act" Addresses Ownership, Promotion, Concert Ticket Concerns
In an attempt to rein in the rapid consolidation of radio since the 1996 Telecommunications Act relaxed ownership caps, Sen. Russell Feingold today introduced in Congress his "Competition in Radio and Concert Industries Act." The bill would prevent further easing of ownership restrictions and charge the FCC with preventing anticompetitive behavior among radio groups.

The bill would also revise current payola law to regulate the use of independent promoters, and seek to prevent the artificial inflation of concert ticket prices.

The three-pronged attack is supported by AFTRA, the Consumer’s Union, the Future of Music Coalition and the Association of Black-Owned Broadcasters. It is opposed by the National Association of Broadcasters.

RIAA Chairman/CEO Hilary Rosen issued the following statement upon introduction of the bill: "We applaud Senator Feingold for introducing this important legislation. It takes the necessary first step toward ensuring diversity of programming on radio stations by preventing abuse of independent promotion through unprecedented increased radio ownership consolidation. This radio promotion system needs reforming and this bill provides the road map to getting there."

Some are finding the notion of the record labels supporting reform of independent promotion practices ironic, since the labels invented the system. With the consolidation of radio, however, that system has shifted dramatically, with the largest chains gaining leverage and cutting exclusive deals with indies of their own choosing, thus establishing the current "toll-taking" scenario, which the labels feel doesn’t involve any actual promotion at all.

Feingold’s bill is thought to be largely aimed an radio/concert behemoth Clear Channel, which has come under attack recently for allegedly stifling competition, leveraging its concert business with its radio business, and exceeding ownership limits by "parking" stations with bogus holding companies.

Clear Channel President and Chief Operating Officer Mark P. Mays immediately issued a lengthy statement, indicating the company’s eagerness to take part in a debate about the industries Feingold’s bill addresses. "As a company that operates openly, honestly and fairly, we look forward to any opportunity to join with others who care about the industry in taking a serious look at it," Mays writes.

He also counters many recent complaints about Clear Channel, noting in particular that ownership is not as concentrated in radio as it is in other businesses, including movie studios, cable and even record labels. The top 10 radio owners account for 44 % of industry revenue, according to Mays, compared to 99% for the top 10 movie studios, 89% for the top 10 cable companies and 84% for the top five record distributors.

"The notion of a few large corporations controlling the majority of the radio industry is not only incorrect, but is actually less of a factor in radio than in most other media and entertainment industries," Mays says. Clear Channel owns 11% of U.S. radio stations.

As for ticket prices, Mays reasons that events continue to sell out regardless of high prices, which he says are dictated by the artists performing, so there really isn’t a problem. And regarding the relationship between concert division Clear Channel Entertainment and the conglom’s radio division, he says, "The partnership between Clear Channel’s divisions has led to more exciting event activities, including contests, online information and new and fun ways for fans to connect with their favorite artists."

And when it comes to promotion, Mays reiterates Clear Channel’s hands-off stance: The labels started it, it’s up to the labels to stop it. "It is our position that the record companies should regulate themselves," he writes. We do not believe it is in the best interest of any of our constituencies to have the government legislate private business practices to the degree that Sen. Feingold proposes…What is needed is communication, not legislation."

"We look forward to joining the discussion with Sen. Feingold, our fellow broadcasters and others who share our concern for American consumers and artists," Mays insists.

Looks like the discussion is just beginning.