The Many-Headed Creature
Clear Channel's Reaches Spread Far And Wide Across Entertainment Field
Volume CIII, No. 6June, 2003
A creature with many heads called the Hydra used to dwell upon the earth, according to Greek mythology. Whenever Hercules chopped off one of its heads, two more would grow back in its place.
There is a modern Hydra. It can be found everywhere. In New York alone, it owns five radio stations, sells ads on tops of taxis, handles the poster ads in the subway, owns many of the Times Square billboards, produces Broadway shows, and owns the Ford Center Theatre, Jones Beach amphitheatre and the PNC Arts Center in New Jersey. It’s currently lobbying the city to win a contract for a concert facility at Randall’s Island and also a franchise on all sidewalk advertising. It promotes concerts nationwide through SFX Entertainment and reaches a third of U.S ears through its radio ownership.
Moreover, it was part of the effort to replace Broadway musicians with computers, and it recently tried to replace live radio personalities with off-site announcers.
This multiheaded giant can even be found drumming up support for the U.S military.
It is named Clear Channel, and it represents a fundamental challenge to Local 802, AFTRA and other entertainment unions through its sheer size and concentration.
Let’s start with radio. That’s the arena where Clear Channel and AFTRA – the announcers’ union – hunkered down for contract talks. AFTRA announcers voted to strike Clear Channel, but the two sides settled on April 22.
The main issue was whether or not Clear Channel could use off-site personalities to pre-record announcements. These announcements are then played over the radio, and it sounds like there are local announcers in the studio, when in fact there are not. This process is called voice tracking. (So when you hear that familiar banter on the radio, sometimes the announcers are not actually there!) It comes down to the fact that Clear Channel can save money by recording announcements elsewhere and then importing them to New York (and other areas).
Replacing live workers with a cheaper process. Sound familiar? It should to anyone who followed 802’s Broadway strike. Clear Channel was one of the main influences behind the producers’ bid to invest in virtual orchestra technology and to thereby replace live musicians with sampled sounds. And it is behind both the virtual orchestra and the voice tracking.
The truth is that Clear Channel owns 1,225 radio stations in the U.S. While this is not a majority by any means (there are about 10,000 stations in the country), the corporation’s secret is that the radio stations they do own pack a lot of economic punch. For instance, they own just five radio stations in New York City, but those five stations hit 25 percent of the city’s listeners.
AFTRA’s final deal with Clear Channel allows the company to use voice tracking, but only on a very limited basis. The contract requires live announcers to be in the studio from 6 a.m. to midnight. After that, Clear Channel can import announcements from elsewhere, but the announcers that record these imported spots are required to be paid AFTRA wages and be AFTRA members. It was a victory for the union, but Clear Channel was able to get its foot in the door with voice tracking.
Peter Fuster is AFTRA’s Assistant Executive Director in New York. He helped negotiate the deal. Fuster says that, ultimately, Clear Channel will only save $30,000 per station per year under the limited voice tracking allowed. So why did this company – which earns $8.4 billion in revenue – care about saving so little money? For that matter, why did Clear Channel push for virtual orchestras with Broadway producers?
“Their objective is to make the unions irrelevant,” Fuster told Allegro. “They’ll live with you as long as you do not affect their decision-making progress. They want to be able to do what they want, when they want.”
Fuster thinks cooperation among the various entertainment unions is key. “It has to be ingrained in us that we have to learn to cooperate and communicate with each other more effectively to battle this animal,” Fuster said.
The roots of Clear Channel’s power can be traced back to the deregulation of radio markets that occurred minimally in 1992 and much more extensively in 1996. Suddenly, there was no limit on the number of radio stations a company could own nationally. Corporations were even allowed to own more than one radio station in the same city, which is how Clear Channel was able to corner the New York market.
As radio ownership becomes concentrated, more jobs are lost. There are fewer radio workers now than in 1982, the AFL-CIO reported recently.
On Jan. 28, Senator Russ Feingold introduced the Competition in Radio and Concert Industries Act of 2003 (S. 221) that would rein in the massive consolidation of radio stations. The bill is currently in committee.
On the opposite front, on June 2 the FCC is supposed to vote on further deregulation of the radio industry, allowing for even more consolidation.
Most musicians would be hard pressed to argue that consolidation of radio ownership is good for them. President Moriarity, in his column last July, reported that the AFM and nine other music industry groups – including AFTRA – called for an investigation into the effects of radio consolidation.
The AFM also called for an end to what amounts to legal bribes. So-called independent promoters pay radio stations hundreds of thousands of dollars which somehow influences what tunes make it to the radio. Who pays for these promoters? The record companies and ultimately the musicians themselves, through their infamous royalty contracts.
Feingold’s bill attempts to stop this practice, but, already feeling the heat, Clear Channel announced on April 9 that it would stop doing business with its independent promoters starting this summer, a move that AFM President Tom Lee applauded in the May issue of International Musician. Clear Channel also announced on the same day that it was experimenting with throwing out playlists on one program on its WHTZ-FM station in New York.
But the company is still expanding its reach. Clear Channel is getting into the business of producing CD’s for the first time, according to a New York Times report on May 5. Through a venture called Instant Live, Clear Channel will record live shows of bands, then sell the recordings immediately after the show, using high-speed CD burners. It’s too soon to say what effect this will have on the industry, but some record labels told the Times that they were afraid Clear Channel would compete with their own releases.
VERTICAL AND HORIZONTAL POWER
Clear Channel’s power is all about what AFTRA’s Fuster calls its vertical and horizontal control of the market. For instance, vertically it controls five popular New York radio stations. When you combine this with its control of the Ford Center and other venues around the country, you have a horizontal power, which means that not only can the company promote its own concerts at its own venues, but it can advertise on its own radio stations and its own outdoor billboards and in the future sell CD’s on its own label.
It is this kind of power that musicians, announcers and their unions struggle against: the power to determine who’s on the radio, and even who will appear live.
But even Clear Channel took its power too far recently when it took a stand on the U.S invasion of Iraq, wrote Paul Krugman in his New York Times column of March 25. Krugman asserted that pro-war “Rally for America” demonstrations were being promoted on radio stations owned by Clear Channel. In fact, 18 rallies were held at the urging of Glenn Beck, whose talk show is syndicated by a Clear Channel subsidiary. Thirteen of the rallies were promoted and co-sponsored by Clear Channel stations.
Clear Channel’s critics say that by pumping up the administration and its war efforts, the company is trying to grease the wheels of the FCC vote on June 2, which might allow it to own even more local stations.
AFTRA’s Fuster said, “Clear Channel was the new kid on the block, but now they are the bully on the block. They want to control the game. They had to learn through 802 and the Broadway strike, and through our actions, that you have to share, discuss and negotiate.”
For more information, see www.saveourmedia.org.