FCC settlement will revitalize radio

I have not listened to commercial radio in nearly four years. I'm not alone, either. A study released by Edison Media Research in 2006 found that radio listenership for the 18- to 24-year-old demographic has dropped nearly 21 percent in the past 10 years.

The study cites the rise of portable music players and downloadable music as a large contributing factor as well as the growing competition for media consumers' attention. However, the study failed to significantly address a reason that people of all ages have drifted away from commercial radio in the past decade-the decrease in diversity and localism of the broadcast content over the same time period.

Broadcasting has become increasingly consolidated, and most radio stations are controlled by one of a small number of broadcasting companies. As a result, a rock station in Los Angeles and a rock station in Boston will sound pretty much alike-they play the same songs by the same artists and often play the same syndicated programming. There is no local flavor, and if a band you like isn't on a major record label, you can pretty much forget hearing them on a commercial station. This isn't to say that there aren't exceptions to this, but these days, consolidated content is pretty much the rule.

All hope may not be lost, though. Four major broadcasting corporations have tentatively agreed to a settlement aimed at combating one of the biggest culprits in the decline of programming diversity-payola. According to the Associated Press (AP), four major broadcasting companies-Clear Channel Communications Inc., CBS Radio, Entercom Communications Corp. and Citadel Broadcasting Corp.-may provide 4,800 half-hour segments of free airtime for local artists and independent record labels and pay $12.5 million to the government as part of a consent decree with the Federal Communications Commission (FCC).

This settlement is the result of a rare FCC response to allegations of pay-for-play promotion tactics in which independent promoters acted as intermediaries between record labels and radio stations, delivering payment in exchange for airplay or providing expensive prizes intended for listeners that would instead be distributed among station employees. The last action taken against radio stations for payola was in 2000, when the FCC fined two Clear Channel-owned stations $4,000 each.

The fines assessed against these broadcasters who violated anti-payola laws seem relatively insignificant compared to the vast amounts of revenue that they bring in each year. For example, CBS Radio, one of the four participants in the FCC settlement, had nearly $4 billion in sales in 2002, but their portion of the $12.5 million fine is only $3 million.

The fine will probably be divided among its approximately 180 radio stations in the U.S., coming to a fine of just under $17,000 for each radio station-admittedly a more significant blow than the $4,000 fines assessed for payola scandals in 2000, but still probably not enough to deter many larger stations which are often the most regular offenders in these pay-for-play operations.

On the bright side, the portion of the settlement that mandates free airtime be given to music not affiliated with one of the four major record labels (Warner, Universal, Sony BMG and EMI) is a major victory for independent labels and artists as well as listeners who long for more localism and less homogenization in their radio programming.

Although the late 1950s and early 1960s were the heyday of the original pay-for-play scandals that made payola illegal, this time period was also a heyday for relatively unknown musicians who could practically gain national popularity overnight if a single local DJ liked what he heard. With the conditions of this FCC settlement, we could easily see a revival of that radio heyday.

Arguably, the internet renders any need for such a revival obsolete, or for that matter, renders radio obsolete altogether as bands can just as easily make a website and a MySpace page and self-market themselves to death in the realm of cyberspace. If they get lucky, some kid with too much time on his hands will use the band's music in the background of some lame yet insanely popular video on YouTube, making the band a million times more popular than they could have ever made themselves, if just for that one song.

However, under the terms of the FCC settlement, it could be just as likely that a DJ happens to come across a track on a band's website and decide that it might be worth giving some airtime. It essentially doubles an artist's opportunity for discovery or exposure.

And if the FCC settlement weren't enough of a boon for independent music, a separate agreement made by the same four broadcasters with the American Association of Independent Music commits these broadcasters to a certain amount of free airtime for independent music and establishes "rules of engagement" that will govern the interaction between record companies and radio station programmers. The combination of these two agreements is something that those in the independent music community have described as "historic" and "unprecedented." If everyone sticks to their part of the bargain, these developments could have a very positive effect on music and radio, from the broadened exposure of new artists to resurgence in radio listenership.

Heck, I might even start listening to the radio again.