Bill aims to increase competition in radio, concert industries
Sen. Russell Feingold (D-Wis.) on Thursday (6/27) introduced the Competition in Radio and Concert Industries Act, which he claims will help small- and independent-radio-station owners and concert promoters to compete in a rapidly-consolidating market.
Sen. Russell Feingold (D-Wis.) on Thursday (6/27) introduced the Competition in Radio and Concert Industries Act, which he claims will help small- and independent-radio-station owners and concert promoters to compete in a rapidly-consolidating market.
Feingold said the dwindling number of locally owned radio stations, increasing ticket prices and reports of anti-competitive promotional tactics have created the need for legislation.
“Radio is one of the most important mediums we have for exchanging ideas and expressing our creativity,” he said in a statement. “I am committed to fairness and competition and to ensuring that cross-ownership of promotion services or venues is not used to hurt musicians, concert promoters, or other radio stations.”
The Feingold bill makes changes to the 1996 Telecommunications Act, which lifted caps on radio-station ownership and ushered in a remarkable period of corporate consolidation in radio.
After a lengthy buying spree, Clear Channel Communications, Inc., now owns more than 1,200 radio stations, making it by far the largest radio station owner in the country. Prior to the act’s passage, one company could own no more than 20 AM and 20 FM stations nationwide. Clear Channel is also the largest concert-promotions firm; according to Clear Channel, the company generated 70 percent of all concert-ticket revenue in the U.S. in 2001.
In recent years, independent radio stations, record labels and concert promoters have alleged that corporations like Clear Channel are using their dominance to illegally shut out competitors.
“I have been hearing from independent radio stations and concert promoters in Wisconsin who are being pushed out by anti-competitive practices that are in turn a result of concentration,” Feingold said. “The Telecommunications Act of 1996 opened the floodgates for concentration in the radio and concert industry, and that’s exactly why we are here today--because we need to repair the damage that has been done through this anti-competitive behavior.”
Feingold’s bill aims to level the playing field by, among other actions:
- revoking the license of any radio station that uses its cross-ownership of promotion services or venues to discriminate against musicians, concert promoters, or other radio stations.
- requiring the FCC to scrutinize the effect of national and local concentration on independent radio stations, concert promoters and consumers.
- preventing further increases in the number of radio stations a company can own in a single market.
- closing a loophole in FCC “Payola” (pay-for-play) regulations to cover independent record promoters, who are paid by record companies to get songs onto radio station playlists.
Clear Channel President and Chief Operating Officer Mark Mays said in a statement that his company was built honestly, and that it is delivering what listeners want. “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,” he said.
Mays argued that the radio business isn’t nearly as consolidated as other parts of the entertainment industry. “Five major players who control 84 percent of all album sales, for example, now dominate the record business,” he said. “And in the movie industry, the 10 largest studios account for almost 100 percent of the revenues.”
In comparison, he said, the top 10 radio-station owners account for 44 percent of industry revenues.
Mays blamed the rapid increase in concert ticket prices on the demands of artists. “The belief by some that Clear Channel charges excessive prices for concert tickets is misdirected since it is actually the artists who set ticket prices and often are demanding more money to perform than ever before,” he said. “This is typical of most entertainment industries--tickets are more expensive for sporting and other events, too. Even so, many events continue to sell out, indicating the excitement fans feel about the experience.”
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