Consolidation -- The Monopoly Game That Kills

The situation at KDND, Sacramento is prophetic for more reasons than the obvious -- that a 28-year old listener died in a stupid, irresponsible on-air contest where she was encouraged to drink water without regard to her health. Now, the family of victim Jennifer Strange is suing the station and naming some 40 defendants in the case.

There's no doubt in my mind that the contest was irresponsible, but its up to a jury to determine whether there is legal culpability. And the FCC may determine whether the station gets to stay on the air. There's an uproar to strip KDND parent Entercom of the license. On that issue, I would not be so hasty. The station has served the community for many years prior to this unfortunate event and that should be factored in to any decision.

But these things are reactions to a bad contest -- not the real issues.

Entercom like a lot of other consolidated broadcast companies is a public company. These companies are pressured by quarterly performance that affects their share prices. Since consolidation legislation in 1996, there has been a lot of pressure -- real and implied -- to perform. For managers, that means numbers -- sales growth. For programmers it means numbers -- ratings. For on-air personalities looking to keep their gigs and avoid being replaced by virtual djs it means numbers -- high ratings and the outrageous things that often come while pursuing ratings at all costs. One could argue that radio has always been numbers oriented, but my response would be it has been far worse since consolidation -- the monopoly game that has killed companies, killed jobs and now is killing listeners.

If you're still not convinced that the consolidators couldn't make consolidation work even with a virtual legal monopoly on their sides, check the share prices of the major radio companies today compared to the early days of deregulation. Even in their own capitalist stronghold -- they couldn't produce shareholder value.

It's not lost on me and perhaps you that KDND is known as "The End" on-air. In more ways than one this station may represent the end of the innocence for radio operators who seem to want a free pass from the old days of radio while operating like a bench clearing brawl at a baseball game today.

Those of us who have been in this business during its better years know what went wrong -- consolidation. The hubris of companies suddenly able to acquire their long time competitors. The joy of becoming public and reaping those high share values in the early days. The new experience of cutting back because you could and you had to -- efficiencies of scale. Virtual programming. Remember Infinity loading up the airwaves with commercials and AM/FM and Clear Channel selling out its hours at nice prices? Life couldn't get any better for the few, the vain -- the consolidators.

But while they fiddled, the next generation got away. Lost -- not to the iPod, but to lack of programming aimed at their changing tastes. Don't you know that Apple's Steve Jobs would have put a radio feature in an iPod or his new iPhone if there was a marketing reason to include it. It has nothing to do with digital. Nothing to do with the Internet. Radio just dropped the ball while it pursued consolidation.

That's why the radio industry should enjoy itself now because each year will be harder and harder. Less is More wasn't a solution to anything. It was a PR ploy that was supposed to sit well with Wall Street. The jury is out on whether Less Is More (cutting commercial loads) has legs.

Now, after misidentifying satellite radio as its main competitor, the consolidators have discovered they have a lot in common with satellite radio, but sat radio has even more problems. Radio was watching the wrong enemy. They only needed to look in a mirror.

Now, after ten years of cost cuts, devaluing employees and failed strategies to put together lasting growth, the radio industry isn't kidding anyone anymore.

This bothers me because I came up through the ranks in this business with a lot of people who are still in it today and many -- not all -- have been constrained or terrorized to keep their jobs. They are good, wise, smart, innovative people. Interactive media companies -- the rage of the day -- should be so lucky to employ such excellent content providers.

It has come to this. Radio management is so misguided that programmers and talent can not recognize a contest that is not only fatal to their listeners but to themselves?

So KDND represents the end -- how apt.

Is there a station out there that would like to represent the beginning?

The start of a new day when the sniveling ends, the buck stops somewhere at the top and consolidation is "defanged" once and for all. Are you paying attention at the FCC? Congress, do you now know what you have to fix?