The recent changes in command at Clear Channel Communications could indicate a move away from the company's current business plan to replace live radio with "voice-tracked" announcements at its radio stations. Clear Channel has developed an aggressive plan that relies heavily on the remote prerecording of customized radio air shifts, replacing live and local radio broadcasts in most U.S. radio markets. Besides laying off significant numbers of local disk jockeys and depressing industry salaries, this tack is ending the local flavor of radio and its traditional contributions to community interests.
Clear Channel is the largest group owner of radio stations in the country, comprising what was once 70 separate companies. With over 1,200 radio stations nationwide, it controls a substantial percentage of advertising revenue in nearly every market in the U.S. In New York City, Clear Channel controls one-third of the radio advertising revenue.
Of course, broadcasting, like any business, needs to be profitable and efficient. Unlike other businesses, though, broadcasters acquired their distribution mechanism—the public airwaves—from the government without any expenditure of capital. The quid pro quo
for that is that broadcast stations are expected to serve the public interest
in local communities.
It is one thing for a radio station to voice-track announcements for overnight broadcasts or prerecord programs in limited circumstances. But when a media company uses voice-tracking as a strategy to eliminate live broadcasts and local employees altogether, the connection to the local community can be hurt. Popular syndicated talent, obviously in one location but broadcasting around the country, is not of concern, but when an announcer sitting in Los Angeles voice-tracks a shift for Boise, Idaho, or Salem, Ore., the broadcaster has no relationship to the community.
Of most concern, Clear Channel compounds this problem by not being upfront with its listeners. Its announcers are often encouraged to manufacture public appearances that did not occur. Clear Channel has its disk jockeys fabricate live calls to the station. The company coaches employees by giving them "cheat" sheets about local people, places and events. Is the public served by that?
The motivation for voice-tracking is plainly economic: By prerecording radio shifts in advance and editing in music and commercials later, a radio station is able to dramatically reduce its costs. Such homogenized voice-tracked formats, though, have not attracted very many new listeners in the largest markets. Earlier this year, Clear Channel abandoned voice-tracking at WKSC, its "KISS" format FM station in Chicago, after listeners rejected the canned announcements in favor of the live broadcasts on the main competitor. Clear Channel's stock price is down, and now its high-profile radio division CEO, Randy Michaels, has stepped down.
Clear Channel's practices have resulted in substantial legal expenses and fines. For example, the company was fined by the Florida attorney general for misleading listeners into thinking that a nationwide contest promotion was actually a local contest. With several legislators banging the drum for an investigation, and legislation recently introduced by Senator Russ Feingold, the company may be expending substantial sums of money to answer inquiries from Congress, the FCC, and the Department of Justice.
We believe Clear Channel pays its voice-tracking announcers wages that are far below market standards, a strategy that will continue to undermine its ability to be successful.
Paying fair wages and providing decent working conditions ultimately benefit not just employees but business as well. There is a direct correlation between having a successful station and providing fair wages and working conditions. Fair employment packages attract top talent and maintain high-quality broadcasts.
Wholesale voice-tracking at substandard wages is a lose-lose proposition. By minimizing its duty to serve the public interest, Clear Channel severs its relationship with the community. By eliminating jobs, it loses loyal employees. By requiring underpaid announcers to fool listeners to promulgate a bland, watered-down product, it will turn off listeners. We think it's only a matter of time before listeners turn off Clear Channel.