1. The Radio Industry Prior to 1996
2. The Telecommunications Act of 1996

1. Changes in the Industry since the Telecommunications Act of 1996
2. The Death of Local, Independent Broadcasters
3. Profits and Financial Trends
4. Advertising Revenue Trends

1. The Initial Concerns of Radio Advertisers
2. Post-Deregulation Changes in Radio Advertising
3. Radio on the National Advertising Map

1. Commercial Spot Loads and Shrinking Playlists
2. Better Technology and Satellite Programming
3. Radio as a Local Medium

1. Disadvantages for Industry Employees
2. Advantages for Industry Employees

Since the Telecommunications Act of 1996 relaxed ownership restrictions, over half of the estimated 12,000 radio stations in the United States have changed hands. Large media conglomerates and group owners are changing the way daily business is done in almost every market (Polgreen). The entire radio industry is changing at an unprecedented rate as a result of deregulation. Local, independent broadcasters are becoming a thing of the past, unable to compete with the larger, more powerful firms. Conglomerates are finding it cost effective to take advantage of technological advancements and customized satellite programming, causing qualms about the stability of the workplace for employees in the radio industry. The sudden rush of media mergers and acquisitions has also led critics to voice concerns about the localism of the radio medium (DeBarros).

The effects of deregulation can be measured in almost every facet of the radio industry. The number of owners continues to decline, as conglomerates become larger and larger. The large conglomerates are merging with other firms to become even larger and more powerful (Pinckney). Costs are down, while profits and advertising revenues for radio have risen significantly as a result of deregulation. The process of selling advertising time on radio has become easier, as many firms can offer their clients a variety of target audiences on a variety of formats. National advertisers are being attracted to large conglomerates who can conveniently offer them time in multiple markets with just one buy (Koss-Feder).

The trend of deregulation has sparked debate about programming content. There is concern that radio is becoming cluttered with more commercials and longer stopsets in order for stations to meet stricter sales quotas. Critics maintain that consolidation has led to shrinking playlists and less local content, while radio owners say that there is more of a variety than ever before (Bachman "More"). New technology is now more affordable and cost effective for large radio groups. This has paved the way for automated studios and customized satellite programming, which many feel are eliminating the need for local talent. While new technology does allow station groups to share some programming elements, radio owners claim that computers are not replacing local talent entirely. Instead, they maintain that digital studios are making the jobs of on-air talent easier, without limiting their localism or creativity. Owners also point out that digital satellite technology can eliminate mediocre talent by bringing major-market voices to smaller cities, where stations may not be able to afford quality announcers (DeBarros).

Ethical concerns about downsizing come into play as larger companies buy up locally owned radio stations. As more and more stations merge, there is less of a need for employees and talent. By moving eight stations into one facility, not as many employees are needed to handle the daily tasks. Sales departments, management staffs, on-air talent, even receptionists and cleaning crews become consolidated (Mundy "All"). Downsizing helps conglomerates cut costs, but some people inevitably lose their jobs. Radio owners defend this practice by pointing out that they can now afford to offer their employees higher salaries and benefits that local owners generally could not offer. Even though benefits and salaries are at an all time high, many ethical concerns remain about corporate downsizing in the radio industry (DeBarros).

Since the Telecommunications Act of 1996 was passed, large conglomerates have been buying more and more radio stations from independent, local broadcasters. This has resulted in higher profits and positive financial trends for the industry, changes in the ways radio advertising is sold, adjustments in programming elements with concerns about the localism of radio, and ethical concerns about the stability of the workplace from employees at newly-consolidated firms. This paper will analyze the effects that deregulation has had on the radio industry. A brief explanation of the Telecommunications Act of 1996 and the subsequent buying and selling of radio stations will provide a historical overview. It will then concentrate on the financial benefits and trends that have come about as a result of consolidation. The paper will also discuss the post-deregulation changes in radio advertising and on-air programming elements, with special notes on how some feel that the localism of radio may be in jeopardy. An examination of ethical concerns and how consolidation is affecting employees in the industry will conclude the paper.

2. History and Overview

The provisions in the Telecommunications Act of 1996 were designed to help the struggling radio industry. United States radio stations increased in number throughout the 1980s and early 1990s. There were 8,761 radio stations on the air in 1980. That number increased 24% to 11,577 by 1994 ("Duopoly"). More and more stations were seeking revenue from essentially the same number of advertisers. Soon, stations began losing money. Many of them went silent or filed for bankruptcy (Barnouw 37). According to a 1992 study published by Mass Media Bureau, more than half of all radio stations lost money in 1990. Average AM station operating profits fell 50% in 1988, while average FM station operating profits fell 36%. A 1994 survey published in Radio Business Report reveals that almost 300 stations had gone silent by 1992. By 1994, that number had increased to 379 silent stations. Many of the stations that remained on the air were forced to cut costs by switching to satellite programming and eliminating staff members. Radio broadcasters from around the country said that this was not allowing them to serve their communities of license ("Duopoly").

As the radio industry continued to face hard times in the late 1980s, station owners began working with the FCC to look for ways to keep radio stations economically viable. Some began to wonder if some form of consolidated operations with another station in the same market might improve their financial outlooks. This led the FCC to relax its duopoly rule in 1992, allowing common ownership of up to four commercial radio stations (a combination of 2 AMs and 2 FMs) in the one radio market. Even though the rules were relaxed, there were still strict limitations based on market size, the number of other stations in the market, and estimated audience share ("Duopoly").

As a result of these changes in the rules, industry insiders immediately began to see dollar signs. They came to the conclusion that further relaxation of ownership restrictions could lead to even higher profits. Radio broadcasters along with members of the television, phone, cable and other telecommunications industries began lobbying for even more deregulation through the mid 1990s. The Telecommunications Act of 1996 was one of the most lobbied bills in history. Telecom and media interests spent $34 million on campaign contributions for the 1995-96 election cycle, almost 40 percent more than the previous election (Polgreen). The Telecommunications Act of 1996 was finally signed into law, full of perks for all media industries, from cable television to wireless phone service providers, broadcast television stations to long distance telephone companies. The bill covered so much ground that the quiet but revolutionary changes it made to the rules governing the ownership of radio stations went practically unnoticed (Alger 56).

Before 1996, one company could own no more than 40 radio stations nationwide and no more than two AM and two FM stations in one market, regardless of its size. The Telecommunications Act of 1996 removed all restrictions on national ownership, and greatly relaxed the rules regarding how many stations one firm can own in a particular market. In the largest radio market, one company can now own as many as eight stations, and in smaller markets, between five and seven. In some smaller cities, it is now possible for two companies to lock up the entire market (DeBarros).

3. Financial Trends for the Deregulated Industry

The passing of The Telecommunications Act of 1996 triggered the feeding frenzy of mergers and buyouts that have been taking place in the radio industry. In 1996 alone, 2045 radio stations were sold, for a total of $13.6 billion. Of the estimated 5000 stations in the 268 ranked markets, almost half are now part a superduopoly, being owned by a company that has three or more stations in the same market. In many cities, it is difficult to find an independent commercial radio station on the dial (Polgreen). According to a September 1999 survey by Radio and Records, approximately $3.35 billion has been spent so far this year on radio mergers and acquisitions. In 1998, a total of $8.08 billion was spent ("Mergers").

Consolidation has become the standard in the deregulated radio industry. The number of radio owners is declining, while profits are increasing. According to USA Today, the number of radio owners dropped 14% as the number of stations grew 3%, from March 1996 to February 1998. In 1998, there were approximately 1,000 fewer owners than there were in 1995. Group owners are becoming richer and more powerful, forcing the independent, local broadcasters out of the business. Today, not only is it tougher for independent owners to buy radio stations, it's more tempting for them to sell. Station prices have skyrocketed and many independents are taking profits while they can. Others decide they simply cannot compete with the larger conglomerates (DeBarros). "When you've got some players that are so dominant in a market . . . you can begin to starve off the other stations," says FCC Commissioner Susan Ness. "It's like taking the oxygen out of the water. The fish start to die" ("Consolidation").

The number of minority radio owners is also declining. From 1995 to 1997, minority-owned AM and FM stations dropped 9%, from 312 to 284. In FM radio, black-owned stations fell 26%, to 64, in 1997 (Alexander). Hispanic-owned stations dipped 9%, to 31. The Commerce Department listed only two Asian-owned FM stations in the United States, and only three owned by Native Americans. "The numbers are pretty scary," according to Larry Irving, assistant Secretary of Commerce. "As the prices of stations go up, small businesses, women, and minorities are finding it harder and harder to buy properties, especially in major media markets" (DeBarros). Susan Ness adds, "In a country that receives such a benefit from having a melting pot . . . we lose that richness when the media are largely owned by one segment of the population" ("Consolidation").

As a safeguard against large monopolies, the FCC and the U.S. Department of Justice must approve all pending deals and mergers. When a radio merger will result in one company getting more than 40% of the ad revenue in one particular market, the Department of Justice’s antitrust division scrutinizes the deal very closely (Teinowitz). With some of the larger mergers, firms are often required to divest some of their interests in certain markets in order to comply with Justice Department standards. Recently, Clear Channel Communications Inc, the country’s second largest radio group, agreed to acquire AMFM Inc., the country’s largest radio group (Fenton). This merger would result in "the largest out-of-home media entity in the world, boasting 830 stations in 187 U.S. markets." In order for this deal to obtain regulatory approval, the companies will have to divest about 125 radio stations in markets where they would control more than the allowed percentage of ad revenue and market share (Taylor "Big").

Even though there has become less room for independent broadcasters, deregulation has proved to be very profitable for the radio industry. Since 1996, financial trends have become a lot more encouraging. In 1998, radio earned a record $15 Billion in revenue and posted double-digit growth in the first quarter of 1999. Radio is now a multi-billion dollar industry that has recorded 80 consecutive months of revenue gain ("Consolidation").

The new rules for radio ownership were intended to "level the playing field" for radio stations vying with TV and newspapers for ad dollars (Engle). Indeed, advertising revenue has increased since the Telecommunications Act of 1996. In September of 1999, 8% of all advertising dollars were spent on radio advertising. This was a milestone for the radio advertising industry, which has spent the past few years at 7%. Local and national figures were 13% higher than they were one year earlier in September of 1998. Even more growth is projected, especially with the recent emergence of the "dot-com" industry as a strong radio-advertising category. "The creative way they’re using our medium has ignited a radio revival," says RAB President and CEO Gary Fries ("Radio Surpasses").

According to the 1998 Veronis, Suhler & Associates Communications Industry Forecast, an annual analysis of a dozen industry segments, deregulation in the radio industry has led to a surge in advertising which should continue for at least another five years. Veronis foresees that radio advertising will rise at a 9.3% compounded annual rate over the next five years, the same rate of increase observed over the past four years. Total spending will climb from $13.5 billion in 1997 to $21.1 billion in 2002. The report says, "the radio industry has announced its intention to increase its share of local market advertising from its historical 7% to 10%, particularly targeting newspapers and Yellow Pages for ad dollars" (Taylor "Veronis").

 

4. Consolidation and Radio Advertising

At first, radio advertisers were concerned that consolidation would encourage monopolies and lead to higher ad rates. There was an opposition to deregulation because of a fear that it would limit competition in radio markets. Media buyers worried that common ownership would lessen their ability to play one station off another as they negotiate the best deals for their clients (Leventhal).

In early 1999, the publication Advertising Age obtained an internal memo distributed among stations owned by Chancellor Media Co (now known as AMFM Inc.). The memo stated that account executives at Chancellor radio stations "must call" their counterparts at other company-owned stations in a market "every time they get a new avail or when specs are changed by the buyer." The memo goes on to say that account executives should "by phone, compare: demo, Arbitron books being used, cost-per-point goals, daypart restrictions, and other buying parameters" (Teinowitz).

Advertisers and agencies claim this memo reveals the extent of information sharing about ad buys or potential buys within a single market. "This is exactly why the agencies [initially] opposed radio consolidation," says Laura Silton, senior VP-director of local broadcast for McCann-Erickson Worldwide, adding that the stations "aren't willing to negotiate based on their own individual merits." Worldwide's Optimum Media in New York refers to the memo as "a classic example of what we all feared. It proves [conglomerates] aren't client focused… Owners said consolidation would give us better service and better ideas. This [memo] clearly shows their colors, that for them it's all about price" (Teinowitz).

While some still question anti-competitive effects of consolidation in the radio industry, most experts agree that deregulation has attracted new radio advertisers. Radio can now offer them higher value and better reach for their dollar. The post-deregulation increases in advertising revenues prove that advertisers are still using radio. Now that a firm can own multiple stations that target a variety of age groups, sales people can direct their clients’ messages to a more defined demographic. "The whole process of buying radio has become simpler and more attractive and useful to advertisers," says Ron Rodrigues, editor-in-chief of Radio & Records. "This has caused ad revenues to go up 10% or more each year over the past three or four years" (Koss-Feder). According to Mark Haworth, president of the Hawaii Association of Broadcasters and director of sales for New Wave Broadcasting Corp., "Consolidation is a big reason that radio's maintained its strength in the market as an advertising medium. We can deliver a broad-based market through one buy" (Engle).

The value and convenience of buying time on the radio has attracted new advertisers to the medium. Although they differ from market to market, some advertisers that are now turning to radio include hospitals, real estate agents, internet web sites, mortgage brokers, high-tech firms, and packaged goods companies. "The increase in demand has enabled radio station owners to raise ad rates by 25% to 35% in some markets during the last five years," said Dick Kalt, executive vice president and an owner of CRN International, a radio marketing firm in Hamden, Connecticut (Koss-Feder).

"By owning clusters of stations in one market, the radio medium can compete more effectively with TV and print in terms of the number of people it can attract through one ad buy," says Cathy Gallagher, director of business development for AMFM Inc.’s eight radio stations in the Washington, D.C. market. She adds: "This has helped radio quite a bit, since radio can be a hard sell. You can read print and see ads on TV, but it's harder for advertisers to relate to being sold ‘air’" (Koss-Feder).

In addition to offering clients better reach and buying convenience, consolidation has helped put radio on the national advertising map. The 1998 Veronis, Suhler & Associates Communications Industry Forecast claims that "radio is better positioned to attract national advertising as a result of cross-market consolidation" (Taylor "Veronis"). Mike Yamada, media director for Starr Seigle McCombs advertising, adds that "Consolidation has not caused any extraordinary increases in radio ad rates. Rather, it has turned radio groups into a means of one-stop shopping covering several demographic areas" (Engle).

Because of the Telecommunications Act of 1996, commercial radio broadcasters now have the ability to pitch their stations to local and national advertisers alike. For example, if Ford wants to sell cars in Cincinnati, it can deal exclusively with Clear Channel Communications, which controls eight stations in the city with a range of formats. It could target the 25-54-year-old soccer moms who might buy Aerostar minivans on Adult Contemporary station WVMX, tempt 18-35-year-old males with Mustangs on Rock station WEBN, and advertise Tauruses and Explorers to 35-54-year-old males on news/talk station WKRC. It could all be done with one ad buy from one sales representative at Clear Channel (Polgreen).

5. Consolidation and Radio Programming Elements

Deregulation has brought about concern that stations are running more commercials and longer stopsets in order to meet sales quotas. Since 1996, commercial spot loads have averaged 12-16 minutes per hour. These averages can be even higher during morning and afternoon drive hours. Radio programmers are concerned that added clutter will drive away listeners, lower time spent listening (TSL) figures, and scare off advertisers in the process (Bachman "More"). A survey of 400 radio listeners nationwide in the 25-54-year-old demographic asked both males and females their number one complaint about radio. Some 33% believe radio has too many commercials, 20% say there is too much talk, while 17% think radio is too repetitious, lacking variety (Spangler).

John Selig, president of research firm Media Monitors, says "stations are charging higher rates in order to meet the sales goals set by their corporate offices and as a consequence must program more units of inventory per hour." His firm, which rolls tape on about 230 stations in all major markets every week, has observed more spots running now than there were in 1995. "If your favorite FM station was running 10 spots per hour, and now they're running 12, is that really gonna turn you off? Are you really gonna detect it? Probably not," Selig says. He maintains that listeners will eventually notice if the increase in spots is more dramatic (Spangler).

Significant increases in commercial stop loads will eventually lead to decreases in TSL. Randy Michaels, radio president of Clear Channel Communications, agrees that TSL has gone down slightly since deregulation, but "if listeners were indeed being turned off by conglomerate programming, then the ratings of independent stations would be higher. I don't think you can point to that," he says (Spangler).

Since 1996, critics have claimed that playlists are shrinking and radio stations are sounding more repetitive and similar from city to city. "A typical adult contemporary station 15 years ago would have 18 to 24 current hits on its playlist in addition to a catalog of about 400 older songs," says Mike McVay, a Cleveland radio consultant. "Today, it might play 9 to 12 current hits." Among the most repetitious: Top 40 stations, which play some hit songs eight or more times per day. Younger listeners seem to be bothered the most by repetition. In a May 1998 USA TODAY/CNN/Gallup poll, 68% of people ages 18-29 said stations tend to repeat the same songs more often than they would like. Among those 30-49, there was less discontent, with 51% citing too much repetition (DeBarros).

"People send us e-mails saying, ‘I hear the same song at the same time every day,’" says Jeremy Wilker, co-founder of Americans For Radio Diversity, a Minneapolis group. "The problem with programming is that it's done more and more by consultants and marketing gurus than people who are passionate about the music" (Spangler). The recent trend of radio mergers has highlighted longstanding listener complaints about repetitious music programming, known as "cookie cutter" formats. Industry watchers claim stations are tightening their formats to cover thin demographic slices. This strategy is called "flanking", buying several stations in a market and positioning each to target a different age and gender (DeBarros).

Radio owners and conglomerates maintain that radio offers more of a variety than ever before. Clear Channel Communications Chairman/CEO Lowry Mays claims, that consolidation has, on the contrary, provided for more diversity in programming. "There is absolutely no question whatsoever that there is a significant amount of diversity that did not exist prior to consolidation," he says. "All you have to do is go and look at the markets. Look at the formats [then] and look at the formats today." For example, examine the Rock format. At one time there was just "Rock". Now, however, groups in major markets are programming Classic Rock, Modern Rock, Active Rock, Alternative, Adult Alternative, and still AOR. The Urban format has splintered into Urban Contemporary, Urban AC, and Gospel in the years since deregulation (Spangler).

"There's absolutely no question that there is extensive diversity compared to what it was several years ago," agrees Randy Michaels. He goes on to explain:

In the pre-consolidation era everybody’s research gave them the same answers, and everybody was after the same most desirable demographic. So, the music tended to sound the same, the talent bicycled back and forth station to station… Nowadays, however, rather than producing blandness or sameness, consolidation is providing more diversity, not less, as larger broadcast companies attempt to have signals in as many sectors as possible (Spangler).

In addition to complaints about commercial stopsets and repetitive formats, industry watchers are concerned that advancements in technology and the popularity of satellite radio are causing on-air talent to be replaced by computers. For example, AMFM uses an Austin, Texas studio to put together customized programming for night and overnight shows on 37 of its stations. The local affiliates send scripts for talkbreaks and weather reports over the company’s computer network, and a group of ten announcers record the copy and send it back to each individual station. AMFM claims that this process brings major market talent to smaller cities. "In smaller markets, you can have trouble attracting quality talent," says AMFM vice-chairman Steve Hicks. "But we can have one quality person do eight or 10 stations from one location, and it's all customized" (Debarros).

Other conglomerates echo these remarks. According to Pam Taylor, a spokesperson for Clear Channel Communications, "At a small station in a small market, it costs a lot to have a live, local person on the air even 12 hours of the day. If you limit on-air live time to morning and afternoon drive, you can get the rest of the day’s programming from the hub." New satellite and Internet technology allows a technician at a small station to literally cut and paste bits of local news, weather and banter into piped-in programming with a click of a mouse on a computer screen. Stations can even apply this technology to listener requests and live remotes, by simply clicking and dragging bits of dialogue into the appropriate places. The computer technology makes the broadcast seem local, and in many cases, it is hard for listeners to know they are hearing something that originated from a different town (Polgreen).

Prior to deregulation, locally owned, independent stations could rarely afford new, digital technology. Conglomerates on the other hand, can easily afford to upgrade the air studios at all of their stations. As digital technology advances, it is now possible to voice-track certain dayparts, especially on weekends. Many stations are turning to satellite radio programs for overnight and evening shifts, eliminating the need for local talent. National programming that can offer big name talent and artist interviews, threatens to drive mediocre talent out of the business (Hornblower).

There is special concern that consolidation, along with advances in technology, is killing the localism of the radio medium. According to Gigi Sohn, executive director of the Washington, DC-based Media Access Project, "what turns some listeners off to corporate radio is that corporate radio ignores localism." Radio groups, she says, are now doing "what’s cheapest and easiest" when it comes to programming: downloading it from the bird, and occasionally cutting in with local advertising. "In all fairness," Sohn says, this is a phenomenon brought on by "the onslaught of satellite technology," but radio companies in general view themselves as "entertainers, and not as citizens with civic duties to serve their local communities" (Spangler).

Randy Michaels, speaking as CEO of Jacor Communications (his former position before Jacor was bought out by Clear Channel), insists that corporate radio does have a local focus. "Radio, to win, has to be done locally," he says, adding that:

Jacor gives its local PDs the utmost flexibility. While we get together on

conference calls and share ideas and do some format coordination, our CHR in Tampa doesn't sound like the one in Los Angeles, and it doesn't sound like the one in St. Louis. They may share some production elements, they may share some concepts, but the music's different, the jocks are different, the approach is different (Spangler).

For listeners, the most noticeable result of consolidation has been the fact that playlists are strategically selected by teams of market researchers who often live and work hundreds of miles away from the people that will actually hear the music. Radio stations are beginning to sound the same from city to city, each one following the same national chart. Critics say that music should be looked at regionally. What works on the East Coast may not be as popular in the Midwest. They maintain that there is too much emphasis on crafting formats to appeal to targeted demographic groups. On the other hand, those who follow programming say listeners prefer familiarity. "Stations are constantly doing major research efforts," says James Duncan, president of Duncan's American Radio. "The core audience does not like strange songs" (DeBarros). Radio groups defend music research. They maintain that familiar music is what appeals to the core of their audiences. "Clear Channel is nothing if not shameless in taking what works at one station and applying it to others," according to Pam Taylor, a company spokesperson. "DJs at corporate stations have little discretion in what they play; it becomes unlikely that something new and untested will get on the airwaves" (Polgreen).

Concerns about local news on the radio are also part of the argument against consolidation. "The local angle just gets lost completely," says Andrew Jay Schwartzman, president of the Washington, D.C. Media Access Project, a public interest law firm. Schwartzman worries that local newscasts are being replaced by regional news services, reducing "editorial diversity." Local news broadcasts are becoming regional news broadcasts. The content is becoming too generic and less informative (DeBarros).

 

 

 

6. Ethical Concerns of Employees in the Industry

As stations merge, the radio workplace is becoming unstable and many employees are finding themselves out of work. In some cities, up to eight stations have been moved into one facility. When this happens, not as many employees are needed to handle the daily tasks. This downsizing can save the owners a lot of money because there are fewer expenses. Instead of leasing eight buildings, there is just one to worry about. Only one receptionist is needed, along with one cleaning service. Instead of eight general managers and eight sales staffs, there is one manager and one sales staff. Part time weekend employees and overnight talent may also be cut in favor of automation. As conglomerates grow, some employees will inevitably lost their jobs (Mundy "All").

The remaining employees at newly consolidated firms still see advantages. Larger corporations have more money that they are willing to spend on equipment and employee benefits, that former owners may not have been able to afford. Employees are suddenly receiving big-league benefits and more career options. "Clear Channel picked us up off Gilligan’s Island," says David Macejko, vice president and general manager of Dayton, Ohio, stations WING and WGTZ, which were bought in January of 1998. "For employees, the opportunities for their careers have expanded tremendously" (DeBarros).

In a survey of radio owners conducted in 1997, it was found that the more profitable consolidated operations created more of a team effort and a closer unit. Employees of conglomerates also have more chances to improve their professional abilities. If a good program director is working for one station, only that one station benefits. If a good program director has the opportunity to work for three or four stations, he can spread his knowledge and use it more effectively. Programming more than one station, with experience in multiple formats will look better on a resume and provide a better path for advancement. Larry Duke, a radio owner in Jonesboro agrees, "We've always had an extremely successful history of hiring high-quality young people and training them well. Now that we are consolidated, I can provide a place for them to go up instead of watching them get a job at a competitor" (Radio Consolidations).

 

7. Conclusion

With the adjustment of the FCC ownership rules in 1992, the struggling radio industry saw a light at the end of a dark tunnel. Intense lobbying for additional relaxation of ownership restrictions, along with pressure on the government from other telecommunications industries led to the revolutionary Telecommunications Act of 1996. Since then, merger-mania has reignited the radio industry. Profits are rising, and even more growth is projected. A record $15 Billion in revenue was earned by the radio industry in 1998, with double-digit growth in first part of 1999. Radio is now a multi-billion dollar industry, with 80 consecutive months of revenue gain ("Consolidation").

The future is also looking bright as experts foresee that radio advertising will continue to rise at a 9.3% compounded annual rate over the next five years. Total spending will climb from $13.5 billion in 1997 to $21.1 billion in 2002 (Taylor "Veronis"). Consolidation has put radio on the national advertising map. In September of 1999, a record was broken as more than 8% of all advertising dollars were spent on radio. In a corporate climate that has shifted focus to more service-oriented corporations, advertising and imaging are more important sources of revenue than ever. The Telecommunications Act of 1996 helped establish group owners that have the size and power to go after a larger piece of the advertising pie, keeping the radio industry alive (Radio Surpasses).

As the conglomerates get larger, many are concerned about how deregulation has affected programming content. Some stations are running a few more spots, but most of the radio owners know how many is too many. Clear Channel and AMFM limit the amount of spots their stations can run per hour to eliminate clutter. Playlists are becoming more homogenized, but research shows that core audiences want to hear familiar songs on their favorite radio stations. The ratings do not point to any problems with conglomerate programming. In most markets, group owners are in control of the top three rated stations (Pinckney).

Radio has always been a local medium. Concerns that conglomerates are attempting to create networks are exaggerated. Group owners still maintain that radio needs to remain local in order to win. New digital technology allows for customized satellite feeds that sound local to average listeners. Conglomerates end up saving money, while small cities receive major market content. As technology gets better, more ways of localizing nationally syndicated shows will be developed. Local talent still exists and technology is making their jobs easier without limiting their creativity.

Today, radio faces competition from the Internet and digital satellite audio services. These services cannot communicate in the same intimate, local, and one on one manner that radio has been able to. For radio to remain in the game, it must retain elements of localism. It must also aggressively attain advertising revenue to stay alive. Quality, localized programming will keep audiences tuned in and advertisers will continue to support the industry and its employees.

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