ClearChannel Complains About XM, Sirius Radio

andyring writes "In the latest attempt by a big corporation with a failing business model to win by legislation and not in the marketplace, ClearChannel is whining to the FCC about XM Radio's recent foray into localized traffic and weather reports." Here I was thinking that satellite radio was a good thing for competition in radio.

Competition is good for radio....

[Asprin]

Here I was thinking that satellite radio was a good thing for competition in radio.

Competition is good for radio... because it's bad for Clearchannel.

Re:Howard Stern

[matts800]

They are not regulated by the FCC the same way FM and television are. They are in the same boat as HBO.

That's funny.

[Anonymous Coward]

XM is a partnership between GM and ClearChannel Communications. The suit isn't being brought by Clear Channel, but by the National Association of Broadcasters.

And as for listening to satellite radio, I'll take Sirius anyday. They don't have the annoying Clearchannel DJ's and the "every stations sounds the same" Clearchannel effect (have they patented that yet?).

Re:"Failing business?"

[generic-man]

Yes. ClearChannel already has a stake in XM Satellite Radio, so they're hedging their bets on the new technology.

ClearChannel... Isn't this the "network" that....

[rusty0101]

... was accused of generating it's own "local" news for many of it's markets? I.E. they didn't have a local news source (online newspaper in the area would probably qualify) so, rather than limiting their news to national coverage, they wrote their own stories with no basis in fact.

Fortunately in the Minneapolis, MN area we do have a reasonably good classic rock station that is not ClrCnl, which has locked out the ClrCnl morning shows. And for local traffic, one of the local Public Broadcast Radio stations provides updates every 10 min during rush hour, and actually has a great Jazz lineup.

ClrChn has attempted to "compete" in the Jazz market with their "Smooth Jazz" channel. I am not what you might call a conisour of Jazz, but I think their playlist is garbage.

I have listened to a couple of XM sat channels, but since I don't own a receiver (yet) I can't make any claims about it.

Radio stations mentioned...
KQRS - http://www.92kqrs.com/ - 92.5 FM
KBEM - http://www.jazz88fm.com/ - 88.5 FM - online
CC-SmoothJazz - 100.5 FM

There are a couple of other locally produced stations in the area. Since I like the Jazz88FM lineup, I have not listened to them.

For those concerned, KQRS is owned by Disney, but the Morning Show should be listened to a few times before you decide to let your kids listen in.

Re:Howard Stern

[Anonymous Coward]

To answer your questions, XM is apparently not regulated by the FCC (though that is subject to change at any time since they've got this little power-grab going on), and yes, they could certainly carry the Stern show.

In recent weeks Howard has actually been considering moving the show to XM if/when things hit the fan and he gets yanked from the public airwaves.

I'm just hoping he hangs in there until the election so we can vote that SOB Bush out and see about getting some of our rights back from the corporations and bible-thumpers he so loves.

No, they only own less than 10%

[JasonUCF]

According to the FCC, there are about 13,000-15,000 radio stations in the US broadcasting at any one time. At last count Clear Channel had 1,176 stations. That is near 10%, not exactly a monopoly. Clear Channel is the biggest single owner, but they are not the only one. Cox, Infinity, Ennis, are all players in this game, and they are part of a lobbying group that asked for this. Clear Channel did not ask for this, the lobbying group did. This is the problem I keep talking about -- people think CC is the only one wrong so they ignore the other people too. Sigh.

Re:Radio Killed the Radio Star

[Ironsides]

and spotty signals when traveling between buildings.

Actually, one of the things that is annoying regular radio broadcasters is that either XM or Serius (can't remember which, or if it was both) got special permission from the FCC to put microrepeaters in buildings in built up areas. (one repeater can cover a fairly large area) This allows people to still recieve even in areas with tall buildings if one of these is arround. The reason the radio broadcasters are annoyed is because the repeaters (being about the size of a desk, and having no external antennas and is installed inside of a building) were allowed to bypass local red tape for installation. AKA they only needed to get federal approval, not local.

Re:"Failing business?"

[pongo000]

They're owned by another corporate entity, Susquehanna [susquehannaradio.com]. They run the same ads here in Dallas on 93.3 "The Bone" (what a stupid name for a radio station..."keep your bone up" is getting old). I'm sure what you hear on 99X is the same as what is played on every Susquehanna station...

Re:No, they only own less than 10%

[WCMI92]

CC owns 9 stations in my 20-something station market.

Those 9 stations, in the ratings, account for about 50% of the listening audience.

Re:"Failing business?"

[Anonymous Coward]

Gross or net?

Gross profit of only 8.2% is okay, not too bad, but not fabulous either. Depends on the cash situation (are they in debt or do they have a cash surplus).

Healthy gross profit is somewhere around 10-15% as that allows room to manuver in cases of inflation and re-investing into the business.

Clear Channel owns a stake in XM Radio

[ninejaguar]

Here [xmradio.com], and here [fool.com].

= 9J =

Re:Why focus on Clear Channel?

[LostCluster]

Actually. Clear Channel is usually in favor of keeping regulations away from XM, since they own a stake in it.

Clear Channel is practically out of the NAB because to put it mildly, their interests are often contradictory to the interests of small station owners. They just don't fit in with the club anymore.

Re:fair market

[Guppy06]

"What about satellite TV, they are allowed to air local television, why shouldn't satellite radio be allowed to air local reports as well."

There are a few reasons.

First off, DirecTV and Dish aren't just putting out local information, they're re-broadcasting local VHF/UHF stations, basicly stuff you could get with some rabbit ears. Sirius and XM are putting out their own content for the local markets, with their own traffic and weather people.

Secondly, DirecTV and Dish are using both special satellite transmitters and the hardware lockouts in the receivers to keep only people in the local area from getting that local content; somebody living in Los Angeles isn't going to be getting New York television stations from either DirecTV or Dish. Neither XM nor Sirius have the technology nor the inclination to do that; they have a few dozen streams set aside for the information and all of their subscribers can listen to it, no matter where they are. Even though I live in the New Orleans area I can listen to traffic and weather in Baltimore.

And finally the streams on Sirius and XM are only carrying traffic and weather. No talk shows, no music, no commercials, just reports that are repeated and updated once every five minutes or so.

Re:"Failing business?"

[LostCluster]

XM isn't actively selling the commericals on the talk-format stations. What you hear there are the commercials that are being distributed by the various talk show syndicators on the same feed as the program is on.

Many of these "network ads" are truely spam-level prices because every single one of the OTA stations are covering the network up with a local ad during that time slot, so only XM listeners end up hearing it. XM might be well served to create some promos for some of their other channels to air in that time...

Re:You've got it backwards.

[ThomaMelas]

Um, no. Congress doesn't oversee the day to day activities of the FCC, but it does oversee it's funding. If the FCC upsets congress (as was threated during the last round of discussion the FCC had on deregulation.) then Congress can state in it's appropration's bill that the FCC may spend up to the massive sum of $0 to enforce what ever rule is annoying Congress. I also think you need to review the concept of checks and balances in the goverment. The FCC is under the exectutive branch, as are all regulatory bodies. But those bodies get thier mandate from Congress. Generally in vauge terms like "make sure that the people can get access to the airwaves...", and the FCC makes the regulations about it. The Congress makes the rules, the President enforces them, the Supreme Court (and lower courts) rule on the consituationality of them.

Re:"Failing business?"

[gnarled]

I think the poster was a little confused about that. I remember seeing an article in the NY Times a couple months ago (I tried searching but couldn't find it) about how in the south some christian radio owners are taking advantage of a law that gives high power broadcast station precedence over low power signal relay stations. Many places get NPR only because it is retransmitted through a relay station. The article talked about how this man was on a mission to get rid of NPR and did it by starting radio stations that broadcasted with higher power and therefore got NPR's frequencies. It had nothing to do with ClearChannel.

Re:"Failing business?"

[Eshock]

You are mostly correct, XM's content is not regulated by the FCC, like over-the-air radio and TV broadcasts are. They are under a looser regulation scheme, like satellite TV. Basically the only thing regulated is what frequencies they're allowed to broadcast on, etc. Content is still 100% up to them though.

Re:Now it is all starting to make some sense ...

[VValdo]

Clear Channel doesn't hold any political views at all that don't directly concern its business.

Oh really?! And you know this how?

Open Secrets [opensecrets.org] tells us that CC gave $209,000 to republicans in 2000-2001.

They have pulled ads criticizing Republicans. [clarionledger.com]

You may remember this:

After Sept. 11, to the amusement/horror of music critics and radio industry professionals, Clear Channel issued a list of 150 songs to its member stations that it deemed too sensitive to play in the wake of the terrorist attacks. The list included an odd mix of songs: the more understandable choices featured flight references ("Bennie and the Jets," "Ticket to Ride"); others were associated with New York ("On Broadway"); and, most surprisingly, many were related to peace ("Bridge Over Troubled Water," "Imagine"). The list also included all songs by the political rock group Rage Against the Machine.

According to this USA Today story [usatoday.com]:

They have given $42,200 to Bush, vs. $1,750 to likely Democratic nominee John Kerry in the 2004 race. What's more, the executives and Clear Channel's political action committee gave 77% of their $334,501 in federal contributions to Republicans. That's a bigger share than any other entertainment company, says the non-partisan Center for Responsive Politics. In contrast, Viacom (VIA) executives and its political action committee gave just 30% of their $545,650 to Republican candidates. Viacom syndicates Stern's show.

Then there's CC executive Tom Hick's previous history of business relationships [buzzflash.com] with George Bush going back to the late 80s.

So let's review-- cushy previous relationship with the Bushes, biased pro-Bush stand on foreign policy, conservative values pushed on their listeners, massive donations to Republican causes, refusal to run anti-Republican advertising...

No, I don't see anything political there. Just good business sense. (Yeah, right.)

W

Re:Out of curiosity

[CptNerd]

It's more a matter of what gets recieved in US airspace. The sole purpose originally, and one of their very anal efforts still, is preventing interference between radio stations in the US. From this has lead to the idea that the FCC is the best agency to be in charge of all aspects of communication technology used by and affecting US citizens. That would include broadcasts from cell phones, radio stations, cordless phones, wireless LANs, and satellite tranceivers. Of course, realistically there are international concerns, so that they really only have control over a subset of those things, including satellite. But, like all bureaucracies, mission creep has given them control over content, which really doesn't impact their prime purpose.

Re:"Failing business?"

[MadBiologist]

ClearChannel already has a stake in XM Satellite Radio, so they're hedging their bets on the new technology.

But their stake is diminishing... they once held over 5% of the company, and programmed a few of the channels... KIIS XM being one of them. Now, they are down to 2%, and have vacated their seat on XM's board of directors. KIIS XM ditched all the ClearChannel crap, and is now programmed in house by XM (still semi-crapy top 40's music.. but it's better than it was).

Peace

Re:someone explain please

[AeroIllini]

"Part of the original license agreement was that theywouldn't offer local content through repeaaters."

but why was that in the original license agreement in the first place? whats wrong with offering local content?

The problem with offering local content is that local content is now the only reason to listen to regular radio over satellite, subscription fees aside. The standard radio stations (including ClearChannel) make their money with advertising revenue, and they can only sell that advertising space if the can guarantee that X number of listeners will hear that ad when it plays. If the satellite companies start giving local news and traffic reports, there will no longer be any reason to not spend the $20 monthly fee: satellite radio has the same music, the same talk shows, no commercials, and now, local information. The AM/FM radio companies are trying to use legislation to preserve their business model. They know that they are losing listeners, and instead of changing their business plan to match the market, they instead use their large legal leverage to bully the competition into not changing the market.

From a third-party point of view, there's nothing wrong with offering local content. From the point of view of the AM/FM media companies, it's forcing them to change, and that's painful. So they try to legislate their way around it.

Re:Monopolies

[ratebeer]

The monopoly is best expressed this way: Clear Channel has higher audience figures in 100 of 112 major markets across the United States.

Additionally, with the company's purchase of SFX Entertainment in 2000, the nation's largest concert venue owner and touring promoter, CC stations developed a beneficial (and exclusive) relationship that allowed them to promote concert ticket sales for their own tours, taking in a 70 percent share of total live music profits nationwide.