War Puts Radio Giant on the Defensive

http://www.nytimes.com/2003/03/31/business/media/31RADI.html

* David Beardsley
* microtonal guitar
* http://biink.com/db

War Puts Radio Giant on the Defensive
By JOHN SCHWARTZ and GERALDINE FABRIKANT

Clear Channel Communications has long been the company that
the music industry loves to loathe, so aggressively dominant
as the nation's biggest radio broadcaster that some critics
refer to it as the Microsoft of music. Now, though, Clear
Channel finds itself fending off a new set of accusations:
that the company is using its considerable market power to
drum up support for the war in Iraq, while muzzling musicians who oppose
it.

The company's executives insist they have no political
agenda, and even some of its most outspoken business
antagonists say many of the latest accusations do not stand
up to scrutiny. But the criticism has grown sufficiently loud
that Clear Channel hired a crisis communications firm last
week to help it handle the uproar.

One former Clear Channel executive said that the company's
rapid rise - from 43 radio stations only eight years ago to
more than 1,200 now - had not prepared it for the bruising
life at the top of the industry. "They don't recognize the
playing field they are playing on now," this person said.

The critics, whose views have been expressed in newspaper
articles and columns, and on Salon.com and other Web sites,
cite an unusual series of pro-military rallies drummed up by
Glenn Beck, whose talk show is syndicated by Premiere
Radio Networks, a Clear Channel subsidiary. He has convened
the rallies in part to counter antiwar comments by celebrities.

The company's critics also point out that some Clear Channel
country music stations stopped playing the Dixie Chicks earlier
this month after the group's lead singer, Natalie Maines, told fans
during a London concert, "We're ashamed the president of the United States
is from Texas."

Clear Channel's opponents either imply or say outright that
Clear Channel has taken these steps to build support within
the Bush administration at a time the Federal Communications
Commission is considering regulations over how many radio
stations a single company can own.

John Hogan, the president and chief executive of Clear Channel's
radio division, dismissed the idea of a corporate political push as
"laughable," saying, "I won't kid you and tell you that Clear
Channel is above criticism, but the brush that is painting us as
evil and mean-spirited, and with some sort of onerous political
agenda is one that I have a hard time getting my arms around."

Clear Channel, he said, is purely a company that builds audiences
through entertainment so that advertisers can sell goods and
services to them. "We're in the business of having the largest
possible audience," Mr. Hogan said, not "the most politically unified
audience."

Even some Clear Channel critics say they doubt there are
Citizen Kane orders emanating from headquarters in San
Antonio, where the publicly held company's founder and chairman,
L. Lowry Mays, and two sons, Mark and Randall, preside.
(The Mayses declined to be interviewed.)

"I don't believe that there's a conspiracy," said Jenny Toomey,
the executive director of the Future of Music Coalition, which
campaigns against the merger rush among media companies.
She said that the political activities simply represented a
conservative company's world view.

And yet, even if Clear Channel's political effect is nothing
more than a cultural homogenization that leaves little room
for boat-rocking and that gives little airplay to antiwar songs
like current ones by Lenny Kravitz and Michael Stipe of R.E.M,
Ms. Toomey is not ready to concede that all is well in radioland.

"This is just enlightened self-interest in some ways," she said,
"or darkened self-interest."

A reason so many detractors are willing to believe the worst
about Clear Channel may be the company's sheer size and reach.
Along with Mr. Beck, the company also syndicates the
talk-radio fixtures Rush Limbaugh and Dr. Laura Schlessinger,
as well as Carson Daly, the ubiquitous D.J., among others.
The widely diversified company's $8.4 billion in annual revenue
also flows from hundreds of thousands of billboards around the
world, dozens of television stations and management of sports
figures like Andre Agassi and Michael Jordan.

But it is Clear Channel's bare-knuckle dealings with the music
industry, and the way the company can leverage its broadcasting
power to the advantage of its concert-promotion business, SFX
Entertainment, that may explain why, for the haters, all roads lead
to Clear Channel.

Some Web sites, for example, reported last week that Clear
Channel's concert promoters threatened to throw the activist
singer Ani DiFranco off the stage of the New Jersey Performing
Arts Center if she allowed representatives of antiwar groups to
speak. Clear Channel did arrange the concert, held on March 19,
but it was the managers of the arts center that tried to ban the activism,
according to Jeffrey Norman, a spokesman for the center. In fact,
the speeches - and the show - did go on.

As for the Dixie Chicks boycott, it turns out that Clear Channel
stations were only sporadically involved.

More unified were the actions of Cumulus Media, which owns
262 stations, and has at least temporarily stopped all 42 of its
country stations from playing the Dixie Chicks. The company's
chief executive, Lewis W. Dickey Jr., denied the move was part
of a political agenda. "We pulled the plug out of deference to our
listeners," he said.

At one rally promoted by a Cumulus station in Shreveport, La.,
a bulldozer crushed Dixie Chicks CD's. Mr. Dickey described it
as "an event that was precipitated by listener demand." He
predicted that after a cooling-off period, the group's music would return to
Cumulus stations.

A program director for another broadcaster, Cox Radio, also
said that much of the political activity was bubbling up from the
listening audience. "Country music is a very patriotic format,"
said Michael Cruise, program director for two Cox Radio
stations in Houston, KKBQ-FM and KTHT-FM. "I didn't want
to come out on the wrong side of the issue."

At Clear Channel, Mr. Hogan said that the company issued no
order that local stations take the Dixie Chicks off the air and
that he did not know how many stations had made their own
decisions to do so.

He does acknowledge, however, that the Clear Channel
stations' carefully defined formats circumscribe the universe
of songs that they might play. "The country programmer who
would choose to play Lil' Kim," he said, referring to leather-clad
hip-hop singer, "probably is not long for the world as a country
programmer."

More difficult is explaining away the 18 "Rally for America!" events
that had been held through last Friday at the urging of Mr. Beck
and co-sponsored by one of his advertisers, Bills Khakis.

Thirteen of those rallies were co-sponsored and promoted by
local Clear Channel stations, including one held March 15 in
Atlanta that was sponsored by Clear Channel's WGST and
attended by an estimated 25,000 people. Further plans for
rallies include events in Tampa; Lubbock, Tex.; and Dothan, Ala.

Such rallies are highly unusual, said a longtime radio
executive at another company, who, citing Clear Channel's
power, spoke on condition of anonymity. "It flies right in the
face of the fact that the government has always said that radio
stations should have a balanced view of what is going on, serve
the public interest and not take sides," the executive said.

Clear Channel, which hired Brainerd Communicators,
a financial communications and crisis-management firm,
last week to help deal with the controversy, did not make
Mr. Beck available for an interview. But in a draft op-ed
article he circulated, Mr. Beck described the rallies as a
grassroots response to his personal broadcast call to "Mr.
and Mrs. America" to urge their local radio stations to hold
rallies. "There is no corporate conspiracy, hidden agenda
or grand design," he wrote. He derided criticism of his
campaign as "a concerted media effort to marginalize the
voices of patriotic Americans."

Clear Channel was a small collection of stations until 1996,
when Congress largely deregulated the industry and lifted
many of the longstanding restrictions on how many stations
a single company could own. A review of those rules is now
pending at the Federal Communications Commission.

With the help of the investment banker Thomas O. Hicks,
who sits on the Clear Channel board and has close ties to
President Bush, Mr. Mays went on a buying spree. The
basic pattern was to buy stations and cut costs by sharing
programming and other resources with other Clear Channel
stations whenever possible - and then to sell ads across all
of the company's media offerings, including radio, billboards
and television. Clear Channel reported an operating profit of
$2.19 billion for its most recent fiscal year, with nearly $1.6
billion of that coming from radio.

Clear Channel creates some of its image problems, said
Paul Kedrosky, a former Wall Street analyst and adjunct
professor at the University of California at San Diego.
"Generally, when the company errs, it errs on the side of
being ham-handed," he said.

One practice that galls record companies is Clear Channel's
frequent demand that rising artists play at live concerts promoting
individual Clear Channel stations. A seasoned recording executive
said there was often an implication that a station would continue
playing the group's music only if it appeared at the concert.

Record companies often resent such concerts because
they must bear the group's expenses. And the musicians
often grumble that such appearances dilute the audience
for their own concerts.

Even Clear Channel's critics acknowledge that other radio
companies use similar tactics, but they say the company's
dominance makes it a magnet for resentment. Mr. Hogan,
of Clear Channel, denied that the company links airplay
of songs to musicians' willingness to appear at its concerts.

Professor Kedrosky said many of the arguments voiced
within "that wonderful echo chamber that is the `I hate Clear
Channel' community" are a kind of liberal nostalgia. A lot
seems to be "wouldn't it be wonderful if the future looked
more like the past?" he said.

A nostalgic view of politically charged music and the history
of radio might recall the way that in the 1960's and 70's, the
diversity of broadcast ownership could allow protest songs
like Buffalo Springfield's "For What It's Worth" and Crosby,
Stills, Nash & Young's cry of outrage about the Kent State
shootings, "Ohio," to find their way onto Top 40 stations.

And yet, in the current era of the Internet and other new
distribution technologies, broadcast radio is no longer the
only way for recording artists to make themselves heard.

Professor Kedrosky, who is writing a book on deregulation
and the media industry, said that dominance today by no
means guarantees dominance tomorrow. Owning billions of
dollars worth of radio stations could end up being a liability
in the future, he said, because evolving technologies like in-car
Internet links and satellite radio are making it possible to
choose from an unlimited bounty of music from just about
anywhere. "It may not be the kind of lock-in that you get from
owning Microsoft Windows," he said.

Indeed, companies like Sirius Satellite Radio, are rethinking
the notion that broadcasting has to be broad. Because the
company offers 100 channels of basic programming, Sirius
can offer something for every listener, said Jay Clark, the
company's vice president for entertainment and information
programming. Activist music is readily available on Sirius
and its rival, XM Satellite Radio Holdings.

And the company has started two new channels for
political commentary, "Sirius Right" and a "Sirius Left."
"Whatever a customer wants to get into," Mr. Clark said,
"it's available somewhere on the platform."

Some music industry executives say there are some
performers who would not fit on mainstream radio,
regardless of their views. Tracy Mann, a publicist for
Ani DiFranco, said, "Ani is not played on commercial
radio, anyway." She added, "It's not relevant to the work
that she does."

Ms. DiFranco's fans seek her work out on the Internet
or in concert, Ms. Mann said. "Her audience is going to
be there whether she's on the radio or not."