How Clear Channel has ruined everything

[AKA]

See also:
Tom Petty Is Pissed!
Riders On The Storm by John Densmore (former Doors drummer)
The Way The Music Died: An Interview With David Crosby

Inside Clear Channel

How the company's domination has made the airwaves blander and tickets pricier

By Damien Cave
Rolling Stone

Scan the radio dial in Detroit, and you'll likely land on a station that's owned by Clear Channel Communications. Seven of the city's most popular stations belong to the company, including WJLB 97.9 (an R&B station that once pushed Parliament-Funkadelic to national prominence), a Top Forty station, a classic-rock station and two adult-contemporary options. Clear Channel also owns two AM talk stations in Detroit, which broadcast Pistons games and talk-show host Glenn Beck.

Clear Channel also has a near lock on Detroit's concert business. The company owns two massive amphitheaters, a pair of 1,000- to 1,400-person clubs and a 2,800-seat theater, and it books the Palace of Auburn Hills, a 15,000-seat arena. During the week of July 26th, the company controlled Motor City concerts by the Dead, Hilary Duff, Midtown, Hanson, Huey Lewis and the News, Prince and D12.

It's not just Detroit, either. Clear Channel controls roughly 1,200 radio stations and about seventy percent of all live events that are promoted in the United States. The company also is reportedly considering the launch or purchase of a record label.

In less than a decade, Clear Channel has become a music company on steroids -- and a company that's increasingly under fire. Critics contend that Clear Channel uses its size to crush the competition while force-feeding audiences the same playlists no matter where they live. Bands, managers and music-industry executives argue that Clear Channel has ruined the concert business. Several tours, including Lollapalooza, have been canceled this summer due to lack of interest, and though Clear Channel slashed ticket prices last month in response to slow sales, many blame the company for driving audiences away with years of rising prices and fees. But some contend the blame must be shared by artists, who have the final word on prices.

Clear Channel communications resides in a green-glassed sprawling office complex in San Antonio. Company founder Lowry Mays, an ex-Air Force officer, is often described as disciplined and insular.

Mays launched his career in radio by accident, when a friend repaid a debt in 1972 by giving him San Antonio's KEEZ-FM. Mays treated the station like any other business -- he concerned himself with growth, not content. It worked. With increasing success at KEEZ, Mays bought another station, WOAI-AM, a profitable all-talk station in San Antonio with a powerful "clear channel" signal. And each time the Federal Communications Commission loosened ownership rules -- in 1992 and 1996 -- Mays went shopping. The most significant growth came after the Telecommunications Act of 1996 went into effect. The legislation virtually eliminated the national limit on station ownership. And no company was better prepared for a shopping spree than Clear Channel.

The usually cautious Mays was joined by his two hotshot sons: Mark, who began work at the company in 1989 after graduating from Columbia Business School, and Randall -- a Harvard MBA -- who became a Clear Channel executive in 1992. More important, Lowry Mays had close connections to Wall Street and no trouble raising money for purchases; Clear Channel's stock became the fifth-best performer of the 1990s. With each uptick in price, "they became more aggressive," says a competitor from the time and a close friend of the Mayses.

Forty-nine stations joined Clear Channel in 1996, seventy more in 1997. It bought Jacor -- owner of the Rush Limbaugh Show -- in 1999. Then in 2000, the company paid $24 billion for AMFM's radio holdings; $4.4 billion for SFX, the nation's largest live-entertainment company; and $776 million for Ackerley Group, a major billboard company.

The end result? A behemoth that, at the end of 2003, controlled 1,182 radio stations, 788,000 billboards and 103 venues in the U.S., not to mention an event-promotion business that sold more tickets in the first half of 2003 than its closest forty-nine competitors combined. There is no bigger company in the music business.

No other company in recent history has had so much power over what the world hears -- and so few top executives with a background in music. Several of the Mayses' friends and business associates say that popular culture has never come up in conversation; radio-division CEO John Hogan is a career ad salesman who says that he prefers talk to rock, rap or country stations. Brian Becker, the live-entertainment CEO, cut his teeth on motor sports and theater. One former Clear Channel executive told Rolling Stone that at annual corporate meetings, sales awards are given out for more than an hour -- and programming prizes take up only ten minutes. "You're controlling all this media, and what you're saying is, 'We don't care about what's on the air,'" he says. "All they care about is moving product."

"If you don't realize that they've sent a chill throughout the creative community, you're living on another planet," says Howie Klein, the former head of Reprise Records. "Clear Channel pretty much can dictate what they want."

As Dixie Chicks manager Simon Renshaw puts it, "They don't care about music. They care about ad rates."

Lowry Mays, who refused to be interviewed for this article, told Fortune in 2003, "We're not in the business of providing news and information. We're not in the business of providing well-researched music. We're simply in the business of selling our customers products."

Traditionally, top-forty stations pick songs through a mix of DJ choice and research. Clear Channel is a master of the latter. "We're probably spending north of $70 million a year to talk with our listeners," says Hogan, "to find out what they like, what they want, what they don't want."

Clear Channel places roughly 26 million calls a year to listeners who are chosen at random and asked to offer opinions on several songs at a time. Local stations generate their own weekly reports on the popularity of songs being played. When Tom Poleman, program director for New York's powerful Z100, came to the station in 1996, it wasn't possible to see why 1,200 stations were spinning certain songs; now, he says, he regularly scrutinizes call-out research from other Clear Channel Top Forty stations before choosing which songs to add. "It all tends to consolidate the opinions of what's working and what's not," says one major-label CEO. Marty Diamond, head of Little Big Man, a booking agency that represents Coldplay and Avril Lavigne, says that he can always tell when there's been a Clear Channel conference call because "my phone starts ringing and everyone asks about the same band."

Playlists bear this out. Clear Channel's Top Forty stations share more of the same songs today than they did ten years ago, and they play the biggest hits far more often. Z100's top five songs in February 1994 received fifty to sixty spins per week; ten years later, its "powers" run seventy-five to ninety times a week.

Some artists and managers also complain that Clear Channel stations use their control of the airwaves to pressure acts into playing radio-promo concerts. A manager of a Top Forty group says that his client's songs were pulled from a large-market station after the band refused to play a free promotional concert in 2000. Even without a direct threat, the possibility of angering Clear Channel keeps artists in check. Steve Miller, who has been touring for decades on the strength of radio hits such as "Jet Airliner," says that in 2000, he wanted to play amphitheaters with Bonnie Raitt. Clear Channel balked at Raitt's price tag. "Previously, we would have gone to another promoter and booked this great package, but since they now owned all the promotion companies, we couldn't do that," Miller says. So, fearing how his decision would affect radio play, Miller scrambled to find a cheaper opener: Gov't Mule. "Had we done the show we wanted, there is no doubt we would have sold 3,000 to 5,000 more tickets per venue," Miller says. "They completely stopped my ability to compete in the marketplace. I went from personally dealing with 140 stations and seventeen different concert promoters in over sixty cities to having only one company to negotiate with for more than ninety percent of my concerts."

Until the 1990s, the concert business was focused primarily on ticket sales. Promoters would sometimes sell the space on the back of tickets to a local liquor store or a car dealership, but because most venues were locally owned, the profit potential was limited.

This started to change when Bob Sillerman, a New York dealmaker who spent the Eighties and early Nineties in the radio business, created a national concert network called SFX Entertainment. Tying together sixteen amphitheaters and 120 venues by the end of 1999, SFX had the ability to offer national brands a new way to advertise. Only a few companies -- Anheuser-Busch, for one -- signed on initially, but after Clear Channel bought SFX in 2000, the ad saturation expanded. Analysts say that this was partly because national advertisers saw the value of marketing to a captive, mostly young audience; it's also because "Clear Channel established a much more organized approach," says Gary Bongiovanni, editor in chief of Pollstar, a concert-industry trade magazine. Today, Bongiovanni says, Clear Channel can sell a full-blown media campaign, complete with billboards, radio and TV ads, and announcements of sponsorship at concerts.

So in 2001, Powerade became the "official fuel" of Clear Channel's motorcycle races, giving its brand access to radio and print ads for the events, plus large live crowds. This spring, Clear Channel promoted the Verizon First Ladies Tour 2004 with Beyonce, Missy Elliott and Alicia Keys, who got second billing to Verizon. And when summer music fans go to, say, the Nissan Pavilion at Stone Ridge, near Washington, D.C., they'll be bombarded with ad-drenched video screens and billboards that ring the lawn. Even staffers' T-shirts and secondary stages are used to display ads for food and booze, such as Jose Cuervo margaritas.

The experience of going to a concert has gotten more expensive, too. In 1999, the average concert ticket cost $36.56; four years later, the price skyrocketed to $50.35, an increase of thirty-eight percent. And that's only part of the total. Clear Channel's extra fees have outpaced even ticket prices. When Pearl Jam's Jeff Ament and Stone Gossard testified in Congress against Ticketmaster in 1994, the battle centered on a $3.50 service charge. Today, Clear Channel regularly charges more than twice that. For the May 27th Cypress Hill show at Detroit's 1,400-seat Clutch Cargo club, tickets cost $30, but there's also a $7.20 "convenience charge" and a 75-cent facility fee.

The pinch at amphitheaters hurts even more. A top seat for Linkin Park's Projekt Revolution Tour stop on July 28th at the Mansfield, Massachusetts, Tweeter Center for the Performing Arts cost $53 -- plus an $8.90 convenience charge and a $4.10 processing fee. In addition, you had the option to pay $30 for a premium parking pass.

Artists don't get off much easier. Many band managers complain that the company pads its audience with giveaways, season tickets and luxury boxes that guarantee a large crowd of eyeballs and concession buyers. Because most of these extra tickets are giveaways, the artists lose out on their cut of sales. "Corporations have been sold all the good seats," says Steve Miller, recalling a 1999 Nashville concert with an attendance of 18,166 and only 2,311 in ticket sales. "[They] are removed from the ticket manifests and not shared with me."

Clear Channel's Becker says that increasing fees are a reflection of growing artist demands and an attempt to account for the company's investment in amphitheaters. He refused to discuss Miller's specific case but says the company often has no choice but to increase attendance with giveaways. "Seventy-five percent of artists do not sell enough tickets to cover the guarantee that we have paid them," he says.

Artists deserve part of the blame: Sting, the Eagles and the Rolling Stones have all spearheaded moves to charge fans more than $100 per ticket. And for the most established artists, Clear Channel's growth has led to longer concert runs and a larger share of the profits.

But bands did not demand amphitheater expansion, nor do they set parking fees or beer prices. The fact is, Clear Channel's go-go Nineties growth is now pressuring the company to find new revenue streams. Financial reports from recent years show that concerts bring in about thirty percent of the company's revenues but only about six percent of Clear Channel's profits. At this rate, excluding the value of its property, it will take more than thirty-three years for the company to earn back the $4.4 billion it paid for SFX. Extra revenue streams, such as parking and advertising, are an attempt to reset the balance in Clear Channel's favor because, says Bongiovanni, "they're never going to recoup their investment with ticket sales alone."

The music industry may not be helping, either. Artists, even those who work with Clear Channel, often harbor resentments against the company. Tom Morello and Steve Earle toured last fall to protest media consolidation and Clear Channel's impact on radio and concerts. Dave Matthews, who has said that he plays non-Clear Channel venues whenever possible, performed a show at D.C.'s Nissan Pavilion this summer and one at its competitor, Merriweather Post Pavilion.

Clear Channel admits to being surprised by such vitriol. "I didn't realize how arrogant and coldhearted and difficult we were perceived to be," Becker says. But don't expect the company to stand for it. Clear Channel's finances dictate a need for earnings, no matter where they come from. And unlike Bill Graham, David Geffen, Clive Davis and other music-industry moguls, the Mays family lacks a natural or historical devotion to music.

Becker, for one, is most excited when talking about Clear Channel's Phantom of the Opera tour or a recent Las Vegas 100th anniversary event that brought in several new advertisers. When we met, he was also hot on two new ideas: One was a "revival" tour of old groups that have broken up. The other? A glitzy event in which bands play in the background while models strut up and down a catwalk to display underwear.

[TJL]

What horrifying statistics. Clear Channel is out of control.

[Hollow]

clear channel LIES.

[Steve M.]

Again, the radio alternative!

BBC Radio 2 (88-91 FM)

[Steve M.]

Or for something hipper. . . .

BBC Radio 1 (97-99 FM)

[musicradio77]

If you don't like Clear Channel, here are those four websites dedicated to classic airchecks in radio history:

Musicradio WABC
Reelradio's Top 40 Radio Repository
Rock Radio Scrapbook
The Airchexx Home Page

[Ohio8]

SCREW CLEAR CHANNEL!!! Here's another reason to hate these bums: Last year, the DJs at their stations in Cleveland, Houston, and Raleigh incited their listeners in cars to cause harm to bicyclists. According to Toledo's The Blade , they encouraged motorists to "throw bottles at bicycle riders or hit them with open car doors....also suggested motorists blast horns at cyclists and speed past them and slam on their brakes in front of the cyclists."