Cause and effect

December 1, 2002


Another year is almost at its end. I'm not going to reflect on thefast passage of time, and how exciting it is to be a part of radio'shistory at this moment. Instead, I want to look at some recent radioevents and explore their resolutions.

Radio from above

Everyone has his own opinion about satellite radio. I find that thistopic is an easy way to break the ice in a group of radioprofessionals. The usual argument comes down to the viability of asubscription-based service and the programming content. That aside,judged on technical merit, the systems that the two providers use workwell. Still, there is plenty of speculation about the longevity of thetwo providers.

Recent financial reports have discussed the long-term business plansof both providers, saying that both companies are on the verge ofbankruptcy. Both companies deny these speculations. Many feel thatGeneral Motors will buy XM, integrating the service into its automobileline. This has some merits but doesn't really change the situation. Theservice needs subscribers. GM is already a point of sale for theservice.

My feeling is that in the end, one company will make a move to buythe other. Depending on the mood of the Justice Department, this may ormay not happen. Regardless, there will be only one provider at somepoint down the road.

Radio from across town

The recent rulemaking concerning changes to Part 74 of the FCC Rulesbrought welcome news in some ways. The main positive point is that itallows stations to operate digitally modulated STLs without alsoobtaining an STA. The main drawback is that applications now must becoordinated through the same procedures used for Part 101 applications.The broadcast auxiliary spectrum has increasingly shared space withother services, which has created some questions about responsibilityand authority in these bands. The ruling forces these questions to beanswered. Look for a tricky transition and lots of misinformation asthe new processes come into being.

Radio from the Web

Between the DMCA and the never-ending battle over royalty payments,Internet radio has been dragged to nearly a standstill. Smallnetcasters are allowed to negotiate their own deals with rightsholders. This is good news for the little guys. Why stop at the smallWebcasters? Let's allow the industry to handle its own affairs andnegotiate its own deals. I'm all for someone getting his fair share forhis work, but the minutia of record-keeping and reporting tied to thecharges will continue to strangle Internet radio and keep it fromreaching its full potential.

Radio from a digital pipe

It's been 10 years in the making and it is finally becoming areality. IBOC has been accepted, albeit with a wide range of opinionsand feelings. I don't see the compelling wow factor to IBOC, but we'reon the front of this train. While there are capital costs and licensingfees, there are some strong potentials. The contrary view is that if wedo nothing, there will still be no wow factor. Some strong radio groupsare making their move to IBOC, which speaks loudly to me. I see slowand guarded implementation of IBOC through the beginning of 2003 thatwill pick up later in the year. When will we see a final sunset onanalog services? It's too soon to tell. The predictions of eight yearsseem too short to me.

Radio from the source

An item that quietly moved through the business pages shows thatClear Channel has begun working directly with several manufacturers toarrange equipment purchases, bypassing the equipment dealership.Naturally the dealers don't like this. The decrease in volume for thedealer can come back to other broadcasters when equipment prices areraised. In the end it's all free enterprise, so I don't fault thelargest owner from trying to get the best deal for itself. Many groupshave held preferred customer status with dealers in the past. This isthe next step. Clear channel owns five times the number of stations asthe next largest owner, so I don't see this as the start of a newtrend.

With a new year ahead of us, we can all look forward to the nextexciting radio development. And despite what I said at the beginning,these are exciting times after all.


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Fax: 913-967-1905



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