Tuesday, May 15, 2018

Report: Radio Could Use Another Round of Deregulation

Washington seems set on yet a new round of media deregulation, allowing further consolidation in radio.

And, according to Gene Ely writing for Forbes,  that raises an intriguing question. If indeed 1996 consolidation was a disaster, can Washington be expected to do any better this time

Why deregulation now? Ed Levine, CEO of Galaxy Media, which owns stations in Syracuse and Utica NY, answers with two words: “Google and Facebook.”

Levine argues that radio needs to be set loose to compete with the two digital giants, which, being unregulated, have an unfair advantage that’s allowed them to siphon off radio’s ad dollars.

Ed Levine
Just how the new round of deregulation might play out has yet to be worked out, but there’s little doubt it will happen, and possibly as early as this fall, with the FCC now under the control of Republicans and led by Trump appointee Ajit Pai, a vocal deregulation advocate.

And radio is just a part of the changes taking place. Relaxed rules are also in the works for TV. The FCC has already abolished a media cross-ownership ban barring broadcasters from owning newspapers in their markets.

Here’s how deregulation could play out for radio.

Under current FCC rules, in the name of competition, no one station group can be the dominant voice in a market. So in your typical radio market, even in small markets, you might have four or five groups competing for listeners and advertisers.

Many in radio want the rules changed to reduce competition. So instead of five competitors in a market, there might be just three or two, maybe even just one.

The rationale: With digital players like Google and Facebook sopping up over half of all local ad dollars, and each enjoying 100% audience penetration, it no longer makes sense to limit radio’s share of audience. Easing the rules to allow any single radio group to gain 40-50% percent share of audience would help it to better compete.

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