Monday, January 17, 2011

After the screaming ...

Despite the raised tones, spending 20 minutes on the phone with Titus probably saved me 5 days worth of posts ...

He claims to have conceded and will post such tonight, but I'm not sure if it was a legitimate concession, or an "I'm tired of arguing & need to pacify you to get you off the phone" concession (hehe). In any event, I wanted to post here in order to clarify what all the screaming is about.

This is also applicable to FOX News, in its' own way, but I'm going to use AM Talk Radio as the example (& those 2 are by far the largest source for conservative news consumers, so narrowing my focus to those 2 isn't really being "narrow" at all).

This is the way it works: Glenn Beck comes up with a show. He convinces a syndicator that its good. That syndicator then signs a deal with Beck. He'll pay Beck X amount of dollars to the syndication rights, then that syndicator sends salesmen, emails, faxes, the works, to radio stations around the country saying, "buy Beck's program, our numbers are good, he's good, you'll be able to turn around and sell the advertising space during his show for a profit."

Everybody with me so far?

Beck doesn't get paid by radio stations. The Syndicator pays him, the syndicator then sells the right to air the show to individual station owners, those station owners then go out and sell advertising to be aired during Beck's show (by the second) to businesses. The more popular Beck becomes, the more the syndicator pays him (come contract renewal), because the syndicator can charge the station owners more for the privilege of airing Becks's show. And the stations charge more for advertising. The point here is, the radio stations pay to air Beck, Beck doesn't "buy time" from the radio stations, it's not an infomercial.

Now since the Fairness Doctrine was lifted, and station owners could control their format (their line up), they were able to go out and pick and choose what syndicated shows they wanted to air, without constraint. And largely due to the efforts of Rush Limbaugh, the pattern, the formula for maximum profits which emerged was "conservative talk." This was probably due to a combination of conservatives hungry for an outlet, combined with the average affluence of the conservative talk radio listener (not that they're all rich mind you, just that they have a higher average per household income, and education - so they consume more).

So as it stands now station owners have complete discretion to go out and by the right to air the most successful shows. They can set up a permanent format, a permanent line up and go to advertisers and say hey, I can sell you X amount of spots per Hannity's show and guarantee an average listenership of "X", all because Rush, Hannity, Beck, Levine and the like have a proven track record, a proven number of listeners. This formula has proven so successful that Rush's last 5 year contract, inked in 2008, paid him $174 Million (over the 5 years). This is more then every network news anchor combined. To put Rush's ratings in perspective - Larry King gets an average ".7 share" in the Neilsens, that's 700,000 viewers a night, times 5 nights equals 3.5 million viewers per week. Rush has proven numbers of 20 million plus, a week. Beck 12. Hannity 15-18 million. The ratings, as compared to EVERY OTHER news format, print or on TV, aren't even CLOSE to what these guys do in ratings and revenue (all though O'Reilly's contract is nothing to sneeze at, and probably gets the closest). Rush, the syndicator, the station owner, the companies advertising on his show, they are all making a FORTUNE, because people like Rush Limbaugh.

If you REimplement the Fairness Doctrine those individual station owners must now provide "the opportunity" to a contrasting view point, in this case that equals a liberal for 3 hours.

The problem is there is no other broadcaster, writer or provider of news, opinion and information that succeeds in the same way conservative talk does. Conservative talk is quite frankly dominant in terms of ratings, advertisers and dollars generated. And what's worse, the "Liberal Talk" doesn't just not compete, it doesn't even come close.

So, under the Fairness Doctrine, a liberal (pick anyone, all their ratings SUCK with a capital S, but lets say it's Al Franken, he was the best of their worst I suppose) goes to a local radio station (or someone he's convinced to syndicate him does) and says he wants the opportunity to do the 3 contrasting hours to Rush. And the radio station owner says "NO, I can make tons more money putting Hannity on after Rush instead of you." Now, RIGHT THERE, at that juncture, WHO DECIDES WHAT GOES ON THE AIR? Can someone answer that?

Titus did. He said the FCC decides. Here's the problem - you have now just turned over the programming format of that radio station to the FCC. And that radio station owner can not go sell commercial time during the 3 hours in question because he can not tell the advertisers what they're buying! The station owner doesn't know what the FCC will decide. When they do decide, even if they rule against airing Franken, that doesn't mean they'll allow it to be Hannity. For every 3 hours the radio station airs a Rush or Beck or Levine they have to "provide the opportunity" to a under preforming liberal host to air a contrasting view, and leave the decision making process as to who gets the equal 3 hours, who qualifies to get it, up to the FCC. How's THAT for a sales pitch to potential advertisers??? You just can not sell advertising during the "hours in question" that way. The businesses will say, "no thanks, but I'll take a few hours during Rush." Well hell, you've just rendered hours of advertising time on that station useless that could of been sold for hundreds of thousands of dollars under the conservative format. That station's, all stations, ad revenues will plummet, perhaps cut as much as in half.

The Fairness Doctrine is like saying to Wal Mart that they have to provide "the opportunity" for just as much shelf space to underselling sodas as they do CocaCola, under the guise you're giving people more choice. THEY'VE ALREADY CHOSEN, AND THEY CHOSE COKE! And the subsequent "opportunity" regulation is doing nothing more than limiting that choice. Plain and simple, Wal Mart couldn't do business that way, and neither can radio stations.

What if Franken agrees to "pay" the station for the air time? Here's the problem - who sets the price? Will it be equivalent to what they would of made selling advertising during Hannity? Will it adjust as Hannity gets more popular? I sincerely doubt it. Under that scheme you've simply capped profits for those select hours, and it's the FCC whom sets the cap price.

This thing would be a disaster. Mankow is 100% correct when he says it would destroy AM Talk Radio as we know it. Why do you think that infamous author wanted to "use" the Fairness Doctrine to get Limbaugh & co off the public air waves? Because he knows it would work. What would end up happening is Limbaugh and crew would go to a private satellite and Internet feed. You'd become a member, pay a monthly fee, and listen that way. Gone would be the days of simply flipping on your car radio to hear engaging political talk. You'd wake up one day, turn on AM radio, and there would be sports, weather, gardening and traffic. All the investors would go do something else, and those whom did stay in the game would go back to making the mediocre amounts of money available in AM radio as it existed under the Fairness Doctrine, before it was a billion dollar enterprise.

And by the way, you can't avoid the destruction and chaos of offering a separate 3 hours by going to Beck and saying, "hey, so and so wants to come on and debate this or that." He's going to say "no." Because he doesn't answer to ANY individual station owner, only to his syndicator. And even if the station owners got together and pressured the syndicator to insist to Beck that he make the changes, well, then what you're listening to isn't really the "The Glenn Beck Show" anymore, is it? You've robbed him of the artistic license to do the show as he sees fit, and now it's the "Beck/FCC Show", which should get just swell ratings ... until the millisecond it takes Beck to go satellite expires, that is. In this scenario Mankow's right, again - you've destroyed AM Talk Radio as we know it.

The bottom line is this - unless station owners have the latitude to format their line ups with the most successful shows, you reduce how much they can earn selling advertising. And the proven path to fortune in AM Talk is conservative talk. The numbers bare that out plainly. Turning over 50% of their air time to the "opportunity" for liberals to speak, in which the FCC is the ultimate arbiter of who gets that 50%, would destroy the business/format which is currently the HIGHEST SINGLE RATED FORMAT FOR NEWS AND INFORMATION IN THE COUNTRY. I don't see how destroying that, or forcing it to go into a subscriber fee based satellite system, increases the public's access to information.

But that's me.

And you can apply the same scenario to the FOX line up, the same would happen the moment the hosts and Rupert Murdoch no longer have the control they enjoy now over their line up and format. It's little wonder that the calls for a return to the Fairness Doctrine come exclusively from the Left. In one move they could do irreparable damage to the 2 biggest thorns in the side of a left leaning agenda. FOX and talk radio have proven that conservative hosts in full control of their format, having the discussions with the public as they see fit, garner more ratings and produce more revenues then any other format, PERIOD. And the Left knows, hell I KNOW, that regulation is the only way to reverse their success and influence (or at least limit it from where it is now).

"Wilkow, Hannity, Limbaugh, et al... they can tell me that the Fairness Doctrine is the end of AM talk radio all they want... but it isn't true."

Yes. Yes it is.

Oh, and by the way - I am not an anarchist. I can be FOR certain government regulation, yet AGAINST others (that I see as going too far)." Favoring child labor laws yet opposing Obamacare or the Fairness Doctrine doesn't make me inconsistent, because unless you're an anarchist or a communist it's not a question of "all or nothing." And as I am neither I'd appreciate your not asking if I still support child labor laws just because I oppose the tyranny of the fairness doctrine... that's a ludicrous premise, and I think you know that.

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