13 November 2007

Radio Snooze

Shareholders have approved Sirius satellite radio's deal to buy rival XM and combine forces. The approval, which was expected, now leaves the tougher obstacles of regulatory approval by the Department of Justice and the Federal Communications Commission.

For whatever reason the deal still faces close scrutiny by regulators in Washington and some consumer groups who've opposed the combination.

The FCC had originally said the two satellite companies could not combine, but that rule can be changed. Sirius and XM have argued that satellite radio now faces more competition for listeners since the advent of portable listening devices like the iPod, internet radio and cell phones that can play music.

Personally, I have no idea what the FCC has to do with satellite radio and that was supposed to be the point of satellite radio! A free-form medium free from censorship and government reign.

The FCC quite obviously feels threatened by satellite radio and its limitless content. They see it as direct competition for regular terrestrial radio.

Whats ironic is that the FCC is responsible for making terrestrial so banal and milquetoast by censoring the living fuck out of it; therefore, people have fled from terrestrial radio to satellite because of this fact and now the FCC is flexing its government muscle to completely control the aural world.

It's an absurd situation; a fucked up loophole of a monopoly.

Satellite radio broadcasting was first authorized in 1997, when two licenses were issued to XM and Sirius. Their applications had taken seven years for the Federal Communications Commission to approve, mainly because the National Association of Broadcasters charged that the new service threatened "traditional American values of community cohesion and local identity." It also threatened revenues. But at the time, the FCC found that traditional radio stations drew 80 percent of their income from local advertising, which suggested that national competition would not be too damaging to existing stations.

The irony, of course, was that just as lobbyists for traditional broadcasters were making arguments about the integrity of regional identity, local stations were airing more and more national programming, and companies like Infinity and Clear Channel were launching their ambitious industry consolidation. But the NAB pressure worked both to delay satellite rivals and to get the FCC to craft license rules that seemed to ensure that satellite service would air only national shows.

In this era of industry consolidation, relatively speaking, there are fewer small, independent broadcasters left to protect. And the FCC's regulations, no matter what their original intent, now serve mainly to spare incumbent broadcasters—tiny or huge—the effort and expense of competing with their satellite rivals.

The notion that traditional broadcasters deliver idiosyncratic menus closely tailored to local audiences is a quaint one. Nationally syndicated content has become the order of the radio day, and satellite programming is, if anything, less cookie-cutter than its earth-bound analogs. That this debate has been framed along such outmoded lines illustrates how increasingly strained the concept of "local" has become. Regulators lacking spatial skills are charting geographic divides when they should be mapping communities of interest. Satellite radio caters to niche preferences in music or politics by connecting dispersed audiences. The opera buff in Tuscaloosa, left for deaf by "local" radio, connects with her community when tuning to satellite radio's 100 channels. To characterize satellite programs as uniform because they are nationally distributed is absurd. To then mandate that uniformity is worse.

It's only natural that sky-bound radio competitors want to offer that additional dimension—local news, weather, traffic, and sports—and they should be allowed to use repeaters to do it. Their financial success may depend on it. The earth-bound stations certainly hope that it does. That's why they are pressing so hard to see that they can't.

More radio news...

Clear Channel is in the process of moving all their stations into the AT&T building at 32 Sixth Avenue.

Clear Channel will stuff all its New York–based radio stations onto the ground, second, third and part of the fourth floors. Z100, Power 105, KTU, Q1043 and Lite FM will all soon be nestled a block south of Canal Street.

The 74-year-old Art Deco Tribeca high-rise that will be Clear Channel’s new home—nicknamed the Hub—contains a total of 1.15 million square feet.

My guy on the inside says Clear Channel's lease is for 121,000 square feet, with rents at approximately $35 per square foot for the first five years, $39 a foot for the next five and $43 a foot for the last five. The company will get the first eight months rent-free.

As Clear Channel veers away from its power-gobbling ways of the 1990’s, the asking rents downtown should be a healthy break from the asking rents of at least $70 per square foot at its three midtown offices: 1133, 1180 and 1120 Avenue of the Americas.

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