Clear Channel Move Could Open Doors for Independents

By DARRELL SATZMAN

Staff Reporter

Promoter Karen Lee says she’s been “banging her head against the wall” trying to get airplay for Porcupine Tree, an aspiring rock band from London, for going on five years now.

With no ties to major station owners like Clear Channel Communications Inc., Infinity Broadcasting Corp. and Emmis Communications Corp., Lee’s agency faces long odds of getting even one song from one artist or band played on any of L.A.’s highly rated radio stations.

“You can’t get an appointment. You can’t get a phone call returned. But that doesn’t mean you don’t try,” said Lee, a former I.R.S. Records executive who co-founded Los Angeles-based Evolution Promotions five years ago. “What happens is you’re forced to the furthest reaches of commercial radio.”

That may be changing.

To an industry already in crisis due to plunging album sales and Internet file swapping, add one more variable: a suddenly shifting landscape for music promoters.

The decision by Clear Channel earlier this month to cut ties with the promotional companies that serve as the middlemen between its stations and the record labels has the potential to reshape the way those labels pitch their products a circumstance that could provide some hope for Lee and other independents.

The inner landscape of radio promotion where hits are made and albums are sold is dominated by a handful of agencies such as Cincinnati-based Tri State Promotions and Jeff McCluskey & Associates of Chicago. They work for the largest record labels and pay millions of dollars to radio stations while trying to influence their playlists.

While these arrangements skirt federal payola laws, which ban payments to a radio station for playing a particular song, the practice has drawn protests from independent record labels and promoters who say it breeds corruption and waters down diversity on the airwaves. Washington lawmakers have joined the chorus of opposition and have made Clear Channel their main target.

San Antonio, Texas-based Clear Channel has enormous influence in the radio industry it owns more than 1,200 stations nationwide, including eight in L.A. and Lee and others are hopeful that other radio companies will follow its example, helping to even the promotional playing field.

But they’re not holding their breath.

“It’s a step in the right direction because there has been so much collusion on the part of some promoters and (radio station owners),” Lee said. “But I’m not sure if I buy it.”

Local Clear Channel officials did not return calls.

Skeptical response

Indeed, pay-for-play issues have surfaced occasionally over the past decade without leading to meaningful reform. This time, questions have been raised about Clear Channel’s motivations since the Federal Communications Commission is just weeks away from a vote to loosen ownership restrictions that would enable Clear Channel and others to own more media properties. Clear Channel has been one of the most vocal proponents of the changes.

“Nothing is really different. It’s a big red herring,” said Bryan Farrish, president of Bryan Farrish Promotion based in Sherman Oaks.

Farrish is one small-label promoter who sees logic in the current system. He argues that the health of the industry relies on producing hits and that only happens when hundreds of stations play a particular song at the same time.

“Those same bands who want to play on a Clear Channel station, why don’t they just apply to play at the Hollywood Bowl instead of some small club? They can’t, because they don’t have an audience. A radio station operates the same way.”

But there are those who believe change is overdue.

Steven Saxton, chairman and chief executive of Beverly Hills-based DH1 Studios, which owns two record labels (Doc Hollywood and Bop City) in addition to a production business, said the current system makes it all but impossible for a band to get on the air without major label backing, talent notwithstanding.

“Clear Channel is definitely the biggest player in the game. If this happens across the board it could be huge for independents,” Saxton said.

Jimmy Steal, vice president of programming for Emmis Communications, which owns Los Angeles’ top-rated station, KPWR-FM (105.9), said there are no plans to change its policies with promoters, although he added that the company continuously evaluates its relationships.

Promoters serve an important role helping the hip hop station stay on top of trends at the various labels, Steal said. More importantly, he added, they streamline the process of sorting through hundreds of labels and thousands of bands. In turn, the labels pay promoters up to several thousand dollars per song for airplay they help generate.

Steal scoffed at the notion that promoters have direct influence over which songs are played. “One tenth of a ratings point in this market is worth $8 million in billings,” Steal said. “If I don’t make the right decision (about a song) I’m screwed. So we don’t rely on anybody.”

Changes coming

While Clear Channel is currently standing alone, its decision could inevitably erode the influence of the largest independent promoters.

Rick Stone, senior vice president and general manager for McCluskey’s West Coast office in Los Angeles, said his firm would likely begin to focus on its consulting and listener reward programs if its promotion business drops off.

“Obviously, we’re not happy with the decision,” Stone said. “The (music) business in general is in contraction and we may have to diversify.”

Although Clear Channel and other companies collectively receive millions of dollars a year from agencies in exchange for early looks at radio station playlists and other information, the totals represent a relatively small portion of their revenues.

On the other hand, record companies often pay dearly to hook up with the most successful promoters. If their exclusive access to the stations is broken, however, the promoters have less value. Record labels may cut off relationships with promotion companies, demand lower fees or widen their client base.

“The major labels are going to benefit from not having to pay huge independent promotion bills,” Lee said.

It’s possible some of the jobs now farmed out to promoters could be brought in house, said Dan Hubbert, senior vice president of promotion for Capitol Records.

“We’re obviously hurting as an industry right now and saving some bucks is good for the bottom line,” Hubbert said. “Clearly there are some changes on the way. There is a lot of trying to figure out what’s next.”