Alec Foege, the author of “Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio,” continues his chat today about his new book. The interview begins here.

HITSVILLE: There’s an interesting passage in your book in which Sen. John McCain grills Clear Channel honcho Lowry Mays about his plans to consolidate the radio industry further. I’d like to stipulate that not all media consolidation is bad, and that, as we talked about earlier, there are extraordinary choices available to consumers that were unimaginable a decade or two ago. All that said, we do live in an age of corporatism. Are McCain’s views enlightened in this context? Clinton’s? Obama’s?

ALEC FOEGE: John McCain has certainly had his moments in the battle against media consolidation, the kick-ass dressing-down of Lowry Mays during the 2003 congressional hearing being the prime example. He also voted against the Telecommunications Act of 1996, the piece of legislation that lifted radio ownership caps and gave Clear Channel the license it needed to acquire stations with abandon. He was one of only five senators who did so. But on the big broadcasting and telecom issues, McCain usually backs big media. For example, along with 33 Senate Republicans and no Democrats, he’s a co-sponsor of the Broadcaster Freedom Act, which would permanently prevent the FCC from reinstating the Fairness Doctrine. In late 2007, McCain declined to co-sponsor a Senate bill, known as The Media Ownership Act of 2007, which would have halted FCC chairman Kevin Martin’s push to change the commission’s newspaper/TV cross-ownership rule, a change that was enacted shortly after.

In contrast, Hillary Clinton backed the 2007 Act, which was introduced by Senator Byron Dorgan (D-ND) and Trent Lott (R-MS), and focused her public comments on the need for a diversity of programming and viewpoints on the public airwaves, particularly those of women and minorities. As is often the case, Barack Obama’s position was essentially the same as Clinton’s, though he put more emphasis on giving the public time to review any major change to ownership restrictions and giving media access to African-Americans and Latinos.

The only problem is, I’m not convinced that any of the three candidates grasp the speed at which big media is currently being transformed. While McCain is typically scattered and oftentimes contradictory in his approach, and Clinton and Obama spout traditional liberal arguments against media consolidation, none seem to grasp that the ability to control the media through a group of brand-name media properties is rapidly coming to a close, regulations or no regulations. The winners going ahead are likely to the broadcasters of any stripe who can figure out how to properly manage and monetize media on the Web.

As commercial radio’s listenership numbers continue to decline radically, it seems less and less crucial to maintain stringent media-ownership rules. In other words, there is no real reason to assume that traditional radio stations know much more (and indeed they may know less) than they’re other online media brethren.

I believe the biggest issue facing the government and the FCC regarding media issues is their woeful inability to keep pace with the transforming technological developments that surround them. Any candidate, or president for that matter, who can see the bigger picture—that media is now doing whatever technology allows it to—will likely have the most success in reining in any of its negative effects. Alas, I’m not convinced any of the three current candidates are in tune enough with how people are consuming radio and music at this moment to make consistently meaningful resolutions.

To read the interview from the beginning, click here or hit the “read more” button below.

A conversation about Clear Channel with author Alec Foege, from the beginning:

In just a few short years, Clear Channel became a media behemoth, a poster boy for the evils of media consolidation … and then a Wall Street basket case. It’s a great story, one taken up by reporter Alec Foege, who has a new book out on the company. It’s called “Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio.” As the subtitle implies, it’s about more than Clear Channel as well.

The company began as a fairly grubby small-time radio operation, grimly running features on local companies to get them to advertise on its stations. As the dreams of its founders grew, however, it was poised to take full advantage once a credulous FCC relaxed media-ownership rules, and in a burst of activity in the late 1990s ended up owning some 1200 stations. Around the same time, its grabbed SFX, which had correspondingly bought up almost the entire rock-concert production industry. (That part of the business has been spun off, and now operates as LiveNation.)

That powerful aggregation, complete with a team of execs that weren’t afraid to use that power, created the Clear Channel we came to know and love. I have been an amateur Clear Channel-ologist since working with reporter Eric Boehlert on what I think is fair to call his groundbreaking investigations of the company in 2001 and 2002 for Salon. When I heard Foege had a book coming out, I emailed him and he graciously agreed to carry on a email discussion about his work. The books is in stores this week and available through Amazon as well.

We’ll be posting the conversation throughout the week.

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Dear Alec:

Thanks for taking the time to chat with me, and congrats on an engrossing book. I thought I would start with one quote you took the time to include in “Right of the Dial,” which underlies its clear-eyed strengths and, coincidentally, brings up an interesting way of looking at how companies like Clear Channel thrive. You’re talking about the future of how folks will consume media online, and you note:

“It more often involves listeners exchanging their musical preferences in real time online. If those preferences happen to be as bland as the offerings of Top 40 radio, so be it.”

It’s not a huge thing, but I does point out the uneasy disconnect between a company like the bottom-line focused Clear Channel and the listeners who, essentially make it easy for them. So before we go into the Clear Channel bashing, can I ask: Do folks get the media they deserve?

ALEC FOEGE: Excellent first question. It is a bit provocative, but it is also one that I spent some hard time thinking about when I first planned out my book. I decided early on that it’s nearly impossible (and somewhat snobbish) to argue what constitutes bad radio purely on aesthetic criteria. So I built my argument against the quality of today’s music radio based on short playlists and repetitive content. But clearly umpteen millions must disagree with me.

As a relatively current example, an Arbitron study from October 2007 determined that the most popular channels on satellite radio mirror the most popular formats on free radio. One could certainly debate the accuracy of Arbitron’s ratings methods, but it still is pretty jarring notion that people may be paying real money for what they already get for nothing (although the cable TV business was built on a similar premise). Then again, this might simply mean that the only people listening to radio of any sort these days are those who actually enjoy it. The answer is probably somewhere in between. A lot of people still listen to the radio because it’s there, typically preinstalled in their car. Likewise, a lot of people listen to satellite radio because their new cars come equipped with satellite radio units and 1-year complimentary subscriptions. Tellingly, the churn rate, the number of subscribers who don’t renew their subscriptions, continues to rise. In other words, the number of listeners willing to pay for radio programming of any kind is likely relatively small and finite. This is why the two satellite radio companies, XM and Sirus, are such trouble financially and why they want to merge.

People do get the media they deserve, but it depends on what the options are. In 1999/2000, when Clear Channel was at the height of its powers, the Internet had not yet caught on as source of music for the masses. Now it has, and that is one of among many reasons why Clear Channel has had trouble. It is also the main reason a broadcast radio company will never again be able to consolidate power, as Clear Channel did. Now radio is beginning to exhibit the Long Tail phenomenon, where listeners with broadband access can hear any radio station they want from their computers. I predict that, within five years, many new cars will have wireless Internet access, allowing drivers to access whatever Internet radio streamcast they desire. This development will kill off satellite radio with a few swift blows.

So how will today’s commercial radio behemoths fare in the online atmosphere? For now they will do fine, thanks to starkly anticompetitive royalty rules devised by the Copyright Royalty Board last year, which impose high fees on Internet-only stations. Internet-based extensions of existing terrestrial stations pay the same fees, but their parent corporations can usually afford them, whereas mom and pop Internet-only stations can’t. But I will suspect these rules will be changed as wireless Internet access becomes more prevalent.

This is all a long-winded way of saying that bland radio will always exist—because a lot of people like it. But fresh, vibrant programming is entering a renaissance and, with greater access, may take away a substantial amount of crummy commercial radio’s listenership over time.

HITSVILLE: OK, that said, one of the amazing things in your book is the creation of the behemoth. From the very start, Clear Channel was about one thing: Billing advertisers, and from its very beginnings, the company treated the medium like anything but a public service:

One day [CC exec Stan Webb] informed [programmer] John Barger that he was trying to pitch Handy Andy. So Barger would tell [biz reporter] Harry Guerra to do a story on Handy Andy during the next day’s business report. […] “We were in the business of sales; we were not in the business of programming,” says Webb. “And I think that made us different from the get go.”

Was this business as usual in radio at the time, or was Lowry Mays and Clear Channel onto something new?

ALEC FOEGE: In the 1970s, most independent radio stations, and many radio companies, were not run as real businesses—i.e. businesses positioned for profits and growth. Station-ownership caps prevented radio companies from maximizing operational efficiencies. Adding to the problem, many station owners, station managers, and DJs alike considered themselves in the entertainment business. According to some of the veteran radio execs I interviewed for my book, the radio world at that time was not all that different from the old sitcom “WKRP in Cincinnati,” except with less humor and a lot more drugs. Payola was alive and well in that era, especially at rock and Top 40 stations, which actually cost most stations a lot of money (in lost listeners), since their playlists did not reflect what people actually wanted to hear but rather what record label paid the stations to play.

Clear Channel stood in stark contrast to radio’s business-as-usual in that era. Founder Lowry Mays, a former investment banker, grilled his station managers on each line item in their budgets, often telling them to cancel trade-paper subscriptions and personnel costs they couldn’t justify. Likewise Mays, based in San Antonio, Texas, considered himself in the advertising business and hired executives who saw things the same way. With its early stations based mostly in Texas and Oklahoma, Clear Channel held no pretensions about being in showbiz. Its employees wanted to make more money, pure and simple—and that meant selling more ads. The programming was considered just “the shit between the commercials.”

As depressing as that perspective may sound, it actually helped save commercial radio from financial ruin a number of times in that era and in the decades after. Radio had never really recovered from the advent of television; but Clear Channel showed that radio’s traditionally high profit margins could be leveraged for growth. Indeed, Clear Channel went public in 1984, only the second company to do so, and many other radio companies later followed suit.

Blurring the line between advertising and content was definitely a more unusual concept back then. Now, of course, you see it everywhere—not just on radio. However, I tend to be an optimist on this point: I happen to think that more people than media critics give credit know the difference between quality programming and the crappy stuff, and—once given easy access—will gravitate to a large array of media options. The problems arise when advertisers are let loose on a captive audience: Nothing bugs me more than settling into an airplane seat only to get bombarded by a half hour of TV ads on the screens hanging from the ceiling as my plane is delayed.

Thanks to iPods and the Internet, among other newer options, radio will likely never again enjoy the captive audience (people stuck in their cars with nothing but a radio) that helped make Clear Channel a financial powerhouse.

HITSVILLE: I was heartened to hear you say on Monday that you thought, with all the options on satellite, internet radio, wireless internet access in cars and the like, that radio programming was entering a renaissance. I think that’s a terrific point: As we saw with cable, there are many many stations filled with crap we’d never want to watch: but there are many many outlets for programming of a quality we’ve never seen before on TV. It’s funny, every once in a while I’ll go back and watch one of those TV shows from the past that are supposed to be so great—Mary Tyler Moore, whatever—and I’m always shocked at how lame they seem next to Seinfeld, much less the amazing stuff you see from the BBC or HBO. And from what you’re saying, in radio at least, we’re never going to go back: Clear Channel may have been the Last Conglomerate.

How did you get interested in the company?

ALEC FOEGE: A couple years ago someone suggested the idea to do a book on Clear Channel to me. Honestly, at that point I didn’t know much about the company except that radio fans hated it. “Clear Channel Sucks” had become something of a mantra in music listener and musician circles starting around 2000. Though I have a background as a rock writer for places like Rolling Stone and Spin, I didn’t even know much about radio, mainly because I didn’t really listen to it. The company itself was kind of faceless, as far as I was concerned. As began to research Clear Channel I became more fascinated. The company started in San Antonio, Texas in 1972, hardly a media hotbed. Many of the original Clear Channel execs were real Texas rock n roll radio guys—they grew up in the late 1950s loving Buddy Holly (who was from Lubbock) and Elvis Presley. I was also intrigued when I learned that most of the modern pop formats of radio (Top 40, classic rock, etc.) were originally cooked up in Texas. Having written two previous books on weird subcultures that affected the mainstream (one is a bio of Sonic Youth; the other is an examination of televangelist Pat Robertson’s media empire), Clear Channel turned out to be right up my alley.

The idea was to do a straight, objective history of the only U.S. corporation I could think of that had built its national brand on negative connotations. How could something like that happen? Was it a fair take on Clear Channel or had they been blamed for the ills of the radio industry as a whole? Another appeal of the topic was that Clear Channel had lived through the era of massive media consolidation that preached “synergy” as the wave of the future, along with AOL Time Warner, Vivendi Universal, Viacom, and others. But Clear Channel had joined this elite bunch via Texas, not New York of L.A. I thought the company was an excellent way to discuss the conflict between commerce and art that creates so much of the energy fueling the American cultural landscape. In other words, Clear Channel was a good microcosm for what was going on the media landscape at large.

Between the colorful company history and the array of business and cultural issues that history addresses, the notion of a Clear Channel book soon became irresistible.
HITSVILLE: It is a terrific story. Now let’s get to the meaty stuff. When I look back on what we were talking about the other day—about how Mays & Co. focussed on the bottom line—I was struck again how the federally mandated requirement to operate in the public interest was basically ignored. That’s gotta be high on the list of Clear Channel’s outrages. Is it fair to say that at least part of the company’s (initial) success came from this—that there are probably a lot of businesses in which you can innovate and make a lot of money if you ignore the laws that your competitors are basically trying to operate under?
Then you have the process you elucidate in such detail in the book, essentially the debauching of the country’s radio stations, quality wise. There’s the bureaucratic legerdemain the company used to get around ownership caps; the dirty tricks played by programing chief Randy Michaels; the increased use of “voice-tracking,” wherein DJs in one city would record programs for another city, with local references tossed in, and listeners none the wiser. …

What’s your favorite Clear Channel crime?

ALEC FOEGE: As a reporter, I think I’m partial to their stonewalling of the press. For example, the company is notorious for denying access to reporters and then complaining later that they were misrepresented. Most good public-relations pros know that it’s always better to provide some access to make sure the corporate perspective is represented. Besides, if you’re a public company, you want to appear as transparent as possible, especially if you’re a media company legally required to operate in the public interest. It sometimes seems as if Clear Channel rose from local powerhouse to global giant so quickly that they didn’t understand the rules had changed. If you suddenly buy up a ton of radio stations, billboards and concert promoters, some journalists and public-interest groups are likely going to have a few questions, and it’s usually a good idea to be prepared to answer them promptly and honestly. Indeed, it’s the American thing to do.

But Clear Channel has rarely taken that road. In the process of writing my book, I spoke to many executives who had worked at Clear Channel over the years, but the members of the Mays family who control Clear Channel never even acknowledged my numerous requests for interviews. I communicated as many times as I could that I was taking the objective route and held no grudge against the company or its activities. As far as I was concerned, the controversy surrounding them was just part of the company’s history—something that was out there, which had to be acknowledged in a credible book, but not necessarily the final word on their corporate image.

Indeed, since the controversy has died down, Clear Channel has been one of the more proactive radio groups in terms of developing new ways to distribute and broaden the scope of radio content. With all the negative press Clear Channel has received over the years, one would think they’d at least be eager to talk about these new initiatives. Instead they seem to have a preternatural aversion to the press, or else an extremely naïve understanding of how the press works. Like what they’ve done or not, Clear Channel would probably have a much more positive public image if the company had been more proactive in responding to their critics and showing them that the company was willing to make some changes–if not in the name of public interest, at least in the name of maximizing revenue growth. That’s what most public companies do, and—at least to some degree—it usually works.

HITSVILLE: What’s your sense of the state of the company right now? My impression is that the stock of Clear Channel proper is in the toilet and the attempt to take the company private has been going through seemingly unending difficulties. There’s always been a sense that the company has basically been sucking the industry dry; is there in fact much left, or is that too harsh of an assessment? In five years, what will Clear Channel look like?

As for the behemoth concert production arm, that was spun off and renamed Live Nation. The jury is still out on the dollars-and-cents reality of its transformation to a so-called 360 artist-friendly outfit—last I looked, its stock was 50 percent off its high, a year ago. On the other hand, it certainly has been getting some good ink for its Madonna, Jay-Z and U2 deals.

And is it just me or has the press developed a sense of amnesia about it once it changed its name? Can you imagine U2 a few years ago making a multi-million-dollar deal with anything with the words “Clear Channel” in the name?

ALEC FOEGE: Indeed, Clear Channel’s stock price is hovering in the high $20s, a far cry from its height of $90-plus a few years back. Of course, radio as a sector and traditional media as an industry are having a terrible time on Wall Street these days. None of that is specific to Clear Channel but more a reflection of the digital (r)evolution ripping through the biz.

I think where Clear Channel’s business approach has left it exposed, perhaps more than others, is in the content department. After years of cutting content and staffing costs to the bone, there’s not much more to cut. They’ve certainly earned their nickname Cheap Channel—though, as I detail in my book, that pejorative label was actually worn as a badge of honor in the early days. The early CC execs considered themselves good businessmen who knew how to make the radio stations they acquired lean and mean—that is, appealing to listeners and profitable. I’m not sure they’ve got much of that spirit left at the company.

I’m not convinced that HD Radio, which CC is promoting heavily, is going to be enough of a success in time to rescue the radio industry. For one, the name is terrible—it sounds like a cheap knock-off of HDTV, and what is high-definition radio, anyway? People don’t think of sound as “high-definition.” The term used to be “high fidelity,” but even that sounds way too retro. So that should give you an idea of how well-conceived the whole initiative is to begin with: Are the masses really crying out for radios with marginally better sound? Audiophiles are an extremely small and unsociable group.

I think you’re going to see Clear Channel sell off more and more of their non-core stations. Just in the past year they’ve sold off a lot in small and mid-sized markets—they were down to 963 from around 1,200 the last time I checked. In other words, it’s the end of an era and the end of a business model. Clear Channel got so big because Lowry Mays decided the bigger the better, from a financial perspective. In its late 1990s-early 2000s heyday, the company was a virtual cash machine.

As far as Live Nation goes, I agree with you that the jury’s still out on the Jay-Z, Madonna and U2 deals. Will they be profitable? In the short run, it doesn’t matter. A quick look at the company’s financials reveal that Live Nation is leveraged to the hilt, with nearly a billion dollars in borrowed cash at their disposal. On the other hand, Live Nation’s 360-degree approach is one of the first meaningful attempts I’ve seen at trying to shape the future of the music industry. It seems clear to me (and has seemed clear to me for about 8 years) that the recording industry is deader than it realizes. The big-money deals Live Nation is signing right now may never pay off in pure dollars, but they may pay off as bait for less established artists who now might consider taking a similar jump.

Some critics of Live Nation’s approach say the live-entertainment company doesn’t know anything about making and marketing CDs (despite the fact that Jay-Z’s deal, for example, reportedly includes three $10 million payments for his next three albums). But so what? CDs are not going to mean much in the new world order of the music biz. At best, they’ll be souvenirs, since anyone under the age of 25 will have downloaded and listened to the whole album for free before they shell out mega-bucks to see their favorite act in concert.

Speaking of emptying your pockets just to see your favorite artists perform, I too am astounded how Live Nation has erased any public memory of its Clear Channel affiliation. Meanwhile, Lowry Mays and Randall Mays still sit on the Live Nation board, as does one of Clear Channel co-founder Red McCombs’s daughters. The word is good on Live Nation’s CEO Michael Rapino, who ran his own concert business before it was bought by Clear Channel. Still, Live Nation still does a lot of the same controversial things that made Clear Channel Entertainment so loathed. I still can’t believe that they renamed Irving Plaza in New York as Fillmore New York at Irving Plaza. To any music fan who has any positive association with the original Fillmore East, run by the legendary Bill Graham in the 60s, the association is a real credibility killer. Anybody else wouldn’t catch the reference anyway. So why do it? Clear Channel Entertainment pioneered a lot of the overpriced concert gambits such as charging an extra $20 bucks or more at its amphitheaters for “VIP parking.” Shouldn’t parking be free if the venue comes with its own lots?

The thing is that, these days, concert fans are aware of more options than ever, thanks to the Internet, so it’s unlikely that Live Nation will be able to retain its dominance if it doesn’t deliver the goods, and at a reasonable price, to attendees at its live events. And that is as it should be.