Higher rating does not mean much in fact - AAR case

Air America Radio launched to encounter a seemingly permanent domination of conservatives in radio, which many democrats thought resulted in Bush, Jr. as what he was. Those influential radio hosts are Rush Rimbaugh and Sean Hannity, and their shows are aired in more than six hundred stations nationwide. Their main tool of popularity is direct attacks on liberals and democrats.

To counterattack these and reclaim radio, democrats started to organize and fundraise to start AAR in 2004 right before presidential election with five radio stations in major markets. Two years later, AAR was in more than eighty markets with sometimes better rating than those conservative radio shows. It contributed the democratic victory of the mid-term election last year.

Among these stories of successes, AAR in January again attracted people’s attention with news about their bankruptcy protection filing. It is a direct result of media environment in the U.S., where even popularity does not guarantee anything.

Its bankruptcy protection means that AAR has earned enough money to get by, but why with that higher rating in major media markets?

First of all, advertisers and sponsors didn’t like what AAR did. For example, right before the mid-term election, October 2006, Hewlett Packard started to withdraw its advertisements from AAR. “In a memo dated Oct. 25, ABC Radio Networks instructed affiliated stations that broadcast syndicated programs from Air America to black out all ads from Hewlett-Packard, which had purchased advertising time on ABC but did ''not wish to air on any Air America affiliates.'' The memo listed almost 90 advertisers that it said were taking part in blackouts of Air America, including Microsoft, Wal-Mart, Visa, Exxon Mobil, Cingular, McDonald's, the United States Postal Service and the Navy.” These companies reasoned that AAR provided ''inappropriate or controversial programming environments.,” but it is not that persuading when taking into consideration that they also advertised in other conservative shows such as Hannity Shows and O’Reilly shows. In essence, these companies discriminated radio programs based on their content. However, in the world of corporate freedom, it is companies’ choices and money talks.

Another reason of financial failure is related to overall industrial structure of radio broadcasting. There are two ways of airing programs: the first is to own a radio station and air what you want; and the second is to buy a segment of schedule and air it. It is like if you own a house or rent one. The first one is more expensive in short run, but more stable because one possesses that station. The second one is you keep pay rent without accumulating any capital in your hands. At first, AAR wanted to buy stations, but conglomerated radio market didn’t show any available station. Especially in major markets, most radio stations were all owned by media conglomerates, such as Clear Channel and Viacom. So there is no way for AAR to buy one, so it needed to keep up with rent every month. Current ownership of radio stations make virtually impossible for a new comer to set a foot in market and to make one’s voice.

Another reason for bankruptcy is failure of management, with too many high-paid celebrities and too many staff. Some media experts say that AAR can be managed with 20 people, while it had 200 staff. Streamlining of labor should not be an exception for liberal radio.

After the bankruptcy filing, AAR seemed to be sold to a New Yorker in real estate management business. Nobody knows how it will turn out, but what I see from this case is how hard it is to have a new voice in conglomerated media industry and how hard it is to have a liberal, or even dissenting, voice in current society dominated by companies and their advertisements.

References*

Some Advertisers Shun Air America, a Lonely Voice From Talk Radio's Left

Liberal Voices (Some Sharp) Get New Home On Radio Dial

Air America, Home of Liberal Talk, Files for Bankruptcy Protection

* All references are from New York Times, though links are to Lexis-Nexis, because NYT charges to see old articles and I don't have that kind of money.