I think there are some severe problems with it. If Clear Channel weren't so greedy-it's typical of them--in trying to dress up something that's good for them as being good for us when in fact it isn't (it is, but marginally). They're not investing in the medium. If they were going to invest in the medium...what they're trying to do is do this to keep it revenue-neutral to them. They've go to invest in the medium-they should take a hit for a year or two and then what will happen is it will start attracting more people into the medium and they'll pay it off. But they're not investors, they're not station operators, they're not builders, they're not investing. So they're trying to pull the wool over the eyes of people who know better."

When you say building and investing in the medium, we are often concerned with the blandness and predictability of the programming. And this is not just about Clear Channel. We gave an example recently of how Infinity's WHFS-FM DC used to be Progressive/Free-Form Rock. In 1995 it had a 3.8 12+ share in the market. In 1996, Infinity bought it and turned it to a mainstream Alternative format. From 1996 to today, the station's share dropped almost yearly to a 1.4 share in 2003, according to Duncan's American Radio.

Says Mandel: "It's funny. This is research of one. I have a 15 and a half-year old daughter. And where she is learning about new music is online. And between the XM Radio in the car and the fact that she listens to radio on her computer-and it is not a terrestrial station, because she is interested in finding new music and they don't have it-I think what he is managing to do is the next generation coming up will not be into the medium, at all. But I know that doesn't matter to them because they are not station operators, they are bankers."

He adds, "They're trying to get the costs out, but they don't realize that, yes, you do get the costs out, but by getting the costs out you've now lowered your ratings, so your revenues have gone down faster than your costs. And then, they have to cut their costs more, because they're not station operators and they're not investing. And it becomes like water going down the drain.

I've seen this happen in the marketing business. Remember Borden Foods? They used to have Wise Potato chips and other great brands. And it's the same thing that happened there. In year one, they would say, 'I've got to cut costs, so I'll use a slightly different vegetable oil on the potato chips' And they tested the new chips vs. the old chips. And the chips didn't taste that much different, so 'OK, I'm saving 10% a bag.' But they sold a few less bags because it wasn't quite as good. So then they had to cut costs some more so they used a different oil. Hey tested year three against year two and couldn't tell the difference. This went on for 15 years until they killed the brand, because they had never bothered to check it vs. the original formula. They just kept cutting costs when sales kept going down, instead of investing in the product. And it doesn't exist anymore as a product. This is a classic mistake that American businesses make. Now most marketers have stopped making those mistakes. Unfortunately, the radio industry and the television industry continue to make those mistakes."

Responded Hogan: "I have responded to the 4As. We went out and we found all of the available research over the last 20 years. And what we concluded was while there was a lot of research-there's some 1,200 pages that we were able to aggregate-very little of it was either current or specific to what we were trying to do. Their interest was in making sure there was research being done. And we did it, to the tune of a half million dollars. We're going to continue to do research about it. I responded to them that we will absolutely share it with them. In fact, we have plans to do that in the next week or so.

And the second one, the non-availability of :60s in first-in-pod-what I told them was their concerns had been heard. We had responded to it initially by creating an island :60 position, which we thought was a pretty fair trade-off. And I went further in a letter to tell them that our goal was to make our stations as accessible and effective as possible for any advertiser-irrespective of their length. And that we're going to look into the possibility of making :60s available for first in pod."

The rest of Hogan's responses and a glimpse into the future at Clear Channel in tomorrow's RBR and TVBR Daily Epapers.

RBR observation:
When we said this was just the tip of the iceberg we were not just kidding. This problem has taken years to grow now it is the process of being addressed. When it doesn't get fixed, however, fast enough, the agency community will speak out, as with Mandel and the Gallagher letter. In his own words Mandel goes on the record with RBR /TVBR. We are quite sure this will be a major issue of talk at the upcoming 4A's conference in New Orleans next year. RBR & TVBR will be there so hold on to your hair as the Fat Lady is starting to sing very loud and when she belts out a tune it will be live not Memorex. Clear Channel's Hogan is aiming to rectify every concern the 4As mentioned. He explains the how and when tomorrow. We also touch upon the next hurdle for radio: fixing the cookie-cutter formats and introducing new ones altogether. Indie Rock, Underground Classic Rock for starters.