Back in the days before the Internet was entrusted to the Public, there were several national dialup computer services that bleeding edge type people were using (Rush Limbaugh was one).<\/p>\n
CompuServe (also known as Compu$pend) was THE place to be if you were wanting a public presence nationally.\u00a0\u00a0\u00a0\u00a0 It was very expensive to use and that kept people from just loitering around to cause trouble.\u00a0\u00a0 Every major tech firm had their customer support operation there (to distribute updated drivers, etc…)\u00a0\u00a0 If you were someone important, you had a Compuserve email address<\/p>\n
ABC Radio was the nationwide radio brand in the 1960s for the young people.\u00a0 It was the network with the rock and roll stations that were changing the minds of young America.\u00a0\u00a0 They owned AM radio in many major cities (WABC in New York, WLS in Chicago, KQV in Pittsburgh, KABC in Los Angeles).\u00a0\u00a0 CBS Radio was and still is a major player in AM radio, but they were the stodgy Edward Murrow “Greatest Generation” news\/talk stations.\u00a0\u00a0 Satellites didn’t exist yet for communications.\u00a0\u00a0 Syndication had to be done over leased phone lines, which meant it was very expensive.\u00a0 AT&T had made a deal in the 1930s to sell that service to radio networks in exchange for the promise that AT&T would stay out of the radio business.<\/p>\n
Then FM radio<\/span> came along.\u00a0 The stereo and better sound made it inevitable that music was moving to FM.\u00a0\u00a0\u00a0\u00a0 AM radio morphed into News\/Talk radio with the early attempts at syndication. \u00a0 Long John Neville, then Larry King on Mutual Broadcasting, Sally Jesse Raphael and Bruce Williams on NBC’s TalkNet.\u00a0 The radio world was still constrained because a radio owner could own no more than 20 stations in the entire country and no more than one AM and one FM in a single market. \u00a0 Most AM stations still had to turn off the transmitter when the sun went down.<\/p>\n Then Ronald Reagan <\/span>arrived with his ideas about deregulating radio.\u00a0 Certain ownership rules were relaxed and the monopoly that had been in effect for 50 years that allowed a handful of companies to monopolize major market AM radio were weakened by requiring all new AM stations to be 24 hour stations and cutting back the “Clear Channel” (not the company, the 50 kW non-directional signals that used to dominate AM radio at night),\u00a0 The national ownership limits would move slowly up to 20 AM and 20 FM.<\/p>\n Without music and without a syndicated talk lineup, ABC radio was not prospering.\u00a0 Its biggest programming asset was a guy named Paul Harvey.<\/p>\n Then the leveraged buyout people <\/span>showed up in 1986.\u00a0 ABC Radio and TV was swallowed up by the much smaller Capitol Cities Broadcasting of Chicago.\u00a0\u00a0 Then this guy named Rush Limbaugh showed up and proved that you could build a national audience on AM radio – he was working for a company called Premiere Radio and most of his big market affiliates were ABC radio stations.\u00a0 Another guy named Art Bell did the same thing in the middle of the night.\u00a0 Life was good.\u00a0\u00a0 ABC became the Brand for Radio.\u00a0 NBC disintegrated, CBS just kept doing what it had always done.<\/p>\n Then Cable TV exploded.\u00a0\u00a0 ABC TV launched a number of cable TV channels to market as a package with their local TV stations.\u00a0\u00a0 In 1995, Walt Disney lusted after ABC TV’s assets, and took over the company.<\/p>\n Then Deregulation happened.\u00a0\u00a0 The Telecommunications Reform Act of 1996, passed by the Republican Congress in cooperation with President Clinton changed all the rules overnight.\u00a0\u00a0 Telephone companies would be free to compete, ownership limits on radio stations would mostly go away – the Internet had arrived, and the Old Order no longer needed government protection.<\/p>\n Disney never wanted to be in the Radio Business.\u00a0\u00a0\u00a0 With the purchase of ABC, they acquired ESPN and several other cable TV channels, and had their own Disney Channel to market.\u00a0\u00a0 The Talk Radio business made lots of money, but was a pain – too many boycott threats and advertisers shying away.\u00a0\u00a0 Radio hosts would come on the air and complain about things like “Gay Pride Day” at Disneyland and give them heartburn.\u00a0 To the extent Disney was in radio, it was only to promote its own brand and its own musical artists.<\/p>\n So in 2005, Disney put the word out it wanted to unload its ABC Radio assets (it would keep ESPN Radio and its own Disney Radio stations).\u00a0 Two main bidders emerged – a company called Citadel that used borrowed money and the 1996 Act to buy up a large number of small town radio stations.\u00a0\u00a0 The other was a company called Cumulus that was also buying up hundreds of small town stations from owners glad to cash out and flee from the radio business.<\/p>\n Citadel “Won” the bidding war for ABC Radio.\u00a0\u00a0 They borrowed a large chunk of money (about $2.4 billion), and turned most of it over to Disney, although Disney retained an interest in the ABC radio stations.\u00a0\u00a0 It was quickly apparent that Citadel was in way over their head, and there was no chance they could ever make the payments on their loan.\u00a0 They quickly were teetering on the edge of default and by 2009 were in bankruptcy.<\/p>\n At CompuServe, they also completely missed the coming deregulation.\u00a0\u00a0 AOL stunned the world by offering unlimited online time, while CompuServe still charged by the hour.\u00a0 AOL had figured out that with the new 1996 rules, they could actually force the local phone company to pay them for every hour you stayed online\u00a0 (See:\u00a0 Reciprocal compensation if you want to know the details). \u00a0 CompuServe was owned by H&R Block, the income tax people.\u00a0 They neither had the interest or the skills to compete with AOL.<\/p>\n By 1997, CompuServe was a ghost town.\u00a0\u00a0 It was bought up by rival AOL for next to nothing.\u00a0\u00a0 In the final indignity, AOL rebranded Compuserve as the simple service if AOL was too complicated for you to understand or $20 a month was too expensive.<\/p>\n Friday, Citadel’s employees will be forced to start using an @cumulus.com email address, ignoring the disruption this will have on sales people.\u00a0\u00a0 This is very deliberate.\u00a0\u00a0 It is the Dickey family in Atlanta making it clear that you are now owned by Cumulus Radio and you better get your mind right about that.\u00a0 The cuts will be brutal and impersonal. Lew Dickey says he can save at least $50 million a year from the combining of operations.<\/p>\n AOL essentially no longer exists.\u00a0 After taking over Time Warner based on stock values that had no basis in real accounting, Time Warner eventually spit out its management and divested it.\u00a0 AOL is now just an adjunct to the Huffington Post.\u00a0 (Robert Pittman, the leader of AOL during much of that time now works for Clear Channel Radio)<\/p>\n I don’t expect the acquisition of Citadel\/ABC Radio by Cumulus to have any positive benefits for anyone in radio.\u00a0\u00a0 I’m very pessimistic.\u00a0\u00a0\u00a0 The persons most at risk are Don Imus and Mark Levin who are still syndicated by Citadel Media.\u00a0\u00a0\u00a0 Sean Hannity used to owned by ABC, but opted out after the sale to Citadel and moved to Premiere (now owned by Clear Channel)<\/p>\n ABC Radio, rest in peace.\u00a0\u00a0 You will be missed, by at least a few.<\/p>\n","protected":false},"excerpt":{"rendered":" Back in the days before the Internet was entrusted to the Public, there were several national dialup computer services that bleeding edge type people were using (Rush Limbaugh was one). CompuServe (also known as Compu$pend) was THE place to be … Continue reading