WASHINGTON – Like much of the radio industry, which has ridden a wave of more than 70 months of sales growth, Lanham-based Radio One Inc. has watched its revenues and holdings expand.
The minority-owned company, with eight urban stations in Washington and Baltimore, is even outpacing the industry. Radio One broadcast revenues from January through September were up 47 percent over the same period in 1997, to more than $38 million, according to filings with the Securities and Exchange Commission.
Radio One’s sales director in Baltimore says business could be even better but for one thing: The skin color of the stations’ owners and audiences.
“If we were Caucasian-owned stations, instead of minority-owned, we would be making a lot more money,” said Howard Mazer. “If we were a Caucasian station, we would have a lot more respect from advertisers.”
A recent study for the Federal Communications Commission backs up Mazer’s claims.
The report said advertisers avoid minority consumers and expect to pay less for ads on minority-formatted stations. It also said that stations with minority listeners earn less per listener than their general- market competitors and that minority-owned stations bring in less ad dollars than white- owned stations with similar formats.
“I’ve had clients say to me that, `The African-American has alienated my Caucasian clients,’ and that is ridiculous,” said Mazer, whose company has the No. 1 and No. 4 radio stations in Baltimore.
But others say the discrimination issue is not one of race or ethnicity but of simple market-driven competition – general-format stations make more money because they have more listeners.
Tom Bisset, general manager of Christian- formatted WRBS 95.1 FM in Baltimore, said that if his station is avoided by advertisers it’s usually because of its size, not stereotypes about its listeners.
“To be honest with you, most people could care less about what color client or buyer comes in the door,” Bisset said. “They are looking at the green that comes in the cash register.
“I don’t see that as in any way wrongful on the part of the buyer because they are trying to get the most for their money,” he said.
Industry experts echo Bisset’s argument about market-driven economics. Urban and Spanish stations are not the only ones that are neglected because of their smaller listener bases, they claim.
B. Eric Rhoads, chief executive officer and publisher of the trade magazine, Radio Ink, argues that while there may be minority discrimination, the real factor that advertisers consider is the bang for the buck.
“It’s an age-old argument. There are some that believe it’s about race and some that believe it’s about the market,” said Rhoads. “I think that really, both are true … there are smaller stations with smaller market shares that are experiencing the same problem” as minority stations.
That doesn’t wash with Debra Merskin, who teaches advertising at the University of Oregon School of Journalism and Communication.
Merskin, who was a media director before she began teaching, said it is just an easy out to chalk up the revenue gaps outlined in the FCC study to market-driven competition.
“I don’t buy that argument,” said Merskin, who argues that the advertising disparity is caused by real discrimination against minorities.
It’s about racism and people being comfortable “dealing with people who look like oneself, since many advertising executives are white,” she said.
An official at Black Entertainment Television agreed with Merskin.
The Washington-based cable network, like Radio One, is doing well financially. BET’s television advertising revenues for the nine months ending April 30 increased to over $55 million, up from $50.8 million during the same period a year earlier. Total revenues for the same time period increased more than $16 million over 1997.
But BET could be doing “tremendously better” said Lewis Carr, executive vice president of broadcast media sales.
Carr agreed with the FCC’s findings and said the report offers credibility and substantial proof to minority broadcasters’ long-made claims of discrimination.
“I am hoping that FCC report will work on people’s consciences,” Carr said. “This report should talk to the consumer. It tells them that this is the way that some advertisers feel about what they bring to their bottom line. That they are worth less than buyers of a lighter persuasion.”
Merskin said the study results were not at all surprising and she hopes that the numbers will help the government work on remedies.
“If the government is going to push the idea or opportunity for minorities to own businesses, the government has to do something about it,” she said. “It’s not enough to recognize it, now it’s time to start making changes.”