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KXMZ (102.7 FM, "Hits 102.7") is a
radio station Radio broadcasting is the broadcasting of audio (sound), sometimes with related metadata, by radio waves to radio receivers belonging to a public audience. In terrestrial radio broadcasting the radio waves are broadcast by a land-based rad ...
serving the city of
Rapid City, South Dakota Rapid City is the county seat of Pennington County, South Dakota, United States. It is located on the eastern slope of the Black Hills in western South Dakota and was named after Rapid Creek (South Dakota), Rapid Creek, where the settlement deve ...
and owned by Houston Haugo, through licensee Haugo Broadcasting,
Licensed A license (American English) or licence (Commonwealth English) is an official permission or permit to do, use, or own something (as well as the document of that permission or permit). A license is granted by a party (licensor) to another part ...
to
Box Elder, South Dakota Box Elder (Lakota: ''čhaŋšúška''; " box elder maple") is a city in Pennington and Meade counties in the State of South Dakota. The population was 11,746 at the 2020 census, making it the 10th most populous city in South Dakota. Ellswort ...
, the station broadcasts a
hot adult contemporary Adult contemporary music (AC) is a form of radio-played popular music, ranging from 1960s vocal and 1970s soft rock music to predominantly ballad-heavy music of the 1980s to the present day, with varying degrees of easy listening, pop, soul ...
format Format may refer to: Printing and visual media * Text formatting, the typesetting of text elements * Paper formats, or paper size standards * Newspaper format, the size of the paper page Computing * File format, particular way that informatio ...
. The station became the subject of notoriety in June 2013, when the owners of the
internet radio Internet radio, also known as online radio, web radio, net radio, streaming radio, e-radio and IP radio, is a digital audio service transmitted via the Internet. Broadcasting on the Internet is usually referred to as webcasting since it is not ...
service
Pandora In Greek mythology, Pandora was the first human woman created by Hephaestus on the instructions of Zeus. As Hesiod related it, each god cooperated by giving her unique gifts. Her other name—inscribed against her figure on a white-ground '' ky ...
announced a deal to purchase the station as a
loophole A loophole is an ambiguity or inadequacy in a system, such as a law or security, which can be used to circumvent or otherwise avoid the purpose, implied or explicitly stated, of the system. Originally, the word meant an arrowslit, a narrow vertic ...
in its disputes with music publishing societies over
royalty payments A royalty payment is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset or ...
. The deal was approved by the
Federal Communications Commission The Federal Communications Commission (FCC) is an independent agency of the United States government that regulates communications by radio, television, wire, internet, wi-fi, satellite, and cable across the United States. The FCC maintains j ...
on May 4, 2015, and was consummated on June 9, 2015. Pandora would later sell the station to Haugo Broadcasting in 2017.


History


Purchase by Pandora

The
internet radio Internet radio, also known as online radio, web radio, net radio, streaming radio, e-radio and IP radio, is a digital audio service transmitted via the Internet. Broadcasting on the Internet is usually referred to as webcasting since it is not ...
service
Pandora Radio Pandora is a subscription-based music streaming service owned by the broadcasting corporation Sirius XM that is based in Oakland, California in the United States. The service carries a focus on recommendations based on the " Music Genome Proje ...
had historically been in conflicts with
ASCAP The American Society of Composers, Authors, and Publishers (ASCAP) () is an American not-for-profit performance-rights organization (PRO) that collectively licenses the public performance rights of its members' musical works to venues, broadc ...
and BMI over increasing royalty rates for internet radio licenses relating to the service. Pandora had filed a lawsuit against ASCAP in November 2012, alleging that the collection society was charging Pandora higher royalty rates for internet radio than those negotiated by the Radio Music License Committee (a group of broadcasters which includes iHeartMedia, Inc., owners of the competing service
iHeartRadio iHeartRadio (often shortened to just "iHeart") is an American freemium broadcast, podcast, radio streaming and Music Streaming platform owned by iHeartMedia. Founded in August 2008, iHeartRadio serves as the national umbrella brand for iHeart ...
, along with
Cumulus Media Cumulus Media, Inc. is a broadcasting company of the United States and is the second largest owner and operator of AM and FM radio stations in the United States ahead of Audacy and behind iHeartMedia iHeartMedia, Inc., or CC Media Holdi ...
and CBS Radio), thus giving terrestrial radio broadcasters preferential treatment. Pandora also believed that it should also be charged lower rates directly from ASCAP because it had reached separate licensing deals with
Sony/ATV Music Publishing Sony Music Publishing LLC (formerly Sony/ATV Music Publishing) is an American music publisher. Responsible for publishing the largest quantity of music, with over five million songs owned or administered as of end March 2021, it is part of Sony ...
and
EMI Music Publishing EMI Music Publishing Ltd. is a British multinational music publishing company headquartered in London, owned by Sony Music Publishing. In May 2018, Sony Music Publishing agreed to increase its stake in EMI to 90%, pending regulatory approva ...
. On June 11, 2013, Pandora Media, the parent company of Pandora Radio, announced via a letter posted on the website of '' The Hill'' newspaper by Pandora's assistant general counsel, Christopher Harrison, that it would acquire KXMZ from
Connoisseur Media Connoisseur Media LLC is an American media company. It is based in Westport, Connecticut and led by Jeff Warshaw. As of May 2024, Connoisseur operates 13 radio stations and digital assets in four U.S. markets: Frederick, MD, Nassau-Suffolk, NY, Ne ...
for an undisclosed amount. The purchase of the station serves as both a strategic move and a
publicity stunt In marketing, a publicity stunt is a planned event designed to attract the public's attention to the event's organizers or their cause. Publicity stunts can be professionally organized, or set up by amateurs. Such events are frequently utiliz ...
; Pandora believed that acquiring a terrestrial radio station would allow the service to receive the same internet radio license that the Radio Music License Committee had negotiated, while drawing attention to the fact that broadcast radio stations do not need to pay such royalties. At the same time, Pandora also announced that it was filing a motion in a federal district court claiming that ASCAP was violating an
antitrust Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
consent decree A consent decree is an agreement or settlement that resolves a dispute between two parties without admission of guilt (in a criminal case) or liability (in a civil case). Most often it is such a type of settlement in the United States. The ...
issued by the
Department of Justice A justice ministry, ministry of justice, or department of justice, is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a ...
. Alongside the preferential treatment of terrestrial radio companies, Pandora accused ASCAP of violating the decree by allowing its members to individually pull their content from its blanket license, but refusing to indicate which songs would be affected when re-negotiating with a company who did so, leaving Pandora liable for
copyright infringement Copyright infringement (at times referred to as piracy) is the use of Copyright#Scope, works protected by copyright without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the c ...
. Pandora also stated that the acquisition would be used as a way to apply its music personalization insight (such as the
Music Genome Project The Music Genome Project is a musical analysis project seeking to "capture the essence of music at the most fundamental level" using various attributes to describe songs and mathematics to connect them together into an interactive map. The Music G ...
) to terrestrial radio; under its ownership, KXMZ was to broadcast music tailored to reflect local listening habits as gauged by the Pandora service, which the company claimed is used by over 42,000 users in the Rapid City market. The move was criticized by David Israelite, CEO of the
National Music Publishers Association The National Music Publishers' Association (NMPA) is a trade association for the American Music publisher (popular music), music publishing industry. Founded in 1917, NMPA represents American music publishers and their songwriting partners. The NM ...
, who declared that Pandora was now "at war with songwriters," and had lost its credibility because it was resorting to "lawsuits and gimmicks" to make its point. However, a member of
Public Knowledge Public Knowledge is an American non-profit organization, non-profit advocacy, public interest group based in Washington, D.C. Founded in 2001 by David Bollier, Gigi Sohn, and Laurie Racine, Public Knowledge is primarily involved in the fields of ...
praised the move, by stating that it was "a perfect example of the twisted incentives and strange results we get from a music licensing system that is based on who wants a license instead of just what they want to do with the music they’re using."


Denial, appeal

The purchase application was filed to the FCC on June 20, 2013. The application includes a copy of the sale agreement indicating that Pandora will pay
US$ The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, currency code: USD) is the official currency of the United States and International use of the U.S. dollar, several other countries. The Coinage Act of 1792 introdu ...
600,000 for the station, as well as a
local marketing agreement In North American broadcasting, a local marketing agreement (LMA), or local management agreement, is a contract in which one corporation, company agrees to operate a radio station, radio or television station owned by another party. In essence, it ...
showing that Pandora began operating the station on June 10. However, ASCAP filed a petition to deny the acquisition, arguing that the acquisition would not serve KXMZ's public service obligations because of Pandora's intent for the station as a "bargaining chip" for royalty payments, and also alleged that Pandora did not provide enough information about its ownership structure to prove that less than 25% of the company was owned by foreign interests. On January 14, 2014, the FCC said it was no longer processing the application, ruling that Pandora failed to "demonstrate adequate support for its foreign ownership compliance certification." Pandora continued to pursue FCC approval, and on May 4, 2015, the FCC announced that it had approved the sale of KXMZ to Pandora, ruling that "it would serve the public interest to permit a widely dispersed group of shareholders to hold aggregate foreign ownership" above 25%. The purchase was consummated on June 9, 2015. Pandora would integrate aspects of the platform into the station's programming, including a daily chart countdown based on ratings given to songs by Pandora users in Rapid City, and a group of
hyperlocal Hyperlocal (also reckoned Hyper-local) is an adjective used to describe something as being "limited to a very small geographical area", and in particular, to anything " tremely or excessively local", in particular with regard to media (commu ...
, genre-based stations on the platform. Pandora's ownership not have a major impact on the station's listenership, which stayed around a 4.0 share in the
Nielsen Audio Nielsen Audio (formerly Arbitron) is a consumer research company in the United States that collects listener data on radio broadcasting audiences. It was founded as the American Research Bureau by Jim Seiler in 1949 and became national by mergin ...
ratings during its tenure.


Sale to Haugo Broadcasting

Amid a declining stock price and a stake in the company being sold to
Sirius XM Sirius XM Holdings Inc. is an American broadcasting corporation headquartered in Midtown Manhattan, New York City, that provides satellite radio and online radio services operating in the United States. The company was formed by the 2008 merge ...
, Pandora sold KXMZ to Haugo Broadcasting for $300,000 in June 2017. Haugo Broadcasting, based in Rapid City, also owns
KSQY KSQY (95.1 FM) is a radio station broadcasting a mainstream rock format. The station known as "K-SKY" is licensed to Deadwood, South Dakota and serves the Rapid City listening area. K-SKY is owned by Haugo Broadcasting, Inc. History 95.1 K-S ...
in Deadwood and
KTOQ KTOQ (1340 AM) is a radio station broadcasting a sports format. Licensed to Rapid City, South Dakota, United States, the station serves the Rapid City area. The station is currently owned by Haugo Broadcasting, Inc., and features programming fro ...
,
KIQK KIQK (104.1 FM) is a radio station broadcasting a country music format. Licensed to Rapid City, South Dakota, United States, the station serves the Rapid City area. The station is currently owned by Haugo Broadcasting, Inc. History The station ...
, and K289AI in Rapid City.


References


External links

* * {{Coord, 44.092, N, 103.249, W, type:landmark_region:US_source:FCC, display=title Hot adult contemporary radio stations in the United States XMZ Radio stations established in 2008 2008 establishments in South Dakota