TVBR's Daily Morning Epaper

Volume 22, Issue 19, Jim Carnegie, Editor & Publisher

Thursday Morning January 27th, 2005

Live from Las Vegas

FCC Michael Copps wants primetime set-aside
for independent producers
Speaking yesterday to a quarter-filled NATPE ballroom in Las Vegas via satellite about the evils of consolidation and the need for more programming diversity: "We're not talking about some future threat, we're talking about present reality. Fewer companies own and control more media properties. Big companies already control radio, television, newspapers, cable networks and cable systems. They own the production, the distribution and the programming. And it's increasingly a cause for concern that they control creativity itself. Many of you not directly affiliated with a conglomerate have felt the pain-the closing off of distribution channels, the inability to bring creative new programming to a viable audience, watching good people lose their jobs and careers. Artists, technicians, all kinds of workers who were once a part of a thriving independent industry." Copps specifically cited the loss of programming directed to older Americans and children's programming as a prime examples. On the children's side, "There is evidence that younger viewers are being left behind in this new media environment. [A study] examined the impact of consolidation on kids just last year in the LA market. They found that the number of broadcast TV programs for children had dropped nearly 50% after independent local stations were swallowed up in media mergers." Copps offered a grand solution: "I think its time, long past time, for the FCC to consider and approve a set-aside, like 25-35% of primetime hours for independent producers and creators. More independent programming would be a wonderful boon to diversity, localism and competition. And these are the three building blocks of a dynamic media environment."

TVBR observation: Copps should see how many cable nets are out there now dedicated to kids...and independent producers alone!...Copps may have some valid points, but many of those once independent companies got successful and willingly sold to the conglomerates. Most of the people that lost their jobs there were hired by a competing conglomerate or another independent entity. The marketplace is huge and ever-growing to make room for all the creativity (and jobs) this human race can muster. Yes, as he pointed out, 90% of the cable nets are owned by the conglomerates. But there is still so much more content out there than just two years ago--and that includes the remaining 10% of the 500-channel universe. Bottom line-if you're independent and offer a good product that can make a conglomerate money, they will want to do business with you-either by buying your content or your entire company! Consolidation is necessary in many industries to compete in a global marketplace. Perhaps there is a downside as Copps points out, but good product will always win in the end. Whether that is created independently or by a conglomerate makes little difference. PS. There were quite a few independent producers on the floor at NATPE doing business. Maybe not as many as years past, but they're still viable.

TV News®

TV not as strong as Gannett expected
Gannett CEO Doug McCorkindale says new business development at the company's TV stations is humming along - - it's the old business that's the problem. "Looking ahead, our latest pacings for the first quarter overall are down compared to last year's first quarter - - down in the low to middle single digits, with January down in the low single digits and February down in the mid single digit range," said McCorkindale in his quarterly conference call, adding that local is currently a bit stronger than national. He said that some traditional advertisers, particularly the auto category, have been holding back on ad expenditures. In answer to questions from analysts, the Gannett CEO said the company is feeling some impact from declining ratings for NBC. "Not a big deal. They're still doing well in many, many categories," he noted.

Indecency back on the Hill agenda
As TVBR has been reporting for months now, Sen. Sam Brownback (R-KS) and Rep. Fred Upton (R-MI) are both set to get ball rolling on their respective bills to jack up the penalties for incidents of broadcast indecency. Although widely supported in 2004, for a number of reasons, Congress failed to get it done. It's no surprise they'll try again in 2005. | More... |

HHS hired columnist to plug program
In a muted echo of the Armstrong Williams case, syndicated columnist Maggie Gallagher reportedly accepted 21.5K from the Department of Health and Human Services (HHS) for which she agreed to plug President Bush's 300M plan to encourage marriage as means of strengthening families. As in the Williams case, the financial inducement to push the program went undisclosed. According to the Washington Post, Gallagher wrote at least one article on National Review Online, and also helped HHS with brochures and a draft for a magazine article. She said she did not consciously avoid mentioning the deal with HHS; rather, she simply didn't think it was anything worth mentioning. According to the Associated Press, President Bush has ordered an immediate halt to any such deals going forward. Bush said that there needs to be an "independent relationship" between the administration and the press.

TVBR observation: This incident doesn't approach the 240K paid to Williams, but it will add fuel to the fill up the gas tank for those seeking to cast a big net over the government in an attempt to ferret out other similar arrangements.

Eddie Fritts: The year ahead, Part 4
Indecency has been a hot topic for several years now, with broadcasters frustrated by an FCC that won't spell out its guidelines, but hands out big fines nonetheless. In a series of questions for NAB President & CEO Eddie Fritts, we asked how he's dealing with the problem. This article appears in its entirety in the January debut issue of Radio and Television Business Report - The Real Business Magazine. If you would like a copy please send a request via email to subscriptions@rbr.com.

Does NAB have a position on indecency, or is the industry too divided on the subject?
NAB's position on indecency is that voluntary industry initiatives are far preferable to government regulation when dealing with programming issues. We also believe most Americans would acknowledge that broadcast programming is considerably less explicit in terms of violence and sexual content than that which is routinely found on cable and satellite channels.

McSlarrow takes NCTA helm
The Washington rumor mill was right again (1/25/05 TVBR #17)! Days after stepping down as Deputy Secretary of Energy in the Bush Administration, Kyle McSlarrow has signed on as President and CEO of the National Cable & Telecommunications Association (NCTA). "The cable industry is providing great benefit to consumers through its quality programming, dynamic new services, and superior technology. By providing jobs for more than a million Americans, it's also a major staple of the US economy and a great contributor to the life of our communities. I'm honored to represent the many fine people and companies that comprise the industry, and I'm eager to lead the effort to tell cable's story in Washington," said McSlarrow. The new NCTA chief once ran (unsuccessfully) for the US House and, in addition to the Department of Energy, had previously worked for Senators Bob Dole, Trent Lott and Paul Coverdell (Republicans all).

TVBR observation: First Billy Tauzin and now another Washington heavyweight is signed to head a trade association without NAB even getting into the bidding. Eddie Fritts' retirement is only a year away and we're hearing that he'll accelerate that timetable when the NAB Executive Board meets next week. Time is a wasting!

Focus on Family cries foul over outing stories
James Dobson's Focus on the Family has no particular objection to Spongebob Squarepants and is saying that Dobson's remarks on the topic of the porous yellow square's participation in a We Are Family Foundation video have been widely taken out of context. "This issue is not about any objections to any specific cartoon characters," said FotF in a statement. "Instead, Dr. Dobson is concerned that these popular animated personalities are being exploited by an organization that's determined to promote the acceptance of homosexuality among our nation's youth." The group continued, "We applaud the ideal of championing to children the value and dignity of every human life as well as respect for our differences. What we vehemently object to is using these well-known characters to help advance an agenda that's beyond the comprehension of 6- and 7-year-old children, not to mention morally offensive to millions of moms and dads."

Conference Calls Q4 2004

Political ads fill Gannett coffers
Powered by political advertising, broadcasting revenues were up 18.7% to 233.4 million in Q4 at Gannett. If you remove the specialized (elevator advertising) Captivate Network from that, Gannett CEO Doug McCorkindale said TV revenues were up 16.2% for the quarter. Local rose 6% and national ballooned 32%, largely due to political revenues. Operating cash flow for the broadcast division increased 27% to 132.6 million. For TV only, cash flow rose 27.3%. For all of Gannett, including its much-larger newspaper operation, Q4 revenues rose 7.7% to 1.96 billion and operating cash flow gained 5.7% to 673.2 million. On a same paper basis, newspaper ad revenues were up 5.7%, with local revenues up 5.2%, classified up 8.7% and national flat.

Adbiz©

"Follow The Money! Ad Strategies In The Digital World"
Agency heavyweights explored the confluence of content and technology in a humor-packed session at NATPE in Las Vegas. What models going forward will offer the best opportunities and value for their clients? What are their biggest concerns? What trends are hitting their radar screens? Panelists included Peggy Green, President, Broadcast, Zenith Media; Jon Mandel, Chairman, MediaCom U.S.; Debbie Myers, Vice President, Media Services, Taco Bell; Charlie Rutman, President, Carat USA; and Rino Scanzoni, CIO, Mediaedge: CIA. One big concern for the industry, according to Green, is the loss of 150 million pharma dollars from the recent pulling of ads from Vioxx and Celebrex.
| More... |

Diageo signs for relationship marketing
database management
Euro RSCG 4D Discovery announced that it has been selected by Diageo North America, to oversee relationship marketing database duties in the region for the adult beverage giant. Euro RSCG 4D Discovery will provide Diageo North America with data strategy development and multi-brand database management. It will undertake the construction of the database that will serve as the foundation for Diageo North America's relationship marketing programs. The assignment was awarded after a competition against three other database companies. The incumbent agency on the business was Experian. Diageo North America's brands include Smirnoff, Baileys, Captain Morgan, Crown Royal, Jose Cuervo, Johnnie Walker, J&B, Tanqueray, Guinness, Beaulieu Vineyard, and Sterling Vineyards.

Ads toned down for Super Bowl
Don't look for any flatulent horses or crotch-biting dogs in ads airing during next month's Super Bowl. After the public outcry over Janet Jackson's "wardrobe malfunction" during half time last year and, more recently, a suggestive promo for ABC's "Desperate Housewives" at the start of Monday Night Football, advertisers are being careful not to run the risk of being tagged as offensive. Anheuser-Busch has even decided not to air a very clever spot which poked fun at last year's scandal - - intimating that a backstage worker damaged the costume by using it to open a Bud Light. According to the Detroit News, there will, however, be a topless ad. A Ford ad based on the movie "Fargo" will feature a Mustang convertible with its top down in freezing, snowy weather as a police officer investigates why the driver hasn't moved after a traffic light turns green.

Meredith targets Hispanic women with new mag
TV/magazine group Meredith Corporation is planning to extend its woman's magazine franchise keystoned by "Better Homes and Gardens" and "Ladies' Home Journal" with a periodical aimed at the rapidly expanding Hispanic market. "Siempre Mujer! The bi-monthly offering is slated for a fall kick-off with a base circulation of 350K. Meredith makes no bones about its ultimate target - - Hispanic dollars. The company says the demographic represents 600B in spending power already, and is expected to kick it up to 1T by decade's end.

You deserve a clot today?
Eat too much McDonald's food and you are likely to get fat. But can you hold their advertising responsible and sue the company? The Second Circuit says yes, overturning a lower court ruling that said no, according to the Associated Press. The new ruling says that the plaintiff need only show that advertising was deceptive and therefore caused injury - - in the case of McDonald's, ads were said to cause a variety of maladies to be suffered by children. McDonald's believes it will eventually prevail in what it believes to be a meritless case.

March Radio & Television Business Report

2005 Technology Odyssey..
The Changing Landscape
Ipods, DTV, FCC, Technology, People Meters. If you are in Business to Do Business in today's New Environment, Position your Company, Technology, Programming and what you do that Radio and Television executives need to know as budgets are being put into action. The Landscape is Changing Fast - March 2005 report is ahead of the curve as first quarter is closing fast.

Advertising/Marketing Placement - Contact
Jim Carnegie - 813 909 2916
June Barnes - 803 731 5951

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Media Markets & MoneyTM

Dividend boost for McGraw-Hill
A day after reporting strong quarterly results, McGraw-Hill Companies announced that its board of directors had approved a 10% increase in the company's dividend. The new dividend of 33 cent per share, up from 30 previously, will be paid March 10th to shareholders of record on February 24th. At the same time, the company said it would continue its stock buyback program, with plans to repurchase 3-5 million shares in 2005. "The dividend increase and our expanded share repurchase program demonstrate the Board's long-term commitment to advancing total shareholder value," said CEO Terry McGraw. "Through expanded share repurchases and dividend payments we returned more than 630 million to our shareholders in 2004, an increase of more than 50% compared with 2003. Since 1996, we have returned nearly 3.2 billion to shareholders through these programs."

Washington Beat

Powell reaction Part 4
Here's a selection of reactions to the announced departure of Michael Powell from the chairmanship of the FCC, including his fellow Commissioner Jonathan Adelstein, who released his own statement too late for our 8th Floor edition. | More... |

NAB weighs in with Supremes on P2P
NAB friends on the Supreme Court have by now received its friend of the court brief concerning MGM v. Grokster. NAB wants Grokster and companies like it to be held liable for aiding and abetting copyright infringement by enabling peer-to-peer (P2P) sharing of audio and video content. The Ninth Circuit Court protected Grokster, effectively legalizing P2P operations since, as NAB put it, "...it is virtually impossible to identify and sue individuals infringing through P2P networks." NAB stressed a number of points in the filing. It noted broadcasters' dependence on copyrighted material, as well as the need to maintain geographic exclusivity, the underpinning of national policy promoting localism. Finally, NAB argued that the Ninth Circuit "...actually encourages software developers to engage in willful blindness about the way their product is being used."

Programming

GSN takes Carson encores out of the can
The Game Show Network happens to be particularly well-situated to take advantage of the wave of nostalgia for late late night icon Johnny Carson. Before taking over the Tonight Show in 1962, he took advantage of numerous opportunities to get before the cameras, and panel game shows offered just such a platform. And they are resident in GSN's vault. As such, a glimse into Carson's pre-Tonight Show career will be provided from 9AM-3PM Eastern/Pacific on 1/29/05. Included are four episodes of "To Tell the Truth," three episodes of "What's My Line," one of "Password" and four from "I've Got a Secret."

TVBR observation: Let's see The Cartoon Network pull off something like this!

Stan Lee and Ringo Star
creating new superhero
Stan Lee's POW! Entertainment has forged a joint venture partnership with Ringo Starr to create and launch an original entertainment franchise. Financed, produced and distributed by IDT Entertainment, the new animation will transform Ringo Starr into an evil-battling, earth-saving (though reluctant) superhero with a great sense of rhythm. Plans are to develop the character for television, home entertainment/DVD, publishing and all categories of licensing and merchandising. Production on the animated series will begin in 2005 with a planned DVD roll-out first quarter of 2006. Executive Producers for POW! Entertainment are Stan Lee and COO, Gill Champion. Executive Producer for Star's Rocca Bella is Marjorie Bach. IDT Entertainment COO, John Hyde will supervise production.

TVBR Ratings

Football tops week one of "Idol"
The AFC Championship game on CBS kept Fox's kick-off of the new season of "American Idol" out of the top spot in the weekly Nielsen ratings. For the full week, CBS was again the winner with a 10.3 ratings and 16 share, followed by NBC 7.1/11, Fox 7.0/11, ABC 6.4/10, WB 2.1/3, UPN 2.0/3 and Pax 0.5/1. CBS also won the 18-49 demo, with Fox second and NBC barely edging ABC for third. | More... |

Stock Talk

Bright skies over Wall Street
Generally good earnings reports had Wall Street traders in a buying mood on Wednesday. The Dow Industrials rose 37 points, or 0.4%, to 10,499.

TV stocks did not join in the advance, with most stocks down a bit. Meredith plunged 4.7% a day after reporting its Q4 earnings. Gannett reported earnings in line with expectations, but gave soft forward guidance. Its stock fell 0.2%. Gray Television's Class A stock, which has been bouncing around lately, gained 3.3%. Univision rose 2.2%.

Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Acme	ACME		5.83	-0.09	McGraw-Hill	MHP		89.87	-0.05
Belo	BLC		23.45	+0.01	Media General	MEG		62.24	-0.28
Clear Channel	CCU		32.29	-0.03	Meredith	MDP		48.19	-2.38
Disney	DIS		28.58	-0.22	News Corp.	NWS		17.66	+0.24
Emmis	EMMS		18.02	+0.23	Nexstar	NXST		8.92	-0.04
Entravision	EVC		7.56	-0.06	NY Times	NYT		39.43	-0.52
Fisher	FSCI		49.92	+0.52	Paxson	PAX		1.63	-0.02
Fox	FOX		33.67	+0.35	Saga Commun.	SGA		16.61	+0.15
Gannett	GCI		80.00	-0.19	Scripps	SSP		47.32	-0.27
Gen. Electric	GE		35.49	-0.21	Sinclair	SBGI		8.18	+0.04
Granite	GBTVK		0.37	-0.01	Time Warner	TWX		18.15	-0.11
Gray	GTN		14.11	+0.25	Tribune	TRB		39.15	-0.37
Gray, C1. A	GTNa		12.45	+0.40	Univision	UVN		27.50	+0.60
Hearst-Argyle	HTV		25.43	-0.09	Viacom, Cl. A	VIA		37.86	-0.20
Jeff-Pilot	JP		50.33	+0.30	Viacom, Cl. B	VIAb		37.38	-0.22
Journal Comm.	JRN		17.06	+0.05	Wash. Post	WPO		902.48	+5.06
Liberty Corp	LC		40.85	+0.74	Young	YBTVA		10.48	+0.08
LIN TV	TVL		18.61	+0.20	-	-	-	-	-

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Competing Media

Emmis jumps into LA Hispanic media battle
Emmis Communications announced plans to launch Tu Ciudad Los Angeles, an English-language magazine catering to upwardly-mobile Latinos in LA, the city with the nation's largest Hispanic population. The bi-monthly magazine, targeting three and a half million affluent Latinos, will debut on newsstands and reach subscribers in May 2005. According to Emmis, "The publication of Tu Ciudad heralds a tectonic shift away from the notion of Latino identity built around language, and toward the new reality of culturally identified and geographically dispersed US-born Latinos who are a growing percentage of high-income individuals in metro areas across the U.S. This hot market, with a buying power of 78 million in Los Angeles alone, is just beginning to be noticed."

TVBR observation: So, if the magazine is going to be in English, why isn't it called Your City Los Angeles?

RBR - Radio News

Mel says "Satellite radio is red hot!"
Super salesman that he is, Mel Karmazin was making lots of promises to shareholders in his first quarterly conference call as CEO of Sirius Satellite Radio. Declaring that "Satellite radio is red hot!" he predicted that penetration could someday equal the current 90 million households total of cable and satellite TV combined, that Sirius' churn rate will be "very low," and he confirmed that Howard Stern's show will carry advertising on Sirius. But he threw cold water on rumors of a merger with XM.

RBR observation: Want to bet on that low churn rate, Mel? We see no reason why satellite radio's churn rate won't double or triple from current levels over the next few years as people trade in cars, one-year packages built into auto purchases expire and some people just decide they're not using the service enough to justify the monthly payment. You're going to need those ad revenues to keep your business model from falling apart. | More... |

January Digital
Solutions Magazine

No more political money or more Olympics advertising. In '05 you're going to have to make money the old fashioned way - earn it. Keep up on trends and figuring new ways to earn ad dollars. The need is serious for a business-oriented publication. In radio or television, many of the challenges are the same -each industry can learn from the other.
No fluff. No hype. Just business.

November Zinio Solutions Magazine
Read RBR in 2 simple steps:
1.Create a simple account with Zinio and download the Zinio Reader.
2. You can then download the January Issue of RBR

TVBR Radar 2005

Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.

Ad sessions at NATPE look at
branded entertainment, strategies
The first, "Branded Entertainment: The 411 on ROI," examined new ad models using branded entertainment. How can their effectiveness be measured and how much is too much for the consumer? With the advent of DVR and the declining effectiveness of :30s, the use of branded entertainment has been increasing exponentially. Some advertisers have been able to capitalize on it; others feel branded entertainment amounts to nothing more than throwing money away with only a chance of success. Some find it most successful using other, traditional ad elements immediately following exposure.Advertisers are putting pressure on buying and planning agencies to develop the tools and processes, and evaluative techniques to do just that. Because each branded entertainment placement is unique, the opportunities can change with each show. 01/26/05 TVBR #18

Excusing Private Ryan
According to reports, the FCC is prepared to clear the ABC Television airing of "Saving Private Ryan" of any indecency charges. Although a full commission vote is said to be pending, the necessary three votes against such a finding are apparently in place. TVBR observation: It is now possible to handicap the voting on the current Commission. Noteworthy is the fact that the factions are not split along party lines. If sentiment on Capitol Hill is any indication, we'd bet that Martin and Copps are the ones who will be getting the reinforcements. 01/26/05 TVBR #18

Expect PPM station data in Q2
Looking for a decision from Nielsen Media Research by mid-year on whether it will participate in this year's Houston test. where things stand in Houston, about 1,000 PPM panelists now have the devices installed for the Houston test. The focus currently is on the quality of the panel, but look for some preliminary data this quarter and station-level audience data by the end of Q2. That means there will be some February sweeps data for TV. TVBR observation: Keep your eye on Houston. Lots of TV groups are already pushing for PPM, or something like it, to replace set-top boxes - - and radio folks, Arbitron's traditional clients, are slowly warming to the idea (if not the price tag). 01/26/05 TVBR #18

Eddie Fritts: The year ahead, Part 3
Q: What happened to the Congressional support for broadcast deregulation in the 1996 Telecom Act? A: Media consolidation is a controversial issue - - When the FCC announced its intention to deregulate media ownership rules, I don't think anyone could have foreseen the amount of criticism that was generated. When you add to that the controversy that swirled over the Janet Jackson indecency incident at the Super Bowl, it became a rallying cry for opponents of media deregulation. Groups are energized like never before, and FCC Commissioner Copps has skillfully tapped into that. 01/26/05 TVBR #18

Ferree following Powell out the door
Media Bureau Chief Ken Ferree is also on the way out, in the same time frame. Perhaps the greatest tribute to this outgoing chief is the fact that a blueprint to endow the latter effort with a date certain is widely known as "The Ferree Plan."
TVBR observation: The twin departures of Powell and Ferree are not all that surprising. As long as Powell has been on the bridge barking out orders, Ferree has been the officer most responsible for seeing that they were executed. They have always seemed to be closely intertwined. 01/25/05 TVBR #17

BizWeek jumps on
Arbitron takeover talk
Inside the broadcasting industry, the possibility of Nielsen parent VNU someday making a takeover bid for Arbitron has been talked about for so long that there was no noticeable impact from BusinessWeek being the latest to report on such rumors. In fact, Arbitron's stock price fell when the story "The Dutch May Tune In Arbitron" was posted on BizWeek's website. RBR observation: A takeover bid by VNU has been expected since the day Ceridian announced plans to spin Arbitron off into a separate, publicly traded company. Steve Morris has staked the company's future on PPM, so he's not likely to be willing seller until he's established just how much PPM is worth. He also has the problem that there's only one logical buyer for Arbitron, so he wants to be able to deal from a position of strength when VNU comes calling to talk merger. 01/25/05 TVBR #17

Publisher Observation: The End to a New Beginning for Broadcasters
Broadcasters have no time to waste and no time for a do over. Chairman Powell's resignation is not a surprise. Go back to Dreg-Day June 2nd 2003 to when Radio got Re-Reg and TV got de-Reg when the FCC, voting 3-2, reworked its ownership rules and then Sen. John McCain and crew wiped the smiles off their faces - Senators grilled Powell & Co. for Monday's vote - The scene resembled a carnival shooting gallery. TVBR Observation then: Sen. McCain's borrowed prayer: "May the words we utter today be tender and sweet because tomorrow we may have to eat-them." This is just the first act! Think of what waits ahead and 2005 is the year for pro-active measures. 01/25/05 TVBR #17

Eddie Fritts: The year ahead, Part 2
What are the biggest issues on Capitol Hill facing TV next year?
I think it's safe to say that the digital television transition and issues related to broadcasters' return of analog TV spectrum will be a priority in the next session of Congress. The fact is that broadcasters have done our part. The vast majority of TV stations are on air in digital, and there is an enormous amount of HDTV entertainment and sports programming on the air. Now it's up to consumers to go out and buy the DTV sets, which is something we can't control. 01/25/05 TVBR #17

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