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Volume 22, Issue 104, Jim Carnegie, Editor & Publisher

Thursday Morning May 26th, 2005

Radio News®

Mel says Stern
will have fewer commercials
With Howard Stern moving to pay radio next year, Sirius Satellite Radio CEO Mel Karmazin says the "King of All Media" will be airing fewer commercials than the 20 minutes per hour that his show currently carries on Infinity. "Because people are paying 12.95 per month, we think the listening experience should be better," the Zen Master told Sirius shareholders in the annual meeting yesterday. Are any other big personalities going to be signed by Sirius? How about the guy who gave Mel the name "Zen Master" - - Don Imus? "He's very greedy," Karmazin said, suggesting that he'd like to have the "I-Man," but doubted that the math would work.

RBR observation: Speaking of math, what was Mel smoking before he suggested that satellite radio could reach 300 million subscribers? What a salesman. But at some point satellite radio is going to have to prove to Wall Street that it can turn a profit. Sirius claims it can go cash flow positive in 2007. But rival XM has to meet its own cash flow positive commitment this year. We remain skeptical that either company will ever reach that point. It's a good thing Mel already has that waterfront house in Naples, Florida.

Adelstein deputizes America
to catch undisclosed ad placements
FCC Commissioner Jonathan Adelstein wants private citizens to begin recording any instance they encounter in which they suspect that a product or service is being advertised on the sly via product placement or pay-for-say. At a Media Institute event yesterday, he said, "Earlier this month, I spoke before 2,500 engaged citizens at the National Conference on Media Reform. I asked them to hit their record button when they saw what appeared to be an undisclosed product placement, a video news release or a news segment that looks like an advertisement. I promised to insist on an investigation of any serious problems they raised. I will continue to call on all viewers and listeners in this country to act as watchdogs for the FCC." He is particularly concerned when "experts" are paid to positively review a product or service in the course of a "news" segment. He said they "...do not always disclose their financial interest in the products they promote." He said, "Undisclosed promotions are not just wrong - - they are payola, and they are illegal. That applies to product placements, paid VNRs, or anything for which payment is made but not disclosed." | View the full text of Adelstein's prepared comments |

Staff cuts at "Gray Lady"
The broadcast division is being spared the knife, but with ad sales still soft, the New York Times Company is reducing staff at its two big newspapers - - The New York Times and The Boston Globe. In all 190 positions are being eliminated, with approximately two-thirds of the cuts coming at the Times. The company says fewer than two dozen of the jobs are being cut out of the Times' newsroom, "where a voluntary reduction program will be in effect." The staff reduction, which comprises less than 2% of the company's total workforce, is to take place at the end of August, in accordance with the waiting periods required by some of its union contracts. "Earlier this year, we began rigorously evaluating our operations to determine how we could further streamline them to improve efficiency and lower costs. Given the current challenges in the advertising at the Times and the Globe and the cloudy economic outlook for the remainder of the year, we believed it was prudent to accelerate these ongoing cost control efforts," Chairman Arthur Sulzberger Jr. and CEO Janet Robinson said in a memo to staffers.

No eye to eye between journalists, public
The Annenberg Public Policy Center of the University of Pennsylvania surveyed 673 journalist and 1.5K members of the general public, asking a variety of questions about the way news is reported. According to former Washington Post ombudsman Geneva Overholser, "This study reveals a worrisome divide between the public's view of journalism and the journalist's' own views of their work." For starters, 86% of journalists believe news orgs get it right, but only 45% of the general public agreed. Flipping it over, 11% of journalists thought that news orgs are often inaccurate, while 48% of the general public expressed the same view. Should the government be able to "limit the right of the press to report a story?" 44% of journalists said never, 48% said rarely and 6% said sometimes. The general public numbers, in the same order, were 29%, 17%, and 37% - - and on top of that, 14% said the government always has that right. 74% of journalists said errors were quickly corrected, but only 30% of the public thinks likewise. The study also revealed the press to be somewhat to the left of the general public. Press numbers were 31% liberal, 49% moderate and 9% conservative, compared to the general public's 24%-33%-38% split. "If journalists do indeed believe that what they do is valuable, fair and ethically sound, it's past time they began to put that case more effectively to the public," concluded Overholser.

Sue me, Crue me
Can a network be held liable for damages to a Rock group for not booking it? In this case, Motley Crue is holding that NBC is discriminating against it simply because one of the band members dropped an f-bomb on the network's New Year's Eve program. Although the incident occurred safely within the confines of safe harbor time (after 10PM, before 6AM), the band apparently hasn't been included in any subsequent network programming. According to the New York Times, it is suing on grounds that its free speech rights have been violated and its recording sales weakened.

RBR observation: Hey, our free speech rights are being violated, too. We were in a band, and we didn't get to be on NBC or any other network - - the best we did was a local college noncom FM. Whaddaya say, Your Honor - - our rights have been violated and a huge settlement in our favor is warranted. RIGHT. This is one lawsuit on the road to nowhere.

Adbiz©

Donchin on the upfront
Andy Donchin, Carat Americas Director of Broadcast Buying, tells RBR/TVBR buyers and sellers are still in the talking phase right now, for the most part. However, he thinks it will be heating up any day now: "Right now, we're just feeling each other out. Some deals have been done, it's moving along and everybody is still measuring out the market. I think it's on the light end."

So the market isn't in any rush?
"No. It's at a do-able pace and everybody is just figuring out where they want to go and what's important. They really want to do their deals, and I think some [significant] things probably have been done. A lot of people are talking and I think it will heat up soon."

Any programs out there getting your attention?
"No. I'm still definitely a believer in broadcast television, but support cable in a big way, and syndication. There's really not to say right now, as I said, we're still feeling each other out and talking-kicking the tires.

How would you compare the upfront at this point in time vs. the last couple years?
"There seems to be more supply than demand, and we're trying to get a grasp of the marketplace based on that."

Starcom MediaVest CEO:
Print needs more online, wireless delivery
Speaking at the International Federation of the Periodical Press (FIPP) conference in NYC this week, Starcom MediaVest Group CEO Renetta McCann said print publishers are falling behind other types of media in their ability to deliver content over broadband and wireless. McCann predicted consumers will "engage with content primarily onscreen and not on the printed page," and print publishers must adapt or face the consequences.

Publisher note: Agree with Renetta 100% that is why RBR & TVBR stopped printing weekly and deliver content with solid presentation and interaction with our colleagues via this morning e-paper. Others just don't get it. Plus, Radio & Television Business Report - The First Monthly Business Magazine - was the First to go Digital 2 years ago with audio and video capabilities. Only problem is not all consumers, including the media, understand Rich Media and digital publishing. If you want to learn to maximize and get familiar with digital - see our June issue soon.

Jack Morton Worldwide looks at
marketing event influence
Live event marketing experiences where consumers interact with products, brands or "brand ambassadors" face-to-face are more effective ways to influence coveted consumer audiences, versus TV advertising, Internet advertising and other marketing tactics, according to results of an extensive survey released today by Jack Morton Worldwide. Comprising an online survey of 2,574 consumers, ages 13-65, in the top 25 US markets, the results confirm that this increasingly important marketing medium resonates strongly across demographic and product categories, with especially high influence among key groups such as women, young people and Hispanics. | More... |

Media Markets & MoneyTM

EMF goes on CP spree
Educational Media Foundation has struck a deal with Broadcasting for the Challenged that will give it seven FM contruction permits in a variety of locations, all for a little less than 250K. Two are squarely in Arbitron-rated markets, and another - - one of the cheaper ones - - isn't all that far from St. Louis. That would be the CP for WDRS-FM, licensed northeast of town and across the Mississippi in Dorsey IL. It's going for 30K. The CP for KBMK-FM Bismarck ND is selling for 60K, with KHBQ-FM CP San Angelo TX going for 40K. Two more, both in New Mexico, are priced at 40K. They are KRSR-FM CP Roswell and KKCC-FM CP Clovisw. Rounding out the multi-contract transaction (paperwork was filed separately for each stick) are KNNU-FM CP Newton IA and KDRE-FM CP Sterling CO. The grand total for the noncom-to-noncom deal is 247K.

Washington Beat

Martin thinking about cable content options
A national watchdog group met with FCC Chairman Kevin Martin, and reports that he is seriously considering policies which could affect the way cable channels are offered to subscribers, as well as looking at regulating content delivered via other wireless means. The group is the National Coalition for the Protection of Children & Families. The focus of concern discussed with Martin and members of the FCC Wireless Telecommunications Bureau was the possibility of objectionable material making it to the eyes of children via "cell phones, PDAs, iPods, Game Boys and other emerging technologies. The meeting also touched on similar issues with cable television and satellite radio and TV. NCPCF President/CEO Rick Schatz said, "Chairman Martin recognizes this is a serious problem. Not only are these communication vehicles unregulated, but also network TV continues to push the envelope of sexual content and language in order to compete." Martin was said to be contemplating the leveling of the decency playing field between broadcast and subscription services. He is also considering "unbundling" cable, allowing parents to pick and choose channels, or the creation of family-friendly tiers which would exclude channels, with MTV and FX being put forth as examples.

Stevens looking at downconverter
subsidy alternatives
In a session with the National Spectum Managers Association its 2005 conference, Senate Commerce Chairman Ted Stevens (R-AK) indicated that as far as he is concerned, the DTV transition is a pressing issue, but as yet all is still on the table. He refused to give thumbs up or down to a House proposal to set a hard deadline of 12/31/08 as the last day of analog video transmission. He also expressed a great deal of concern for making the transition to digital as painless for American citizens as possible. Asked about subsidizing the acquisition of digital-to-analog downconverters to households which would otherwise lose service when analog is turned off, he said it was a possibility, but there are others. What he'd like to do is put the burden on set manufacturers, which he noted are all based on foreign shores. "I'm also toying with the idea that those who manufacture analog sets after a certain date, must provide a box with it. I don't know why these foreign manufacturers shouldn't shift over to digital and if they don't, they should give us a box. I'd like to avoid the subsidy and let the buyer have the full value of going to digital and if they want to buy analog now, it ought to transition into the next generation of digital. I'm not sure I'll win on that, though."

Programming

Miami to get Classical back, via HD multicast
WLRN-FM Miami is stepping in to fill South Florida's classical music void. Late this summer, the station will roll out a 24-hour classical station, hearable only on digital radio. The station has been granted a temporary FCC license for HD Radio multicasting. In 2002, Cox Radio Classical WTMI-FM switched to dance music. Earlier this year, WKAT-AM, which had briefly adopted a Classical format, changed to Talk.

Ratings & Research

Arbitron unveils small market changes
Details were released yesterday of how Arbitron is modifying its ratings reports in 110 small markets to smooth out fluctuations and create more stable ratings results. Beginning with the Fall 2005 survey, Arbitron will include the in-tab diaries from both the current and previous period in tabulating audience estimates. Thus, the Fall book will have data from both the Spring 2005 survey and the Fall 2005 survey. But more changes are coming for those 110 "condensed" markets. Beginning in January 2007, Arbitron will survey them continuously, converting from two books a year to four. Then, instead of a two-book rolling average, the rating will be a four-book rolling average. Note that these changes apply only to the 110 condensed markets that are not embedded within a larger market (there are four such condensed markets). Also, these changes do not affect the 84 "standard" two-book per year markets which have larger sample sizes than the condensed markets. If you're big on math, there are also 98 four-time-a-year markets, all of which adds up to 296 Arbitron-measured radio markets.

TVBR TV News

DC stations want LPM halted
There are two very different views of how Local People Meters (LPM) are working in the Washington, DC market. "Nielsen's numbers are wrong, because the new Local People Meter System is not counting lots of people," said Allbritton Communications Sr. VP Jerry Fritz in a telephone news conference. "The faulting rates are simply off the chart. Nielsen won't fix them before it launches the new service and we don't like that." Specifically, Allbritton, Gannett, News Corporation and Tribune, which collectively own five of the six major commercial stations in the DC market, want Nielsen to put LPMs on hold until it corrects what they identify as problems and get Media Rating Council (MRC) accreditation for the LPM service. That's not likely to happen. "The sample is right on," said Nielsen spokesman Jack Loftus. "The meter is accurately showing that, particularly African-Americans are watching a lot of different channels, as well as a lot of viewers are watching a lot of different channels," he said, disputing claims that LPMs undercount minority viewing. As for the fault rates, Loftus said they are on par with the National People Meters, which have been in use since 1987. He says fault rates are higher in homes with more TV sets. "It's a factor of size of the home. It has nothing to do with race," he insisted. In Nielsen's view, LPM is better than the meter/diary system that it is replacing. "I'm kind of surprised that WJLA is complaining, since their numbers are up," Loftus said of the Allbritton station. But Allbritton is objecting in DC, along with Gannett and two other broadcasters who have had previous experience with LPMs and been steadfast in their objections - - News Corporation and Tribune. During the news conference, TVBR asked whether they had seen any improvement over time in those other LPM markets. "The answer is no. We've been very reticent to publicly engage in this fray, but our frustration is so palpable, that's why we're on this call," said Tribune VP Shaun Sheehan. As it happens, Nielsen is meeting today with its client station groups to go over the latest data from the LPM markets. It's likely to be a lively session.

TVBR observation: Little noticed, Nielsen last week got MRC accreditation for its San Francisco LPM system, the second market to earn that distinction after the original LPM market, Boston. But there are still issues to be resolved in New York, Chicago and Los Angeles. We find it interesting that no one in Philadelphia has asked for an LPM delay, although News Corp. and Tribune both have stations there as well. The LPM opponents know that DC is not just another market - - the Senators and Congressmen who write the laws, as well as their families, watch WJLA, WUSA, WTTG, WDCA and WBDC. They are going to hear the complaints about LPMs. And while Allbritton insists that it doesn't want government regulation, but rather for the TV industry to resolve this within the family, News Corp. has been pressing, and pressing hard, for Congress to get involved. We have warned that this is a dangerous and stupid move by Rupert Murdoch - - and that he'll hurt himself and every other broadcaster if he succeeds - - but he knows that DC is the place to fight this battle. Nielsen had better wise up and marshal its own forces on Capitol Hill.

Transactions

5.525M KNRC-AM Denver-Boulder (Englewood CO) from NRC Broadcasting Inc. (Timothy Brown et al) to New Radio Venture LLC, a subsidiary of HM Communications LLC (Maria Elena Llansa, Heberto Lima-Villers) and Susquehanna Radio Corp. (David E. Kennedy). 250K escrow, balance in cash at closing. LMA 6/1/05. [File date 4/25/05.]

2.875M KOTR-FM & KTEE-FM Monterey-Salinas-Santa Cruz (Hollister, Felton CA) from Mapleton Communications LLC (Adam Nathanson) to Lazer Broadcasting Corporation (Alfredo Plascenia). 175K escrow, balance in cash at closing. Mapleton is selling existing duopoly to stay within local market ownership caps. Buyer must change call letters. [File date 4/25/05.]

Stock Talk

Oil prices send stocks lower
Oil prices surged on Wednesday, sending stocks lower. The dow Industrials lost 46 points, or 0.4%, to close at 10,458.

Radio stocks fell with the market. The Radio Index was down 2.461, or 1.2%, to 200.826. Beasley fell the most, dropping 3.1%. Saga dropped 2.3%. One of the few gainers was Journal, up 3%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		40.65	-0.37	Jeff-Pilot	JP		49.45	-0.35
Beasley	BBGI		16.34	-0.53	Journal Comm.	JRN		16.53	+0.48
Citadel	CDL		12.09	-0.05	Radio One, Cl. A	ROIA		12.49	-0.07
Clear Channel	CCU		30.21	-0.23	Radio One, Cl. D	ROIAK		12.49	-0.11
Cox Radio	CXR		16.11	-0.04	Regent	RGCI		5.91	-0.06
Cumulus	CMLS		12.40	-0.25	Saga Commun.	SGA		13.58	-0.32
Disney	DIS		27.65	-0.01	Salem Comm.	SALM		17.98	-0.05
Emmis	EMMS		17.78	-0.22	Sirius Sat. Radio	SIRI		5.64	-0.03
Entercom	ETM		32.57	-0.58	Spanish Bcg.	SBSA		8.22	-0.14
Entravision	EVC		7.50	-0.11	Univision	UVN		26.53	-0.09
Fisher	FSCI		50.37	-0.62	Viacom, Cl. A	VIA		35.25	-0.26
Gaylord	GET		41.43	-0.77	Viacom, Cl. B	VIAb		35.10	-0.31
Hearst-Argyle	HTV		24.94	+0.17	Westwood One	WON		19.83	-0.11
Interep	IREP		0.45	+0.02	XM Sat. Radio	XMSR		30.87	-0.39
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to [email protected]

This reader agrees that Paris Hilton's burger spot is soft core porn
(5/25/05 RBR #103).

If the FCC or someone doesn't take action on this spot, or if Carl's Jr. doesn't voluntarily drop it, then this whole indecency debate is clearly aimed unfairly at the networks only. No prude here, believe me, but I agree with those who say, this is "laddie mag" stuff...I used to sneak out behind the barn to look at pictures like this...there's gotta be a better way to sell a 1,000 calorie burger.

Gary Lico
CABLEready
CABLEready Blog

This reader disagrees with our take on advertisers pulling ads when they get bad press (5/25/05 RBR #103).

This issue is not new. For years publishers have stated that "...advertising and editorial don't mix..." But let's get real. If I, as an advertiser, am spending millions of dollars each year in a specific publication, see my company as the subject of criticism by that publication's editorial staff, what's my incentive to continue contributing to their salaries? Surely, the word "masochistic" lurks in my mind. "Freedom of speech" is not the issue here...paying someone else to criticize your company is! Say what you want...it's your privilege in America. But I do not have to support your efforts.

Donald Emanuel, President
Continental Marketing LLC
Colorado Springs, CO

Arbitrends

More News Headlines

ABC News Radio details
Memorial Day offerings

Imus officially dumps Sid

Michael Savage gets
strong Winter ratings

RBR Radar 2005

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

Some real ad nauseum
Energy company BP has joined Morgan-Stanley in instituting a policy in which any magazine advertising they may have booked is to be pulled if the magazine contains any editorial the company feels is negative or otherwise objectionable. The BP directive asks that publishers notify both their sales and editorial staffs about the policy.
RBR observation: Editorial department here. We note this because this type of thing is just as applicable to radio and TV advertising. We dearly love our sales staff, especially on payday, but it is absolutely critical that we have an arms-length relationship when it comes to content. Without editorial integrity, there would be no point in reading us, nor would there be any point in advertising with us. Our sales staff has yet to be granted editorial privileges, just as our editorial staff has no say in what ads are sold, what they say or what they look like. Advertisers, if you want to control editorial in the magazines you advertise in, we suggest you do what Clear Channel did: Buy one.
05/25/05 RBR #103

Jon Mandel on the upfront
Chairman/MediaCom US and Chief Global Buying Officer MediaCom Worldwide - Indeed, the 2005-2006 upfront isn't starting off with a rush or panic, as in recent years. Mandel's observation - "There's that, and also, if you're going to do the job right, you take the time to do the estimates properly; you take the time to watch every single pilot; you take the time to talk to the producers about where the shows are going. You don't just go and buy based on two-minute clips. People that do that aren't doing a good media job. They're just buyers. The reason why clients get crazy at the business is because they feel that people don't give it the proper thought. And you can talk strategy all you want, but when you go and do conceptual deals without having watched the shows and matched the shows, the audience and the brand you're advertising, then you're doing a disservice to your client and you're doing a disservice to the industry." 05/25/05 RBR #103

Cumulus loss not crippling blow
Business will continue as usual at Interep, despite losing Cumulus as a client Interep CEO Ralph Guild told RBR .. it is not a crippling blow by any stretch of the imagination." Interep has operated a boutique rep as Cumulus Radio Sales, it had no employees who were exclusively repping the stations, so no staffers will lose their jobs or have to be reassigned. RBR observation: Cumulus has indicated that it plans to honor the terms of its contract with Interep, which still has several years to run. So, look for Interep to receive contract termination payments. We're still waiting for confirmation from Cumulus CEO Lew Dickey - - and word on what he expects to get from Katz that Interep couldn't, or wouldn't deliver. Our expectation in a word 'Future' and in many cases a major difference in age brings a major difference in business philosophy or just the old saying of philosophical differences. It will be interesting to see the business plan Allen & Co. come up with for Interep that will take them into the increasing total media competitive arena before the close of this year as it will not be business as usual in 2006. 05/25/05 RBR #103

Product placement in
Neil Simon Broadway play
As part of a product placement campaign in Broadway's Sweet Charity, playwright Neil Simon approved a script change to promote Jose Cuervo's Gran Centenario tequila. Sweet Charity stars Christina Applegate. Simon approved a script change to incorporate the brand into the dialog. The brand logo will also appear in set and ads will be placed in the playbill. NY-based Bridge to Hollywood/Broadway put the deal together-it previously brokered product placement deals for appearances in Thoroughly Modern Millie and Raisin in the Sun.
RBR observation: Ok this is hard beverage dollar shit but it pushes the point that more national spot dollars will move into this environment in 2006. 05/24/05 RBR #102

Is deconsolidation
just part of a cycle?
That's the theory put forth by Thomas Weisel Partners analyst Gordon Hodge in a research note on the current wave of media companies spinning off units or selling assets. After a boom-bust consolidation period in the late 1980s, the Telecom Act of 1996 propagated another consolidation wave, which rolled through the Internet bubble and then crashed into the breakers of recession, antitrust concerns and 9/11. We are living in the aftermath of that wave. RBR observation: Reminds us of a Yogi Berra quote on his hitting, "Slump? I ain't in no slump ... I just ain't hitting." Well same with many companies they just ain't hitting because as Berra would say - "90% of the game is half mental." Think about it because Hodge and Berra are both correct either a slump of the sum of their parts. Key for all media companies is your business plan and execution of the plan. If you didn't see it coming after 9/11 and the '02 recession which is still alive then you best get your house in order now or you will find it very difficult to compete in 2006. 05/23/05 RBR #101

Correction

Ptak acq location
de-villed
WMGZ-FM, which is being acquired by Paul Stone along with WKGQ-AM, is not located in Eatonville GA, as we reported, but in Eatonton GA, as was pointed out by alert reader Larry Fuss. Thanks.

GSM Opportunity with Emmis
Legendary KSHE-95 St Louis needs a strong GSM with minimum 5 years battle experience and NTR skills a plus. Generous benefits and compensation await. Are you ready for this challenge!

General Manager
On the NJ Shore with at least five years suburban market and cluster exp. Strong sales but programming and engineering knowledge a plus. Excellent benefits including 401(k).

Broker Opportunity
Established in 1979, conducted over 1 billion in transactions seeking just one exec that desires to learn and become a player in the investment media station brokerage business. First quality in our firm is integrity.

Sales Position
We're expanding our sales force to spread the word about MusicMaster for Windows music scheduling software. Self-starters that can build relationships apply and grow. Must be able to travel but no relocation required.

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