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Volume 23, Issue 117, Jim Carnegie, Editor & Publisher
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Thursday Morning June 15th, 2006
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Radio News ®
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 May looking a bit better for radio
Very few radio companies report monthly revenues, but Journal Communications is one that does and May came in up 6.3% at 7.1 million. That's a considerable improvement over April, where Journal's radio group was up 1.3%, while the radio industry was down 1%. TV revenues jumped 73.2% to 11.8 million in May, but, as you might have guessed, that was due to recent acquisitions. Excluding those new stations, TV revenues rose 4.4%. All in all, revenues for Journal Broadcast Group rose 40.1% in May to 13.5M, which worked out to a 5.4% gain on a same station basis. Newspaper revenues for Journal were down 2.1% to 27.1 million, with ad revenues down 2.2% to 20 million.
Chandlers want Tribune breakup
Going beyond their previous objection to the two billion bucks plus stock buyback planned by Tribune management, the Chandler family has filed a detailed letter with the SEC which rips management for "strategic missteps" and calls for the company to be broken apart and sold off. The Chandlers, who controlled Times Mirror prior to its merger with Tribune, hold the second largest block of Tribune stock. Without mentioning CEO Dennis FitzSimons by name, the letter from the two Chandler trusts to the Tribune board of directors notes that since the beginning of 2003 - "when current management of Tribune was put in place" - the value of Tribune's stock has fallen over 38%, which the letter compares unfavorably to an 8.8% decline for other newspaper stocks and 29% for broadcast stocks. Three directors selected by the Chandler trusts opposed the company's pending two billion plus stock buyback and the letter spells out why, saying it will increase the company's risk profile and undercut financial flexibility. Meanwhile, the letter says a new round of cost-cutting will just lower already low morale at many of the newspapers. As for the future, what the Chandler trusts want is for Tribune to take three steps: 1) Separate its newspaper and broadcast operations, preferably through a tax-free spin-off; 2) Explore strategic alternatives for the sale, breakup or spin-off of some or all of its newspaper properties; and 3) Appoint a committee of independent directors to oversee a thorough evaluation of the company and "promptly execute alternative to restore and enhance stockholder value."
RBR observation: No specific mention of the sole radio property, WGN-AM Chicago, but the Chandler family clearly wants to hang a for sale sign on everything. They are fed up with FitzSimons and want to take their money and walk away.
TV had double digit Q1
 Radio revenues may have been flat in Q1, but the picture for TV was much brighter. The Television Bureau of Advertising (TVB) reports that local TV stations saw ad revenues grow 7.1% in Q1, with network up 12.8% and syndicated TV growing 6.2%.
| View the Chart |
RBR observation: Folks in radio can only hope that the TV guys do even better as the year goes on. Sold-out TV inventory as the November election approaches could cause some advertisers to turn to radio. But we wouldn't count on any major windfall, since auto advertising continues to be soft for TV. That Q1 gain came despite a 2.8% decline for local TV's #1 ad category. In any case, radio needs to focus on building business, not hoping for scraps to fall from the TV table.
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 CBS affiliates fighting fine
Affiliates of the CBS Television Network are trying to have a fine levied by the FCC on each station for an episode of "Without a Trace" thrown out on grounds that there is little evidence that the complainants watched the program on the indicted stations. Most of the complaints were generated almost two weeks after the program aired, after a pair of indecency watchdogs put their constituents on the job. The email campaign is said to have come from Parents Television Council and American Family Association. According to reports, the affiliates are arguing that the complaints came from viewing a clip on the Internet, not over the air when the program ran on the network. They point out that levying fines on this basis essentially licenses an organization to eliminate any program they want simply by mounting a similar Internet campaign against it.
RBR observation: Just about two weeks ago when legendary radioman Dan Ingram had an on-air slip of featuring an unbleeped f-bomb, we wrote, "What will be interesting is to see if a major email protest kicks off, complete with enthusiastically outraged complainants who live up to three thousand miles out of earshot of WABC." (6/1/06 RBR #107) Looks like RBR was just ahead of the curve on this one. The FCC frequently throws out petitions on grounds that the petitioner has no legal standing in the matter at hand, and declining to comment any further regardless of the evidence brought to bear by the spurned party. If you accept the premise that the program was indecent, and someone in Urbanville complained, then the CBS Urbanville affiliate may be liable. But if the affiliate across the state in Metrotown did not draw a complaint, shouldn't it be a case of no harm, no foul? One thing is for sure: The more we see of indecency regulation, the less clarity we have.
Senators find full-spectrum of support for net neutrality
There is bipartisan agreement, reflected in telecom bills in both houses of Congress, that it is time to take video franchising national. However, disagreement over the concept of network neutrality, reflecting a breakdown which also cuts across party lines, threatens to slow acceptance of the bill as a whole. Senators Olympia Snowe (R-ME) and Byron Dorgan (D-ND) highlighted the issue and its convoluted battle line yesterday in Washington. The duo appeared to tout their Internet Freedom Preservation Act (S. 2917), which would "maintain fair treatment of all Internet content, applications and services by prohibiting broadband network operators from blocking, degrading, or discriminating against others on their networks." They had representatives from a wide variety of organizations to demonstrate just how widespread is support for the net neutrality concept, bookended by MoveOn.org and the Christian Coalition. As Dorgan Communications Director Barry Piatt put it, "You don't often see MoveOn.org and the Christian Coalition standing behind the same microphone, but they'll be there as will a number of other groups from across the political spectrum..."
RBR observation: Just like the media consolidation battle of 2003, which brought the NRA and Code Pink together, this issue is on the cutting edge of creating strange bedfellows. And it's giving the strange bedfellows a chance to tune up just in time for the FCC's attempt to revisit the ownership issues. FCC Chairman Kevin Martin will finally be able to consider the Third Circuit remand this summer, now that he has a third Republican commissioner on hand, but he won't likely be able to do so peacefully.
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Ad Business Report TM
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Ford signs American Idol
 winner Taylor Hicks
American Idol winner Taylor Hicks will launch a new ad for Ford's model year-end sales event. In the television ad, which debuts today, Hicks sings and dances to a new song, "Possibilities." The commercial was created by JWT Detroit and directed by Michael Humboldt of Plum Productions. Print featuring Hicks will debut nationally in USA Today and major newsweeklies. The 60- and 30-second television and radio spots will begin airing locally and nationally today. Ford's "Drive on Us" promotion runs through 7/31, and is available in most major markets.
GroupM acquires M80
WPP's GroupM has bought LA-based M80, a leading online word-of-mouth marketing company. M80, established in 1998, identifies, empowers and activates word-of-mouth among online influencers and opinion leaders, harnessing the power of devotees to promote products and spread enthusiasm to exponentially increase a brand's fan base. Their clients include Microsoft, SegaAmerica, Universal Music Group, Twentieth Century Fox and the NBA. "Our acquisition of M80 reflects our commitment to the value of peer to peer communication in marketing," said Rob Norman, CEO GroupM Interaction. "Word of mouth at internet speed and user generated content are of increasing importance and M80 are already engaged with many of our clients and delivering huge value."
Alcohol watchdogs says ads hit African-American youth
The good news from the Center on Alcohol Marketing and Youth (CAMY) is that overall, alcohol advertising reaching those too young to drink during 2003-2004 declined, at least for radio and magazines. The bad news is that the same advertising aimed at African-American youth actually increased. The page count in magazines was said to be 30% higher than in general audience magazines; Black-formatted stations had higher levels than others in nine of the top ten and all of the top six markets, and all of the 15 most popular television shows among African American youth carried alcohol advertising. CAMY used the findings to continue its push for a 15% underage audience threshold, meaning that is 15% of the audience is underage, alcohol ads will be kept off the media venue. The alcohol industry currently observes a 30% threshold.
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| Media Markets & Money TM |
Clear Channel Marshalls Station station
The acquisition arm of Clear Channel is on the move, but it doesn't look to be the kick-off of a new round of buying such as the spree which marked the onset of Telecom 1996. KVJM-FM will mark the fourth FM for the multimedia giant in the Bryan-College Station TX area. The station, which hails from Hearne TX, is coming from Pluria Marshall's Equal Access Media Inc. for 900K cash. It'll be considered part of a cluster which also includes KAGG-FM, KKYS-FM and KNFX-FM.
Rearranging beachfront properties
Triad Broadcasting is reconfiguring its Hilton Head, SC cluster. Kalil & Company reports that Adult Alternative WWVV-FM "The Wave 104.9" is being spun-off to Broomfield Broadcasting, headed by John Broomfield, who owns two other stations in South Carolina. That will make room for Triad to acquire Classic Hits WGZO-FM "The Drive" from Zip Communications. Triad has been handling sales for the station since September 1, 2000. Terms of the sales were not immediately revealed.
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| Washington Media Business Report TM |
Barrington keeps its Michigan satellite in orbit
Barrington Broadcasting's 262M acquisition of a fleet of Raycom television spin-offs included two in the small yet far-flung Traverse City-Cadillac DMA. The linchpin is WPBN-TV, the NBC affiliate in Traverse City. The station has taken its programming into another area of the market with WTOM-TV in Cheboygan, operating as a satellite of WPBN with the FCC's blessing. However, the sale of the stations forced a reconsideration of the satellite-enabling waiver. The fact that the stations do not overlap and the fact that NBC programming would be unavailable in Cheboygan without the satellite arrangement satisfied two prongs of the FCC's requirement package. The third prong came via the testimony of broker Brian Cobb of CobbCorp. He noted that all of four major network affiliates in the market operate satellites in some of the outlying areas, and there is little chance the satellites would be able to survive on their own. To underline his statement, Cobb testified that he would turn down the chance to sell the station if he had to do so as a standalone. The satellite arrangement will be permitted to go on as is.
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| Internet Media Business Report TM |
 MySpace to solicit bids for search
News Corp. COO Peter Chernin announced the company's hugely-popular youth-oriented network MySpace plans to tap one of the three leading Internet companies to provide its with search-based advertising-Microsoft, Google and Yahoo. "We will auction off our search business to Google, Yahoo, or MSN," Chernin reportedly said.
SmartyAds unveiled for eBay sellers
Scope Aware introduced SmartyAds (www.SmartyAds.com), the first turnkey search engine marketing (SEM) solution for eBay sellers, at eBay Live! in Las Vegas. Fully-integrated with auctions, stores and the new eBay Express format, SmartyAds enables merchants to advertise their goods on Google, Yahoo!, MSN, Ask.com, and beyond. The service starts at 99 dollars/month.
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| Ratings & Research |
 Survey finds "if you stream it,
they will come"
In Jacobs Media's 2006 Technology Web Poll, streaming continues to profile as a primary Internet activity, providing terrestrial radio stations with an avenue to participate in the digital frontier. Among respondents (who are mostly members of Rock-formatted stations' email clubs), 86% use the Internet for at least one hour on an average weekday. And more than nine in ten (92%) have access to a high-speed Internet connection. This lays the groundwork for streaming radio. Overall, three in ten (29%) listen to Internet radio of one sort or another - up from 23% in the 2005 study. Mainstream Rockers and Alternative fans tend to more regularly listen to streaming audio. Among these "streamies," the big change from year to year is listenership to local stations' Internet streams. In the 2005 study, only 12% listened to the surveying stations online. In this new study, one-third (32%) indicate they now log onto the streams provided by the stations that participated in the survey.
What explains this significant increase? Simply stated, more terrestrial stations began streaming their audio in the past year, providing a place for listeners to access their programming while on computers. When "streamies" are searching for familiar, known brands to access, local station streams are most likely to come to mind. If you stream it, they will listen. Why is it important for local stations to stream? Nearly six in ten (58%) cite simple convenience as the key factor, while four in ten (37%) indicate they have trouble receiving the station terrestrially in certain locations. More than a third (35%) mention a lack of access to a radio in particular situations, while 16% report not being allowed to have a radio in workplaces and other locations. How important is streaming to overall listenership? Among those who say the station that sent them this survey currently provides a stream, three-fourths (74%) say they now listen a little or a lot more than before. And for those who report that the station that sent them this questionnaire does not stream, three-fourths (77%) also say they would listen a little or a lot more if this service were provided.
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| Transactions |
350K WMYP-FM Frederiksted VI from Juan G. Padin and Jose H. Martinez d/b/a J and J Broadcasters to Amanda Friedman. 17.5K escrow, balance in cash at closing. [File date 5/23/06.]
10K WMBG-AM Norfolk-Virginia Beach-Newport News (Williamsburg VA). 100% of Williamsburg Radio Station Inc. from Gilbert L. Granger to Gregory H. Granger. prepaid in cash. Station is being sold by father to son. [File date 5/22/06.]
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| Stock Talk |
Stocks rise despite it all
There was more bad news on the inflation front Wednesday, so you would expect stock prices to fall. But there had been so much bad news lately that traders are resigned to more rate hikes from the Fed and decided that had already been factored into stock prices. The Dow Industrials rose 111 points, or 1%, to 10,817.
Most radio stocks were up slightly, but the Radio Index slipped 0.436, or 0.3%, to 150.469. Arbitron fell 1.5% after a couple of days of setbacks for PPM deployment. Journal Communications fell 2.5% after reporting May revenues. Cumulus fell 2%.
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| Radio Stocks |
Here's how stocks fared on Wednesday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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37.44
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-0.55
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Hearst-Argyle
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HTV
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21.67
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-0.05
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Beasley
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BBGI
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7.08
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+0.01
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Journal Comm.
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JRN
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11.14
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-0.28
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| CBS CI. B |
CBS |
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25.83
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+0.04
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Lincoln Natl.
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LNC
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55.02
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+0.12
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| CBS CI. A |
CBSa |
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25.82
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+0.03
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Radio One, Cl. A
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ROIA
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6.97
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-0.07
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| Citadel |
CDL |
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8.96 |
+0.05 |
Radio One, Cl. D
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ROIAK
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7.02
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+0.02
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Clear Channel
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CCU
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29.56
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+0.02
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Regent
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RGCI
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3.80
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+0.04
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Cox Radio
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CXR
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13.50
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+0.11
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Saga Commun.
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SGA
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9.43
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-0.08
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Cumulus
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CMLS
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11.56
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-0.24
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Salem Comm.
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SALM
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13.97
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+0.07
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Disney
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DIS
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28.69
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+0.41
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Sirius Sat. Radio
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SIRI
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4.10
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+0.01
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Emmis
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EMMS
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15.85
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-0.10
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Spanish Bcg.
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SBSA
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5.49
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+0.04
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| Entercom |
ETM
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24.96
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-0.26
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Univision
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UVN
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34.67
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+0.11
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Entravision
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EVC
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7.81
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+0.07
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Westwood One
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WON
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7.87
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-0.07
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Fisher
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FSCI
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41.82
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-0.18
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XM Sat. Radio
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XMSR
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13.32
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-0.36
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Gaylord
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GET
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40.82
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+0.24
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]
Wow Dennis [Dennis Israel comments, (6/14/06 #116)], you need to move outta '80s Radio. Yeah, some of my clients are still using :60s. But I'm also providing better results, with better creative & more Frequency for those clients who are effectively utilizing :30s. If your creative people can't "set the stage" with :30s, you need to alert your HR people. And Dennis, can you say "Mini Cooper"? How about "Dodge Caliber" or "Joe Blow Nissan"? Put a stop watch to 'em. Then ask yourself, can a one-second ad be an effective, affordable element of a Branding campaign?
Lou Vespasian
Account Manager
Clear Channel Radio
Tulsa, OK
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Below the Fold
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Ad Business Report
Alcohol watchdogs says
Ads hit African-American youth...
Media Markets & Money
Clear Channel on the move
The acquisition arm but doesn't look to be the kick-off of a new round...
Washington Media Business Report
Barrington keeps Michigan satellite
In orbit 262M acquisition of a fleet of Raycom spin-offs...
Internet Media Business Report
MySpace to solicit
Bids for News Corp. search...
Ratings & Research
Survey finds
If you stream it, they will come...
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Radio Media Moves
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 ABC makes
NYC changes
Steve Borneman, previously Station Manager of WPLJ-FM, has been named President and General Manager of its senior band sister, WABC-AM New York. Borneman succeeds Tim McCarthy, who, in anticipation of the pending merger of most of ABC Radio with Citadel, will focus exclusively on his position as President and GM of WEPN-AM, the ESPN Radio O&O which will remain with The Walt Disney Company.
Premiere ups Glicklich
Premiere Radio Networks' VP/Interactive Brian Glicklich, has been promoted to the newly created position of SVP/Digital Media. Based in Los Angeles, Glicklich will continue to oversee all of Premiere's interactive businesses including the innovative subscription websites, the first of which he developed in 1999, for the company's radio personalities. In addition, he will lead Premiere's strategic expansion into other digital media, focusing on alternative forms of program delivery, product development, and relevant marketing mechanisms.
New president for Continental Electronics
Tony Grimes is the new president of Continental Electronics, replacing John Uvodich, who served in that role since 2001. Grimes reportedly comes to Continental after bring President of TRAK Microwave Corp. and on the board for Radyne Corp.
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More News Headlines
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Good news and bad news from Best Buy
The good news, especially for politicians and regulators in Washington, is that electronics retailer Best Buy had a bang-up first quarter, largely because it is selling high-tech items, such as flat-panel TV, like hotcakes. Every digital TV that is sold is one less household that will be clamoring for a set-top digital-to-analog converter on 2/17/09 when analog TV goes bye-bye. The bad news is that the profit margin was robust in part because the retailer cut back on its advertising expenditures.
RBR observation: Did you hear that, Circuit City? Time to call your account rep at your favorite radio station and steal away some market share...
Reese and Field
re-elected
There will not be any major changes in leadership at NAB this year. Bonneville International CEO Bruce Reese was elected to another year as Joint Board Chairman at the NAB Board of Directors meeting that concluded yesterday in Washington, DC. Of course, new President and CEO David Rehr was officially elected to hold his offices for the next year. Likewise, Entercom CEO David Field was re-elected Chairman of the Radio Board and Withers Broadcasting founder Russ Withers was re-elected First Vice-Chair. The only addition was the election of Commonwealth Broadcasting Corp. CEO Steve Newberry as Second Vice-Chair, succeeding Jerry Hanszen of Hanszen Broadcasting. HD Radio got attention at the meeting, with a presentation from iBiquity and an update on the nationwide roll-out. The Radio Board agreed that rapid adoption of HD Radio is a top priority and NAB is reviewing options for boosting its success.
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RBR Radar 2006
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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Arbitron asked for more PPM info
Clear Channel instituted Next-Generation Electronics Ratings Evaluation Team has written to Arbitron, complaining that while the company supplied lots of material to the team about the Portable People Meter (PPM), it still didn't answer some questions says are essential and that a good deal of what was submitted didn't relate to the work of the evaluation team.
RBR observation: Specifics that the letter alludes to and once this has arrived in the hands of Arbitron RBR trusts it will also be made public to what Clear Channel's Next-Generation Electronics Ratings Evaluation Team is exactly looking for or from Arbitron as the entire Radio Business has a complete right to know.
06/14/06 RBR #116
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