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Volume 22, Issue 147, Jim Carnegie, Editor & Publisher

Thursday Morning July 28th, 2005

Radio News®

Nielsen on defensive
as Burns convenes LPM panel
Sen. Conrad Burns (R-MT) had the Senate Commerce Committee pretty much to himself yesterday as testimony was taken concerning his S.R. 1372 FAIR Ratings Act. Nielsen's Susan Whiting spent much of the afternoon fending off complaints from representatives of the broadcasting and accreditation communities. However, she had very strong support from the lone representative of the advertising community, MindShare's Kathy Crawford. Burns stated the issue in a nutshell. While it is not surprising that there are problems between the rater and the rated, broadcasters are hampered by the fact that Nielsen "is the only game in town." Burns said that the Media Rating Council is the perfect vehicle with which to audit and monitor ratings providers, but that it lacked teeth to make its recommendations stick, hence the need for his bill. Gale Metzger, a former player in the ratings game who said he was on the panel only to speak for himself, said that part of the problem was the proliferation of video options - - as the networks lost audience and power, the balance of power has tipped Nielsen's way. Tribune's Pat Mullen complained about bottom-line reliance on reliable ratings, with little recourse given Nielsen's monopoly status.

He said he needs a reliable report card, and in big markets, Tribune isn't getting it. George Ivie of MRC explained his organization's oversight process, and said that there was much to like in Nielsen's LPM technology. But he said its not there yet, and needs more work. His biggest gripe seemed to be Nielsen's going ahead with commercialization of the service in three markets without an audit.

Nielsen and friends respond
Nielsen's Susan Whiting said that her company is eager to please all of its clients. The problem with that, however, is the same - - Nielsen has to please all of its clients. And the desires of its clients are not always in sync. The main fear of Nielsen isn't the expense of going through accreditation; it's the time that can be swallowed up in the process. She said the bigger the hurdle, the less likely any company would be to bother introducing new technology. She got a strong helping hand from Kathy Crawford, representing advertiser interests. Advertisers want to know what they're getting for their investment, and they want local overnights in particular. They've been waiting 15 years, and want to get on with it. In her opinion, broadcasters were happy with an old-fashioned ratings system when it over-reported their true audience size, and their only problem with LPM results is the fact that it reports lower audiences - - she said they'd be against that result whether or not it was more accurate. Fault rate is the sticking point: The imposition of a federally-mandated regime on ratings is basically coming to a head because of fault rates for LPM. The problem, according to Tribune's Pat Mullen, is that when LPM households fault, it is usually because they are actually watching TV, but somehow mishandle the LPM equipment. Active viewers are missed - - whereas there are lots of non-viewing explanations for an unusable diary. The households that fault most frequently under LPM are in the black, Hispanic and young demographics. The broadcaster concern is that after a year, Nielsen has done little to improve the fault rate. Whiting said that at least LPM allows Nielsen to be aware not only of the fault rate, but in which demos it is occurring, information they are indeed using to improve the system.

More opposition to Burns bill
As lawmakers on Capitol Hill mulled the proposed bill to regulate TV ratings, a couple of major groups from the advertising industry announced their opposition to the Burns bill. The American Association of Advertising Agencies (4As) Media Policy Committee said making Media Ratings Council accreditation mandatory for TV ratings companies "would undermine the basis of the current self-regulatory system" and quoted the Chair of the FTC in noting that self regulation can be more prompt, flexible and effective than government involvement. "There is nothing to suggest that responsible self-regulation cannot continue to work going forward," said the letter signed by executives of 25 ad agencies. Also, the Association of National Advertisers (ANA) issued a statement opposing the bill. "We believe the current voluntary accreditation process with MRC involvement is effective," said the ANA, adding, "This proposed bill would slow the introduction of new technology and create barriers to entry for new ratings services and for new products within those services." Arbitron also announced its opposition to the bill, saying it "would establish a new and permanent regulatory process that would negatively impact the media and marketing research industry." Just in case you haven't been keeping your own list of who is opposed to the Burns Bill, Nielsen Media Research has supplied one: | The List |

Blow-out sales event? Not with a flat June
By the time the tote board was added up, the results for June 2005 radio revenues were in a dead heat with the results of June 2004. That's for both local and national business. In fact, the exact same thing can be said for all of the second quarter. It is not until you look at YTD figures where there is any discernible improvement over 2004, and at that we're talking a 1% gain, which again holds for both local and national business. The one difference noted in Radio Advertising Bureau stats for June over June is a 5% decrease in non-spot revenue, the bulk of which is too small to bring down the flat results from the other two categories.

RBR observation: Here's a quote for you: "Local business had been delayed by concerns over the economy and global affairs, but has held steady. All indicators point to growth and recovery for the 3rd and 4th quarters." Continued mixed signals from the economy operating against a backdrop of global terrorism seems to be S.O.P nowadays, does it not? As a demonstration of just how stagnant it has been, we now reveal that the above quote came from RAB President/CEO Gary Fries. On 8/8/03. The Q3/Q4 growth he was looking for never materialized. Hmmm...

National lagging local for TV groups
Two more TV groups have confirmed that national sales remain soft, despite strong performance by their station sales forces at the local level. At this point, Meredith says it expects same station revenues for the current quarter to be down in the low to mid single digits. LIN Television also expects Q3 same station revenues to be down in the mid single digits. Asked about the weakness in national sales,

LIN CEO Gary Chapman said auto - - the biggest category - - was up overall for the first half of the year, with increased advertising by foreign makes counteracting a slowdown by Detroit. Now, Chapman says, the domestic carmakers appear to be accelerating ad spending. But even with the auto improvement, other important national ad categories remain soft.

Moonves sees cash flow ahead
CNBC may be owned by a competitor, but Viacom Co-President/COO Les Moonves was interviewed live Tuesday on "Mad Money with Jim Cramer." Speaking by phone, Moonves said the new public company that he'll be running when Viacom splits next year - - CBS - - will throw off a lot of cash flow. That new company will include the TV, radio and outdoor businesses. And while ABC may be looking at selling out of radio, Moonves gave radio a thumbs up as a valuable contributor to that cash flow and stability. On the TV side, Moonves dismissed Cramer's concerns about any threat from TiVo, noting that it is only in 6% of households. For his part, Cramer advised viewers to buy CBS stock after the split.

RBR Poll

Question:
Now that you've heard all of the arguments, put yourself in the role of a United States Senator. How would you vote on S.1372, the Burns bill to regulate TV ratings?

For It
Against It
Still Undecided

Conference Calls Q2 2005

Broadcast revenues flat for Meredith
As Meredith Corporation wrapped up its fiscal year, it reported that Q4 (April-June) revenues for its broadcast division (14 TV stations and 1 radio) were essentially flat (down 0.5%) at 79.5 million as a 3.9% gain in regular spot sales replaced last year's 3.6 million in political revenues. Broadcast operating profits fell 6% to 24 million. For the full year, broadcast revenues were up 8% to 312.5 million and operating profits gained 25% to 86.7 million.

Adbiz©

David Verklin: What research the Carat boss wants
RBR/TVBR recently asked David Verklin, CEO of Carat Americas:

What do you wish research companies could provide that they're not?
"I think there are a few key buckets on the research area that we're all interested in. The first is that in the quest for ROI, everyone wants research that answers the question "I spent a dollar and I want to know what I got back." But there's really an issue that's before that which is some kind of research on the effectiveness of non-traditional media. How do we measure event marketing? How do we understand what is the ROI on that model? What do you get for that experimental market activity? I think the research on non-traditional media is one that we could really use. ROI research would be great, but even in front of that would just be some metrics on how do people react to event marketing? Does it have a lingering effect on brand imagery? Are we seeing that those kinds of experiences do drive purchase intent? I'll give you a very simple fact; call it 'Verklin's Law...
| More |

GM to end employee discount promotion
Rather than extending it's successful (but costly) promotion offering car and truck buyers the same discount that General Motors employees get, GM is ending the program August 1st. The employee discount promotion, which began June 1st, has been greatly successful in clearing out GM's backlog of 2005 models from dealer lots in preparation for introduction of 2006 models, but also contributed to the car maker posting a Q2 loss for its North American business. GM now is expected to focus on its new pricing strategy for the 2006 model year - - with lower sticker prices but, if things go as planned, less need for special incentives to move inventory. Both Ford and Chrysler had matched the GM program this month with their own employee discount deals. They aren't saying yet whether they'll also end their promotions come Monday.

Publicis profits up 49%
Crediting both strong organic growth and new business wins, Publicis Groupe reported that profits for the first half of 2005 rose 49% to 130 million euros (156 million bucks). North American business for the Paris-based advertising company grew organically by 6.1%.

Nickelodeon links with WNBA
Children's basic cable net Nickelodeon is making the Women's National Basketball Association a part of its ongoing "Let's Just Play" plan, a series of initiatives encouraging "healthy and active lifestyles for kids and local communities." WNBA will get exposure on Nickelodeon, while Nick will get special consideration at actual WNBA games, including "Let's Just Play" stretch breaks, in-arena PSA announcements and specialty prize packages. WNBA has its own healthy lifestyle initiative, called "Be-Smart-Be-Fit-Yourself." Nickelodeon will be participating in the Be Fit Tour thoughout the remainder of July and August. Said WNBA's Mary Reiling Spencer, "...we are very pleased that by joining forces, we'll be bringing that message to a broad, national audience."

TVBR observation: Yeah, and bringing the message that Nickelodeon and WNBA are positive entertainment options to a broad, national audience.

Verizon Wireless adds Hispanic agency
Cell phone giant Verizon Wireless announced that it had named Latinvox of New York as its Hispanic agency for the Northeast region. The selection followed a three month review. California-based la gente de RLR, which previously had the account, will continue to handle the Midwest and West regions.

Radio & Television Business Report

Radio's Important September Face Off
UpFront 2005 - will radio face the mild reception as Network TV? Top media agency buyers and network radio sellers participating so far: Kelly Cadotte, Natalie Swed Stone, ,Irene Katsnelson, Chris Fontana, Rich Russo, Matt Feinberg, Matthew Warnecke, Kim Vasey, and Lisa Opensky Greenberg.

And we go One on One with Charles Courtier, Executive Chairman of Mediaedge:cia

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Reserve your Ad Marketing Space today for NAB & UpFront 2006.
Advertising space is limited, contact:
June Barnes [email protected] -- or -- Jim Carnegie [email protected]

Media Markets & MoneyTM

Nassau heads to the Cape
Lou Mercatanti's Nassau Broadcasting Partners is heading into a new market with a 10 million bucks deal to acquire three Cape Cod stations from Frank Osborn's Qantum Communications. According to brokers Glenn Serafin for Nassau and Doug Ferber for Qantum, Qantum had to spin off WPXC-FM, WTWV-FM and WDVT-FM, which are being held in a trust, because they would have put the company over the FCC's local ownership limits following two Qantum deals to acquire stations on Cape Cod.

Weston moves eastward in Texas
Gregg Weston's Weston Entertainment LP is headed for Crockett TX via a 1.4M deal with Nicol Broadcasting for KBHT-FM. When the deal comes to a close, it will add Weston to the ranks of radio group owners. According to broker Bill Whitley of Media Services Group, who represented the sellers in this deal, Weston already owns KVRP AM & FM in Stamford/Haskell TX in an unrated part of the state north of Abilene. Those stations have nothing whatsoever to do with KBHT-FM. Crockett is a crossroads town, also in an unrated portion of the state, about halfway between Lufkin-Nacogdoches to the east and Waco to the west.

Interep extends bank loan
Interep has amended its 10 million bucks revolving credit facility with Commerce Bank to extend the loan facility by more than a year to December 31st, 2007. "We believe that the Amendment is of significant benefit to us in that it provides continues access to revolving credit for an additional 15 months and on more favorable terms. We also believe that the Amendment indicates the continued confidence that the Bank has in our operating strategy," Interep said in reporting the extension to the SEC.

Washington Beat

Possible commish candidates are grist for rumor mill
Various reports suggest that the White House may finally be closing in a some candidates for the two openings for Republicans to fill the big chairs on the FCC's 8th Floor. (One of those seats - - Michael Powell's - - is empty, and Kathleen Abernathy has made it clear that she's mainly keeping hers warm until reinforcements arrive.) One of the candidates is currently working within the White House - - Mike Meece is a special assistant to the President in the specialty area of FCC-type issues. Another name in play is Deborah Tate, who in the past has worked with Powell as a member of a conference on telecom issues. Other names apparently have not been ruled out, but if the rumors are accurate, we should know that one way or the other very soon - - that's when definitive announcements are expected.

RBR observation: And it won't come a moment too soon for Chairman Kevin Martin, who no doubt is tired of trying to conduct controversial business in the face of a guaranteed two-two deadlock when push comes to vote.

GM Talkback

What does EDI invoicing mean to you? Are you satisfied with your rep firm's progress to help with national sales using EDI?

Trey Fabacher, Station Manager, WCCO-TV Minneapolis (CBS):
I have been involved for years with EDI as a board member for Encoda Systems for many years. EDI to me spells future, and we need to get there as soon as possible. There are so many benefits we will get from EDI. Stations will receive payments for invoices quicker, spot television will be easier and more efficient to buy for clients and agencies, but the biggest benefit to me is the lack of discrepancies. Television account executives spend so much time communicating program changes, spot shifts, preemptions, etc. These are very important parts of business. But once the buy is over and the client is invoiced, many times our paperwork still does not match what the client has recorded after all that correspondence. When EDI is in full play, a discrepancy becomes a thing of the past. Every change that is made in our traffic system is electronically sent and reflected in the system at the client/agency. When the station electronically sends an invoice for payment, they will always match because they will be one in the same. Therefore, our reps will have more time on their hands to sell and to service our clients with creative ideas on moving the client's product.

Transactions

172,864 KSSW-FM Nashville AR from Don Campbell to Family Worship Center Church Inc. (Jimmy Swaggart). 1K escrow, 9K cash at closing, 162,864 note. [File date 6/23/05.]

97K FM CP Shreveport LA (Blanchard LA) from Missionary Action Projects (William D. Franks) to Family Life Educational Foundation (A.T. Moore, Donna M. Cole, Maxine H. Moore). Cash. CP is for Class C2 on 89.1 mHz with 20 kw @ 406'. [File date 6/23/05.]

Stock Talk

A lighter shade of Beige
Why did stock prices move up on Wednesday? It was based on Wall Street's interpretation of the shades of gray in the latest Beige Book from the Federal Reserve. The monthly report contained indications that inflation is contained and that the economy is still relatively healthy in most of the country. Based on that, the Dow Industrials moved up 57 points, or 0.5%, to 10,637.

Radio stocks were barely higher. The Radio Index inched up 0.019, or 0.01%, to 209.038. Beasley, which reports earnings this morning, slipped 0.6% after several recent gains. The biggest movers were Salem, up 2.2%, and Saga, down 4.1%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		42.58	+0.67	Jeff-Pilot	JP		50.33	+0.29
Beasley	BBGI		15.89	-0.09	Journal Comm.	JRN		16.00	-0.11
Citadel	CDL		12.52	+0.03	Radio One, Cl. A	ROIA		13.07	-0.13
Clear Channel	CCU		32.62	+0.14	Radio One, Cl. D	ROIAK		13.08	-0.14
Cox Radio	CXR		16.10	-0.20	Regent	RGCI		5.54	+0.07
Cumulus	CMLS		12.63	-0.01	Saga Commun.	SGA		14.17	-0.61
Disney	DIS		25.83	-0.05	Salem Comm.	SALM		21.15	+0.45
Emmis	EMMS		20.06	+0.15	Sirius Sat. Radio	SIRI		6.97	-0.03
Entercom	ETM		32.35	-0.13	Spanish Bcg.	SBSA		8.84	+0.05
Entravision	EVC		8.50	+0.04	Univision	UVN		27.96	-0.09
Fisher	FSCI		45.00	-0.91	Viacom, Cl. A	VIA		34.01	+0.47
Gaylord	GET		48.15	+0.07	Viacom, Cl. B	VIAb		33.87	+0.58
Hearst-Argyle	HTV		24.84	+0.14	Westwood One	WON		20.47	unch
Interep	IREP		0.57	+0.01	XM Sat. Radio	XMSR		36.85	+0.40
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]

Very interesting to read your piece today on the "Mysterious Mailer" (see RBR-Radio News). Based upon what you reported, it is obvious that the writer hasn't even the foggiest notion as to how the PPM works, or how the methodology is implemented. Having been involved with Arbitron and with the PPM, with particular reference to introducing this technology to the UK, I can state absolutely that the concerns quoted are ludicrous. My guess is that the Mysterious Mailer is somehow associated with a major, established broadcaster who is unhappy that the PPM will show that actual listening to his/her major station is actually less than has been reported in the past, and will show additional listening to smaller stations that are often not reported or underreported in a written diary. To say that the agencies and advertisers will end up being disappointed by the PPM is one hundred and eighty degrees out of phase: these groups can hardly wait to see accurate reporting for the first time, and to be able to compare radio listening with TV viewing with the same sample.

Robert E. Richer
International Media Consulting

Upped & Tapped

Changes at Regent
Terry Jacobs has announced plans to retire from Regent Communications on September 1st, with co-founder Bill Stakelin moving up to the CEO post, while keeping the President title. Board member William Sutter will assume Jacobs' other title - - Chairman. Also, CFO Tony Vasconcellos has been promoted from Sr. VP to Executive VP.

Arbitrends

More News Headlines

iBiquity offers 15K
in promotion prizes
Hoping to encourage stations to promote their HD Radio broadcasts, iBiquity has announced a nationwide promotion contest with prizes totaling 15,000 bucks. "Best in Show" will get 10 grand. There will also be 1,000 buck prizes for Best AM HD Radio On-Air Promotion, Best FM HD Radio On-Air Promotion, Best Freelance Producer-Created On-Air Promotion, a Copywriter Award and a Webmaster Award for using audio on an HD Radio station's website. The winners will be announced at this fall's NAB Radio Show in Philadelphia. Details are on the new hdradioplaybook.com site just launched by the company.

Sillerman adding MBST
Bob Sillerman's CKX Inc. announced a deal to acquire Morra, Brezner, Steinberg & Tenenbaum Entertainment (MBST), a manager of comedic talent and producer of movie and TV programming. Top executives Larry Brezner, David Steinberg and Steve Tenenbaum have signed long-term employment agreements with CKX and will continue to oversee day-to-day operations. Terms of the sale were not immediately disclosed.

Air America cited
in NYC scandal
Were New York City taxpayer funds invested in Air America Radio? That's one of the allegations reported by the New York Daily News in a story about a financial scandal involving the nonprofit Gloria Wise Boys & Girls Club. The organization and another affiliated nonprofit had their city funding cut off last month following a probe by the city's Department of Investigation. Evan Cohen, who was Chairman of Air America in its financially troubled start-up phase, had been Gloria Wise's director of development.

July Digital Magazine
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RBR Radar 2005

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

Mysterious mailer attacking PPM
Following Forrester Research report on the economic impact of Arbitron's Portable People Meters, someone has been mailing out their own analysis urging broadcasters to "Vote no on Arbitron's PPM." The 18-page document is apparently being sent out to radio executives (one of whom, of course, sent it on to RBR), with no signature, return address or (strangely) postmark. We can tell you, though, that the mysterious author appears to have a 17-year-old son and doesn't know how to spell Nielsen correctly. Some of the anti-PPM complaints in the mailing are downright bizarre, though, such as the claim that PPMs will lead to widespread illegal use of another station's trademark name or slogan to boost ratings and that PPM won't be able to tell the difference between multicast HD Radio channels. 07/27/05 RBR #146

TV ratings bill gets airing
TVBR observation: OK, if you've read the bill can you show us anything in there that will improve ratings participation by young demos, reduce fault rates or make LPM ratings data look more like the results of the previous meter/diary system? That's what this fight with Nielsen by News Corporation, Tribune and some other broadcasters (now with the support from the NAB) is all about. If you can see those things in the bill, you're seeing something that we can't find. Rather, we see frivolous lawsuits ahead whenever a station owner doesn't like their ratings, higher ratings costs for all broadcasters and slower progress on ratings innovation and upgrades. 07/27/05 RBR #146

Spitzer is singing Adelstein's tune
Democratic FCC Commissioner Jonathan Adelstein has taken the lead role in examining payola, 21st Century style. It therefore should not be surprising that he was quick to praise New York AG Eliot Spitzer's collar of Sony, and his eagerness to take the ball and run with it himself. RBR observation: We are torn in our feelings about Spitzer's investigation. It looks like he really has found some cases of payola, but he's also lumped in some practices that don't appear to violate the federal payola statute or FCC rules. Other concerns - Sen. Feingold deserves credit for pushing radio companies to get out of bed with the indie promoters ending some apparently legit agreements that still stunk to high heaven. But the Senator is unfortunately mixing up media issues in ways that don't make sense. If anything, consolidation has cut down on payola, since big media companies have more resources than mom and pop operators to detect evidence of payola and deal with employees who are on the take. 07/27/05 RBR #146

Wachovia cuts radio
expectations Again
analyst Marci Ryvicker is expecting disappointing growth of only 1%. She's cut her Q3 growth estimate to 2% (from 3%) and dropped her projections for most of the radio companies she follows.
07/27/05 RBR #146

Ad agencies oppose Burns bill
Advertising business have weighed in against the legislation. In a letter to key Senators, Wallace Snyder, President and CEO of the American Advertising Federation, wrote, "I ask you to reject any attempt to regulate television ratings and instead, allow the industry to continue to determine how best to measured its audiences and their impact. "
07/27/05 RBR #146

General Manager

Saga Communications Brad Eure retires and we seek his replacement with a radio professional that has passion and commitment to the radio business to take the leadership at WWWV / WQMZ & WINA Charlottesville, VA. Saga, we believe in our people. Interested then tell us about yourself.

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