Radio News ®

Who gets the FCC FINE?
Well, the ‘F’ word slipped out plus others choice phrases from the mouth of DNC Don Misher. After 11:00PM EDT last night when all was happy except the balloons didn’t fall as planned. Misher caught on-air by CNN saying: We need balloons… I want all balloons, ‘God---‘ and no balloons. Then the slip of that great ‘F’ word – just over a few crummy balloons.

RBR observation: Who does FCC fine? The balloon maker, the balloon blower upper, the balloon cord puller, Misher, the DNC, John Kerry since those balloons were for him, or CNN? Na on CNN that is cable. Ah, what the ‘F’, nobody cares. It was a slip of the, ahhh, tongue.

Local gains lead to modest June increase
The radio industry picked up the pace with local advertising in June, bringing in 5% more cash than in the same month in 2003, according the Radio Advertising Bureau. National business, on the other hand, was an anchor that slipped out of the boat, dragging the total business increase to a gain of 3%. But at least it was a gain!
Q2, radio was up 2% over all, on a 3% local increase and flat national dollars. The YTD results are a notch higher, with overall revenue up 3% on gains of 4% in local and 1% in national business.

RBR observation: Most of the mid-level radio group dog and pony shows have featured reports of a more robust Q2 and YTD. Some one must be having problems! Quoting "Lost in Space" icon Robby the Robot, "Warning! Warning, Will Robinson!" From what we've been hearing, we may well be able to stitch ourselves a Santa Claus suit with the July revenue report, based on the fact that companies with otherwise positive tales to tell have been complaining about Month #7.

Looking ahead at Radio One
One of the first questions radio honchos are getting during the current round of dog and pony shows is what they think of the Clear Channel (CC) spot load reduction initiative. Like everyone else, Radio One applauded the move, saying it would probably put pressure on inventory and drive up rates, if CC can pull it off. "That's something we're all looking forward to, because right now pricing is a little iffy," said Mary Catherine Sneed. Like most groups we've heard, Radio One said it was never really part of the problem in the first place. Sneed noted that the sudden absence of pacing reports has been a non-event. "We haven't even talked about it so obviously we aren't missing it," she said.

On the TV One front, Al Liggins noted that the company has managed to get the 4M subscriber level. It's shooting for 9M-10M by year's end, and is hoping to accelerate that growth rate by cutting a deal with one of the big DBS services. They are looking at a ballpark figure of 26M subs as a break-even point, although they think a favorable rate-per-sub ratio may hasten their arrival at the black inkwell.
For the near future (and recent past), execs said July business has been soft, August is good (the group is at 75% of goal) and September looks good. They are hoping for a big back-to-school push, as well as the change to partake at this year's richly-endowed political smorgasbord.

Looking ahead at Beasley Broadcast
Execs had a lot of good news to report to investors, riding into town on the back of a strong Q2 performance, and with solid ratings and revenue gains projected into the near future.
The company has not been shy about spending money to make money. Chairman/CEO George Beasley explained, "...these expenditures made sense from a competitive and opportunistic standpoint, and we believe they will ultimately enhance the value of our station portfolio." One future expense which will be gone over with a fine-tooth comb is rights fees for play-by-play programming. Contracts for some such material may be allowed to expire if the numbers do not add up.
Beasley seems to be one of the few companies not reporting a soft July - - it says it was up 7%, and that improvement in August and September looks softer. The September guidance, however, is company-specific, based on an NTR event in 9/03 which is not scheduled for a repeat this year. In general, Beasley is not convinced that the overall US economy is stable yet, and until that happens, it doesn't seem disposed to get too excited about its own prospects.
Ditto - Ditto, Beasley applauds the Clear Channel spot reduction diet, and claims it was never a part of the problem in the first place.

LIN TV Corp proud as a peacock
Top brass all smiles and attacking radio on their conference call yesterday morning, 7/29/04. Chairman/President/CEO Gary Chapman very glad to be with NBC-TV Network and its strong programming lineup. This is especially true of upcoming Olympic coverage from Athens, which is being sold gangbusters at the local level. Moving from ABC to NBC, 7/28/04 TVBR Daily Epaper #146, means better programming, which means more money. Key word spoken was local - - more local news content, more local on-air talent, and more local sales staff on the street. Chapman is also homing in on the Internet, with more sales people selling Internet alone.

The Internet driver will be taking business from the local Yellow Pages advertising. Chapman explains the allure of taking that flat yellow print ad and putting it on video - - local television stations can replace that heavy yellow phone directory. They have all the advantages of video content, and can carry all of the data found in the print ad as well. The local dentist, retail store, or lawyer gets more focus with video and that is what will drive Internet sales. And that is why they have a sales dedicated just for Internet.
Chapman had a few words about radio and in short "radio has matured and its one pony trick is over." IN other words, radio is consolidated.
A big focus is on its new partnership with MTV in San Juan, Puerto Rico, where street - or mall-front studios have been built and they are attacking the radio revenues on that island. This partnership is not picking up MTV programming but using MTV to brand original programming and local on-air talent. The plan is to go after the territory's younger demo radio dollars, estimated at $200M.

RBR observation: The NBC move buys LIN time from a network content issue but does not cure the cough. What's clear is that Chapman is not waiting for someone to fix an overall television problem - - he knows local in all areas is vital to growth, as is embracing new technology the consumer is using to keep step with lifestyle and spending habits. All in all, the "L" in LIN seems to go hand in hand with the "L" in local.

Conference Calls, Q2 2004

Radio One moves to the groove
Things are on the up and up at radio's leading Urban specialist Radio One. It reported a net revenue increase of 7%, centering its prior guidance prediction of a 6-8% increase. Its jump in operating income was even better, nosing into double-digit territory with an 11% gain. It managed to cut its losses at cable start-up TV One. And just for good measure, it added a second FM in Charlotte NC.
"Even in the face of difficult industry dynamics, Radio One posted an impressive quarter on virtually all metrics," said President/CEO Al Liggins. "We grew revenue in line with prior guidance, controlled costs, posted double-digit operating income growth, expanded our margins and continued to reduce our leverage."
One negative was actually seen as a positive. That was the performance of start-up basic cable service TV One. It lost $1.4M - - a number prefixed with the adjective "only," because the loss could have been worse. Radio One is looking at a net revenue gain in the 3%-5% range for Q3.

Out performing the radio industry
Venerable radio stalwart Beasley Broadcasting Group enjoyed a solid Q2, posting gains of 8.7% in consolidated net revenue and an impressive 11.6% gain in operating income, on totals of $31M and $7.9M respectively. It also announced that it planned on investing in itself, to the tune of a $25M stock repurchase plan.
The group rode impressive performances at its clusters in Miami, Ft. Myers and Las Vegas to success, and had generally positive results throughout the portfolio. "Revenue increases at seven of our 10 market clusters combined with positive developments in Philadelphia led to better than expected revenue growth during the second quarter," said Chairman/CEO George Beasley.
The company estimates its on track for an overall gain of 4% for Q3.

Adbiz ©

Real men do groceries (and push carts)
It still may be a woman's world inside the grocery store but real men do push the carts with the squeaky wheels that wobble. Did you know that 50% of men do grocery shop at least twice per week? As they push that cart 19% of men spend over $100 weekly at their favorite grocery store.
Remember in your local sales efforts that shopping for groceries is a neighborhood choice where people talk with people and get to know each other. It is just not pinching the peach to check for ripeness. The kicker is 23% of men are self-proclaimed homemakers, to the extent of being the primary shopper.
Income average is $40K versus the comparable average female median income of $30K. Interep put out this valuable study of the changing male consumer of today. He must be taken into account when planning your local sales strategy.
More next week, including a look at men's trends in media usage.

Simultaneous media usage threatens effectiveness
of D to C marketing campaigns
Advertisers' quest to increase advertising ROI through direct communications in a one to one environment may be hitting some unexpected bumps in the road caused by consumers multiple media consumption patterns, according to the latest Simultaneous Media Survey (SIMM) of 13K consumers by BIGresearch. "Simultaneous media consumption is creating a moving target for advertisers through all communication channels and that includes direct communication online or via mail," said Joe Pilotta, PhD, VP Research BIGresearch. "Directly targeting consumers based upon behaviors is in theory a great way of cost effectively enhancing relationships and eliminating waste from ad budgets, however, the reality is that direct communication with consumers rarely occurs one to one, but is more like 2 to 1 or 3 to 1 in the context of SIMM usage." Some of the findings on ho! w this multitasking phenomenon is effecting online and direct mail are:

When online:
-- 63.5% say they regularly or occasionally watch TV
-- 59.7% say they regularly or occasionally listen to the radio
-- 40.3% say they regularly or occasionally read the mail

When reading mail:
-- 73.9% say they regularly or occasionally watch TV
-- 57.5% say they regularly or occasionally listen to the radio
-- 35% say they regularly or occasionally go online

Media, Markets & Money tm

Washington Beat

GM TalkBack

One GM on Indecency self-protection
What new rules have you instituted (if any) for your air staff to guard against indecency? Do you use delay for all call-in shows? David Paul Estes, WEZJ AM/FM & WEKX FM, Williamsburg, KY
We really haven't instituted any new rules as a result of the recent events. We've just reemphasized our existing policy of zero tolerance. As a result, we have never had problems. Our main goal has always been to serve our communities with content that is both entertaining and acceptable. Our on-air staff realizes and embraces that idea. We do realize that we only can control what we say on the air, we can't control what callers say. So we NEVER put callers on live. For call in shows we use a 7 second delay and all other callers are recorded for future playback.

Transactions

$10.6K KSRD-FM CP St. Joseph MO from Calvary Chapel of St. Joseph Inc. (Pat Wood) to Horizon Christian Fellowship (Mike McIntosh et al). Cash. CP is for Class C3 on 91.9 mHz with 10 kw @ 492'. CP expires 10/10/04. [File date 6/29/04.]

N/A WRTP-FM Roanoke Rapids NC from Radio Training Network Inc. (James L. Campbell) to Roanoke Valley Communications Inc. (Kenneth Harris et al). Swap for WZRV-FM. RTN will pay up to $5K to cover transaction fees. Both organizations are noncommercial. [File date 6/29/04.]

N/A WZRV-FM Roanoke Rapids NC from Roanoke Valley Communications Inc. (Kenneth Harris et al) to Radio Training Network Inc. (James L. Campbell). Swap for WRTP-FM. RTN will pay up to $5K to cover transaction fees. Both organizations are noncommercial. [File date 6/29/04.]

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