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Volume 22, Issue 167, Jim Carnegie, Editor & Publisher

Thursday Morning August 25th, 2005

Radio News®

So many channels,
but what to call them?
One sidelight of last week's Arbitron Radio Advisory Council meeting was a preliminary discussion of how HD Radio multicast channels should be identified. That's an issue on several fronts - - marketing, ratings credit and even how future HD receivers are manufactured to display the identifier on their tuners. Some of the ideas put forth have been to modify the current frequency identifiers, and even to use some that don't really exist (108 mHz and beyond) to extend the FM band, at least in terms of numbering. That sort of thinking drew a sharp rebuke in an email to RBR/TVBR Publisher Jim Carnegie from Mark Ramsey, President of Mercury Radio Research. "It is patently stupid to tack on HD stations to existing analog frequencies (as in 98.5-1, 98.5-2, 98.5-3) and then put three different things on those frequencies. In people, we call this 'multiple personality disorder' and we send them to psychiatrists. One address must represent one and only one thing. MTV may have MTV-2, but they exist at two separate addresses," he noted. "Furthermore, the names are so incredibly clunky, moving newfangled digital radio strongly in the direction of being even clunkier than HAM radio. It's a confusing mass of digits, decimals, and dashes. We would be better off reconceptualizing the entire dial and taking this opportunity to simplify it across the board. For example (and brace yourself), how about numbering our stations 1 to 100? If this sounds like Satellite Radio, just remember HD Radio was your idea, not mine," Ramsey said.

RBR observation: Forget about mHz and kHz. This really needs to be approached from a branding perspective. US radio today is branded (for the most part) by call letters and frequencies because that's the way things started out in the 1920s. In many other parts of the world, stations are branded by names, with call letters all but ignored, and frequencies are irrelevant for marketing because most are national or regional services on several different frequencies. We in US radio have a chance to start over and establish a whole new branding scheme with the advent of HD Radio. The most important thing is having the listener be able to find your station on their receiver. (Pictured is an HD Radio receiver by Radiosophy.) Let's get it right by making it consumer friendly.

Publisher note: Take our observation words to heart and if there was a time and place to slow down and breath into a brown paper bag - this is it - we in radio are only going to get one shot at the HD future or what I call the college graduating class of 2009. Those college Freshmen/women were born in 1987 and to them what they see today is a mobile device driven society. No books but hand devices, laptops, etc is where it is today. Forget the '20s, '50s or in my era of the '60s by asking this class about that time, events because if you do you get their reply - "Well - whatever." The leaders of our radio business best sit down and not at an NAB convention or board meeting but in an atmosphere that is non-combative but - fear I say it - 'Think Tank' it out by getting up close with manufacturers of the potential sets and even the auto business. Talk with the designers of the Ipod etc. Nothing is too far out when asking questions for verbatim input because we in radio call that a focus group. RBR will work with our radio business with thought reports on HD so don't watch your post office box but watch your email box because that is how our reports will be sent – electronic like 'When ever.'

Moody's weighs in on Emmis TV sale
Following Emmis Communications' announcement that it is selling nine TV stations of 681 million bucks, Moody's Investors Service has been reviewing its debt ratings for some of the companies involved. As you'd expect, the implications are better for the seller than for the buyers. | More... |

FTC lights up Smoke Away for 1.3M
Emerson Direct used radio, TV and the Internet, and a pair of doctors, to market "Smoke Away" smoking cessation products. The FTC has ruled that they advertisements made unsubstantiated claims and misrepresented refund policies. Further, the doctor endorsers had no scientific basis for their endorsements. Emerson is subject to a 1.3M payment to the FTC (and that could go higher) and are barred from making similar claims in the future. As to the possibility of further financial penalties, the FTC said, "if they misrepresented their financial condition, the full 61 million suspended judgment will be due." The FTC listed the following alleged advertised claims as unsubstantiated: " * Smoke Away enables smokers to quit smoking in seven days or less; * Smoke Away enables smokers to quit smoking quickly, effortlessly, and permanently; * Smoke Away eliminates nicotine cravings; * Smoke Away users have no withdrawal symptoms or side effects, such as weight gain, insomnia, or tension; and * Smoke Away is more effective than nicotine patches, nicotine gum, and prescription medications for smoking cessation." The two doctors, one of whom was a chiropractor and completely out of field, were prohibited from making similar endorsements in the future unless they are backed by "reliable scientific evidence."

Sirius' first Stern channel
to launch in September
Sirius Satellite Radio will launch one of its two Howard Stern channels in September, likely beginning as a promotional vehicle for the live Stern-programmed channel, to debut there 1/9/06. On yesterday's show, Stern said he, EVP/Programming Jay Clark and other Sirius execs have been working on content, but nothing specific. Meanwhile, the news goes on about the FCC investigating the new indecency complaint. Florida indecency activist Jack Thompson filed a complaint against Beasley' WRXK Ft. Myers and flagship WXRK New York. An FCC spokesperson told the Miami Herald it has already sent letters to the station licensees requesting information on the broadcasts cited.

Another Media General TV/paper combo attacked
As is its practice, Media Access Project (MAP) is objecting to yet another Media General Inc. (MGI) in-market television/newspaper combination on the occasion of the TV's application for a license renewal. This time, the market is Tri-Cities TN-VA in Nielsen DMA terms. It's known to radio folks and Arbitron as Johnson City-Bristol-Kingsport. The station is CBS Channel 11 WJHL-TV, which MGI owns in conjunction with the Bristol Herald Courier, which according to BIAfn is one of the top two newspapers in the far-flung market, and which reported the MAP action. Previous challenges under similar circumstances came in Pensacola FL and Myrtle Beach-Florence SC. A newspaper/television combination must be in a market with a significant number of independent media voices or requires an FCC waiver. Part of the FCC media ownership rulemaking of 6/2/03 would have made such combinations easier to put together, but that part was among those remanded to the Commission by the Third Circuit for revision or better justification.

RBR observation: We've said it before and we'll say it again. The Third Circuit specifically said it had no philosophical objection to broadcast and print outlets being locally co-owned, and went so far as to note that in many cases such combinations provided the market with its leading news organization. What the Court objected to was the evidence provided as a foundation for numerical cross-ownership media limits. MAP has argued that owners of such combinations knew they were taking a risk as to whether or not there would be timely regulatory relief. However, since the objection is not to cross-ownership itself, just where the number line should be drawn, it is patently unfair to force a company to divest itself of a valuable media property under fire sale conditions while bureaucrats fiddle with slide rules. If in the end the ruling goes against the Media Generals of the world, let the sell-off begin. Until then the FCC should declare a temporary waiver for all existing cross-media combinations until such time as the issue is resolved.

Adbiz©

Pepsi launches Mountain Dew Pitch Black II
Pepsi-Cola North America has launched Mountain Dew Pitch Black II for a 10-week period from now until November. It's Mountain Dew with a blast of black grape and a metallic silver label. It's reminiscent of last year's limited-time offer, Mountain Dew Pitch Black, but this time, with a sour bite. Mountain Dew Pitch Black II hits stores nationwide this week in 20-ounce bottles, two-liter bottles, and 12-packs of 12-ounce cans. The rollout of the brand will be supported by POP materials created by TracyLocke, Wilton, CT, Pepsi's promotional partner, and an internet marketing campaign created by Tribal DDB Dallas. The website, pitchblackexperiment.com, features a gangly redheaded character named Cliff who shows his devotion to the product by conducting a "Pitch Black Experiment" by living in total darkness for 90 days. Also, later this fall, NASCAR's Jeremy Mayfield will drive the Mountain Dew Pitch Black II paint-out car at the Nextel Cup race in Kansas City on 10/9.

Travelex effort features John McEnroe
Travelex, a worldwide foreign exchange company, launched its first U.S.-focused integrated advertising and promotion campaign, featuring tennis champ and Travelex brand ambassador John McEnroe. The multi-million dollar, multi-year effort via M & C Saatchi NY, kicked off yesterday in conjunction with this year's U.S. Open Tennis Championship, being held in NYC from 8/29 to 9/11. Half-page ads are running in major papers including the Wall Street Journal, the New York Times and the Financial Times. The campaign will ultimately feature a comprehensive mix of print, online, outdoor and direct-mail, with the potential for television and video opportunities. It represents a concerted effort to promote the Travelex brand and its leading service offerings to customers, principally in the commercial foreign exchange sector. Travelex's relationship with McEnroe is part of Travelex's ongoing brand ambassador program, which saw vice captain of the Australian Cricket team Adam Gilchrist appointed in 2001 and England rugby international and Great Britain and Ireland Lions tour member Jonny Wilkinson appointed in May of this year. The creative will explore the global tennis icon's varied personal dimensions, including that of tennis champion, expert commentator, art collector and world traveler. As part of the campaign, Travelex retail locations will feature McEnroe imagery and McEnroe himself will participate in a series of activities, including client hospitality and an exclusive Travelex press event.

Media Business Report

Whole lotta shakin' at CBN?
Pat Robertson has made headlines for his comments on US foreign policy, but there's another issue bubbling beneath the surface which may also bring negative attention to the Christian Broadcasting Network. It involves marketing of a dietary shake developed by Robertson. According to The Virginian-Pilot's Hampton Roads online edition, Robertson has been touting a recipe for a weight-loss shake for four years, giving it to anyone who asked for it. Now, suddenly, the product is being sold for profit via General Nutrition Corp. (GNC) retail outlets. The problem is not in the way the product is being marketed - - although the FTC loudly warns about widespread marketing abuses in this area, the campaign makes no bones that the supplement must be accompanied by proper diet and exercise. The problem is that it was launched over time, as pointed out by religious watchdog Trinity Foundation, using donation-supported, tax-exempt, and supposedly non-profit airtime. According to V-P, ads for the product have run before Robertson's "700 Club" goes on air on some stations, but the show has declined to run any during the program.

Media Markets & MoneyTM

CRN moves into Kings Mountain
Daniel J. Fontana is about to become the proud owner of WKMT-AM in Kings Mountain NC. The 1220 kHz Talker is being sold by Geddings & Phillips Broadcasting Corp. for 950K cash. Kings Mountain is west of Gastonia NC, which is the west of Charlotte and constitutes the western outpost of the Charlotte-Gastonia NC-Rock Hill SC Arbitron market. According to brokers Terry Greenwood of TAG Media Consulting, who represented the seller, and Josh Wilkey of WilkeySouth Media Brokers, who represented the buyer, the station should soon do a much better job of covering the market. Its night power will remain at 106 watts, but it's headed for a ten-fold increase during the day, up to 10kW.

Catholic group gets CBS Ft. Wayne station
We'll bet you didn't even know CBS was active in Ft. Wayne at the O&O level - - that's because we refer to Jon Yinger's Christian Broadcasting System, not the Viacom-owned TV organization. Yinger is owner and now seller of WLYV-AM. The buyerer is Chris Langford's Ft. Wayne Catholic Radio, doing business as Redeemer Radio Group. Broker John Pierce tells us he was very familiar with the property - - he used to own it before selling to Yinger. The deal is valued at 700K.

Washington Beat

LPFM reply period extended
The deadline for reply comments was 9/6/05, but thanks to a petition from REC Networks, those wishing to put their two cents in will have extra 15 days to put them together. REC said since the 8/22/05 deadline for original commentary - - itself the result of an extension - - attracted so much activity that it was impossible to review them all and reply if necessary. The FCC agreed, and has extended the reply deadline to 9/21/05.

Foot in the door
for multicast must-carry?
The FCC, by a three-one vote, has approved special rules governing the relationship between satellite TV distribution services and local television broadcasters in Alaska and Hawaii. According to the Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA), the DBS services must carry local analog signals by 12/8/05. The FCC says local broadcasters have until 10/1/05 to assert this right. Further, SHVERA stipulates carriage of digital signals by 6/8/07. Broadcasters must stipulate digital carriage by 4/1/07, at which time the DBS is no longer required to carry the analog signal. However, the FCC said that the DBS must carry the entire digital signal, whether it is being used for high definition television or is being split into a multicast stream of two or more channels. The ruling applies only to broadcast facilities in the two non-contiguous states. Commissioner Kathleen Abernathy cast the partially-dissenting vote.

RBR observation: How hard do you think the NAB is going to work to extend this policy to the other 48 states, and to cable? Short answer: VERY HARD.

Engineering

Podcasting: can it make money?
Part IV
What do the buyers think? Zenith Media's recent report, "Podcasting 101: The Future of Radio or The Latest 8-Track?," detailed there are several options available for advertisers to enter the podcasting space: Audio Spots: Using the traditional radio advertising model, audio commercials can be inserted into podcast programming. These ads, however, may be viewed as obtrusive to listeners, who could skip over them easily with their MP3 devices; Sponsorships: As a presenting sponsor, advertisers could underwrite entire podcasts; Owning Your Own: Advertisers could produce their own podcast devoted to their brands, which could provide exclusive information to listeners. The podcast link could be housed on a client's existing website; and Building an Online Community: Advertisers have an opportunity to provide a message space where users have an opportunity to post experiences relating to a specific product/lifestyle.
| Q&A from the buyers |

Transactions

827,300 WMGQ-FM & WZAM-AM Ishpeming MI. 70% of Taconite Broadcasting Inc. from Estate of William J. Blake, deceased, Patricia Blake, Personal Representative (70% to 0%) to Thomas P. Mogush (30% to 70%). cash. [File date 7/14/05.]

650K WVHR-FM Huntington TN from Milan Broadcasting Company Inc. (Jerry Vandiver) to Jim W. Freeland. 30K escrow, balance in cash at closing. [File date 7/14/05.]

400K WRTK-AM Youngstown-Warren OH (Niles OH) from D&E Communications of Ohio Inc. (Dale Edwards) to Harold Glunt/Beacon Broadcasting Co. 50K deposit, balance in cash at closing. Duopoly with pending acquisition of WANR-AM Warren OH. [File date 7/14/05.]

Stock Talk

Oil sinks stocks again
Yet once again, oil prices shot to a record high as traders worried about the possible impact of a hurricane on oil facilities, sending stock prices lower. The Dow Industrials declined 85 points, or 0.8%, to 10,435.

Radio stocks followed the market lower. The Radio Index dropped 0.788, or 0.4%, to 205.918. Salem declined 1.7%. Arbitron and Viacom were each down 1.5%. Moving the other way was Beasley, up 2.5%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.85	-0.62	Jeff-Pilot	JP		49.43	-0.21
Beasley	BBGI		14.21	+0.35	Journal Comm.	JRN		15.76	-0.19
Citadel	CDL		13.77	+0.05	Radio One, Cl. A	ROIA		14.24	-0.04
Clear Channel	CCU		33.35	-0.24	Radio One, Cl. D	ROIAK		14.27	-0.04
Cox Radio	CXR		15.00	unch	Regent	RGCI		5.43	-0.06
Cumulus	CMLS		12.32	-0.12	Saga Commun.	SGA		13.65	-0.17
Disney	DIS		25.40	-0.40	Salem Comm.	SALM		18.52	-0.32
Emmis	EMMS		23.67	+0.16	Sirius Sat. Radio	SIRI		6.51	-0.01
Entercom	ETM		32.90	-0.13	Spanish Bcg.	SBSA		7.71	+0.06
Entravision	EVC		7.85	-0.10	Univision	UVN		26.73	+0.15
Fisher	FSCI		45.93	+0.40	Viacom, Cl. A	VIA		34.09	-0.51
Gaylord	GET		44.39	-0.06	Viacom, Cl. B	VIAb		33.96	-0.51
Hearst-Argyle	HTV		25.54	-0.11	Westwood One	WON		20.15	-0.20
Interep	IREP		0.59	unch	XM Sat. Radio	XMSR		33.65	+0.23
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]

The article picking Rush Limbaugh as the worst person of the day (8/23/05 RBR #165) is wrong in picking him because of words he said on August 15. I was listening to the program that day and he did not say what was reported on the Keith Olbermann show. Olbermann was picking up on words used on a Sunday news program by a Democratic operative. On August 15, Rush first expressed sorrow for Cindy Sheehan loosing her son and she had every right to be protesting... he then stated she was being used by the left just as they used Bill Burkitt and they are using her just like the forged documents. If you listened to the program you still may not agree with the conclusion but at least you will hear the comments in context. Instead, commentators are using comments made by other commentators to make outlandish charges... | Full Response |

Jeff Hancock
WCBK/WMCB
Martinsville, IN

Arbitrends

Stations for Sale

Suburban NYC AM
Good population coverage. Comes with studio/transmitter site. Fulltime station w. low night power, upgrade possible. 1.6M. 781-848-4201
[email protected]

More News Headlines

Suzuki adding XM
for new 2006 models

RAB presents sales and marketing sessions at NAB

"Last Great Motor City Broadcast Reunion" approaching

International

News Corp. selling Dutch radio?
The Times of London, which is owned by News Corporation, reports that News Corporation is about to sell its radio company in the Netherlands, Sky Radio, because Rupert Murdoch "believes that the popularity of digital music players is drawing listeners away from radio, making the long-term future of the medium uncertain." The newspaper said employees of Sky Radio were told in a company email that News Corporation has "received expressions of interest" in the radio group and is giving them "due consideration. The report values Sky Radio at about 360 million bucks (US). News Corporation also owns radio stations in Denmark and Germany.

RBR observation: So much for speculation that the owner of Fox Television would someday buy a US radio group as well. Fox has a radio network here, but no O&O stations.

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RBR Radar 2005

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

Analysts up estimates
for Emmis TV sell-off
After seeing the numbers for the first nine TV stations sold by Emmis Communications, Wall Street analysts are upping their projections of the total take. At Bear Stearns, analyst Victor Miller has increased his estimate by 100 million - - to a range of 1.25-1.35 billion. At Goldman Sachs, analyst Mark Wienkes also notes that the first round of sales at Emmis amounts to about half of the TV group's EBITDA, so he expects the total to come in around 1.3 billion - - up from the Wall Street consensus of 1.2 billion. RBR observation: That 1.2 billion consensus was more like 1.0 not long ago - - and there were even stories in some newspapers that Emmis might take less than one billion if it could find a single buyer willing to take the whole group. Why that would make a difference, we can't imagine. Apparently, neither could Jeff Smulyan. RBR/TVBR said 1.1-1.2 right from the get-go. We were on the high side then, but now look to be conservative. 08/23/05 RBR #166

TVBR observation: Emmis sale is good news for Susquehanna
Wall Street may be down on broadcasting stocks, radio in particular, but phase one of the Emmis TV sell-off shows that there is still strong demand for good broadcast properties. Back when Susquehanna Media announced that it was putting its properties up for sale, RBR/TVBR said 1.2 billion would be a bidding floor for the radio properties and 600 million for the cable systems. Based on the strong demand for the Emmis TV stations, and with more information about the Susquehanna radio properties, we are now ratcheting up that prediction. It appears that Susquehanna Radio has 120 million, more or less, in broadcast cash flow. At a 12 times multiple, that's 1.4 billion plus. And since the Susquehanna group has three markets in the top 10 and Atlanta, THE market that everyone else wants to get into or grow in, a total sale in the 1.5-2 billion range looks more likely. As for the cable TV side, 600 million still looks like a solid base, but demand is strong.
08/23/05 RBR #166

Rich Hamilton takes leave of absence
Rich Hamilton, Zenith Optimedia Americas CEO, is taking an immediate leave of absence for personal reasons and will be replaced by the agency's chief strategy officer Tim Jones, without the responsibility for Canada and Latin America. Jones reports to Steve King, CEO of ZenithOptimedia Worldwide. As part of the shift, Wendy Marquardt, Director of Information Technology Development, has been upped to COO at Zenith Media. Zenith President/National Broadcast Peggy Green will become President/Broadcast and Entertainment there as well.
08/23/05 RBR #166

Hey Talk Radio GSM

Are you a direct "animal" with the savvy to manage transactional business? Top 20 market waiting for the right GSM. Need a top performer with a proven track record of success to take a new Talk station to record heights. Can you attract and grow top sales talent - build and lead a top performing sales organization? What about maximizing inventory, on air and off, of a high profile talk format? Answer is - Yes - (no calls) send your resume in Confidence to -
[email protected]
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