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Volume 22, Issue 168, Jim Carnegie, Editor & Publisher

Friday Morning August 26th, 2005

Radio News®

Analyst cuts radio forecast
That's becoming the all-purpose headline of 2005. In the latest move by a Wall Street analyst to ratchet down their outlook for radio, Marci Ryvicker at Wachovia Securities has dropped her July forecast to flat from her previous expectation that radio revenues would be up 2%. Her estimate for full year 2005 growth is now an anemic 1.5%. "We continue to believe that the radio industry is in a transition phase that is likely to last another 6-12 months as operators reduce inventory, implement iPod-like format changes, and upgrade to HD Radio. We believe that radio will resume mid-single-digit top line growth once it cycles through its many changes, likely in 2007," she told clients.

RBR observation: Ryvicker may be slightly below the Wall Street consensus at this point, but we won't be surprised to see other analysts lower their projections yet again, particularly if the RAB's monthly report for July, which should be out in a few days, shows another flat or near-flat month. With radio revenues up only 1% for the first half of the year, there's no way that 2005 is going to turn into a stellar growth year.

FEC redefining "electioneering"
The Federal Election Commission has opened a Notice of Proposed Rulemaking (NPRM) seeking comment on the legal definition of "electioneering communications," prompted by a decision in the US District Court for the District of Columbia in the Shays v. FEC case. Interested parties: Start your essays now. Here's how the FEC sets up the issue: "Electioneering communications are broadcast, cable or satellite communications that refer to a clearly identified candidate for Federal office, are publicly distributed within 60 days before a general election or 30 days before a primary election, and are targeted to the relevant electorate. Such communications carry certain reporting obligations and funding restrictions. The proposed changes would modify the definition of 'publicly distributed' and also the exemptions to the definition of 'electioneering communication.'" The NPRM will consider retaining or narrowing the 501(c)(3) exemption for tax exempt groups, as well as the state candidate exemption, or perhaps repealing all such exemptions. It will also consider "...replacing all the current exemptions with a broad new exemption covering all communications that do not promote, support, attack, or oppose a federal candidate." Comments are due 9/30/05, and a hearing on the topic is scheduled for 10/19/05.

NYT tells the government to stay out of ratings biz
In the midst of the annual August Congressional doldrums, the New York Times has decided to focus its editorial spotlight on pending legislation which would create a government advisory board to oversee the television ratings business. The Times take: What a crazy idea. For starters, NYT is surprised that the impetus for government intervention has been championed by Rupert Murdoch and his News Corp./Fox empire - - an organization known more for espousing the very solutions NYT thinks would be far more appropriate in this instance. It wrote, "Television ratings would seem to be a perfect place to encourage the market to work its magic - - one of the favorite tenets, by the way, of the New Corporation's media voices on Fox News." NYT acknowledges that no ratings system can ever be foolproof. "But it would be better to find a more workable system to compete with the people meters instead of creating a new government power."

RBR observation: There are some small companies out there trying to bust into the ratings business. That's a task easier said than done, and the dusty trail is littered with the bleached out bones of the many companies which have tried and failed to accomplish that daunting task. And maybe there are problems with the current system. We simply fail to see what the government can bring to the table that can ease new entrants into the business or improve the refinement process of constantly evolving audience measurement systems. The New York Times isn't exactly shy about advocating aggressive use of the tools of government to solve a particular problem. The fact that even NYT thinks this is not an appropriate place for government intervention is particularly telling.

Bad news about military news
A poll put together by the McCormick Tribune Foundation and Gallup has found erosion of the public trust in both the military's provision of reliable information to the public, and the media's reporting of reliable information about the military. In 1999, over three-fourths of Americans (77%) thought the military kept them well-informed; now that number is just over half (54%). Confidence in the military press has similarly declined - - positive assessments came from 79% in 1999, but have now dipped to 61%. The failure to adequately inform Americans during the run-up to the war in Iraq was a major contributor to the drop. 68% said the military did either a fair or poor job. 61% said the same of the media. Worse yet, 77% think the military occasionally distributes false or misleading information on purpose. Still, parents would encourage their own children to enter into either a military or journalistic career if that's what they wanted, although that two has eroded. 62% of parents would approve of entry into the military, down from 71% in 1999. Pursuit of a career in journalism fared better, with 80% of parents expressing approval compared to 85% in 1999.7

Anti-smoking campaign upheld by DE court
Lorillard Tobacco Company has failed in an effort to stop the American Legacy Foundation from continuing its truth(r) anti-smoking advertising campaign, which strives to keep children from using cigarettes. Lorillard was arguing that the ads "vilify" tobacco companies and their employees, and that they were in violation of a 1998 settlement between tobacco companies and the state of Delaware. The Delaware Chancery Court held that Lorillard's case was without merit. ALF went beyond claiming victory, calling for the tobacco industry to cease their own youth anti-smoking campaign, "...which offer no reason not to smoke and portray smoking as an acceptable adult habit, thereby making it appealing to kids striving to appear more adult." The American Public Health Association also applauded the decision, saying the truth(r) cut the total number of teenage smokers as measured in 2002 by some 300K.

RBR observation: So there you have it. Two health organizations say that certain tobacco industry PSAs are actually generic pro-tobacco advertisements in disguise, aimed at children, no less. Plug them into your schedule at your own risk.

Satellite radio listeners profiled
A new analysis of the most recent Simultaneous Media Survey (SIMM VI) by BIGresearch defines listeners of satellite radio from a consumption standpoint. Here are numerous insights from the study on the consumption power of a small (4.3% of 18+ population, approximately 9.5 million) but lucrative group of consumers: | More... |

Conference Calls Q2 2005

Record profits for Orban/CRL
Circuit Research Labs, commonly known as Orban/CRL, reports that it had earnings of 2.6 million bucks for Q2, a sharp reversal of a net loss of 264K a year earlier. That improvement was largely due to restructuring the company's loans with Harmon International last October, but Orban/CRL also reports an increase in net sales - - 4.4 million in Q2 of this year, compared to 3.1 million a year earlier. "Finally! Patience and perseverance have prevailed, allowing us to generate a profit for the company. I feel this sets the stage for a healthier, more stable financial environment," said CEO Jay Brentlinger.

Adbiz©

ABCRN to develop electronic
traffic, reporting system
And the accountability train just keeps on chuggin': ABC Radio Networks announced an agreement with software developer Spot Buy Spot to create and deploy an e-business solution to track commercial airplay across ABC Radio Networks programs. This new state-of-the art system is being developed exclusively for ABC Radio Networks and is scheduled to be operational by the end of Q1 '06. The reporting system will enable affiliates to quickly and efficiently process network traffic orders and return commercial clearance logs to the net. The automated process will reduce the need for manual data entry by the affiliate traffic department while ensuring accurate and timely information management. "Providing accurate reporting to our advertisers has always been of paramount concern for ABC Radio Networks and we are very excited to be able to announce this e-business endeavor to our advertising and affiliate partners," said John Rosso, ABCRN SVP/Affiliate Relations and Business Administration. "This tracking system will produce detailed reports with valuable information for our advertising partners. This is a major step forward and significantly improves communication between ABC Radio Networks, our affiliates and advertisers." Spot Buy Spot will oversee the creation, and support of the system including training for ABCRN affiliates.

Cold-EEZE taps Merkley + Partners
The Quigley Corporation has chosen Merkley + Partners NY as its AOR to handle all creative. The two companies, in conjunction with buyer Nail Advertising, will launch a national effort including television, print and web-based interactive programs to further increase consumer awareness for the Cold-EEZE brand.

Help-Wanted Ad Index increases
The Conference Board's Help-Wanted Advertising Index -- a key measure of job offerings in major newspapers across America -- edged up in July. The Index now stands at 39, up from 38 in June. It was 38 one year ago. In the last three months, help-wanted advertising increased in five of the nine U.S. regions. Largest increases occurred in the East South Central (4.7%), Pacific (4.7%), and West North Central (2.7%) regions. Online want-ad volume does not show a markedly different pattern. The Conference Board Help-Wanted Online Data Series shows that the number of new online job ads fell slightly to 1,970,000 in July from just over 2 million in May and June. However, the latest figure is still almost 10% higher than the 1,799,000 new online jobs posted in April. The Conference Board surveys help-wanted print advertising volume in 51 major newspapers across the country every month.

Media Business Report

Six Flags board bows
to Red Zone pressure
Washington Redskins owner Dan Snyder and former ESPN EVP of Programming Mark Shapiro are off to a pretty good start in their new line of work as corporate raiders (8/19/05 RBR #163). The first move by their new entertainment company, Red Zone LLC, had been to announce a proxy fight to throw out the management of Six Flags Inc. so they could take over and reinvigorate the amusement park company. Now, the board of Six Flags has voted to put the company up for sale - - inviting Red Zone and others to submit bids. Lehman Brothers and Allen & Company have been retained as financial advisors by Six Flags.

Media Markets & MoneyTM

Close encounter in Denver
New Radio Venture has the keys to its new Denver AM station, according to Patrick Communications brokers Greg Guy and Larry Patrick, who represented the buyer, and Jody McCoy of Media Venture Partners, who worked for seller NRC Broadcasting Inc. The station is News/Talk KNRC-AM out of Englewood CO, with sold for 5.525M. Maria Elena Llansa and Heberto Lima-Villers combine for a 90% share of New Radio Ventures, with long-time group Susquehanna along for the ride with a 10% stake. They are also acquiring KMYL-AM in Phoenix.

Washington Beat

AK-HI multicast hinges on the letter "s"
The FCC's decision to mandate carriage of the full digital output of broadcast television stations over DBS in Alaska and Hawaii (8/25/05 RBR #167) hinges on the precise wording of Congress. That language stipulates that DBS providers must carry all of the broadcasters' signals - - not signal - - and the FCC took that to mean it is the intent of Congress that the "s" means Congress wants all multicast channels carried, at least in these two states. Thanks to Bob Thompson of law firm Smithwick & Belendiuk for putting the magnifying glass to the FCC's reasoning in this matter.

Ratings & Research

PPM tracks multicast channels
Arbitron demonstrated that its Portable People Meter system has the ability to track HD Radio broadcasts and their multicast channels. The trials, which took place the week of 7/28 in one of the top ten metros, showed that separately encoded multicast channels did not conflict with the main channel's encoding. In addition, the PPM codes, which were unique to each of the digital channels, were properly identified by the PPM. "The industry is currently debating what to call their HD Radio multicast channels, which is important for radio when it comes to promoting these new options to their listeners," said Pierre Bouvard, President/PPM, Arbitron. "But in terms of measuring listeners to HD Radio multicast channels, the PPM has solved the problem. It doesn't even matter if a listener does not know the names or slogans that broadcasters are using to differentiate analog signals from digital signals or primary digital channels from multicast sub-channels. With the PPM, each distribution stream can have a unique identification code. If a listener hears it, the PPM can identify it with near-perfect certainty." Previous tests with HD Radio technology have demonstrated that the PPM system can recognize a PPM code in a sub-channel that is encoded at a rate as low as 12 kbps, which would be used for Talk programming only.

Arbitron opens new territory in NC
The newest addition to the Arbitron fall market lineup will be Rocky Mount-Wilson NC, filling the gap between the Greenville corner of Greenville-New Bern-Jacksonville to the east and Raleigh-Durham to the west. First Media's Mike Binkley, GM for a quartet of stations there hailed the move, saying that it will put his and his competitors' station on the map, and will eliminate confusion with the adjoining markets. Arbitron pegs the area, with a population of 185.8 persons aged 12 or greater, as #200 on its 290+ roster of markets.

Transactions

425K KXLQ-AM Des Moines IA (Indianola IA) from Warren Broadcasting Inc. (Dwaine F. Meyer) to Davidson Media Station KXLQ Licensee LLC, a subsidiary of Davidson Media Group LLC (Peter Davidson). 42.5K escrow, balance in cash at closing. [File date 7/15/05.]

375K KXLI-AM Spokane WA (Opportunity WA) from QueenB Radio Inc. (Elizabeth M. Burns, Stephen R. Herling et al) to Mutual Broadcasting System LLC (Thomas W. Read). 200K cash at closing, remainder via payment schedule including with 161K note. Combo with KSPO-FM Dishman WA. [File date 7/14/05.]

N/A KZIP-AM Amarillo TX from Del Norte Communications Inc. (Jorge A. Veloz) to Tejas Broadcasting Ltd. LLP (James L. Anderson, Charles J. Brooks, Derrick Varnell, Kendall R. Coffey Jr.). Debt assumption. Duopoly with KTNZ-AM, KRFX-FM & KBZD-FM. LMA 12/23/04, when buyer took over LMA from Amigo Broadcasting which began 7/1/99. [File date 7/15/05.]

Stock Talk

A nearly flat day on Wall Street
Oil prices retreated only slightly and stock prices were little changed on Thursday. The Dow Industrials managed to edge up 16 points to 10,451.

Radio stocks were mostly lower. The Radio Index dropped 0.684, or 0.3%, to 205.234. Radio One was the day's poorest performer, with its Class A stock down 1.7% and Class D down 1.5%.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.95	+0.10	Jeff-Pilot	JP		49.83	+0.40
Beasley	BBGI		14.16	-0.05	Journal Comm.	JRN		15.85	+0.09
Citadel	CDL		13.66	-0.11	Radio One, Cl. A	ROIA		14.00	-0.24
Clear Channel	CCU		33.40	+0.05	Radio One, Cl. D	ROIAK		14.05	-0.22
Cox Radio	CXR		14.97	-0.03	Regent	RGCI		5.41	-0.02
Cumulus	CMLS		12.21	-0.11	Saga Commun.	SGA		13.64	-0.01
Disney	DIS		25.20	-0.20	Salem Comm.	SALM		18.66	+0.14
Emmis	EMMS		23.42	-0.25	Sirius Sat. Radio	SIRI		6.58	+0.07
Entercom	ETM		32.85	-0.05	Spanish Bcg.	SBSA		7.71	unch
Entravision	EVC		7.76	-0.09	Univision	UVN		26.48	-0.25
Fisher	FSCI		45.75	-0.18	Viacom, Cl. A	VIA		34.07	-0.02
Gaylord	GET		44.69	+0.30	Viacom, Cl. B	VIAb		34.00	+0.04
Hearst-Argyle	HTV		25.69	+0.15	Westwood One	WON		20.27	+0.12
Interep	IREP		0.58	-0.01	XM Sat. Radio	XMSR		33.87	+0.22
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]

Regarding channel IDs for HD Radio (8/25/05 RBR #167).

The International Association of Audio Information Services (IAAIS) has been asking in all its comments to the Commission, and to as many manufacturers of HD units as possible that this new class of radio be consumer friendly... and accessible. Our 120 member-stations provide reading services over FM-SCA to millions of Americans who can't read because of vision loss. We know first-hand that a radio that is overly complex won't be accepted in the home of a retiree whose vision has deteriorated from macular degeneration or diabetes. The new class of HD units must be accessible to people with low-vision, those who are legally blind, and those who cannot read any of the controls or displays at all. In this case, no matter which numbering system is adopted, if more than 3.2 million Americans (National Eye Institute estimates of blindness and low vision in the US) can't make out what the display says, the unit won't sell.

According to the US Census Bureau the US population is skewing towards seniors, not teens with the latest version of an MP3 player. In fact, by the year 2025 all our "baby-boomer" generation will be 65 or older. Age related eye diseases will follow that trend. The technology we pick today will shape how our parents and then we will be able to gather information in our retirement years. Today's seniors now did not grow up with technology like laptops and palm units. If it is in their car or on the table at home the technology has to be accessible, useful, and easy to understand. Pick a numbering scheme that is simple and accessible. Who cares what we used to have? IAAIS agrees with you that "we in radio are only going to get one shot at the HD future". Let's make it work for all.

David W. Noble
Chairman, Digital Radio Subcommittee
International Association of Audio Information Services

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]

International

700 Club reaches
the Finnish line
It's curtains for "The 700 Club." It's been dropped from the schedule. In Finland. According to the Associated Press, the sole religious TV service in the Scandinavian nation has elected to get rid of Pat Robertson's show in the wake of his comments regarding the potential assassination of Venezuelan President Hugo Chavez. A spokesperson for the channel said they regretted the Robertson's practice of mixing religion with politics. Calls in the US for Walt Disney's basic cable ABC Family Network to drop the program have not been honored. According to reports, ABCFN is contractually bound to carry the program.

More News Headlines

NYSBA providing RAB
sales training sessions

Sirius now has wearable radio, too

RBR Radar 2005

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

HD, So many channels,
but what to call them?
One sidelight from 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.
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.
08/25/05 RBR #167

Market Manager
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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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