RBR's Daily Morning Epaper

Volume 24, Issue 231, Jim Carnegie, Editor & Publisher

Wednesday Morning November 28th, 2007

Radio News ®

Steve Morris explains
PPM delay decision
There may be blood in the water at Arbitron, as analysts drilled Arbitron CEO Steve Morris yesterday on the dilemma the radio medium is facing right now with PPM. As the news of Arbitron delaying the commercialization of its PPM radio ratings service in nine markets made headlines yesterday morning (11/27/07 RBR #230), Morris held a conference call to shed more light on the decision and answer questions. The general theme was focused on restoring confidence and trust, but as one analyst mentioned in the call "Now that blood is in the water," when six months comes and goes, will the broadcasters be even more united in killing PPM? A class action suit is possible, but unlikely, as the MRC will be the arbitrator before it could come to that. "No one is more disappointed than me on making this decision, but it is consistent with Arbitron's history of confidence with buyers and sellers in the radio industry," said Morris. "We have a long-term partnership with the radio industry and in the end, it's all about confidence and trust." Morris also explained that the whole process of moving to electronic has not been without problems, and that Nielsen's LPM rollout process took about a year to work though. "We are encountering a convergence of issues from different constituencies. It has been apparent over the last few days that we should not open up new markets until we can get confidence in the [ones we are already rolling out]."

Indeed, it boils down to confidence, compliance and currency-the three C's. Are we going to move forward in 2008 to develop this currency the radio medium needs? By slowing down and stopping the currency, are they sending a mixed signal to their investors-the PPM is not right? And by being on hold, investor confidence dropped and the stock plunged (see related story). The overview, as Bear Stearns analyst Victor Miller stated, brings more questions than answers: "Will ARB wait until it gets MRC accreditation before continuing its roll-out? How will ARB bring its 55%/67% 25-54/18-24 demo indexes up in NYC substantially? Will ARB be willing to increase sample sizes? How will advertisers revert back to diaries in NYC? How do advertisers remove diary/PPM bias from their minds? Will ARB be able to roll-out Atlanta, Detroit and Washington, three of the U.S.' most densely populated African-American markets, without delay? Does this set radio back relative to other media? Will this embolden ARB's competitor, Media Audit, to develop its cell phone technology?"

The PPM panels will still be active in the nine delayed markets. "We're working on the assumption that the resolution will take about six months to bring the panels under alignment, said Morris. "In the meantime, we'll be keeping the diary panels active for nine months. Running diaries simultaneously with the PPM in those markets is the reason for lower financial projections." Those lowered projections, he said, will cost Arbitron anywhere from 22-33% in 2008 revenue projections. It shouldn't impact 2009 projections, however. When asked about increased costs associated with the delays and work to improve sample sizes, response rates and ethnic compositions, Morris said there should be no additional fees levied upon broadcasters. "We don't see a fundamental change...and over time, there will be cost savings in efficiency and automation with going electronic to offset any additional expenses [in getting it right]." Another issue brought up in the call was whether broadcasters might have any cancellation clauses in their contracts for the delayed PPM rollout and associated problems. Morris claimed there were none, since the broadcasters will still get the ratings they've paid for. Houston and Philadelphia remain accredited by the Media Rating Council (MRC), said Morris. "The data is still statistically valid." We wonder how that might be possible, considering they've admitted problems with PPM and delayed the rollout in nine markets-another mixed signal that's tough to digest.

RBR observation: What might all of this do to agencies' and advertisers' confidence in the medium now that the numbers and methodology are in question? Could this chaos (with no blame mentioned) be hurting the radio industry in the long run because of confidence issues? As well, it's our feeling that the radio stations were not properly prepared for the drama of these numbers. There have been issues with compliance in the past and the final numbers didn't change that much. Broadcasters have bought themselves six more months with this, but bottom line, electronic measurement is going to give different numbers than diaries, for a variety of reasons. It is likely a more accurate measure, but the learning curve and transition curve is turning out to be longer than expected. Can it be fixed? We'll see in six months. In addition, we're hearing, but couldn't confirm, that the MRC was instrumental in moving Arbitron to the nine-market delay. Arbitron would not comment on the "particulars of the MRC process."

Bob Neil comments on
PPM slowdown
Cox Radio CEO Bob Neil, who has been outspoken in recent months about PPM's flaws, told RBR what he thinks Arbitron should do, from a broadcaster standpoint: "I think the next steps are pretty clear. Their customers, broadcasters and agencies, see little or no value in 6-11 year olds in the sample. They were there for TV purposes. Eliminating them allows the sample size to grow 12 plus, which should help at least get bigger numbers in the challenged age cells. The sampling issues must be dealt with, and I think an 85 index against target is a good floor. That's a "B" in High School and we're paying for an "A". If we don't get there, there should be a rebate to broadcasters and agencies that is significant enough to hurt, so it forces Arbitron to keep an unrelenting focus on the sample. Before another market rolls out, Philly and any other proposed PPM markets must get MRC accredited. Because of this snafu, customers are going to demand to know they are getting a quality product, and the MRC gives us confidence that the data is credible. No more waiting on accreditation. I don't think any of this is unreasonable, nor should it cost customers any more than the huge increases we're paying. It's going to be up to Arbitron to set a new direction here by telling their shareholders and Board that this is going to go slower, and frankly, that their profits on PPM won't be what they thought they were going to be. If they shut down their spin machine, and fix these problems, the industry will move into the Electronic Measurement age smoothly and with confidence. If not, Arbitron may be the Hooper and Pulse of the new millennium."

NABOB applauds Arbitron decision
Jim Winston, Executive Director and General Counsel of the National Association of Black Owned Broadcasters said NABOB is delighted to hear that Arbitron will not rollout PPM in anymore markets for at least nine months. "We have been meeting with Arbitron since early spring, and we are pleased to see that they have finally responded to the concerns that NABOB and others have expressed about the PPM methodology. NABOB, like the rest of the radio industry, wants an electronic rating service. However, we need a service that measures our actual audience and provides reliable and credible information. We look forward to continuing our work with Arbitron to make PPM such a service." NABOB has expressed concern for months now about the substantial decreases in audience for urban stations reflected in the early PPM results. NABOB had advised Arbitron that its PPM methodology showed deficiencies in the recruitment, retention and participation of the sample panel and these deficiencies had resulted in a significant under representation of younger African Americans in the PPM results.

FCC tables ownership review
We expected that the big item on the planned discussion of media ownership rules at the FCC would not include discussion of Chairman Kevin Martin's proposal to eliminate cross-ownership restrictions in the top 20 markets. That vote is widely believed to penciled in for 12/18/07, allowing a month or so for commentary. But the whole item was pulled from the delayed meeting. The news will come as at least a mild disappointment to watchdog organizations that were looking for movement on the issue of increasing broadcast ownership for minorities and women in particular and, to use the more court-friendly designation, socially-disadvantaged businesses in general. It also looks like Martin's controversial attempt to impose new regulatory burdens on CATV is in for a stall.

RBR observation: Frankly, we were surprised to see ownership issues on this month's agenda in the first place, precisely because Martin was allowing commentary time on his cross-ownership proposal. He is being criticized for not allowing enough time as it is, and Byron Dorgan (D-ND) is threatening legislation that would move consideration of the proposal to next May at the earliest. So a meaningful action at this time did not seem to be in the cards. However, Martin has promised studies on localism and minority ownership -- we'll be interested to see when those are made public.

Broadcast Electronics and iTunes...

Advertisement

...the ultimate tag team
Enable your listeners to "tag" songs on their FM HD radios for later purchase from the iTunes Music Store. Build listener loyalty, enhance your station's brand and generate new revenue.

Learn more about iTunes Tagging.

Wall Street Business Report TM

Arbitron lowers 2008 revenue predictions; shares tumble
Running diaries simultaneously with the PPM in those nine markets is the reason for lower financial projections, Arbitron CEO Steve Morris said yesterday. Those projections are pegged at anywhere from 22-33% in 2008. Arbitron is now projecting earnings between 1.30 to 1.35 a share compared to previous guidance of 1.35 to 1.45. Meanwhile, Arbitron shares tumbled Tuesday after the conference call. They settled at 15% lower to 41.70 yesterday after hitting a 52-week low of 34.81 earlier in the session. Bear Stearns downgraded the stock from outperform to peer perform.

Tribune slides in October
The ink for the month of October was read at on-the-block Tribune Company. Consolidated revenues fell 9.3% to 383M. Publishing only suffered a 7.9% loss to 287M, while broadcasting and entertainment properties fell 13.3% to 96M. Actually, broadcasting did not fare as poorly as print, falling only 7.1% in a challenging advertising climate. The real drop came from the Chicago Cubs, where the problem was simple scheduling -- the team had five fewer home games compared to the year before. The company offered some category color on the broadcast side. Down categories included political, mivies and retail. On the upswing were food/packaged goods, telecom and restaurant/fast food. Retail was also a down category for the company's newspapers, where the bigger problem was a 19.2% decrease in classified revenue fueled by a 26.9% drop in real estate.

Ad Business Report TM

Religious reps gang up on Savage
Talk Radio Network talkmeister Michael Savage is known for freely expressing his thoughts, a fact that does not sit well with many, including a brand new organization called the Hate Hurts America Community and Interfaith Coalition. They are claiming two major victories in their campaign against Savage: the addition of Wal-Mart and AT&T to the list of companies refusing to advertise on "Savage Nation." The group says that AutoZone, Citrix, TrustedID, JCPenney, and OfficeMax are already in the fold. AT&T isn't an active supporter of the program. It told HHA member Council on American-Islamic Relations (CAIR), "AT&T has never directly supported this program through advertisements or sponsorship. Some radio stations may have inserted AT&T advertisements locally during the broadcast of Michael Savage's syndicated program. We are reaching out to individual radio stations to reinforce our policy to ensure this doesn't happen."

RBR observation: CAIR is an ever-alert watchdog which has been trying to hold the lid on what it sees as unjustified anti-Islamic attacks, and it has successfully chased talent off the air now and again. In the case of Savage, it has been joined by a wide variety of religious leaders. We have no idea how successful their campaign will be, but it is certainly a completely viable tactic. In a nation where free speech is treasured, they have no legal recourse to muzzle Savage. But they are perfectly free to exercise their own freedom of speech to discourage financial support for his program, proving that free speech is indeed a double-edged sword.
| HHA Coalition members here |

Media Markets & Money TM

EMF adds in West Virginia
Ever-expanding Educational Media Foundation has inked a deal which will bring in a pair of reserved-band FMs in two West Virginia markets. It'll get WMEJ-FM, ranging from Huntington WV to Proctorville OH, and WZWA-FM in Clarksburg WV from Paul Warren's Maranatha Radio. According to broker John Pierce, the price is 900K. Pierce says EMF is already active in Charleston WV and Wheeling WV, and the Maranatha will remain on the air with another Charleston station.

Washington Business Report TM

CommComm puts FCC on agenda
The Senate Commerce Committee has just put an item on the calendar for all five FCC Commissioners. It has scheduled an oversight hearing for 12/13/07 at 10AM in which it will grill the residents of the FCC's 8th Floor on "current proceedings involving media and telocommunications policy." That includes Chairman Kevin Martin (R), Michael Copps (D), Jonathan Adelstein (D), Deborah Taylor Tate (R) and Robert McDowell (R). No other guests are invited to testify. Committee member and Senate communications point man Byron Dorgan (D-ND) may have a special treat for Martin. He has managed to fast track his bill S.2332 Media Ownership Act of 2007 onto a 12/4/07 mark-up session for a full committee vote. The measure would prevent Martin's desire to bring up the elimination of cross-ownership restrictions in the top 20 markets at the Commission's 12/18/07 open meeting. It would require 90 days for comment and reply (Martin's schedule allows for about a month), and would also require completion of proceedings on localism and minority/female/socially-disadvantaged businesses, with another 90-day comment period, pushing any vote back to May 2008 at the earliest.

RBR observation: If they were to build an automobile in Washington at this point in time, in this particular media regulatory climate, the car would have two brake pedals and no accelerator.

FCC addresses DTV outreach to minorities
A 12/4/07 FCC session to make sure minorities aren't left behind during the DTV transition is coming into shape. The event will consume the morning hours, and will be hosted by FCC Consumer and Governmental Affairs Bureau Chief Cathy Seidel. The first of two panels will discuss reaching these communities, and will feature remarks from NAACP's Hilary Shelton, Michael Sherman, GM of Asian-formatted KTSF-TV and League of United Latin American Citizens Executive Director Brent Wilkes. The second panel will focus on support for these communities, with remarks from Lisa Bland Malone, VP, National Urban League Policy Institute, Betty Valdes of the DC Chapter of REFORMA, a Spanish-language group, and Daniel R. Wilson of the National Caucus and Center on Black Aged.

Internet Business Report TM

News Corp. builds online ad network "FIM Serve"
News Corp.'s Internet division plans to launch an online network to sell advertising across all of its media properties beginning the first half of next year. Fox Interactive Media president Peter Levinsohn told the Reuters Media Summit in New York the network, internally dubbed "FIM Serve," is the subject of discussion across the company after first being built for its MySpace online social network. "We're well down the path in terms of discussions with some of the other News Corp. properties to do ad serving," Levinsohn said. "Ultimately we'll take the company off network and become an ad network for assets outside of the News Corporation empire." The genesis of the decision likely comes from its work to better target MySpace users, a project which it launched over the summer called "HyperTargeting," said Reuters. The technology mines the profiles of its 110 million global users to bring them ads more relevant to their interests.

Transactions

300K WZZB-AM Seymour IN from S.C.I. Broadcasting Inc. (Lewis W. Dickey Jr.) to Midnight Hour Broadcasting LLC (Blair W. Trask, Kelly O. Trask). Cash. Combo with WXKU-FM Austin IN. LMA 10/24/07 replaces original LMA between same two principals dating to 5/25/01. [File date 11/7/07.]

Stock Talk

Arbitron stocks drop and recover
Yesterday was a tough day for Arbitron, as CEO Steve Morris held a conference call on the whys of delaying PPM rollout in nine markets. They settled at 15% lower to 41.70 after hitting a 52-week low of 34.81 earlier in the session.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.70	-7.21	Google	GOOG		673.57	+7.57
Beasley	BBGI		6.97	+0.02	Hearst-Argyle	HTV		17.89	+0.04
CBS CI. B	CBS		26.61	+0.49	Journal Comm.	JRN		8.87	+0.36
CBS CI. A	CBSa		26.55	+0.39	Lincoln Natl.	LNC		57.62	+0.97
Citadel	CDL		2.19	+0.04	Radio One, Cl. A	ROIA		1.94	+0.06
Clear Channel	CCU		34.80	+0.66	Radio One, Cl. D	ROIAK		1.95	+0.05
Cox Radio	CXR		11.93	+0.12	Regent	RGCI		2.02	-0.05
Cumulus	CMLS		8.62	+0.18	Saga Commun.	SGA		6.89	-0.10
Debut Bcg.	DBTB		0.80	unch	Salem Comm.	SALM		7.79	+0.06
Disney	DIS		31.72	+0.48	Sirius Sat. Radio	SIRI		3.56	-0.06
Emmis	EMMS		4.08	+0.15	Spanish Bcg.	SBSA		4.72	+0.06
Entercom	ETM		16.69	+0.51	SWMX	SMWX		0.01	unch
Entravision	EVC		7.44	unch	Westwood One	WON		2.03	+0.09
Fisher	FSCI		41.72	+0.11	XM Sat. Radio	XMSR		14.20	+0.24

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]

Performance Rights Issue: Here's a quick note in support of radio:

Dang it, Lyle! Twenty years ago, I stood supportively in your corner. When the critics were offering less-than-glowing reviews of your albums, I still bought 'em. I heard songs with killer lyrics and an enormous amount of style. Then came the Julia Roberts thing. Again, I was there. I was openly badmouthing the late night talk show hosts for failing to recognize the appeal for a talented, young actress. Through the years, I've continued to be supportive. When I got a hankerin' to hear "Which Way Does That Old Pony Run" a few months ago, I even bought a new copy on CD. I could just as easily have skipped the cost and dubbed it from my vinyl copy, but hey - the music was worth it to me.
| Read Dan's full comment |

Dan DeBruler
General Manager
WCLN-FM
Christian Listening Network
Fayetteville, NC

Below the Fold

Ad Business Report
Religious reps
Gang up on Savage a fact that does not sit well with many...

Media Markets & Money
EMF adds in West Virginia
Inked a deal which will bring in a pair of reserved-band FMs in two WV...

Washington Business Report
FCC addresses DTV
Outreach to minorities, a 12/4/07 session to make sure minorities aren't left behind...

Internet Business Report
News Corp. builds
Online ad network "FIM Serve" an online network to sell advertising across all of its media properties...

Stations for Sale

Seller Financing Available
Mississippi FM
Buy or Lease Studios, Tower
Gordon Rice Associates
(843) 884-3590
or E-mail Gordon Rice

Market your Stations For Sale
in our daily epapers.

Contact
June Barnes
[email protected]

Radio Media Moves

Padron upped to VP/DOS at CBS
Radio Sales
Interep's CBS Radio Sales announced Lisa Padron has been promoted to Vice President/Director of Sales from her previous position as Vice President, Sales. Padron joined Interep in 1997 as a Sales Assistant at Allied Radio Partners. After graduating from Interep's Radio Apprentice Program in 1999, Padron joined the company's McGavren Guild firm as an Account Executive. From 2001-2002, Padron was Partnership Marketing Manager for the Red Bull Energy Drink account at Kastner and Partners in LA. In 2002, she rejoined Interep as a Sr. Account Executive at CBS Radio Sales. She was promoted to VP/Sales in 2005.

TVBR - TV News

PTC protests
FCC/CBS agreement
The Parents Television Council is not at all happy that the FCC ducked the indecency issue and CBS got off with "a slap on the wrist." At issue is the license renewal of KUTV in Salt Lake City. "The FCC has failed its obligation by letting CBS off the hook -- not once, but now a second time -- for airing the same indecent content," said PTC President Tim Winter. "The FCC has chosen CBS' corporate interest over the public interest, but the public, not CBS, is the true and rightful owner of the public airwaves. And shamefully, the FCC announced its decision the day after Thanksgiving, trying to bury any public scrutiny. What kind of signal does this send to broadcast licensees -- and more importantly, what kind of signal does this send to the public? The Commission has failed miserably to serve the public interest." Winter added that "CBS has no credibility when it says its violation of the Consent Decree was 'inadvertent.' The truth is that CBS first ignored broadcast decency law when airing a teen orgy scene in the first place, and then again when it ignored the terms of the Consent Decree its own attorneys negotiated to absolve itself of responsibility for the content it aired." He concluded, "Instead, CBS gets off with a paltry fine and a slap on the wrist -- there is no real financial penalty to ensure that CBS will follow the decency law in the future. The $300K settlement sounds like a lot of money to consumers, but it's a tiny fraction of the sale price of KUTV and the value of the broadcast license it uses to operate."

TVBR observation: That sounds pretty bad. Teen orgy? A teen orgy has no business being on television outside of safe harbor. But PTC calling it a teen orgy isn't all that meaningful to us, since the group tends to go for the hyperbole when stating its case. We'd like a second opinion. IN this case, PTC thought the material indecent, while CBS, and apparently millions of viewers, did not. Defining the line between decency and indecency is an impossible task, and the instances where fines have been levied compared to other instances where they have not do nothing except highlight the apparent randomness of indecency enforcement. We read this situation as a concession by both CBS and the FCC that neither wishes this to be the case in point when push comes to shove and another indecency battle winds up in the courts.

RBR Radar 2007

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

PPM hits brakes hard
Arbitron to delay PPM rollout in NYC, LA, Chicago, San Francisco and Dallas. Looks like all the PPM recent numbers issues raised by Cox Radio, Beasley and others has forced Arbitron's hand and will delay the commercialization of its PPM radio ratings service in nine markets. There are the usual statements but note you should view the chart on the markets in RBR.

RBR observation: Perhaps the problems between Arbitron and the New York City Council about the independent panel reviewing the rollout of PPM was the last straw-there may not have been time as PPM was set to go live there 12/31. Ironically, the decision does not impact PPM ratings currently in Houston and Philadelphia. Also have to note from last week when Bob Neil stated the train, meaning PPM, had left the station. But RBR cautioned it was time to slow the train down before it had a bad experience. Seems now the train has come to a complete stop and it is now best to make sure all parts are in working order--especially the brakes before the train leaves the station, again. Also, this morning Arbitron has scheduled a conference call and RBR will be there and report the findings. (For Aribtron's financial guidance see Wall Street Business Report in RBR)
11/27/07 RBR #230

Radio Advisory Council chair responds to Arbitron
Steve Sinicropi, Chairman of the Arbitron Radio Advisory Council and VP/GM of Cox Radio Greenville, sent RBR this response to the comments published Wednesday from Arbitron VP Thom Mocarsky (11/21/07 RBR #228). Arbitron positions the methodological differences between Houston and Philadelphia as a more of tweak than a major change and assured the Council that concerns over differences were unwarranted. Obviously Arbitron was wrong. More Sinicropi comment in this report page of RBR.
11/26/07 RBR #229

RBR Classifieds

New Positions
Available in RBR Classifieds.
See Radio Careers

Additional Positions
Available in RBR Classifieds.
See Radio Careers.

Other Links

State Associations
Contact Us
Advertising Opportunities
Submit a news story

Help Desk

__EMAIL__ :
Having problems with our epapers?
Please send Questions/Concerns to:
[email protected]

If you wish to remove your name completely from our database use this link __UNSUB__