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Volume 23, Issue 241, Jim Carnegie, Editor & Publisher

Wednesday Morning December 13th, 2006

Radio News ®

One buck Jeff
"On December 5, 2006, Jeffrey H. Smulyan advised the Board of Directors that he was reducing his base salary for the fiscal year ended February 29, 2008 from $880,000 to $1 as part of a corporate cost cutting initiative," Emmis Communications said in a filing with the SEC. It is not like Smulyan is going to have to bike to work because he can't afford to buy gas. He is still the largest shareholder of Emmis and recently was the biggest recipient of that four bucks per share special dividend. So RBR asked Smulyan what message he is trying to send with the move. "The message is we are looking for ways to create value for all of our shareholders. Obviously, I'm the largest one, and we felt that as we look at costs and evaluate the media business going forward - we have a corporate cost-cutting group to look at all of our costs - and I felt that the first place that we should start was with me. I felt that it was important to deliver the message to our people that I'm not going to ask anyone to tighten their belt without starting with me," Smulyan said. As for whether he will be eligible for a bonus on top of that one buck paycheck, the CEO said that hasn't even been considered yet.

RBR observation: This, of course, has less to do with money than in making a statement of confidence in the company. Emmis and other radio companies have taken a beating on Wall Street. Emmis has been particularly hard hit by the tough radio ad market this year in New York and LA. It is unusual, but not unprecedented, for a media CEO to forego a salary and bank on gains from moving the company stock up. Jerry Perenchio never took a paycheck at Univision. He seems to be doing OK.

Which medium is the biggest eLoser?
A recent ZenithOptimedia forecast sees Internet advertising surpassing radio on a worldwide basis by 2009, but radio will only lose 0.4% of its share from 2006 through then. That matches the projection for magazines, and is not as severe as the drop for television. But the biggest loser is projected to be: Newspapers. When this year wraps up, newspapers are expected to command 29.1% of the global advertising market, but figure to drop 1.8% to 27.3% by 2009. Looking back to 2005, the drop is even more precipitous. While radio and TV are surrendering 0.6% and magazines 0.8%, newspaper will be dropping 2.5%. The beneficiary of most of this will be the Internet, climbing from 4.7% in 2005 to 5.8% in 2006 and 8.6% in 2009. Outdoor is predicted to register much more modest growth of about half a percent during the same period. A seventh category, cinema, is expected to hold a market share of 0.4% through the first four years of the study until hitting the 0.5% mark in 2009. All media are expected to grow in terms of actual revenues though the duration of the study.

RBR observation: One way to look at this is that the Internet is creating revenue. Another way is that it is enjoying the explosive growth that is the norm for a new viable medium, maintaining for a time a pace which is practically impossible for mature media to match. Yet another way to look at it, one preferred by many broadcasters who participate in quarterly conference calls, is that the Internet is benefiting from experimentation right now but is inherently flawed and will not grow at the rate predicted. Regardless of which of these approaches you take, it is clear to most that the most severely challenged medium at this point, any way you fold it, is newspaper.
| Media growth charts from ZenithOptimedia here |

Nashville forum follows the script
Disgruntled musicians and disenfranchised citizens carried the day at the FCC forum on media ownership in Nashville. A few broadcasters were on hand to explain they way they do business, but were for the most part drowned out by alarm bells warning of the dangers of further consolidation. A host of Country artists were on hand, including legends like George Jones, Naomi Judd and Porter Wagoner and relative newcomers such as Big & Rich (Big Kenny Alphin and John Rich), along with other artists and songwriters. Wagoner said that in today's media environment, acts such as Dolly Parton would have gone undiscovered. "I don't even know how to advise a new artist today on how to get played on the radio. The days of new acts receiving reasonable airplay are over." They were countered by Bud Walters of Cromwell radio, a smaller regional radio group, who noted consolidation was becoming a necessity for survival as new media encroach on the local advertising pie. On the topic of airplay, he said, "Artists and writers are still very relevant to radio. But so is the public, who express its tastes in ratings and purchases." He added that radio cannot "...market for free the music of whomever wants to be on the radio." Local television and newspaper execs also pointed out the need for increased management flexibility, in the form of loosened cross-ownership regulations, in order to remain competitive. Rep. Jim Cooper (D-TN) was also on hand. He said of the forum process, "We still don't know if this is window dressing. You hope it's not. But then you go to a national broadcasters' convention or something like that and you'll see 300 congressmen there."

RBR observation: Huh? Who went to a convention - ever - and saw well over half of Congress enjoying a junket on the broadcast tab? We would point out that the presence of a legislator at an industry gathering is roughly on par with a legislator showing up at this sort of forum. But ethics concerns have curtailed the travel habits of members of Congress in general, and the 2006 NAB Radio Show was 100% legislator-free. As for getting on the radio, its always been mystifying from the artists perspective. We're not sure how Wagoner can say nobody new gets on the radio while he was sitting on a panel with Big & Rich, who to the best of our knowledge do not qualify as a heritage act. The truth is that broadcasters face challenges that musicians don't understand and couldn't care less about, and vice versa. It's not necessarily a bad thing to sit down together and discuss it. But it doesn't do anybody any good when the facts are tossed out the window.

Urban added to Mercury Awards
Radio spots specifically designed for Urban format stations will have their own category in the 2007 Radio-Mercury Awards. The Urban winner will receive a 5K prize and be eligible for the 100K grand prize. "By adding this new category into the Radio-Mercury Awards, we recognize the importance of the ever growing Urban format, its large and loyal customer base, and its impact on general market advertising. We also seek to increase participation from the African-American and Multicultural advertising agencies and their clients," said Jeff Haley, President and CEO of the Radio Advertising Bureau (RAB). In addition to the new Urban Category, the Radio-Mercury Awards will continue to present nine 5K General Category Awards for agency-produced spots; one 5K Radio-station produced category, one 5K Spanish-Language Category, and one 5K 30-Second Spot Category. The winners of those categories are eligible to compete for the 100K grand prize. The official call for entries will begin January 1st.

Will FTC give buzz the business?
Has anyone ever come up to you and said something like, "Man, this Diet Doctor Pepper tastes great! You should try it! (This seemingly spontaneous person-to-person conversation was paid for by Pepsico.)" If the person didn't add the parenthetical addendum, and it turns out they were put up to it by Pepsico, the Federal Trade Commission may make it a case in its case-by-case approach to enforcing word-of-mouth or buzz marketing disclosure requirements. However, it has answered a Request for Investigation from watchdog Commercial Alert with a determination that it need not take the more substantial step of issuing guidelines at this time. Defending against Commercial Alert was the Word of Mouth Marketing Association (WOMMA). Although word-of-mouth is an accurate description of how such a transaction often takes place, it can also take the form of a website or blog posting or any other kind of testimonial in which an established relationship between the testifier and the advertiser is not made public. The FTC acknowledged that the effects of buzz marketing can be especially harmful for children and teens. The decision to take a case-by-case approach may not be the final word on the matter, as "...the Commission will continue to evaluate these issues."

Iraqi insurgents kill AP cameraman
Another journalist working for the Associated Press has been killed while working in Iraq. The AP says Aswan Ahmed Lutfallah, 35, a cameraman for AP Television News, was having his car repaired when he rushed off to shoot video of a clash nearby between police and insurgents. He was spotted by the insurgents and shot dead on the spot. Lutfallah was the second AP cameraman to be killed in the northern Iraq city of Mosul in 21 months.

Ad Business Report TM

Nielsen Monitor-Plus: US ad spend rose 5.1% through Q3
Advertising spending for the first three quarters of 2006 rose 5.1% over the same period last year, due to ad spending increases across many major media, according to Nielsen Monitor-Plus. Ad spending increased in most reported media, led by the Internet (49.2%), Spanish Language-TV (16.6%) National Newspapers (8.4%) and Spot TV Top 100 Markets (7.4%). Growth in several media remained relatively flat or decreased year over year including smaller Spot TV markets, B2B magazines, Local Newspapers, and Spot and Network Radio. The recent midterm elections have contributed significantly in increased ad spending in the top 100 television markets, and because all the political ads were local, it led to an uplift in Spot TV ad revenues, particularly in Q3.
| Read More... |

Musicrypt completes pilot
for ad delivery
Musicrypt Inc., a provider of in secure digital music distribution, has entered the ad delivery biz with the successful completion of a pilot program with The Gary Group, an agency for the recording industry, based in LA. The three-month program involved the secure digital delivery of radio spots to major market radio stations across the US via Musicrypt's patented Digital Media Distribution System ("DMDS"). The 30 and 60-second ad spots included Sheryl Crow's "Wildflower", Diamond Rio's "Greatest Hits II" and Indigo Girls' "Despite our Differences". "The pilot program just completed with Musicrypt's DMDS has proved to us, that this patented technology can deliver our client's advertising in a more timely, effective and efficient manner," said Dick Gary, Chairman, The Gary Group. "We look forward to using DMDS to securely deliver broadcast quality radio and TV spots for our clients in a way that will no doubt revolutionize our industry. We will continue our work with Musicrypt to further enhance and refine DMDS for the advertising sector." No special network, hardware, or software is required. Agencies and stations can securely access and DMDS via the internet from any computer. Musicrypt's DMDS has delivered over 5,000 songs from more than 150 record labels to clients including CBS/Infinity, Citadel, Clear Channel, Cox, Cumulus, Emmis, Entercom, Federated Media, Sirius, Journal, DMX, Jones Radio, AOL, Music Choice, Radio One, Salem, Univision, Westwood One, Regent, Premiere Radio, Next Media, XM, Waitt Media and others.

Media Business Report TM

CBS Outdoor set to
lose NYC transit
The board of the Metropolitan Transportation Authority is due to vote today on a new 823 million bucks, 10-year contract covering advertising on most New York City buses, the Long Island Rail Road and the Metro-North commuter rain system. Unless the board goes against a committee recommendation, the contract will go to Titan Worldwide, replacing CBS Outdoor. CBS Outdoor will continue to handle advertising on the New York subway system.

RBR observation: Both CBS Outdoor and Clear Channel Outdoor have shown themselves to be prudent lately, refusing to over-bid for advertising contracts with government entities and be stuck with low profit margins. Better to stick primarily with billboards, where the outdoor companies have more control of their own destiny. Despite losing the revenues and profits from the NYC transit contract, Bear Stearns analyst Victor Miller estimates that CBS will improve the EBITDA margin for CBS Outdoor to 29.4% from 28.9%.

Media Markets & Money TM

Your cola, our cola, Arcola
John Maguire is leading a group of investors known as Champaign Partners into Arcola IL for the purpose of owning and operating WXET-FM. But it won't stay that way for long. Besides new ownership, they'll have to come up with new calls and a new format. But they'll get the stick for 500K cash from Gayla Jo Ring's Premier Broadcasting. Premier retains WXEF-FM in Effingham IL, which is presumably where WXET's intellectual property will wind up (and to an extent, already is). Maguire and friends will also be on the lookout for new transmitter location. If they want to add credence to the company name, they'll have to get FCC approval for a northward migration - its present location in Arcola is a little too far south to be considered part of that market.

Correction
Citizens of Gillette WY, put away your sextants. You do not need to take any North Star readings, nor has your fine city migrated a couple hundred miles toward the Pacific Ocean. We wrote yesterday that Gillette was in the northwest quadrant of Wyoming. We meant northEAST quadrant. We apologize for any inconvenience (or lost luggage) this error may have caused.

Washington Media Business Report TM

Diversity Committee gets extended life
Looking to increase minority and female participation in the communications industry, the FCC has renewed the charter for its Advisory Committee on Diversity for Communications in the Digital Age. It will add two more years, through 12/5/08 as a result of the move. It is also scheduled to meet later this month on Thursday 12/21/06 to "consider possible areas in which to develop recommendations" on furthering this goal. The chair of the Committee is former Commissioner Henry Rivera. Both the communications industry and watchdog community are well represented.
| Full committee membership here |

Entertainment Media Business Report TM

WMMR's Camp Out For Hunger a big success
From 6am Monday, 12/4 until Friday, 12/8 at 10am, WMMR-FM Philadelphia morning show hosts Preston Elliot and Steve Morrison camped out at the Metroplex Shopping Center collecting non-perishable food items on behalf of Philabundance. They broadcast their show each morning while living in an RV all week. WMMR listeners filled 16 tractor trailers with food, totaling over 100 tons. Preston and Steve also received an additional 18,000 in cash from charitable members of the community that went directly to Philabundance. All of the food benefits the hungry people of the Delaware Valley, especially during the holidays. Picture: Crowd shot of the morning show broadcasting live from the Camp Out with listeners/donators.

Howard Stern to interview Martha Stewart
Sirius Satellite Radio announced Howard Stern will interview Martha Stewart for the first time as she celebrates the one-year anniversary of her Sirius Satellite Radio Channel - Martha Stewart Living Radio - with a visit to The Howard Stern Show on Thursday, Dec. 14 at 7:30 AM ET. Needless to say, we're sure Howard will be asking the tough questions, like her stay at the WV Women's prison.

Local bumps syndicated
in Orlando
Cox Radio announced the launch of 96.5 WHTQ-FM Orlando's new local morning show featuring Richard Dixon & J. Willoughby. The live show will debut January 2nd and will broadcast exclusively from WHTQ studios from 5:00am to 9:00am. The new morning team will replace The John Boy & Billy Big Show Network programming. Richard Dixon and J. Willoughby come to Cox Radio Orlando from WAPI-AM Birmingham, AL.

Internet Media Business Report TM

AMS launches Internet division
American Media Services (AMS) has formed a new division of the company, AMS-I, to assist radio stations in capitalizing on Internet-related technologies. AMS-I joins the brokerage and engineering technology divisions, through which AMS has provided consulting service for the past 10 years. The new division will provide broadcasters with expertise in such areas as streaming onto the internet and creating internet radio sites that offer high-quality audio. AMS CEO Ed Seeger tells RBR AMS-I is a turnkey service that covers legal/rights fees, technical/installation, additional formats, design, bandwidth and more: "We think it's vitally important that every radio station offer streaming audio, as more and more people are viewing the PCs and laptops sitting in their offices and homes as a radio receiver. In addition, we can help them expand their horizons in developing other online formats, in creating their own internet stations. At some point in the future as broadband is being perfected, people will be listening to anything they want on the Internet riding down the road in their automobile. This is something broadcasters need to embrace, and jump in it with both feet."

Transactions

100K WFXU-TV Tallahassee FL-Thomasville GA (Live Oak FL) from WFXU Corp., related to Pegasus Communications Management Company (Scatt A. Blank, SVP) to Budd Broadcasting Company Inc. (Harvey Budd, Irene Budd). 25K deposit, balance in cash at closing. Station is on CW affiliate Channel 57 (DTV 48). [File date 11/24/06.]

N/A KFAB-FM Fargo ND-Moorhead MN (Kindred ND) from Radio Fargo-Moorhead Inc. (James D. Ingstad) to Northwestern College (Alan S. Cureton). Donation. Ingstad is buying from Capstar TX LP, a subsidiary of Clear Channel Communications Inc. (Mark Mays) along with oversized superduopoly and must spin one station. Radio Fargo-Moorhead will get 500K toward tower lease from Northwestern. Any further appraised value will be used as tax credit. Duopoly with KFMW AM & FM. [File date 11/24/06.]

Stock Talk

Worries on Wall Street
The Fed didn't change rates, but investors were nonetheless worried about hints of inflation worries in the statement that accompanied the no change action. And that came after Best Buy delivered results that were below expectations. The Dow Industrials dipped 13 points, or 0.1%, to 12,316, and other indices were also lower.

The Radio Index declined 0.263, or 0.2%, to 151.638. Beasley was the best performer, up 2.6%. Citadel was the worst, down 2%.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		44.49	+0.17	Hearst-Argyle	HTV		26.01	+0.01
Beasley	BBGI		7.87	+0.20	Journal Comm.	JRN		12.28	+0.13
CBS CI. B	CBS		31.30	-0.18	Lincoln Natl.	LNC		63.75	+0.44
CBS CI. A	CBSa		31.23	-0.10	Radio One, Cl. A	ROIA		6.64	-0.06
Citadel	CDL		9.52	-0.19	Radio One, Cl. D	ROIAK		6.66	-0.04
Clear Channel	CCU		35.30	-0.13	Regent	RGCI		3.01	-0.01
Cox Radio	CXR		16.59	+0.11	Saga Commun.	SGA		9.18	+0.02
Cumulus	CMLS		10.53	-0.13	Salem Comm.	SALM		11.11	-0.22
Disney	DIS		35.54	+0.02	Sirius Sat. Radio	SIRI		3.77	-0.04
Emmis	EMMS		8.19	unch	Spanish Bcg.	SBSA		4.24	-0.01
Entercom	ETM		27.72	+0.15	Univision	UVN		35.40	-0.02
Entravision	EVC		7.87	-0.07	Westwood One	WON		6.81	+0.04
Fisher	FSCI		42.35	+0.07	XM Sat. Radio	XMSR		15.06	-0.12
Gaylord	GET		50.41	-0.03	-	-	-	-	-

Bounceback

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Below the Fold

Ad Business Report
US ad spend rose 5.1%
Through Q3 due to ad spending increases across many major media platforms...

Media Business Report
CBS Outdoor set to lose
NYC transit as due to vote today a new 823 million bucks deal as CBS and Clear Channel prudent lately...

Media Markets & Money
Your cola, our cola, Arcola
Investors known as Champaign Partners into Arcola IL but not for long...

Internet Media Business Report
AMS launches Internet division
A turnkey service that covers legal/rights fees, technical/installation, and more...

Arbitrends

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Radio Media Moves

New station brewing
in Milwaukee
Two key managers have been hired by Radio For Milwaukee (RFM), which will launch a new station in February on WYMS-FM, which RFM has a contract to operate for the licensee, the Milwaukee Public Schools. Vicki Mann, who has more than 30 years experience in radio and was Advertising Manager for the 2002 Salt Lake City Olympics, will be Station Manager. Jay Hedblade, most recently Program and Music Director of WEBX-FM Champaign-Urbana, IL, will be Music Director of the new station.

More News Headlines

Curt Petersen
dead at 54
The Green Bay Press-Gazette reports that Packer garb is to be the fashion of the day tomorrow as family and friends gather at a wake for long-time radio and TV personality Curt Petersen, who died Sunday at age 54 after battling cancer. Petersen's broadcasting career in Green Bay included stints at WFRV-TV, WGEE-FM, WJLW-FM and most recently WDUZ-AM & FM.

Crystal awards nominations open
The National Association of Broadcasters' 2007 Crystal Radio Awards entry information is now available online, with February 1 as the entry deadline. Finalists will be honored and winners for their outstanding community service will be announced at the NAB Radio Luncheon, sponsored by ASCAP, Tuesday, April 17, during NAB2007 in Las Vegas. Winners will also be honored at the Service to America Gala in Washington, DC on June 11.

Ideas Working Now TM

Start your new business year with our upcoming 2007 January
RBR-TVBR Magazine.

In January report Look For:
Media Association Presidents forecast their competitive media.
Like Cable - CAB's CEO
Sean Cunningham:

Q: What is your industry facing that needs to be overcome in 2007?
A: The call for greater accountability by clients can't be addressed by rushing questionable measurement products into the TV/Video advertising marketplace...

Contact & Discuss how you can Partner with RBR/TVBR

June Barnes: 803 731-5951
Carl Marcucci: 703 492-8191 ext 202
Jim Carnegie: 813 909 2916

Ideas Working Now TM
View '07 Content Focused
Reports Calendar

RBR Radar 2006

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

Arbitron breaks into the 300s
With the announcement that four new measured markets are on their way this spring, ratings giant Arbitron takes its total over the 300 benchmark. There are newbies added to the measurement list.

RBR observation: This is good news for many and trust Arbitron will deliver the marketing necessary to put these radio markets and those stations on the radar screen in 2007. So much attention this year has been dedicated to PPM that many, including RBR, have to get refocused on all of radio and their needs to succeed. Not matter the size of the market or station owner, everyone needs ideas that work in today's competitive environment.

Publisher note: A new year will be here in two weeks so RBR and TVBR brand's 2007 the year to Work Smarter Not Harder. Stay tuned. See the rated markets to be in
12/12/06 RBR #240

VNU begins streamlining
Confirmed that parent company VNU is seeking to cut costs companywide by 10%, but beyond that there is no detail on any cuts to be made at the TV ratings company. Pink slips went out last week at many of the trade publications owned by VNU, which include such US titles as Billboard, The Hollywood Reporter and AdWeek. That job cutting across the VNU print publications was first reported December 1st by Folio magazine, which follows the magazine business. A number of jobs had been previously eliminated when VNU acquired Radio & Records (18.5M) and combined it with the now-defunct Billboard Monitor.

RBR observation: You don't cook the goose that lays your golden eggs, so don't look for a lot of cutbacks at Nielsen Media Research, the most profitable part of VNU. Key is focusing on ones core business and making it manageable to produce a profit.

Publisher note: Being in the Trade publishing business for 24 years it is not for all and not what it used to be. Specific trades serve specific purposes as one key to trade success, knowing which have Unique Brands with a mission benefit to the medium they serve and are Creditable along with being Manageable. All trades will not go away.
12/12/06 RBR #240

RBR observation
CBS could go a Googling?
The Google train of speculation keeps on chugging-this time Bank of America's Jonathan Jacoby says in a research note that Google might be viewing CBS as an attractive partner: Bottom line, Google is still for the most part in the remnant inventory biz and just announced official beta testing. The new Google Audio Ads are being sold just like Google's keyword search ads are sold-advertisers determine their campaign criteria and bid on the online marketplace. RBR sees Google being involved in YouTube ads for CBS content, but only facilitating a deal already announced in the CBS Brand Channel there. Westwood One, which has been hurting as of late, may offer up more prime inventory, but with Google taking 50% of the revenue in inventory deals with their 800 client stations, WW1 may be better off just dropping their rates.
12/11/06 RBR #239

Media Seller
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