RBR's Daily Morning Epaper

Volume 21, Issue 250, Jim Carnegie, Editor & Publisher

Tuesday Morning December 28th, 2004

Radio News®

They said it in 2004: January
As the old year exits stage right and the New Year makes its way to center stage, we thought we'd string together a compendium of quotes which appeared in RBR during the past year. Today: Joel Hollander, David Kantor, Natalie Swed Stone, Gary Fries, Mark Mays and Michael Powell had interesting quotes in January 2004
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Two Commissioners
think Entercom got off light
The FCC's 220K fine against Entercom for a flurry of episodes in the spring of 2002 was based on four programs on four different days, aired over two stations. Despite the six-figure price tag, Commissioners Michael Copps (D) and Kevin Martin (R) think Entercom got off easy. Copps said, "I concur in the decision to find these broadcasts indecent in violation of the statute. I disagree with the majority's conclusion that we are precluded from issuing a fine for each indecent utterance within a broadcast because we had not provided adequate notice. In this case, I believe the Commission could have found multiple violations and assessed a larger fine." Martin agreed, saying, "Consistent with my past statements, I believe we should be fining broadcasters on a 'per utterance' basis. In this instance, we could have found several violations within the broadcasts at issue and therefore could have assessed a larger fine."

RBR observation: Anybody want to play George Carlin's "Seven Dirty Words" routine? Let's say you are going to do a public affairs discussion of the indecency debate, scheduled to begin right at the onset of safe harbor, 10:00 PM. You run the Carlin piece to frame the issue. But your engineer's watch is fast and it actually airs at 9:59. Under a per-utterance regime, would that cost 130K, the product of seven dirty words at 32.5K a pop? This is really going to be fun if and when Congress jacks up the fines. And for those have never heard Carlin's skit then listen in on the Seven Dirty Words

Satcasters continue to add subs
Sirius Satellite Radio passed a major milestone on its march to maturity, adding its millionth subscriber and moving on from there. The second kid on the block still has a ways to go to catch XM Satellite Radio, which managed to up its sub total to 3.1M. Both companies were able to capitalize on the holiday shopping season. "We predicted that we would reach one million subscribers by year-end and we did it," said Sirius CEO Mel Karmazin. "It's now clear that consumers are increasingly recognizing the appeal of our programming..." Sirius also benefited from its headline-grabbing deal with Howard Stern. "We are very pleased to announce that XM recently exceeded the 3.1 million-subscriber mark, which was our goal for the end of year," said XM President/CEO Hugh Panero "Holiday shoppers bought XM radios in record numbers, reinforcing XM's significant market leadership position in satellite radio."

RBR observation: Given the national scope of the pond XM and Sirius are playing in, these subscriber numbers are not yet a serious threat to terrestrial broadcasters. However, they are enough to create a few ripples, and they are certainly an indication that the two satcasters are going to easily make it out of infancy. Terrestrial radio still has the advantage of a local presence - - but any broadcaster who is not superserving its local audience is leaving the back door unlocked - - and a few years down the road, satcaster mice may just come in a clean out the pantry while the terrestrial cat is off at the regional studio programming from research reports. 2005 Year for Local to Muscle Up and use Common Sense. Note: January Radio & Television Business Report - The Real Media Business Magazine outlines why Local must Muscle up. Check your mail.

Radio markets: Did you know?
There is a built-in anomaly in the new Arbitron-geographical radio market definition. For the purposes of establishing station counts in a given market, the brand new low power FM class of stations is not in the mix. They do not count. However, we noticed the presence of WMUC-FM College Park MD on the BIA Washington DC market list, all nine watts of it. The antenna is equally impressive, at about three feet above average terrain. In short, the University of Maryland station barely gets out of the Student Union, much less participating in the market in general. We asked the FCC Media Bureau about this, and they indicated that there are only about six or so stations sharing the general technical parameters of WMUC. And in most cases, the presence of one of these in a market is unlikely to provide the tipping point between one ownership tier and another - - this is certainly the case with WMUC, which is one of 63 stations listed under Washington the last time we checked the BIA report. DC is an eight-station tier whether WMUC is in the mix or not. However, there are far more stations near the 100 watt threshold which also applies to LPFMs, however. So these stations count, even though they are basically just like LPFMs, which don't. The Media Bureau told RBR that should a low-powered but fully-licensed FM station exist right on the cusp of a tier border in a market of interest, its presence may be brought to the attention of the Commission and arguments made as to whether it should be included in the count or tossed out.

RBR observation: This does not figure to be a big deal, but it could come up sometime, somewhere. It is a new wrinkle in the new definition regime which did not tend to come up under the contour system.

Consolidation in the watchdog pound
America's packs of watchdogs is famous for its tenacious fight against media consolidation, so it is perhaps a tad ironic that the watchdog class is now indulging in a little consolidation of its own. In this case, the Alliance for Better Campaigns is merging with the Campaign Legal Center. In essence, ABC will function as CLC's Media Policy Program. The two groups are advocates for better campaign financing, and are trying to "...increase the flow of political communication on the nation's publicly owned airwaves. It will also help shape political broadcasting policy by promoting awareness and enforcement of political broadcasting laws through FCC rulemaking proceedings, congressional action and public education." ABC's Meredith McGehee will stay on as the head Media Policy Program.

Arbitron and CC Radio re-up contract
No bluffing or playing chicken this time around: Arbitron signed a four-year license agreement with CC Radio re-up its biggest client with ratings and software services through the Fall 2008 survey. The agreement also renews existing contracts for Scarborough and other local market consumer information services. CC also renewed its agreements with Arbitron for Premiere Radio Networks, KMG Consolidated Radio Sales and CC Traffic. Clear Channel represented approximately 21% of Arbitron's revenue in 2003. "We are pleased that Clear Channel has renewed its agreements with Arbitron. We look forward to continuing to provide our largest customer with the information services that will help it grow its revenue and manage its radio business," said Steve Morris, Arbitron CEO.

Adbiz©

Coors pulls TV ads from CBS
that compared Aspen Edge to Michelob Ultra
Looks like Anheuser-Busch is on the warpath. More in the recent string of beer ads being pulled over unsubstantiated claims about taste preference. Coors Brewing has pulled from CBS ads for its Aspen Edge brand that compared it to Anheuser-Busch's Michelob Ultra. Anheuser-Busch says the ads are misleading and make unsubstantiated claims about consumers' taste preferences. Anheuser-Busch alerted Coors of its concerns about the ads that mention Michelob ULTRA on 11/12. Anheuser-Busch later filed a challenge with CBS, and has been notified that, in response to the challenge, Coors has decided to pull the ads. NBC and CBS also recently pulled SABMiller ads that made unsubstantiated claims about taste preference (12/21 RBR #247), (12/20 RBR #246). "Competition is the lifeblood of American business, but companies like Coors and SABMiller are now on notice that we will fight for truth in advertising," said Michael Owens, VP/Sales and Marketing for Anheuser-Busch.

Media Markets & MoneyTM

Close encounter on Black Mountain
The deal for WZNN-AM in the Asheville NC market has been brought home for 375K dollars. Rock and Beth Howerton and their Zybek Media Group are the new owners. According to broker Terry Greenwood of TAG Media Consulting, the seller of the 1350 kHz Talker was Truett Yarbrough of Black Mountain Broadcasting Corp.

Washington Beat

FCC not in the mood to reconsider Moody fine
A 5K fine against Moody Bible Institute's KMDY-FM Keokuk IA is sticking, despite Moody's protests. It had already been reduced from 10K, issued for a public file violation, but Moody tried and failed to duck the assessment entirely. During a 6/23/03 visit to the station, an FCC agent found that the station manager was "...for some unknown reason unable to locate documents when asked to do so..." Moody said that the American Family Association had been let off the hook for the exact same violation. The FCC countered that AFA had been able to demonstrate that the documents in question were present at the station, but misfiled. Moody made no such demonstration in this case. Moody's claim of a clean record was also shot down - - the FCC noted five priors in the owner's file. Then there was this parting shot. "Finally, Moody questions the scrutiny given to its stations as compared to NPR stations. We note that this is not the proper forum for such a discussion."

RBR observation: We find it hard to believe that the FCC is gunning for the Moody Bible Institute. Moody, AFA and other similar operations often run lightly-staffed network O&Os and constantly need to make sure that paperwork for FCC issues like main studio waivers are up to date. The FCC's tendency to catch slip-ups here and there may present the illusion of special persecution, but we think it is just that: an illusion. It all begs the question though: just what is the proper forum for this discussion?

High court to hear music file-sharing dispute
The Supreme Court has decided to consider if online file-sharing services Grokster and StreamCast Networks may be held responsible for their customers' online swapping of copyrighted songs and movies. Justices will review a lower ruling in favor of the peer-to-peer services, which came as a blow to recording companies and movie studios. Arguments are expected in the spring, with a ruling by July. The appeal by Metro-Goldwyn-Mayer Studios and other entertainment companies said that the file sharing is "inflicting catastrophic, multibillion dollar harm on petitioners that cannot be redressed through lawsuits against the millions of direct infringers using those services." Grokster and StreamCast say once the software has been downloaded by users, they have no involvement in, nor ability to control how it is used. The 9th U.S. Circuit Court of Appeals in San Francisco ruled in August that file-sharing services were not responsible because they don't have central servers pointing users to copyright material. The court said the firms simply provide software that lets individual users share information over the Internet, regardless of whether that shared information is copyrighted.

Programming

Entravision flips three to
"Super Estrella" format
Entravision Radio flipped three stations yesterday to the Super Estrella format: KLOB-FM Palm Springs, KRRE-FM Sacramento and KJMN-FM Denver. The Super Estrella format primarily appeals to the 18-34 audience and includes well-known Spanish language artists such as Ricky Martin, Shakira, and Alejandra Guzman.

Transactions

KBMI-FM Roma TX from Horizon Broadcasting Inc. to Border Media Partners.

KMHF-FM Austin (Bastrop TX) from Media for the Holy Family Foundation to Houston Christian Broadcasters Inc.

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Stock Talk

Dollar drags the market down
The dollar slipped again, and in so doing left a pothole on Wall Street which pulled in a few of our friends in the broadcasting business. In most cases the losers were dealing in mere pocket change, and several companies - - notably Fisher, with a 45 cent gain, managed to skirt the issue with black ink to spare.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		39.17	+0.41	Jeff-Pilot	JP		51.33	-0.37
Beasley	BBGI		16.78	-0.22	Journal Comm.	JRN		18.05	+0.01
Citadel	CDL		16.24	-0.14	Radio One, Cl. A	ROIA		16.04	-0.06
Clear Channel	CCU		33.68	-0.19	Radio One, Cl. D	ROIAK		16.11	unch
Cox Radio	CXR		15.75	+0.06	Regent	RGCI		5.35	+0.01
Cumulus	CMLS		14.70	-0.29	Saga Commun.	SGA		16.90	-0.25
Disney	DIS		27.75	+0.16	Salem Comm.	SALM		24.20	-0.11
Emmis	EMMS		18.89	-0.05	Sirius Sat. Radio	SIRI		8.10	+0.15
Entercom	ETM		35.35	+0.06	Spanish Bcg.	SBSA		10.68	+0.12
Entravision	EVC		8.25	+0.12	Univision	UVN		28.60	+0.08
Fisher	FSCI		48.95	+0.45	Viacom, Cl. A	VIA		37.13	+0.03
Gaylord	GET		41.11	-0.05	Viacom, Cl. B	VIAb		36.55	-0.05
Hearst-Argyle	HTV		26.03	+0.25	Westwood One	WON		26.53	+0.14
Interep	IREP		0.76	unch	XM Sat. Radio	XMSR		39.73	-0.19
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

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Arbitrends

TVBR - TV News

Religious broadcasters qualify for educational category
Satellite multichannel video program distributors (MVPD) are supposed to assure that 4% of the programming they carry is noncommercial and educational. The FCC has ruled that religious broadcasters may qualify to be counted toward meeting that obligation. A complaint was filed by The Secular Coalition for America, which felt that DirecTV was both counting noncommercial religious channels toward the 4% requirement and not explaining why. The Commission said that the rules "...do not suggest or provide that a programmer offering programming of a religious nature should be disqualified from access to reserved channels if it otherwise meets the set-aside qualifications." It goes on to explain that decisions on how to allocate the channel usage are entirely the MVPDs - - there is nothing in the rules stipulating otherwise. As for not providing an explanation as to why certain channels were left out, the FCC noted that such an explanation is required but it need only be of the briefest nature, and that DirecTV had indeed provided it. The turndown phrase provided by DirecTV, found to fulfill its requirements, was "capacity full."

RBR Radar 2004

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

Before Time Runs Out
A Look For and Must Do list
As the year draws to a close, we remind you of a few issues to be aware of in 2005 like Accountability, EDI, PPM and LPM, FCC's rulemaking and influence on consolidation, Spot load/clutter, Capital Expenditures, Shedding of assets, Branding & Marketing of your company, Public groups got hammered Go private, 5 C's - with the key C of Common sense be applied in 2005. RBR observation: Best regroup around the camp fire and smoke the pipe and prepare for a new year which will bring a number of surprises for people that are not of Common Sense. 12/27/04 RBR #249

It's a twister, Auntie En!
A 220K twister
Entercom has been hit with a 220K dollar FCC fine over alleged indecency over a pair of Midwest stations. Dating back to spring 2002, the first incident in question was a game of "Naked Twister" on the "Dare and Murphy Show," heard on KQRC-FM in Kansas City and KFH-AM in Wichita. e ball is now in Entercom's court. It can either pay up; argue for a reduction of the fine, or its complete cancellation.
RBR observation: Or Entercom can do nothing and see if the FCC will take it to court. The indecency wars continue to heat up, and figure to get much, much hotter, especially with the threat of supercharged fines coming into the mix courtesy of Congress. Somewhere, someday, somehow, somebody is going to take this to court. Welcome to 2005. 12/27/04 RBR #249

Susan Whiting: Nielsen's PPM decision to be made by Q2
Has until the end of Q2 '05 to decide whether to form a joint venture with Arbitron for a TV and radio audience measurement service based on Arbitron's passive PPM system, possibly breaking the in-house tether its current LPM measurement system requires. Nielsen CEO Susan Whiting detailed the announcement in a letter to Nielsen clients. RBR observation: "This letter outlines the key open questions and Nielsen's plan to address them before deciding whether to join Arbitron in the launch and accreditation of Houston as the first commercial market of the PPM." RBR has the letter so click to view. It is hard ball time folks.
12/22/04 RBR #248

Publisher's Perspective
In few days we will be into 2005, and operators in the radio and television business would do well to consider what I call the Five C's as they get set to face the year ahead: Challenge, Commitment, Content, Cross-marketing and - - most of all using - - Common sense. We need to re-establish each medium and get back to the pattern of steady growth that has characterized broadcasting throughout most of its history. At the same time, we must consider new challenges which could very well threaten the extinction of our business. To deal with these challenges, we recommend an extra heaping helping of The Biggest C - - Common sense. That's what it will take to win in 2005 - - along with passion and heart - miles and miles of heart. Naples, FL called to some in 2004. 12/22/04 RBR #248

RBR Exclusive--Spinning into '05
Joel Hollander In - John Sykes Out
It was just a question of when and according to various record industry sources Infinity CEO John Sykes will be leaving to pursue other opportunities sometime after the first of the year which also comes with a generous golden parachute. Intelligence gathered the announcement will be coming soon by Viacom Co-COO Les Moonves. 12/20/04 RBR #246

VP/Programming for The Dr. Laura Show
Take On The Day, Inc., by Geoff Rich and Dr. Laura Schlessinger looking for an experienced PD to manage and market The Dr. Laura Show. Experience in talk radio programming, marketing and media relations. Based in L.A. Confidentiality respected. EOE

Major Market
Affiliate Director
Take On The Day, Inc. newly formed radio network producing and distribution of The Dr. Laura Show beginning 01/ 1/05. Candidate must have major market affiliate sales experience with Talk format. Cover letter, resume and salary requirements - Confidentiality respected. EOE

See Radio Careers for more info.

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