RBR's Daily Morning Epaper

Volume 22, Issue 85, Jim Carnegie, Editor & Publisher

Friday Morning April 29th, 2005

Radio News®

Mel raises the bar at Sirius
After beating Q1 expectations for revenues and subscriber numbers, Sirius Satellite Radio CEO Mel Karmazin has increased the company's guidance for 2005. He's now projecting that Sirius will add 1.6 million subscribers this year, bringing its total to 2.7 million by the end of 2005. The previous guidance had been 2.5 million. Sirius is now projecting 2005 revenues of 215 million, up five million from its previous guidance. More importantly, Karmazin reaffirmed his commitment to

move the still-young company out of red ink two years from now. The Zen Master told investors he expects not just to make Sirius profitable, but to make it a very profitable company. "Satellite radio is a hot category and we are the hottest company in that category. Consumers love our products and are increasingly recognizing our superior programming," Karmazin told the investors and analysts. According to recent research by Sirius, the biggest impediment to people becoming satellite radio subscribers is not the monthly subscription cost, but the cost of receivers. Thus, Sirius is launching a new 50-buck rebate program to entice people to buy receivers.

RBR observation: Mel is a great salesman and it's always fun to hear him make his pitch, even if we remain skeptical of the long-term viability of the satellite pay radio business. It was interesting to note that Sirius has found that its ad-supported talk and sports programming (plus Howard Stern on the horizon) is increasingly driving its subscriber growth. No wonder they brought in a new CEO who knows how to drive ad sales! Sirius is also reporting a lower churn rate than XM - - a monthly rate of 1.3% for Q1, which it claims is its lowest churn rate ever.

Radio Marches forward 3%
Radio comps for March 2005 can be written in black ink, according to the latest figures from the Radio Advertising Bureau. A 3% gain in total business matched the gain in local - - a 5% uptick on the national side was insufficient to push the total figure any higher, an non-spot revenue was flat. The RAB said the gain was more impressive than it may look because the radio industry registered a double-digit gain in March 2004. YTD, local is up 2%, national is up 3% and non-spot is down at -2%, which when brewed all together results in a 2% gain.

RBR observation: These numbers, while not what you'd call eyecatching, are certainly in line with what we've been seeing since we got out from under the red-ink splatter of the dot-com bubble burst. What this means is that, while LIM doesn't seem to be causing a major revenue surge, neither does it seem to be punching a gaping hole into early 2005 results.

Clear Channel on deck today
Wall Street analysts get to hear this morning just how much of an impact Less is More has had on revenues at the biggest radio company of all, Clear Channel. Goldman Sachs analyst Mark Wienkes is expecting radio revenues for the company to be down 4% and Gordon Hodge at Thomas Weisel Partners is even more pessimistic, expecting a 5% drop. Since Less is More was expected to depress ad sales in the short run at CC Radio, investors and analysts will be waiting to hear from Mark Mays and John Hogan where things are heading in the long run - - is Less is More doing the job its supposed to do: putting upward pressure on rates and making people listen to the radio more because there's less clutter.

Interep's 7th "Power of Urban Radio" draws heavy-hitters
Interep hosted its 7th "Power of Urban Radio" yesterday in NYC under the theme, "The Emergence of the Urban Market as the New General Market," focusing on the integral role of African-American consumers in today's economic and cultural landscape, and marketers' rush to secure relationships with Urban consumers. (L to R: Charles Warfield, Inner City Broadcasting; Barry Mayo, Emmis Broadcasting; Rich Russo, JL Media; Zemira Jones, Radio One)
| More on "Power of Urban Radio" |

PTC adds NCTA to indecency hit list
The NCTA just announced a 250M campaign to educate viewers about tools at their disposal to protect their children from undesirable programming. The Parents Television Council isn't buying it, calling the campaign a "sham." This follows blistering attacks on the broadcast industry on similar charges. PTCs complaint is based on the same complaint it has with broadcast content - - it's study of the ratings system indicates that use of content descriptors is spotty and unreliable, and without them, the V-chip cannot do its job. PTC President Brent Bozell would rather have an a la carte menu option from cable operators. "This 250 million sham is being foisted on American consumers by the cable industry with the sole purpose of shirking responsibility for its product," he said. "In an effort to protect their billion-dollar empires, the cable industry is spending tens of millions of dollars on a red herring like the V-Chip. Instead, the industry should provide the ability for consumers to pick and choose - - and to pay for - - only those cable networks that subscribers want, rather than forcing consumers to pay for channels they don't want. And if the cable industry won't allow that to happen, they should be forced to abide by the very same indecency guidelines which govern network broadcasters."

Publishers Perspective

Network TV's Big Problem:
No Passion
Ever wonder why the network programming gurus dump programming as well as your affiliate compensation? No passion or respect for programming content, or a commitment to find that right time slot. Once there were only three networks, now there are six with beaucoup cable channels. In days the network fall line ups will be announced and - nothing new or what guru dumped what program. The words of passion spoken by Jonathan Prince, creator & executive producer of American Dreams (AD) at NAB Vegas just may get your blood pumped again because Prince sees something lacking in TV today - Passion with Commitment. Put these two ingredients together and you have a winner. View Prince's Remarks. AD has all you need in programming, content, presentation, advertising support and what many want from the networks - - family value with education: it's called GOOD TV. It's no secret on my level of passion for the show, and if this is in doubt just re-read these columns 04/05/05 TVBR #67 along with the history of AD's American Bandstand. Bet you didn't know how Bandstand got its Brand - pg 2- 04/05/05 TVBR #67 The biggie - The advertiser was Ford Motor Company. Remember or know their support for American Dreams? No? This is where your national spot is heading--product placement. NBC will keep American Dreams or pull the plug. I say - NBC pull the plug - because you don't have Prince's Passion or Commitment. You now have Monday Night Football (MNF). ABC you did the best thing by not having MNF. It gives the opportunity to re-evaluate some of your programming to build passion and commitment to your lineups. ABC's affiliate board: Get on the phone to those decision-makers and tell them to pick up American Dreams. Remember history and let it repeat itself: American Bandstand (AB) is American Dreams and Dick Clark's AB was a key in building ABC 30 years ago. The first word of these programs and the network is "American." Get to know this program and what makes it tick -
Get To Know The Cast.

Two quick reasons to have AD: If you were a teenager in the early 1960s, like I was, you looked forward to watching American Bandstand. Second, if you are too young to remember the 1960s, but are curious about the styles of dress, dialog, boy-girl infatuations, racial tension, religious conflicts over birth control, the "transistor radios" that everyone carried around, the round-screen black and white TVs, all those are very authentic in this TV series. It's a time machine. It's a great show.

See the Ford mini movie for product placement Then View It Here.
ABC Pick it Up - - Build from it - - because it is all American.

RBR News Analysis

Demise of Rock formats examined;
we examine the solution
A report stated yesterday that "major radio companies are abandoning rock music so quickly lately that sometimes their own employees don't know it." The New York Times article added up just the last four months, that radio executives have switched the formats of four modern-rock, or alternative, stations in big media markets, including WHFS DC, WPLY Philadelphia and the year-old KRQI Seattle. Earlier this month WXRK in New York discarded most newer songs in favor of a playlist laden with rock stars from the 80's and 90's.

RBR observation: The "stars" may not be there, but the music sure is-big time. It's called Indie Rock and Indie Pop. Why radio still has to beholden to the "big" labels and their artists escapes us. Like our previous mantras on this topic, pick the music because it's good, not because it indirectly helps the bottom line or because some consultant told you how to. | More On The Solution |

Conference Calls Q1 2005

Sirius reports more subscribers, more red ink
Unlike rival XM, which reduced its net loss in Q1 (4/28/05 RBR #84), Sirius Satellite Radio is still upping its quarterly order for barrels of red ink. The company reported a net loss of 193.6 million bucks, up from 144.1 million a year ago. The loss per share rose by three cents to 15 cents. Revenues, however, shot up 365% to 43.2 million, driven mainly by a 312% increase in subscribers. At the end of March, Sirius has 1,448,695 subscribers. During the quarter it added 174,202 net subscribers from its retail channel and 132,211 from its auto, truck and boating channels. With both satellite radio companies out signing big bucks deals for exclusive content, programming costs for Sirius rose sharply in Q1, hitting 24.5 million, compared to 8.7 million a year ago. Most of the increase was due to costs associated with the NFL, NBA, college sports and new branded music and talk channels.

Adbiz©

Upfront predictions examined
In RBR/TVBR's May print issue examining the upfront process, we look a bit into predictions for 2005-2006's upfront. What about demand and potential CPM increases this time around? We excerpt a bit: It's a bit soft, as most are saying, due to an unimpressive scatter market. In fact, scatter pricing is down 5% overall vs. 2004-2005 upfront pricing. ZenithOptimedia Group predicted in its recent updated forecast that the 2005-06 network upfront will be "relatively soft." "Telecom and retail mergers, government scrutiny, high oil prices and the weak dollar have led advertisers such as P&G, Pfizer, Merck, and Kraft to exercise cancellation options at generally higher rates this year," noted the report, which predicts network TV ad spend will climb only 3% in 2005. | More On The Upfront |

Med Gen using radio for
snoring products effort
Med Gen, manufacturers of the national brands Snorenz, snore relief throat spray and Good Nights Sleep, sleep aid throat spray, announced it has placed ad commitments with Plus Media Buying Services NY, for a 12 week blitz aimed at the over 100 million snoring sufferers nationally. "Getting the word out about Snorenz, is our most important job, as we move forward to meet our sales objectives," said Paul Kravitz, Med Gen CEO. "As a company, we suffer from publicitis, not having been able to communicate enough publicity for our brands or our company. Thus we suffer from an undervalued stock and under-recognized brands, Snorenz and Good Nights Sleep." Starting with Phoenix on KFYI-AM, the areas leading News/Talk station and continuing on to WBBM-AM Chicago, WIOD-AM-Miami, WBZ-AM Boston, KNX-AM Los Angeles and WINS-AM New York in two-week segments, Snorenz spots will air to a combined 56 million listeners. "This is a product that really works and few know of its existence," Kravitz said in a broadcast, which can be heard on Wall Street Reporter.com.

Radio & Television Business Report Magazine

June Magazine
'05 Clock is Ticking -
Heading for Closure

National Sales:
EDI - Electronic Delivered Invoicing
Special Analysis:
Public now Go Private
Media, Markets & Money:
Shakers & Makers in the
Public Market

Reserve your Ad Marketing Space today. Advertising space is limited, contact:
June Barnes [email protected] ----- or ----- Jim Carnegie [email protected]

Media Markets & MoneyTM

MacDonald pinning its hopes on Pinconning
MacDonald Broadcasting has a deal which will take it to superduopoly status in the far-flung Saginaw-Bay City-Midland MI market. It's paying 750K cash for Blue Moose Broadcasting's WSAG-FM in Pinconning MI. It'll join a cluster which already includes Country WKCQ-FM Saginaw, Classic Hits WJMO-FM Essexville and Easy/AC WSAG-AM, also licensed to Saginaw. Media Services Group broker Jody McCoy, who represented Blue Moose, told RBR that the station would simulcast the AM format for the time being via an LMA which began 4/18/05.

Washington Beat

Truth in Broadcasting Act introduced
The Senate Commerce Committee has been trying to schedule a hearing on an as-yet unintroduced bill concerning the use of video news releases (VNRs) by the government. Now, thanks to John Kerry (D-MA) and Frank Lautenberg (D-NJ), when the committee finally gets around to having the hearing, it will have a bill to consider, the Truth in Broadcasting Act. The senators noted that such material has been ruled illegal covert propaganda by the Government Accounting Office, and would require that sourcing be provided on all such materials. An amendment similar to this bill attached to an unrelated piece of legislation on 4/14/05 has been withdrawn upon Commerce chair Ted Stevens' (R-AK) promise to hold hearings on a standalone bill. The hearings are expected early next month. Kerry said, "The American people deserve to know that they're not just watching the administration's spin on their local newscasts - - they're paying for it, too. It's one thing to watch Jon Stewart on television. It's another to imitate him with Americans' hard-earned tax dollars. In a time of record-budget deficits, we need to address this abuse of the public trust and waste of money." Lautenberg added, "Our government should not be in the business of fooling the public with fake news stories. If President Bush wants to promote his views, he can do that, but he should not hide behind fake reporters to get his message out. The President already has the 'Bully Pulpit' - he shouldn't need to use puppets pretending to be reporters."

Legal Ease

A legal-eagle eye view
of the Durbin amendment
We asked attorney Gregg P. Skall of Womble Carlyle Sandridge & Rice, PLLC for his thoughts on Sen. Dick Durbin's (D-IL) amendment to the McCain 527 bill which would expand the period during which broadcasters must offer political candidates lowest unit charge (LUC), and which would make such ads non-preemptible. Here's what he had to say: "Making broadcasters provide LUC to candidates throughout the year and giving them preemptible status is a terrible idea. It is probably unconstitutional and is tantamount to requiring illegal campaign contributions by all broadcasters. It is no different that requiring that all in the airlines and lodging industry subsidize political candidates by providing them deep discounts and bumping other passengers and guests if a politician wants a reservation. Those industries also rely on public benefits such as road construction and air traffic control and are not so different than broadcasters in that regard. Yet such benefits from them would likely be considered illegal corporate contributions and broadcasters should not be held to a different standard. "Polls demonstrate time and time again that Americans are sick of slickly produced political advertisements, the real reason why political campaigning has become so expensive. My experience is that broadcasters would gladly devote more time to political candidates if they would just come into the studio to speak for themselves and debate their opponents. That is where the real contribution can be made to the political process by America's broadcasters, but they need the cooperation of the politicians. Yet too many of them decline those invitations in favor of prepackaged advertising presentations that do not show what their positions are nearly as well as how good are their advertising agencies."

Transactions

174,072 WQFD-FM Webster Springs WV and WVAR-AM Richwood VA. 62.5% of J & K Broadcasting Inc. from Freddie Seabolt (37.5% to 0%), Thomas & Karen Toler (25% to %) to James A. Hardman (37.5% to 100%). 106,072 to Seabolt (5K escrow, 95,072 cash upon FCC approval, 6K note); 68K to the Tolers (20K note, 48K debt assumption). Stations do not overlap one another. [File date 3/31/05.]

100K WHFD-FM Lawrenceville VA from Willis Broadcasting Corporation (Levi E. Willis) to Lawrenceville Christian (Katrina T. Chase). 50K deposit, 50K note. [File date 3/31/05.]

0 FM CP Lockwoods/Folly Town NC from Grace Missionary Baptist Church (Clyde I. Eborn) to Church Planters of America (Danny Hawkins). Donation. CP is for Class A on 88.1 mHz with 2.9 kW @ 121'. [File date 3/31/05.]

Stock Talk

A dismal day on Wall Street
Stock prices took a tumble as the government reported that annualized GDP growth for Q1 of only 3.1% - - well below expectations. That raised fears that the recovery is running out of steam, even as inflation heats up and the Fed appears hell-bent on further rate hikes.

Radio stocks were down across the board. The Radio Index plunged 5.515, or 2.7%, to 197.914 - - the first time our index has been below 200 since March 19,2003. Hardest hit were Regent, down 5.2%, and Emmis, off 4.7%.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.86	-0.34	Jeff-Pilot	JP		48.07	-0.07
Beasley	BBGI		15.17	-0.48	Journal Comm.	JRN		15.17	-0.33
Citadel	CDL		12.45	-0.19	Radio One, Cl. A	ROIA		13.05	-0.19
Clear Channel	CCU		32.00	-0.37	Radio One, Cl. D	ROIAK		13.06	-0.25
Cox Radio	CXR		15.53	+0.32	Regent	RGCI		5.10	-0.28
Cumulus	CMLS		12.92	-0.23	Saga Commun.	SGA		14.20	-0.55
Disney	DIS		25.90	-0.94	Salem Comm.	SALM		18.70	-0.63
Emmis	EMMS		15.38	-0.76	Sirius Sat. Radio	SIRI		4.73	+0.06
Entercom	ETM		31.68	-0.91	Spanish Bcg.	SBSA		8.18	-0.33
Entravision	EVC		7.78	-0.23	Univision	UVN		26.26	-0.29
Fisher	FSCI		49.25	-0.05	Viacom, Cl. A	VIA		35.00	-0.47
Gaylord	GET		39.99	-0.10	Viacom, Cl. B	VIAb		34.76	-0.52
Hearst-Argyle	HTV		24.86	-0.04	Westwood One	WON		18.35	-0.47
Interep	IREP		0.46	unch	XM Sat. Radio	XMSR		27.25	-1.10
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]

Should it be changed to the National Association of Podcasters?

Regarding your April 19 "NAB Vegas The funny to start your morning" news clip (4/21/05 RBR #77) ...what the heck is the NAB thinking?? Why didn't they just give ALL the attendees iPods! Whatever I'm missing with that must mean I've been doing this too long.

Lou Vespasian
Account Manager
Clear Channel Radio
Tulsa, OK

Editor's note: Lou we thought the same thing when it appeared on our computer screen. First it was WOW. Then, na nobody is that dumb. Then we laughed and asked the same question as you. So far nobody at the NAB has answered us so maybe they will answer you. Win an iPod at a radio convention.

Arbitrends

Stations For Sale

Santa Fe Market New FM
Market #237 has a new FM station ready to go and priced right! Santa Fe is a unique and rich market! A great opportunity for an aggressive, innovative operator!
Cliff at Clifton Gardiner & Co
(303)758-6900
[email protected]

More News Headlines

Randi Rhodes apologized
for Bush stunt

Dan Shulman reups with ESPN Radio

TVBR - TV News

NBC gets aboard the self-policing boat
NBC Universal announced that it will join other broadcast and cable entities in an effort to provide parents with better tools with which to control what their children are watching. On the broadcast side, it will run the Parental Ratings icon at the beginning of every program, and after every commercial break, and will provide age and content descriptors. Cable outlets, which include USA, SciFi, Bravo and others, are participating in the NCTA 250M campaign to educate viewers on use of the V-Chip and other devices to block undesirable programming. Chairman/CEO Bob Wright said, "We serve our viewers best by ensuring that they are fully informed about the content of our programs. We particularly want to provide information to parents so that they can judge the appropriateness of programming for their children. These changes provide our network and cable viewers with more frequent and more detailed information about our programs. By enhancing the visibility of content ratings, and raising awareness of the V-chip, we believe parents have the tools they need to make informed decisions." NBC had recently come under fire from the Parents Television Council in particular for its failure to provide the program descriptors, which PTC says makes the V-Chip worthless.
| MORE: From NBC, read the particulars of its new initiative |

RBR Radar 2005

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

RBR FIRST
Warning to broadcasters: Politicians into your wallet again
The Senate Rules Committee passed to the full body Senate Resolution 271, which is intended to rein in 527 groups, which were able to indulge in unbridled political ad spending sprees during the 2004 election. But an amendment tacked on at the last minute by Sen. Dick Durbin (D-IL) would also make broadcasters provide even cheaper ads to political campaigns. The bill was sponsored by John McCain (R-AZ).
RBR observation: There will never be an end to the efforts of politicians to get themselves free or discounted airtime - - we all as a rule are willing to go to bat for our own wallets. However, of all the avenues available to voters to get information about elections, issues and candidates, political ads are the rock-bottom worst. If a proposal involves improving reporting, increasing the number of debates, encouraging town hall meetings, and other vehicles to provide critical information to voters, we're ready to talk. But if the proposal is simply to plunder the inventory of broadcasters so we can find out that Candidate X has a photogenic family, likes flags and is running against Attila the Hun, then forget it. Now we need the NAB at full force and all State Broadcaster Associations to kick in. 04/28/05 RBR #84

Infinity launching "KYOU Radio"
on KYCY-AM
San Francisco will convert itself into a podcasting format with the name "KYOURADIO." All the content will be submitted by listeners and be available on the radio station and streamed online at kyouradio.com beginning 5/16. Indeed, the calls will change as well to KYOU-AM, as it is currently unused. RBR observation: More and more, it is obvious Infinity is willing and able to take chances and experiment with new media, instead of complain about it. We assume XM and Sirius will copycat this move by traditional radio as well.
04/28/05 RBR #84

Fox News issues legal threat to ABC over "Idol" expose
ABC has been warned in writing it could face legal fallout for airing its scathing behind-the-scenes look at Fox's American Idol. Fox owner Rupert Murdoch has informed execs it appears ABC is attempting to maliciously "destroy" the nation's most-watched series as it heads into the final weeks. Fox believes ABC has interviewed a half a dozen losing contestants -- contestants who will claim Idol producers and judges somehow manipulate the show's outcome. TVBR observation: ABC if you have a confirmed story run it and don't get intimidated by Murdoch. Remember what Murdoch attempted with the Glover against Nielsen. ABC as for your programming - we advise you again you need quality content so talk with Jonathan Price of American Dreams and pick up this program. Don't let the A in ABC stand for Almost and leverage your radio and all broadcast assets. You can make a big difference this fall. 04/28/05 RBR #84

Universal McCann's Coen:
2004 was better than thought
Tallying up the final numbers for 2004 ad spending - - and concluded that the year came in a bit better than he had projected in December. National advertisers was stronger, while local ad spending lagged. Local radio finished up 3%, rather than the 4% that Coen had projected. Likewise, local TV was up only 7.3%, not 8.5%. Network TV, however, rose 11.2%, not just 9.5%, and national spot TV gained 14.3%, rather than 10%. "Consolidations in many areas have reduced the number of local marketers and often redirected spending into nationally distributed media. The Wal-Mart effect has cut into the available co-op advertising funds.." 04/27/05 RBR #83

He's at it again McCain wants
To mandate TV for the visually impaired with The Television Information-Enhancement for the Visually Impaired Act of 2005 (TIVI) has been officially introduced by Sen. John McCain (R-AZ). It would require television stations to provide verbal descriptions of programming for at least 50 hours of prime time or children's programming per quarter, using a secondary audio programming (SAP) subcarrier channel much like is done to provide translations of the programming into foreign languages. RBR observation: Will this guy ever get his head out. It takes money to do what he wants. OK Big John, you write the checks to the stations. 04/27/05 RBR #83

Susquehanna sell-off:
Who makes sense?
When it comes to the sale of Susquehanna Media, getting the money together to make a bid isn't the only thing to consider. Financial backing for acquisitions is plentiful for all of the established players. So then there's the strategic question: Who fits and who doesn't? We can guarantee this - - Clear Channel won't be the overall buyer. We examine the possibilities market-by-market.
RBR observation: We've already mentioned that Cox Radio is the ideal buyer, The other really good fit that emerges from our market-by-market analysis is Entercom, although it wouldn't have a use for the cable properties. 04/26/05 RBR #82

LSM-Suburban Chicago
NextMedia - Joliet, IL looking for a LSM who will keep the momentum going and build on it. Four station cluster has grown significantly if you can do the job, fit into a strong team come join us.

Details see Radio Careers

For Confidential Placement Contact: Cathy Carnegie, VP, [email protected]

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