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Welcome to TVBR's Daily Epaper
Volume 22, Issue 143, Jim Carnegie, Editor & Publisher
Friday Morning July 22nd, 2005

TV News®

NAB adds its fire to Burns MRC bill
National Association of Broadcasters President/CEO Eddie Fritts fired off a letter to Sen. Conrad Burns (R-MT) expressing the organization's support for legislation which would strengthen Media Rating Council (MRC) oversight over TV ratings companies. Fritts noted it was an unusual stance given the NAB's general preference for "voluntary inter-industry cooperation." He told Burns that NAB is ready to help move the bill forward to becoming law, despite the fact that "further modification of the bill may be necessary." Fritts noted the critical impact ratings have on the business, and the general lack of competition among the ratings providers, which is why strong oversight is needed. He listed beneficiaries of a strong MRC: the media industry, advertisers, the ratings providers themselves and "...ultimately, the American public, which benefits greatly in an environment where business and creative decisions are based on the most accurate and reliable information possible." Burns is expected to use the Senate Commerce Committee to hold hearings on the bill, S.1372, next week. | Read the Fritts letter |

TVBR observation: To say the least, we are very disappointed by this NAB move. This legislation to inject federal regulation into the TV ratings business is bad for every broadcaster and every NAB member. Those broadcasters, led by News Corporation's Rupert Murdoch (not even an NAB member, by the way), who are now foolishly backing the Burns bill will someday regret their actions. If this bill becomes law it will add needless delay and cost to future attempts to upgrade and improve TV ratings - - and likely be expanded someday to include radio in the mess. It the short-run it will hurt broadcast stations and cable networks targeting ethnic audiences, in particular, because Nielsen would have to shut down such offerings as the Nielsen Hispanic-American Television Index , which doesn't even qualify for MRC accreditation. Disputes about LPM can and should be dealt with inside the industry. The NAB has wandered off course and needs to get back to defending the free marketplace.

Swords remain sheathed, but pens unholstered
Reaction to news of the NAB/Fritts letter to Sen. Conrad Burns (R-MT) was swift from the principals involved in the dispute. Both sides seemed surprised by the development, with Nielsen literally saying as much. The reactions were, of course, completely opposite. Comcast has also weighed in, on Nielsen's side. | Here they are |

Telemundo execs push for multicast must-carry
The mail carrier with the Senate Commerce Committee route has been busy of late. Sen. Kay Bailey Hutchison (R-TX) was the recipient of a letter written late last month from some of her constituents urging that a multicast must-carry mandate be part of the DTV transition. Not coincidentally, signatory to the letter were three Telemundo GMs in Texas's three largest markets, along with their boss. Ibra Morales is President of Telemundo Station, and he sent the letter along with Clara Rivas of KVDA-TV San Antonio, Jose Valle of KXTX-TV Dallas and Roel Medina of KTMD-TV Houston. NBC/GE owns Telemundo, and all three stations are O&Os. "One of the most exciting and ground-breaking benefits of digital television is its ability to receive four or more digital programming channels in place of their single existing analog channel," they wrote. "The potential benefits of this to Hispanic consumers is truly breathtaking." They argued that they'll be able to bring more choice and local programming to their viewers. And since Hispanic viewers are going to bear a large share of the cost to upgrade their receivers as part of the digital transition, they argue that it would be unfair to not provide the full benefit of that very transition.


More TV softness expected at NY Times
After reporting that Q2 broadcast revenues were down 1.3% to 37.2 million, New York Times Company CEO Janet Robinson told Wall Street analysts to expect more of the same in Q3. July pacings are down in the low single digits, the company said. Robinson noted that political ad revenues in Q2 this year were only 800K, compared to 3.4 million last year. "Gains in automotive, financial services and home improvement advertising, partially offset the losses in political advertising," she said.

Arbitron chief gung-ho on PPM
This week's release by the RAB-PPM Task Force of a Forrester Research study on the economic impact of going to Portable People Meters (PPM) for radio ratings (7/20/05 TVBR #142) is just another encouragement to Arbitron CEO Steve Morris to push ahead on PPM. With the report showing that PPM deployment could lead to a 3% gain in radio revenues, while sticking with diaries could lead to a 2% decline, Morris told Wall Street analysts that the report confirms "significant economic incentives for radio to move forward." As for a rollout timetable, Morris says there's a convergence of events coming in the next six months: Clear Channel completing its request for proposals on a new radio ratings system by the end of this year, the MRC accreditation process for PPM, Nielsen deciding whether to join a joint venture in Q4 and "just a general sense in the radio industry that it's time to get rolling." As stated previously, Arbitron is already approaching radio clients with a "radio goes first" proposal to start deploying PPM with or without Nielsen. As one analyst noted during the call, radio groups are certainly going to want early PPM deployment in the top 10 radio markets, while Nielsen is in the midst of deploying its Local People Meters in the top 10 TV markets and would likely be more interested in beginning PPM deployment for TV at market #11 (in TV that's Houston, which just happens to be where Arbitron is testing PPM this year) and below. "If we're going to serve the radio industry, we're certainly going to have to put PPMs where the money is, and that's in the top 10 markets," Morris responded.

AP to launch online video network
The Associated Press announced it will launch an online video news network for newspaper, television and radio websites in the US. The digital video network, which would be ad supported, would be available through AP member websites. In a separate action, the board approved a 2.2% general assessment increase for members next year, coupling it with a new licensing policy for online use of AP content. The rate increase takes effect 1/1/06 and applies to basic and supplemental services for AP's 1,500 newspaper and 5,000 broadcast members. It is the lowest rate increase for AP in 35 years, except for in 1999, when it was also 2.2%. In addition, the board approved a total 4.5% increase for some selected broadcast services.


Conference Calls Q2 2005
Times Co. reports in line with guidance
There were no surprises in the Q2 results from the New York Times Company. Total revenues 2.6% to 845.1 million, with the biggest percentage gains at the company's small market newspapers. Total ad revenues grew 3.8%, excluding recently acquired About.com. Operating profits decreased 19.1% to 106.5 million. TV revenues fell 1.3% to 37.2 million and operating profits declined 16.6% to 9.2 million. News Media Group (newspapers/Internet/radio) revenues grew 1.2% to 795.9 million, with ad sales up 1.9%, while operating profits decreased 20.2% to 107.2 million. For the month of June, TV revenues were down 1.8% to 10.6 million. News Media Group ad revenues rose 1.3% to 159.8 million, with retail up 0.9%, national up 2% and classified down 0.5%.

Q2 revenues and profits
rise for Arbitron
Not only did Steve Morris have good news from the Forrester Research study this week, he also had good numbers to report to Wall Street for Q2. Arbitron's revenues rose 7.3% to 69.8 million and EBIT gained 17.2% to 18.6 million. One the bottom line, including a decreased tax expense, net income shot up 78.7% to 15.4 million. Earnings per share rose to 48 cents from 27 cents a year ago. "We made steady progress on our two key growth initiatives-the Houston market demonstration of the Portable People Meter and the pilot panel for Project Apollo, the national marketing research service which would collect multi-media and purchase information from a common sample of consumers At the same time, we continued to invest in the quality of our core services in order to enhance the value that we provide our customers," Morris declared. Looking ahead to Q3, Arbitron is telling The Street to expect revenues to rise 4.5-6.5% and for earnings per share to be 59-61 cents. That's down 16-18 cents from Q3 of last year, which Arbitron said was attributable to a 13 cent tax benefit last year and five cents in spending this year for Project Apollo. Nevertheless, the guidance was a bit below what analysts had been expecting, so Arbitron's stock was off yesterday.


Adbiz©

Moody's: Online ad growth to pressure traditional media
The growth in on-line advertising spending is likely to outpace that of any other media over the next five years, Moody's Investors Service said in a new report. Not only will traditional media such as newspapers and broadcast television see their share of advertising spending decrease, but lower prospects for growth may prompt new rounds of debt financed acquisitions. In addition, low equity values could lead to share repurchases, also potentially debt financed. | More... |

NBC launches media review
NBC Universal Television Network has reportedly launched a review for its estimated 140 million buying and planning account. RFPs, due back to the client today, were reportedly sent to 12+ media and general service agencies.

Jane Barratt named managing director
of Euro RSCG 4D New York
Charlie Tarzian, CEO of Euro RSCG 4D NY, announced Jane Barratt as Managing Director of the office, overseeing the marketing services brand of Euro RSCG Worldwide. In making the announcement, Tarzian said, "Jane Barratt will be a superb leader of our New York office. She brings a depth of experience in all marketing disciplines, a successful track record for delivering integrated solutions for her clients and a global perspective from working on some of the world's most valued brands to her new post." Barratt has served since 2004 as International Brand Director on Intel, managing global advertising, marketing services and interactive marketing across consumer, business and channel segments. Earlier, she spent four years at Euro RSCG Hong Kong, rising to the post of Managing Director of the agency. Her client portfolio included: Worldcom, CNN, Dell, Philips, Citibank and Intel.

Subway dismisses Goodby, Silverstein
Subway has fired Goodby, Silverstein & Partners, in favor of MMB in Boston. Subway spent 340 million on measured media in 2004, according to Nielsen Monitor-Plus.


Radio & Television Business Report

Radio's Important September Face Off
UpFront 2005 - will radio face the mild reception as Network TV? Look for the major Ad Agency decision makers to speak they mind in our upcoming September magazine. This is last call for networks to get their message across for 2006.
(15,000 mailed and Special distribution at NAB Philly )

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Media Markets & MoneyTM
Dow domesticates its CNBC stake
Dow Jones & Company announced that it wants to remain a part of CNBC in the United States. However, its 50% equity interest in CNBC Europe, 50% equity interest in CNBC Asia (together, CNBC International), and 25% equity interest in CNBC World are all going to NBC Universal "...for nominal consideration." DJ&C said the Asia portion of the deal still had structural work to be complete between now and the end of the year. DJ&Cs Peter R. Kann explained, "At CNBC International and World, we and NBC Universal have agreed for Dow Jones to exit the partnership to eliminate our share for business reasons and to simplify NBC Universal's ability to deploy its assets to continue to grow these operations." The relationship between the two companies in the US remains intact and unaffected.

Discovery gains its liberty from Liberty
Liberty Media Corp. has divested itself of all outstanding shares of Discovery Holding Company (DHC), which is now an independent entity. The move had been announced in March (3/16/05 TVBR #53). It's trading on NASDAQ as DISCA and DISCB. Discovery Holding fully owns Ascent Media, which provides creative, media management and network services, and holds a 50% in Discovery Communications, which lists The Discovery Channel, TLC, Animal Planet, The Travel Channel and Discovery Health Channel and other services among its program offerings.


Washington Beat
Commerce tees up FAIR Ratings Act
Opinions about the FAIR Ratings Act (S. 1732) will get an airing before the full Senate Commerce Committee next week. An afternoon session is scheduled for 7/27/05 at 2:30 Eastern time. The witness list includes George Ivie, Executive Director & CEO, Media Rating Council; Susan Whiting, President & CEO, Nielsen Media Research; Ceril Shagrin, Executive Vice President for Research, Univision; Pat Mullen, CEO, Tribune Broadcasting; Kathy Crawford, President Local Broadcast, MindShare Worldwide; and Gale Metzger, Former CEO, SMART Media. Then on Thursday, same bat-time, same bat-channel, the Committee will look at the file-sharing and copyright protection implications of MGM v. Grokster. Witnesses have not yet been announced for that one.


Programming
UPN announces premiere dates for Fall shows
UPN will roll out the premieres of its new 2005 fall schedule beginning the week of 9/ 19 and continue through 9/27. With several returning favorites and three new, quality series, including two comedies and one drama, UPN has created a more cohesive schedule that targets adults 18-34 with a focus on young women.
| See the premiere dates: |

UPN details HDTV programming
Beginning this fall, UPN will offer its largest slate of HDTV programming in the history of the network for the 2005-2006 season, it was announced by Dawn Ostroff, President, UPN. More than half of the network's primetime line-up will be broadcast in high-definition television. With all of the Network's comedies and dramas broadcast in HDTV's highest definition format, 1920 x 1080i, UPN's weekly hi-def offerings will increase to six hours this fall, including new comedies Everybody Hates Chris and Love, Inc. and new drama Sex, Love & Secrets. Additionally, UPN will broadcast several of its Saturday afternoon movies in hi-def (if available). | UPN HDTV Schedule: |


Ratings & Research
Nielsen breaks out
debut demos from LPM

Demonstrating some of the demographic analysis that can be done with Local People Meter data, Nielsen Media Research has released, for the first time, local demographic data for the network programs which premiered this summer. Of course, ABC's "Dancing with the Stars" was the ratings star in all seven LPM markets. It drew double digit ratings for women 18+ in all LPM markets - - except Washington, DC. (Perhaps folks there would rather see "Dancing with the Politicians.") | View the Charts |


Stock Talk
London blasts heard on Wall Street
New bomb blasts in London unnerved Wall Street traders. The Dow Industrials fell 61 points, or 0.6%, to 10,628.

With no particular news for broadcast stocks, TV stocks followed the market lower. Saga fell 4.1%, Liberty Corp. 3.5% and Sinclair 3.4%.


Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Acme

ACME

4.20

unch

Media General

MEG

67.25

-0.45

Belo

BLC

23.73

-0.01

Meredith

MDP

49.36

-0.60

Clear Channel

CCU

31.38

-0.38

News Corp.

NWS

17.58

+0.05

Disney

DIS

25.56

-0.27

Nexstar

NXST

5.65

+0.05

Emmis

EMMS

18.50

+0.35

NY Times

NYT

31.59

-0.53

Entravision

EVC

8.38

-0.11

Paxson

PAX

0.60

-0.01

Fisher

FSCI

44.37

-0.68

Saga Commun.

SGA

14.20

-0.60

Gannett

GCI

72.24

-0.46

SBS

SBSA

8.50

-0.14

Gen. Electric

GE

35.00

-0.30

Scripps

SSP

50.64

+0.36

Granite

GBTVK

0.23

+0.03

Sinclair

SBGI

8.71

-0.31

Gray

GTN

12.85

-0.15

Time Warner

TWX

16.65

unch

Gray, C1. A

GTNa

11.88

unch

Tribune

TRB

35.83

-0.07

Hearst-Argyle

HTV

24.16

+0.31

Univision

UVN

27.29

-0.16

Jeff-Pilot

JP

50.10

-0.60

Viacom, Cl. A

VIA

32.73

+0.24

Journal Comm.

JRN

15.99

-0.41

Viacom, Cl. B

VIAb

32.60

+0.13

Liberty Corp

LC

36.86

-1.32

Wash. Post

WPO

864.99

+6.99

LIN TV

TVL

14.77

+0.01

Young

YBTVA

3.55

+0.10

McGraw-Hill

MHP

44.38

-0.42

-

-

-

-

-


Bounceback

Send Us Your OpinionsWe want to
hear from you.

This is your column, so send your comments to [email protected]

Terry Baker of Brooksville, FL is not a broadcaster, nor does he work for Nielsen or any other broadcast research company. His only tangential connection to Nielsen is that the company he works for supplies commodities to a large customer base, including Nielsen's Tampa Bay processing center. He contacted TVBR after sending a brief note to Sen. Mel Martinez (R-FL) asking him to withdraw as a co-sponsor of S. 1372 to regulate the TV ratings industry.

Dear Senator Martinez,
It has come to our attention that you have apparently agreed to co-sponsor legislation that would regulate Nielsen and risk thousands of jobs and the investments they have made in Florida. We hope you will reconsider such an action and support us.

Thank you,
Terry Baker
Brooksville, FL

In reply, Baker received this note from Sen. Martinez defending his support of the legislation.

That didn't satisfy Baker,
who wrote back, disputing Martinez's arguments and urging him to let the marketplace take care of whatever problems there might be with LPMs.


RBR - Radio News

Bids for ABC Radio called "underwhelming"
Three radio groups have reportedly submitted bids to buy ABC Radio from Disney, but one insider is quoted as calling them "underwhelming." According to the Financial Times, Emmis, Entercom and Citadel all submitted offers last week. Although incoming CEO Bob Iger has said publicly that he might consider spinning off the radio group, it is a strong cash flow contributor to the company - - and Disney would face a huge tax bit for a straight-out sale. Thus, speculation lately has focused on a tax-free merger, with Disney continuing to own a 50% stake in the resulting company - - a deal structure that would work well for Emmis, Entercom or Citadel.

RBR observation: This is going pretty much the way we expected - - and the same way it did in recent years when Disney previously tested the waters for a potential radio sale. It seems highly likely that, in the end, Disney will decide again that it is better off staying in radio than getting out.


July Digital Magazine
Now Available

AdBiz:
Carat Americas CEO
David Verklin: "Mastering a digital future" from advertising in a digital convergence world to improving metrics to the TV upfront and more.


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TVBR Radar 2005
Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.

TV-Ratings task force
opposes Burns bill
Sen. Conrad Burns' (R-MT) bill to regulate TV ratings is drawing fire from the Independent Task Force on Television Measurement that was set up to deal with allegations of minority undercounting by Nielsen. Although the Burns bill to make Media Ratings Council accreditation mandatory for TV ratings services was prompted by allegations that Nielsen's Local People Meters undercount minorities, the Task Force says the legislation would hurt minority programmers and ad agencies. The Task Force, which was chaired by former Rep. Cardiss Collins (D-IL), says such regulation would impair Nielsen's ability to introduce new services for stations and networks aimed at minority communities. TVBR observation: Don't know what it is going to do to convince broadcasters especially local TV GM's to see that Burns and crew are shut down. We as broadcasters at TVBR and some with media research experience see bright lights of trouble for local TV if this is not stopped and now.
07/20/05 TVBR #142

Forrester study sees radio gaining 700M a year from PPM
Here's the short-hand summary of the Portable People Meter economic impact study by Forrester Research that was made public by the RAB-PPM Task Force: If radio adopts PPM, ad revenues will go up, but if it sticks with diaries, ad revenues will go down. Not all of the 189 advertisers surveyed said they would increase radio ad spending with PPM, but 23% - - about one in four - - said they would. TVBR observation: One thing Forrester didn't analyze is whether PPM deployment would justify the 40-65% increase in ratings costs that Arbitron has told radio broadcasters to expect from transitioning from diaries to PPM. 700 million bucks is about 35% of radio current revenues, so if Forrester's projections are accurate, paying Arbitron an additional 110-180 million a year would be a good deal for broadcasters. But while that may be true industry-wide, it's a different calculation in the real world, where stations in smaller markets where ratings are less important than face-to-face selling are less likely to see a cost benefit from PPM. That's also likely to be the case for many niche players in larger markets. If radio embraces PPM, it will be because the big guys - - Clear Channel and Infinity in particular - - see a cost benefit in it. 07/21/05 TVBR #142

Where would that
PPM gain come from?
If advertisers are going to increase ad spending on radio if PPM is deployed, that additional cash has to come from somewhere. When RBR/TVBR asked about that, Josh Bernoff, Vice President, Principal Analyst, Forrester Research, said the survey didn't specifically ask that question. However, he noted that in incidental comments during the survey, several of the participants indicated that they would move dollars from television, while others said it would just be a result of radio getting a bigger share of growing ad budgets. Notably, there was a lot more dissatisfaction with current radio ratings - - Arbitron's diaries - - than with Nielsen's TV ratings, whether Local People Meters or meter/diary. TVBR observation: Being a radio-centric survey, the Forrester study assumed that only radio would switch to PPM in assessing the financial impact. Of course, Arbitron is also seeking to get Nielsen to commit to a joint venture which would make PPM the ratings currency for broadcast TV and cable, as well as radio. We would assume that such a move would reduce any potential shifting of ad budgets from TV to radio. But it would also keep the ratings cost increase for radio closer to the 40% end of Arbitron's range, rather than the 65% jump for a radio-only PPM system. The math on all this is complicated, to be sure.
TVBR note: Ditto goes for LPM so TV take a lesson from this research and Forrester interviewed the same people that have view on LPM. 07/20/05 TVBR #142

Report: TiVo's "paradigm shift"
likely to be unsuccessful
A new report from The Diffusion Group proposes TiVo's new plan to seek "mass deployment" of the TiVo service through cable service providers, while likely to help boost revenue, will do little to generate profit. According to "Can TiVo Survive? TVBR observation: Why would MSOs need TiVo when they have their own technology and DVR offerings? Most new subscribers will opt for the easiest way to DVR - - whatever the cable company offers as part of their package. Why would the subscribers or MSOs need a "DVR middleman"? Brand appeal will only get TiVo so far, and we think we've seen how far already. TiVo's best chance for revenue seems to be its recent interactive additions for advertisers. 07/21/05 TVBR #142


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