Welcome to TVBR's Daily Epaper
Volume 24, Issue 235, Jim Carnegie, Editor & Publisher
Tuesday Morning December 4th, 2007
WGA Strike Central: Day 30
Natixis Media & Entertainment looks at the WGA strike
Alan Gould, Media Analyst at Natixis Bleichroeder, released a report on the ongoing WGA strike. Nataxis hosted a conference call with Chuck Slocum, Associate Executive Director of the WGA and John Bowman, negotiating committee Chairman for the WGA. Their primary conclusion from the conference call and other contacts is that the strike is beginning to have an economic impact on the television business, will shortly begin impacting the film side, and, if not resolved, will impact their estimates for 2008. Excerpts: "Network ratings are already depressed. Overnight ratings (excludes DVRs) for the Big-4 networks are down 8% for the November sweeps, with ABC in first place, down 10%; CBS in second place, down 8%; NBC in third place, down 14%; and Fox in last place, but up 3%. Both sides are expected to come back to the bargaining table [today]. If this strike continues past Christmas, we will have to start cutting our EPS estimates for the television companies. Assuming the strike costs ABC, CBS and Fox each 100 million of revenue and income off of their 5 billion-6 billion of TV network and station businesses, the impact would be 0.09 per share off of our 2008 CBS estimate of 1.95; 0.03 per share off of our DIS fiscal 2008 EPS estimate of 2.30 and 0.02 per share off of our NWS fiscal 2008 EPS estimate of 1.20. In addition, we note there has been softness in the DVD business."

Zucker hopes for strike resolution
Complaining that there had not been any substantial give and take by the two sides up to now, NBC Universal President and CEO Jeff Zucker told the UBS Media Conference in New York yesterday that he hopes "real dialog" can begin as the talks between striking writers and the networks and studios resume today. Zucker said he'd like to remain optimistic, but just doesn't know where the strike talks will go. He insisted, though, that NBC Universal's movie studio is in fine shape for 2008 no matter what happens. The most impact will be on NBC and two of the company's cable nets, USA and Sci Fi, which air significant amounts of original scripted material. There has been no impact so far on NBC's primetime programming and he said that the network will be able to air mostly original programming through March, even if some of the programming isn't what the network had originally planned to have in its schedule at that time. Late night programming has been most affected, he admitted, where reruns have been airing.

Leno to pay non-writing staffers, too
As the NBC layoffs began yesterday, Jay Leno host decided to follow in the footsteps of David Letterman and Conan O'Brien and pay non-writing staffers out of his own pocket. O'Brien decided last week to pay his staffers himself.


TV News ®

Spot TV bonanza forecast by Coen
With a big boost from political spending, not to mention the Olympics, Universal McCann Sr. VP and Director of Forecasting Bob Coen predicts that national spot TV sales will jump 10% in 2008 and that local spot will rise 4%. The Big Four networks are forecast to post a 5% gain and cable is expected to jump 6.1% (Coen's office corrected that from the 5% we reported yesterday in MBR). That makes television, both broadcast and cable, a pretty good place to be in 2008. Other than that, and of course the red-hot Internet (+16.5%), Coen isn't predicting much ad revenue growth for the rest of US media in 2008. In his annual appearance before the UBS 35th Annual Global Media and Communications Conference in New York, Coen said his original forecasts for 2007 missed the mark because big marketers became more focused on global corporate profits and tightened the reins on ad spending. That trend, he said, will continue in 2008, so he is not expecting to see much growth in ad spending, other than the political/Olympics windfall for TV. For 2008, Coen predicts that total US ad spending will be up 3.7% to 294.4 billion bucks, with local barely better than flat and national up 5.5%.

Bob Coen's advertising forecast for 2008

Dec. '07

Ad spend

Media

Forecast

(millions)

Four TV networks

5.0%

$17,895

National spot TV

10.0%

$11,957

Cable TV

6.1%

$21,718

Syndication TV

1.0%

$3,430

National radio (net & spot)

1.0%

$4,350

Magazines

3.0%

$14,106

National newspaper

-1.0%

$6,558

Direct mail

4.5%

$63,732

National yellow pages

2.0%

$2,272

Internet

16.5%

$12,722

Other national media

5.7%

$39,802

TOTAL NATIONAL

5.5%

$198,542

Local newspaper

-2.0%

$35,589

Local TV

4.0%

$15,018

Local radio

0.0%

$14,285

Local yellow pages

1.0%

$12,443

Other local media

1.0%

$18,509

TOTAL LOCAL

0.2%

$95,834

GRAND TOTAL

3.7%

$294,376

Source: Universal McCann

TVBR observation: Here's hoping that Coen doesn't have to revise his estimates sharply downward as he did in 2007 - especially since they aren't all that strong to begin with. Just a little more sputtering of the economy could have other media, such as radio, joining newspapers in having a down year. TV gets a breather in 2008, but absent the elections and Olympics, those forecast numbers wouldn't be impressive either.


Full slate of witnesses headed for the Hill
As expected, all five FCC Commissioners have an invite to the oversight hearing pegged for the Subcommittee on Telecommunications and the Internet this Wednesday morning. They'll be followed by a second panel with an interesting cross-section of guests, to say the least. The commissioner's visit will come less than two weeks before the FCC Open Meeting during which Chairman Kevin Martin intends to introduce a rulemaking which would legalize broadcast/print cross-ownership in the top 20 markets, a plan which has been widely criticized on Capitol Hill and in the watchdog community. The five commissioners will be back on the Hill again in a little over a week on Thursday 12/13/07 for an encore with the Senate Commerce Committee. The Subcommittee hearing also features a seven-member second panel. The top item on the menu for anti-consolidation legislators figures to be Andrew Levin, representing Clear Channel Communications. Two other broadcast companies are represented, including Sidney Bliss of Bliss Communications and Jerald N. Fritz of Albritton Communications. Prominent watchdog Andrew Jay Schwartzman of Media Access Project will be on hand. Rounding out the panel will be John F. Sturm of the Newspaper Association of America, Juan D. Gonzalez of the National Association of Hispanic Journalists, and E. Faye Williams from the National Congress of Black Women.

TVBR observation: Subcommittee Chairman Ed Markey (D-MA) once sentenced former FCC Chairman Michael Powell and his fellow Republican commissioners "...to watch the movie 'Citizen Kane' over and over again until they flinch at the word 'rosebud.'" So Markey v. Martin figures to have plenty of entertainment value. Perhaps the proper venue for Markey v. CCU would be a three-ring circus. Stay tuned.

Poltrack sees nets building
on current strength

The current writers' strike is a wild card and CBS Corporation Chief Research Officer David Poltrack declined to make any suppositions about which way it will go in revealing his forecast for 2008 network TV revenues in his annual presentation to the UBS conference in New York. He is, however, a bit more optimistic than noted ad guru Bob Coen (see above). Poltrack noted that the Big Four networks under-delivered in the first half of 2007, but have been stronger in the second half. Thus, they will see growth of only 2%, rather than the 3% he had originally forecast. For the coming year, Poltrack projects that 2008 growth will hit 7%, which would be 5% growth after adjusting for the impact of the Olympics, so a pretty good year ahead. Poltrack also took some Wall Street analysts to task for viewing the growing online world as a threat to the TV networks. Rather, Poltrack says, online is a growth opportunity for TV with the growing popularity of online video viewing.


CWA attacks liquor ads
Janice Shaw Crouse of Concerned Women of America is not pleased that NBC O&O WNBC-TV New York has decided to go ahead and air ads for distilled spirits. She said the promise that the ads will not air until after 11PM is meaningless, given the popularity of late sports and comedy programming among teens and young underage adults. "With so-called hard liquor more popular with young people -- especially young women -- the decision to promote distilled spirits through a medium that is known to influence young people will have disastrous results," she said. Crouse concluded, "We cannot say that we care about our nation's children and then turn around and make marketing decisions that put them at risk."

TVBR observation: We have mixed feelings about this sort of thing, on many different levels. First of all, when we were growing up we did not need television to clue us in to the wide range of new experiences and substances available to us. Then there's the age-old argument that if you're old enough to vote and, more to the point, to put on a uniform and die for your country, you should be considered old enough to have a beer, and see a liquor ad. On the other hand, we certainly not in favor of road fatalities, and we understand why cigarettes are banished from the airwaves. On the competitive front, the distilled beverage community argues that being denied access to the airwaves that beer and wine companies are free to use puts them at a competitive disadvantage. Should they get more freedom or should beer/wine be restricted? This, in short, is a complex issue. Any thoughts? That's what the RBR/TVBR Bounceback department is for.

Focus on Content
NAB unveiled a new logo for its Spring convention in Las Vegas: "NAB Show, Where Content Comes to Life." As the slogan indicates, the confab April 11-17 will focus on the content community, regardless of which part of the media world they come from. "By spotlighting the content community, the NAB Show will remain the dominant event for the future of content creation, management and delivery. Whether it is broadcast TV and radio, the Internet, satellite, IPTV or the next yet-invented handheld device, it is content that serves as the unifying driver of entertainment and innovation," said NAB Executive Vice President of Conventions and Business Operations Chris Brown. Scheduled speakers at this year's show will include iconic author Alvin Toffler, whose book "Future Shock" has sold more than six million copies and accurately forecast the disruptive influence on global economics by transformative information and content delivery technologies.


Ad Business Report TM

WPP scores Dell's
4.5 billion account

Dell has selected WPP Group to create a new 1,000-person strong marketing agency that would handle 4.5 billion in Dell accounts over three years (1.5 per year), beating out a seven-month "review" shootout with IPG. Dell's advertising and marketing business had been spread among 800 firms worldwide. The new agreement will allow the company's partner to spend 100% of its time thinking about customers, rather than how it will get the next assignment, said Casey Jones, Dell VP/global brand marketing. "Dell has made world-changing advances in the management of the supply chain. We are now applying that same discipline to our marketing," he said in an interview. "We are making a mutual investment in people, processes and technology to provide greater continuity of the Dell brand globally. And we will operate together as one marketing and communications team." The Dell agency, which will be given its own name, will handle creative, planning CRM and PR. Buying duties will handled separately, to continue to allow Dell to take advantage of a buying agency that has negotiation clout with many large media budgets. We assume WPP's GroupM would be a consideration when that decision is made, right?


Washington Business Report TM
Adelstein named for another term
The White House has decided to put Jonathan Adelstein's name back before the Senate for another go-around at the FCC. A former staffer of former Senate Democratic leader Tom Daschle (D-SD), he came on board the FCC 12/3/02 after being held hostage in the Senate over completely irrelevant matters. If confirmed, his new term will extend to 6/30/13. Adelstein commented, "I am deeply honored that the President has announced his intention to nominate me to serve another term as Commissioner of the Federal Communications Commission. I would also like to express my deep appreciation to Majority Leader Harry Reid (D-NV) for his support and faith in me. If confirmed by the Senate, it would be a privilege to continue working to ensure that the American public has access to the best possible communications opportunities in the world."

TVBR observation: Adelstein has been a reliable ally to fellow Democrat Michael Copps, and is a strong advocate for extending the benefits of modern communications technologies to rural areas. He has also made pet projects of issues such as payola, pay-for-say and undisclosed airing of VNRs. The FCC is set up as a bipartisan commission with the majority ceded to the occupant of the White House, and it is traditional to let members of Congress have leeway in who sits there for their particular party. His renomination is an example of Republicans in the White House and Democrats in Congress working and playing well together. We have no reason to expect any problems in Congress related to his qualifications or service. Whether he is destined once again to be used as a hostage is another matter, but all things being equal, we expect his nomination will sail through Congress without any problems.


Entertainment Business Report TM
Petty booked for Super Bowl XLII
Tom Petty & the Heartbreakers will be the featured halftime act for Super Bowl XLII at the University of Phoenix Stadium in Arizona on Sunday, February 3rd. The Fox broadcast will also have a new sponsor, Bridgestone Tires. The announcement from the NFL says Tom Petty & the Heartbreakers "bring prestige and undiluted rock and roll to the Bridgestone Super Bowl XLII Halftime Show." The NFL has been working with Don Mischer Productions and White Cherry Entertainment on Opening Kickoff and Super Bowl shows for four years now - beginning after the Janet Jackson "wardrobe malfunction" year.


Ratings & Research
35% of U.S. tweens
own a mobile phone

The Nielsen Company yesterday released the findings of a study on the mobile media and cross media behavior of U.S. "tweens" (ages 8-12). The report estimates that: 35% of tweens own a mobile phone; 20% of tweens have used text messaging; 21% of tweens have used ring & answer tones. While text-messaging and ringtones remain the most pervasive non-voice functions on the phone, other content such as downloaded wallpapers, music, games and Internet access also rank highly among tweens. According to Nielsen, 5% of tweens access the Internet over their phone each month. While 41% of tween mobile Internet users say they do so while commuting or traveling (to school, for example), mobile content such as the Internet is also a social medium for this audience: 26% of tween mobile Internet users say they access the web while at a friend's house and 17% say they do so at social events.

Young mobile users are also turning to their phones for in-home entertainment:
58% of tweens who download or watch TV on their phone do so at home
64% of tweens who download or play music on their phone do so at home;
56% of tweens who access the Internet on their phone do so at home.


RBR Radio News
Q3 radio pothole
The Radio Advertising Bureau is encouraged by positive results for network and non-spot revenue categories, both of which improved in the high single digits during Q3 2007. But that success story cannot mask the ugly negatives posted in the meatier local and national categories, resulting in a total loss of 5% compared to the same quarter in 2006. During the third quarter, local was down -5% to 3.653B; and national was down -8% to 1.127B, combining for -6% on revenues of 4.78B. Network, up +9% to 293M; and non-spot, up +7% to 395M, conspired to bring the overall revenue total closer to par, but the overall improvement was only one percentage point to -5% of combined revenues of 5.468B. YTD, local is at -2% tp 10.753B; national is at -4% to 3.2B; network is at +5% to 844M; and non-spot at +10% to 1.106B. Revenue numbers come from Miller, Kaplan, Arase & Co.

Revenue Comparisons - 2007 vs. 2006
(In Millions)

 

 

 

 

 

Radio Revenue

$ Q3 '07

% Chg

$ YTD '07

% Chg

Local

 $    3,653

-5%

 $10,753

-2%

National

 $    1,127

-8%

 $3,200

-4%

Local & National Comb.

 $    4,780

-6%

 $13,953

-3%

Network

 $       293

9%

 $844

5%

Non-Spot

 $       395

7%

 $1,106

10%

Grand Total

 $    5,468

-5%

 $15,903

-2%

Source: Miller, Kaplan, Arase & Co.*


Stock Talk
Stocks take a dive
Worries about the US economy and the impact of the continuing subprime crisis sent stock prices lower on Monday. The Dow Industrials lost 57 points, or 0.4%, to end at 13,315.

TV stocks were almost all lower. LIN had a tough day, falling 10%. Media General was down 5.8%.


Stocks

Here's how stocks fared on Monday

Company Symbol Close Change Company Symbol Close Change

Acme

ACME

3.09

-0.06

Lincoln Natl.

LNC

61.22

-0.35

Belo

BLC

16.10

-0.46

LIN TV

TVL

10.09

-1.13

CBS CI. B CBS

27.04

-0.39

McGraw-Hill

MHP

46.30

-2.78

CBS CI. A CBSa

27.02

-0.43

Media General

MEG

23.34

-1.43

Clear Channel

CCU

35.30

-0.60

Meredith

MDP

54.47

-0.58

Disney

DIS

33.04

-0.11

News Corp.

NWS

21.57

-0.11

Emmis

EMMS

3.91

-0.40

Nexstar

NXST

8.90

-0.17

Entravision

EVC

7.69

+0.21

Ion Media

ION

1.38

+0.06

Equity Media EMDA 2.31 +0.11

Saga Commun.

SGA

7.06

+0.23

Fisher

FSCI

39.54

-1.19

SBS

SBSA

1.74

-0.18

Gannett

GCI

36.52

-0.23

Scripps

SSP

42.91

-0.54

Gen. Electric

GE

36.93

-1.36

Sinclair

SBGI

9.99

-0.36

Google GOOG

681.53

-11.47

SWMX

SWMX

0.01

unch

Gray

GTN

8.15

+0.16

Time Warner

TWX

17.14

-0.12

Gray, C1. A

GTNa

8.46

+0.16

Tribune

TRB

30.50

-0.54

Hearst-Argyle

HTV

19.71

+0.13

Wash. Post

WPO

801.90

-4.60

Journal Comm.

JRN

8.88

-0.22

Young

YBTVA

1.18

-0.23


Bounceback

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Below the Fold

Ad Business Report
WPP scores Dell's
4.5 billion accountbeating out a 7 month "review" shootout with IPG ...

Internet Business Report
ABC O&O stations
Re-launch websites, a redesign across all 10 of its websites, featuring large 16x9 format media player...

Washington Business Report
Adelstein named
For another term as The White House has decided to put his name back before the Senate for another go-around...

Ratings & Research
35% of U.S. tweens
No surprise here they own a mobile phone but the stats are more interesting...


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TV Media Moves

Coane slides from
cable to Granite

There's a new President/GM at Granite Broadcasting's KBWB-TV San Francisco, an indy on Channel 20 (DT 19). Craig Coane comes over from Comcast's San Francisco office, where he was director of local sales.

Generational
change at CBN

Pat Robertson announced that he is handing over his duties as CEO of Christian Broadcasting Network (CBN) to his son, Gordon. The elder Robertson, who is 77, will continue as Chairman of CBN.

Murray launches Greylock
Rick Murray, former CMA VP/Strategic Marketing is launching Greylock Entertainment, an entertainment marketing and promotional company dedicated to the expansion of brand equity. Greylock Entertainment will provide strategic marketing services, sponsorship/partnership program services, marketing program event production and develop entertainment properties and promotions including tours, special events and television properties.



More News Headlines

No end in sight for Internet growth
Presenting his global ad spending forecast at the UBS conference in New York, Zenith Optimedia CEO/Worldwide Steve King said Internet ad spending around the globe surpassed outdoor advertising for the first time in 2007. And he expects continued growth in market share, with the Web passing radio in 2008 and magazines in 2010, when Zenith Optimedia projects that the Internet will claim 12% of worldwide ad spending, up from a record 9% in 2007. Despite the obvious ad slowdown experienced in the US and some other regions, King does not believe there will be an advertising recession in 2008. He told the New York gathering that the situation is very different now from the 2000-2001 timeframe, when the Internet bubble burst. Part of that is that Internet and other new media companies are now real advertising businesses. They have added inventory to the advertising universe. But they have also helped to make advertisers smarter, demanding accountability for their ad spending. King lowered his US/North America ad spending expectations to 2.5% growth in 2007, down from the original forecast of 4.2%. He is looking for US/North America growth of 4.1% in 2008 and 3% each year in 2009 and 2010. His forecast for Europe is 5% across each of those four years and, excluding Japan, he expects double digit growth each year in Asia. So, worldwide, Zenith Optimedia is looking for ad spending growth of 5.3% in 2007, 6.7% in 2008, 5.6% in 2009 and 5.9% in 2010.

ABC O&O stations
re-launch websites

The ABC O&O Television Stations Group has introduced a redesign across all 10 of its websites, featuring large 16x9 format media player. The player seamlessly integrates video, graphics, text and ads-allowing users to rapidly browse different stories and branded entertainment while the player continues to deliver content. Ads are fully integrated into the media player's platform, benefiting both users and clients with ad presentation that appears more relevant and less intrusive. Site navigation is designed to be more intuitive and features a customizable dashboard-style control panel where individual users can pick and choose the content of greatest interest to them. The new design offers more content choices to the user, while at the same time offering an uncluttered appearance. The ABC stations launching redesigned websites include WABC-TV in New York, KABC-TV in Los Angeles, WLS-TV in Chicago, WPVI-TV in Philadelphia, KGO-TV in San Francisco, KTRK-TV in Houston, WTVD-TV in Raleigh-Durham, KFSN-TV in Fresno, WJRT-TV in Flint, and WTVG-TV in Toledo. Schematic, a WPP Digital company, worked closely with the stations in the development and implementation of the redesign.


TVBR Radar 2007
Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.

WGA Strike Central, Day 29
WGA to mull AMPTP offer;
Not Optimistic

Both sides have agreed to get back to negotiations tomorrow, after WGA has a few days to consider the offer made Thursday by the Alliance of Motion Picture & Television Producers. The proposal would deliver more than 130 million in additional compensation to writers over three years. In their new proposal and the Cost Factor are examined in TVBR.
12/03/07 TVBR #234

Less growth, maybe more
red ink going forward

BMO Capital Markets analyst Leland Westerfield has knocked the overall ad spending projection for 2007 from growth of 3.4% to 2.6%, and he's taking 2008 growth down from 4.3% to 3.6%. The outlook for 2009 is even worse, at 2.7%. He says there are eerie similarities to the dot.com bust of 2000-2001. Spot TV: Is expected to continue its election year pendulum swings while veering downward, finishing 2007 at -2.7%, riding the major national elections to a +9.2% gain in 2008, then giving much of that back in 2009 with a -6.3% drop. Broadcast networks are expected to follow a muted version of that same pattern, with a scant +0.1% gain in 2007, a +6.2% gain in 2008 and a -1.4% loss in 2009. Radio: BMO sees not so much a downward spiral as a downward angled plane, with a -1.8% loss this year, another -1.8% loss next year and a -1.7% loss in 2009. The big gainer? If you said Internet, Don Rickles might award you a cookie. Its numbers are predicted at +24.2%, +19.6% and +30%. The big loser? If you said newspaper, help yourself to another cookie. Its red record is set at -5.3%, -4.5% and -6.2%.

TVBR observation: If this was a Dickens novel we might have some recourse from these ominous forebodings from the Ghost of Things Yet to Come by repairing our wicked ways. The problem is there seems to be an entire platoon of these ghosts running around, intoning pretty much the same thing. All we can say is make sure you're tight with your local community, be kind to your local politicians, and try to get your fork into that burgeoning slice of pie on the Internet plate. 12/03/07 TVBR #234

WGA Strike Central, Day 26
WGA, AMPTP still talking; no breakthroughs
The WGA and studio reps for AMPTP have agreed to keep talking, and have been each day since they agreed to resume talks. However, we're hearing there's some stagnation. Reportedly, most of the discussion in the sessions held has amounted to how to agree to move forward in seeking a compromise on new media residuals.
11/30/07 TVBR #233

Clear Channel gets
clearance to spin TVs
A 13.7B transaction sending 35 television stations and associated low power properties to Newport Television has been given a conditional go-ahead from the FCC.

TVBR observation: How much control does an equity backer exert on localism in broadcast programming? We'd guess not much, other than to support it because generally it's a good business practice. But with cash in short supply, we'd have to think twice about the ultimate affect on public interest that would follow chasing money out of the business.
11/30/07 TVBR #233


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