Welcome to TVBR's Daily Epaper
Volume 24, Issue 240, Jim Carnegie, Editor & Publisher
Tuesday Morning December 11th, 2007
WGA Strike Central: Day 37
Ratings shortfalls abound now:
what about midseason?

As reports surface that NBC already begun reimbursing advertisers for Q4 primetime ratings shortfalls, we're hearing the shortfalls are almost across the board (except for Fox, which is up year to year). And there's no makegood inventory in Q4 to offer-at least in the weeks that count (If you're a retailer, you want inventory before the Christmas holiday). That means Q1 inventory is being offered to advertisers. What will this mean when midseason hits and ratings will likely plunge even further-without scripted programming from the WGA strike? Not pretty.
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TVBR observation: NBC CEO Jeff Zucker said not all that long ago that the network would be looking more and more at affordable, reality programming. He said costs on scripted shows that don't make it are becoming prohibitive. So he's followed through with his promise, but is this the result? And down the line, they're not going to get any payment back to them in off-net syndication. Their goal is to try and find profitable programming product. If it tarnishes their image, so be it-they're making money for GE.


TV News ®

Google renews push for white space access
Internet search guide Google says it has devices which can operate in the margins between television stations without interfering with licensed spectrum users, and says it's demonstrated two technologies for the benefit of US regulators. Broadcasters remain unconvinced that it's time to open the spectrum up to all comers. Earlier tests have either come up short or have been withdrawn in advance. Broadcasters contend that it will take very little interference to disrupt a broadcast digital signal, and the disruption will be more than mere static, but will make the broadcast signal completely unwatchable. And if the devices causing interference are unlicensed, there will be no possibility of tracking them down to bring such interference to an end.

TVBR observation: We will say once again that it is utterly irresponsible to consider such a potentially-disruptive regulatory spectrum land rush on the eve of the digital television transition, the most ambitious and risky such endeavor ever attempted. If all involved parties want to experiment with white spaces and potential unlicensed devices over the next two or three years, fine. All serious regulatory consideration should be tabled until digital television is up and running with no viewers left behind.

Ad-dled by politics
NBC Television Network first turned down, then accepted an ad from conservative watchdog Freedom Watch which was intended to thank troops stationed overseas for their service during the holiday season. Not long before, Fox News Channel rejected an ad from liberal Center for Constitutional Rights that was accepted on two rival cable networks. The objection to the Freedom Watch ad was not controversial content, but rather a reference to the group's website, which NBC deemed overtly political and triggering the network's ban on such material. NBC said in a statement that from now on ads will be judged by content only. The CCR ad rejected by FNC featured actor Danny Glover and charged that the Bush administration is chipping away at constitutional rights of Americans. Fox said the ad's charges could not be substantiated, and said in a statement that documentation was required to show that the Constitution was actually being "destroyed." CCR objected to FNC's "literal interpretation of the ad." It was accepted for broadcast on CNN and MSNBC.

TVBR observation: It is our firm belief that matters of opinion do matter to the American public. Media outlets cannot help but be gatekeepers, but that does not mean they need to put on a complete hockey goalie uniform and decide what is and is not worthy of being passed along to the public. As long as an ad isn't based on obviously false information and is not indecent, it should run.


No bidding war likely for Gemstar-TV Guide
Analyst Alan Gould of Natixix Bleichroeder says the sale price of 2.8 billion bucks for Gemstar-TV Guide (12/10/07 TVBR #239) was disappointing. But he also doesn't see it likely that anyone else besides Macrovision will make a bid for the company. "We were too optimistic on the asset value and recognize that management has probably been more focused on getting a deal done than running the company," Gould wrote in a note to clients. But while he thought the company ought to be worth more, he assumes that the logical strategic buyers, including Google, Microsoft, Comcast and others, all looked at the deal and took a pass. "We surmise that 41% shareholder, News Corporation, agreed to vote in favor of the deal because it was the best/only deal offered and Mr. Murdoch decided it was time to put the Gemstar chapter behind him," Gould said. He had originally estimated that a private equity buyer would pay a minimum six bucks per share and a strategic buyer at least 7.50, so 6.35 was at the low end of his expectations. Wall Street clearly didn't like the deal. Gemstar-TV Guide shares dropped 99 cents - and more than that in trading - after the deal was announced to close Friday at 4.99. Gould notes that is a 17% arbitrage opportunity if the deal goes though, and he assumes it will since News Corporation is committed to voting its 41% stake in favor of the deal, which puts it well on the way for the necessary two-thirds shareholder approval.

Down year for Senate spending?
Wachovia Capital Markets' Marci Ryvicker and associates are looking for at best a rerun of the amount of spending on Senate races as we saw in 2006, which WCM pegs at 302M (for television). WCM says it could even be lower than that, noting that Republicans may not mount as spirited a defense as it did that year in which the Democratic Party squeaked out enough wins to gain control of the body. How much lower? WCM suggests as much as 20%-30%. Two states have both seats up for grabs -- Wyoming's Michael Enzi (R-WY) is up for re-election and the other seat opened upon the death of Craig Thomas (R-WY). In Mississippi, Thad Cochran (R-MS) has indicated he'll run for another term, while Trent Lott (R-MS) is retiring early after winning re-election in 2006.

Five other open seats are available, all due to exiting Republicans. They are in Colorado (Wayne Allard), Idaho (Larry Craig), Nebraska (Chuck Hagel), New Mexico (Pete Domenici) and Virginia (John Warner). Democrats are expected to be competitive in Virginia, Colorado and New Mexico, and perhaps Nebraska. Idaho is still generally considered safe Republican territory despite Craig's well-publicized problems. Republican candidates thought to be particularly vulnerable include Susan Collins (R-ME), Norm Coleman (R-MN), John Sununu (R-NH), and Gordon Smith (R-OR). Conversely, two Democrats are being targeted by Republicans, Mary Landrieu (D-LA) and Tim Johnson (D-SD). Wachovia lists nine states anticipated to be staging areas for hot races. Among those we mentioned are Colorado, Louisiana, Maine, New Hampshire, New Mexico, Oregon, South Dakota and Virginia. It does not list Minnesota or Nebraska. The others it thinks may attract cash are Georgia, Saxby Chambliss (R-GA) defending; Kentucky, Minority Leader Mitch McConnell (R-KY) defending; and Texas, John Cornyn (R-TX) defending.

TVBR observation: Depending on how things are going, we'd suggest that there is every possibility that spending on Senate races will exceed 2006, even though the presidential race will drain some of the cash as it did not last time around. Smelling blood, Democrats cheerfully went into debt to maximize their chances at the last minute, a tactic either party may adopt if it smells opportunity or needs to put up a stiff defense.


Wall Street Business Report TM
Fidelity cuts Clear Channel stake
Once the largest institutional shareholder of Clear Channel Communications, FMR Corp., parent of the Fidelity Mutual Funds group, has been selling off most of its shares. Once the owner of 9.8% of Clear Channel, FMR reported to the SEC yesterday that it has cut that to 13.4 million shares, or 2.7%. That puts FMR below the 5% threshold for having to report further Clear Channel stock sales. FMR had been one of the leaders of the resistance to the initial going private offer for Clear Channel, helping push the bid up to the eventual 39.20 per share. The stock has been trading well below that, but with the closing dragging on into 2008, the mutual fund giant has apparently decided to take a lot of cash off the table now and move on.

Social networking IPO this week
How much is Wall Street really willing to bet on the social networking craze? We'll find out this week as Classmates Media Corporation prices its IPO, expected to raise 120-144 million bucks. The company operates the Classmates.com website for folks to stay in touch with old school chums. It was a true pioneer of the field, dating back to 1995, before anyone started calling them "social networking" sites. But even with 50 million registered accounts, it is nowhere near the size of MySpace or Facebook. Pro forma 2006 revenues were 152.1 million and the company was just eight million short of that with another quarter to go this year. The IPO led by Goldman Sachs, Deutsche Bank and JPMorgan seeks to place 12 million shares in an expected range of 10-12 bucks each.


Ad Business Report TM

43% more viewers recognize brands in
"emotionally engaging" programs

Products placed within "emotionally engaging" TV programs are recognized on average by 43% more U.S. viewers, The Nielsen Company disclosed in the company's most recent issue of Consumer Insight, an online news report that connects and integrates information across The Nielsen Company. Nielsen asked the survey participants to rank their overall program enjoyment for specific programming on a scale of 0-10, with a 7-10 score being termed 'highly enjoyable.' Nielsen found that brand recognition increased 29% for product placements during highly enjoyable programs, 21% for commercial spots and 5% for the combination of a product placement and commercial spot for that brand.

Positive brand feelings increased by 85% for product placements, 75% for commercial spots and 68% for combined campaigns when the program was highly enjoyable. Purchase interest increased 145% for product placements, 120% for commercial spots and 97% when the exposure consisted of both a placement and commercial for highly enjoyable programs. Product Placements during lifestyle programs typically get a 59% boost in brand recognition when the program is highly enjoyable. Nielsen found that a commercial spot receives a 28% boost in brand recognition during reality programs when the program is highly enjoyable compared to a 10% boost during sitcoms. Brands featured as a placement on dramas are recognized 30% of the time, but dramas that connect emotionally with their audience see their average brand recognition rate climb to 39%, a level that approaches that of an average lifestyle or reality show.


Media Business Report TM
ABC SuperSign beefs up
in Times Square

The ABC SuperSign, the giant electronic icon in Times Square known for its signature wavy LED ribbons and eye-catching curved ticker, has heightened its digital and multimedia capabilities to offer advertisers and producers the most technologically advanced displays in operation. With resolution of its LED ribbons boosted 25 times and the addition of many other new features, the SuperSign has significantly expanded options and flexibility in content display, interactivity, synchronized multimedia timing and remote high definition feeds. SuperSign advances in interactivity give advertisers more ability to engage customers and passersby in custom-developed marketing campaigns, special promotional activities and live events through digital photo uploads, text messaging, e-mail, and other applications. Greater real-time control allows "on the fly" switching among graphics, video, text and other media. Many more effects are also available to enhance marketing messages. Live video feeds from remote locations can now be more flexibly received and displayed in high definition across any of the sign's display surfaces.

Telecom spending drives Q3 outdoor ad spend
In a Bear Sterns report issued today on outdoor ad spend, the company noted that the Outdoor Advertising Association of America (OAAA) recently said industry revenues increased by 6.1% in Q3. Q3 revenue growth was driven by categories such as communications (+35%), public transportation, hotels & resorts (+13%), and the insurance & real estate category (+6%). Communications spending grew by nearly 40 million in Q3. Real estate remained one of the more healthy categories in Q3, posting the 3rd largest growth rate among the top 10 categories. However, real estate spending has slowed from 15% in Q1, to 13% in Q2, to 6% in Q3. Said the report: "Some of the private outdoor companies we speak to have cited real estate or slowing ad spending from home builders as reasons for a softer second half than first half of the year."

Five of the top 10 ad categories posted increases in Q3, which is lower than Q2, when 7 of the top 10 categories showed increases. In addition to the categories listed above, the largest category, local services and amusements grew by 1%, while auto, auto access & equipment increased by 2%. Ad spending from the media and advertising category was flat. Down categories included automotive dealers & services (-5%), financials (-5%) and retail (-3%). On a combined basis, the two separate auto categories posted a 2% decline. Bear Stearns' is maintaining a 7% growth outlook for 2007. "Outdoor advertising is benefiting from advertiser perceptions that other traditional mediums face increased competition, fragmented audiences, and new technologies. Though ad spending from weak categories (financials) and strong categories (real estate) bear watching given recent trends in the housing and financial markets, we expect outdoor to continue to take share from traditional media. Converting static displays to digital displays should accelerate the pace of outdoor's share gains."


Washington Business Report TM
DTV transition leaves LPTV
with a chip on its shoulder

The Community Broadcasters Association is stunned that some of the digital-to-analog converter boxes approved for distribution are not equipped to pass through analog signals, a fact which could be seriously detrimental to the operations of large numbers of LPTVs, Class As, translators and even some full-power stations which will continue broadcasting analog signals after 2/17/09. The purpose of the boxes is to pass through stations off-air to households retaining their analog receivers, but CBA VP-Technology Greg Herman, pictured, told RBR that boxes failing to include an NTSC chip will only pass through broadcast digital signals, blocking analog broadcasts. The only recourse available to affected consumers will be to unplug their converter box and reattach their rabbit ears to pick up an analog television broadcast. Herman noted the example of the lone local digital station in Bend OR. Bend citizens will be able to pick it up off the air, but will lose access to numerous Portland OR stations available off-air in Bend only via analog translators. CBA President Ron Bruno said, "Converter boxes that block our analog LPTV signals will confuse viewers and significantly decrease LPTV viewership." The group has lodged an official complaint with the FCC, and threatens to seek redress for lost viewers and revenue. Herman concluded, "It will be substantially less expensive to correct this problem now instead of recalling 70M boxes and paying our industries' lost revenues later."

TVBR observation: Herman says adding an analog pass-through to the boxes would be a relatively inexpensive fix. It seems to us it's either that, or the government steps in an builds digital plants for all the affected analog stations, or buys all affected citizens a digital receiver. We doubt there will be much debate as to which course makes the most sense at this late date in the transition.


Entertainment Business Report TM
RAW renewed for USA
Most weeks "WWE Monday Night RAW" is the highest-rated show on USA Network and it is one of the few cable offerings to regularly rank among the top 100 for all broadcast and cable/satellite programs in the Nielsen ratings. So, it is hardly surprising that USA wanted to renew its contract with WWE. NBC Universal, which owns USA, announced an extension of the current contract by two years, keeping RAW on USA through 2010. In addition to the cable renewal, NBC Universal said WWE will continue to provide NBC with special programming twice a year for the late night Saturday time slot. In addition, WWE will continue to provide its weekend program "A.M. RAW" for USA and provide a Spanish-language version of Monday Night RAW for Telemundo and mun2. "Monday Night RAW" celebrated its upcoming 15th anniversary with a special three-hour episode yesterday. The prime time cable series flourished for seven years on USA, establishing cable ratings records, before moving to Spike TV in September 2000. It returned to USA in October 2005.


Internet Business Report TM
Microsoft and CNBC join forces on ad syndication
Microsoft and CNBC announced a strategic alliance in which the two companies will collaborate to bring relevant advertising to the more than 2.6 million unique monthly visitors to CNBC.com. Microsoft will be the exclusive third-party provider of display and contextual advertising for CNBC.com and its global audience. The companies expect contextual advertising appearing later this month. Execution on display advertising will begin in March.


Stock Talk
Betting on the Fed
The Federal Reserve's policy making committee meets today and Wall Street traders are convinced another rate cut will be announced. So, they bid stocks up yesterday. The Dow Industrials rose 101 points, or 0.7%, to 13,727.

TV stocks joined the parade. Young, though a penny stock, shot up 14%. Media General rose 3%.


Stocks

Here's how stocks fared on Monday

Company Symbol Close Change Company Symbol Close Change

Acme

ACME

2.89

-0.13

Lincoln Natl.

LNC

61.77

+0.86

Belo

BLC

16.94

+0.32

LIN TV

TVL

11.05

+0.15

CBS CI. B CBS

27.09

-0.06

McGraw-Hill

MHP

46.60

+0.36

CBS CI. A CBSa

27.01

-0.13

Media General

MEG

22.76

+0.67

Clear Channel

CCU

35.31

-0.52

Meredith

MDP

56.24

+0.35

Disney

DIS

32.35

-0.44

News Corp.

NWS

21.83

-0.15

Emmis

EMMS

4.51

+0.19

Nexstar

NXST

8.40

-0.11

Entravision

EVC

7.55

-0.04

Ion Media

ION

1.31

-0.06

Equity Media EMDA 2.93 +0.17

Saga Commun.

SGA

6.70

-0.05

Fisher

FSCI

38.46

-0.04

SBS

SBSA

1.86

+0.11

Gannett

GCI

36.29

+0.45

Scripps

SSP

43.78

+0.17

Gen. Electric

GE

37.41

+0.18

Sinclair

SBGI

9.89

-0.01

Google GOOG

718.42

+3.55

SWMX

SWMX

0.01

unch

Gray

GTN

8.17

-0.05

Time Warner

TWX

17.23

-0.17

Gray, C1. A

GTNa

8.67

unch

Tribune

TRB

31.45

-0.40

Hearst-Argyle

HTV

21.78

+0.48

Wash. Post

WPO

795.05

-4.95

Journal Comm.

JRN

8.96

+0.06

Young

YBTVA

1.22

+0.15


Bounceback

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Below the Fold

Ad Business Report
Viewers recognize brands
43% more viewers recognize brands in "emotionally engaging" programs...

Media Business Report
ABC SuperSign
Beefs up in Times Square w/ resolution of its LED ribbons boosted 25 times...

Washington Business Report
DTV transition
Leaves LPTV with a chip on its shoulder...

Entertainment Business Report
RAW renewed for USA
Most weeks "WWE Monday Night RAW" is the highest-rated show...


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TV Station Auction

WTVE-TV / DT51
Philadelphia DMA
Full-Power Commercial Independent. Carried on nearly 2 million households

The auction of WTVE will take place at 9:30 AM EST on January 3, 2008 in the United States Bankruptcy Court for the Eastern District of Pennsylvania, 900 Market Street, Philadelphia, PA 19103.

Qualified bids are due on December 21, 2007. The minimum bid price is $12 million and a refundable deposit of $200,000 is due on that date. A copy of the Sale Motion, Bidding Procedures and/or Bidding Procedures Order may be obtained by written request:

J. Scott Victor
Senior Managing Director
(610) 940-5802
[email protected]

Michael J. Gorman, Associate
(610) 940-3615
[email protected]

Ryan C. Cole, Analyst
(610) 940-2619
[email protected]



TV Media Moves

New money man
Luc Gregoire was appointed Senior Vice President and Corporate Controller of the McGraw-Hill Companies. Gregoire was previously Corporate Controller and Chief Accounting Officer at Standard Motor Products, an aftermarket auto parts manufacturer.

O'Connor joins Univision
Univision Communications announced the appointment of Tonia O'Connor to the position of Executive Vice President of Distribution Sales and Marketing for the Univision Networks, effective January 2, 2008. In this position, O'Connor will be responsible for leading the company's distribution efforts with cable, satellite and telecommunications operators, and managing the affiliate relations teams for the Univision and TeleFutura Network stations and the cable network Galavision. O'Connor will be based in New York and report directly to CEO Joe Uva. O'Connor joins Univision from Gemstar-TV Guide, where she has spent the past 13 years, most recently as Executive Vice President, Distribution.


RBR - Radio News

Legal beagle handicaps Savage suit
Michael Savage is going after the Council on American-Islamic Relations (CAIR) for going after him. CAIR is not at all happy with the opinions espoused by Savage on his Talk Radio Network program, and has been using exerpts in a campaign to encourage an advertiser boycott. Savage has turned around and sued CAIR for copyright infringement. George Washington University Professor Jonathan Turley has looked at the case and offered his opinion on his blog. Savage is attacking CAIR's motives, saying it was done not for political reasons but rather to use him to raise funds. "In part of his complaint, Savage seems to be laying the groundwork for a false light claim," said Turley. "He claims that CAIR 'repackaged' the material to falsely suggest a hatred for Islam -- though it is pretty hard to imagine a context where these statements would not reveal such a hatred." Turley thinks Savage may instead be using the "privileged" nature of court filings to make charges against CAIR without risking exposure to defamation charges directed back at him. "The purpose does not appear to be true legal action," Turley said. "If it were, this is a remarkably low-grade effort for a federal filing."

RBR observation: The substantial elements of this altercation seem to have high on heat but low on matter; Savage's suit is found to be light on substance by a legal expert, while CAIR's plea to advertisers appears to have been more successful in listing companies with "non-controversial" program dictates that kept them away from the program regardless, rather than persuading existing Savage clients to exit the show. The bottom line is that Savage is free to do what he does, and CAIR is free to protest it. CAIR is just as free to try to persuade advertisers to stay away from the show as Savage is to try to sign them to a long-term contract.




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

WGA Strike Central, Day 36
WGA-AMPTP negotiations
break down

The AMPTP late Friday declared a breakdown in negotiations and walked away from talks with WGA. The breakdown came after a tough week of talks that moved progress actually backward, rather than forward. Why talks broke down and Reality TV: The straw that broke the camel's back?

TVBR observation: See TVBR as we have all details outlined about reality readiness for midseason. Bottom line, the networks and studios have already planned for midseason changes to accommodate a long strike. Agencies and advertisers will still buy television, but less of it. With less expensive production costs on reality shows (and obviously the cheap ride with repeats), studios might actually be anticipating a more profitable 2008, who knows. Obviously, the studios and networks feel they can ride this one out, as the WGA strike money will be running out as well. It's a game of chicken that AMPTP thinks it can win. If the timing of all of this were eight months ago, things might be different. What a mess in Hollywood-a lot of money and jobs are going to be lost if this isn't solved soon.
12/10/07 TVBR #239

Lots of initiatives to improve PPM
In Arbitron's monthly calls with reporters and clients for a PPM update, the company said lots of things are being done and considered to improve PPM sample performance. Hush-Hush on Houston MRC accreditation - There was, of course, no confirmation that the Media Rating Council MRC has moved to withdraw PPM accreditation in Houston and that Arbitron is appealing through the MRC's secret proceedings MRC, A few words, and only a few, The Media Rating Council (MRC) is famed for its extreme secrecy, but RBR did receive a response from MRC Executive Director George Ivie to our questions about PPM. Not that he had much to say. A: "I have no comment on this matter."
12/10/07 RBR #239


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