|Most important week in advertising
The TV “upfronts” will reveal where advertising’s going in 2016 and beyond.
The questions are - Did some agencies and clients stretch too much in last year’s upfront sales season, and over-commit to digital? Did they suffer lower ROI – return on investment? And (really big question) are they more open to traditional media? American Express Senior VP Rich Lehrfeld recently told Advertising Age that “When we run a heavy TV schedule, we see a lift in sales and product awareness. We need to run two weeks of digital to get the reach of one day of broadcast.” Network TV is still a reach medium – and that’s very much how radio seems to be pitching itself, with Nielsen’s much-repeated figure of “93% overall weekly reach.” Time-spent is down with both radio and network TV, but they’re both preaching about mass-appeal reach. Jim Rutenberg at the New York Times quotes CBS Chief Research Officer David Poltrack, who says one reason retail sales are slumping now is that advertisers went too far last year with digital. Is 2016 the year of the rubber-band bounce-back? At least one radio CEO said so on a recent quarterly call. This week’s television upfronts should yield higher CPMs (cost per thousand). Some of what happens with TV will hopefully cascade down to national radio sales – and eventually local radio.
Nielsen and George Flinn settle their dueling lawsuits over PPM.
The lack of details is frustrating, but standard in these cases. All we know is that following last Wednesday’s settlement conference ordered by a federal judge, both sides tell the court that all their “counterclaims, cross-claims and third-party claims” have been settled. Each side will bear its own costs (unless there are other arrangements). Three months ago, the ratings service threw the kitchen sink at Memphis owner Flinn (February 8 NOW), alleging non-payment of about $14,900 per month for his stations’ PPM service. The judge refused Nielsen’s request for summary judgment, and then Flinn – a prosperous MD and medical entrepreneur – unloaded his own counterclaims. They revolved around charges that Nielsen’s PPM system is flawed, especially in the younger and minority demos important to stations like his urban “Hot 107.1” KXHT. Flinn noted that Nielsen’s never obtained Media Rating Council accreditation for PPM in Memphis, and claimed it “fraudulently concealed” problems. Flinn also wasn’t happy about his competitors installing Voltair audio processors, which he said put him at a disadvantage. (He said Nielsen advised him not to install Voltair units, but to wait for its own Enhanced CBET.) In its original suit, Nielsen alleged that Flinn owed about $172,134 in unpaid principal and interest, for the period from February 2015 through year-end.
Other subscribers wanted the fight between Nielsen and Flinn to last a few more rounds.
The case brought sunlight to the usually-top-secret cost of PPM services. George Flinn was supposed to pay $14,896 (rounded to the nearest dollar) in monthly “PPM data and estimates,” which included 10% discounts for “continuous service” and “group discount.” There was another monthly $1,280 charge for PD Advantage software, $271 for “PPM RLD data” (respondent-level data), and $568 for “Tapscan Web Suite Radio.” Flinn was clearly ready to counter-punch, knowing that refusing to pay would have consequences. (He also says he informed Nielsen he wasn’t going to pay up.) So why did they settle? It may be that Nielsen didn’t want to reveal any further details about PPM costs or its methodology, in court. It’s already disclosed more than Arbitron ever did about monthly subscriber charges. Since Nielsen sued Flinn in February, there have been many filings back and forth, and other than the court-ordered settlement conference, there was no indication that the parties were ready to go to their corners – but that’s what happened. Either side could re-open the action within 30 days “if settlement is not consummated.” After that, the dismissal by the court is “with prejudice,” meaning the case can’t be re-filed.
Activist investor tries to put Pandora in play.
Corvex Management reveals it’s taken a 9.9% ownership position in Pandora – and has “urged the Internet music company to explore a sale,” says CNBC. The usual script here is for the investor to write a letter to management, and this one pulls no punches – “We have become increasingly concerned that the company may be pursuing a costly and uncertain business plan.” Corvex recommends that Pandora “immediately explore the potential value to shareholders that could be realized in a sale transaction.” Both previous Pandora CEO Brian McAndrews and his successor (and co-founder) Tim Westergren have talked about investing for the long-term, including doing more marketing. CNBC notes the heritage of Corvex – it’s “run by Keith Meister, a protégé of billionaire activist investor Carl Icahn.” We also learn that Corvex has been meeting with management - including before McAndrews was replaced by Westergren. At one time Corvex proposed another activist shareholder tactic, putting up its own candidates for the Pandora board. Now it’s just publicly pushing the company to explore selling itself. Even if Pandora fights this off, it will be an expensive distraction for the new CEO. Pandora’s “P” stock was up over 3% in yesterday’s after-hour stock trading, as the news broke about Corvex.
“This American Life” is dropped by an Indiana non-com who’s bugged about carriage on Pandora.
Mike Savage isn’t just the GM at Purdue-owned talk WBAA West Lafayette (920) – he’s also a member of the National Public Radio board of directors. He’s not happy about TAL originator Ira Glass sharing his baby with Pandora, where it’s “drawn 2.1 million listens since it began streaming three weeks ago,” says Current.org. To Savage, the nub of the problem is the weekly show’s availability on the paid tier of Pandora, as well as the ad-supported side of the service. He says “for a program that got its start on public radio and had some of the best on-air fundraising messages for listeners, where Ira Glass says he is volunteering his time because he believes in the mission of public broadcasting – the move to Pandora is disingenuous, at best.” Ira, no shrinking violet, responds. He “respectfully disagrees” with Savage. And says “we’re taking the money that we’re making in these other ways, and we’re putting that into programming which shows up on public radio stations.” He also believes that “nationally, we’re not losing audience on the radio, because people are getting us on other platforms. We’re just adding audience.” (This American Life is self-distributed to radio, with delivery by PRX.) Purdue’s non-com news/talk WBAA features This American Life in a prime weekend slot – noontime on Saturdays. That ends in August.
iHeart and its unhappy note-holders stay in mediation.
They were due in a San Antonio court yesterday, but in an SEC filing the company reveals that the past couple of weeks of mediation talks have continued. (Read that filing here.) It’s unusual, but iHeart also makes available the term sheet, labeled “confidential draft,” which is the most recent offer by priority guarantee note-holder Benefit Partners and several allies. Read it here. Same “confidential draft” header on this May 15 response by iHeart, here. This began when Benefit Partners objected to iHeart moving over $500 million in proceeds from majority-owned Clear Channel Outdoor to a new non-restricted subsidiary named Broader Media – presumably so iHeart could buy back some of its nearly $21 billion in debt at a discount.
Presidential campaign ads on radio slow to a trickle.
How quiet was the ad-buying in the period between May 6 to May 15? Media Monitors says “there were no ‘against’ Donald Trump ads” in the 82 major markets in the study. Trump himself ran exactly two ads, and Media Monitors posits a reason – “Trump is on TV constantly and is the subject of every radio talk show.” On the Democratic side of the world, Hillary Clinton ran just 81 ads – and her opponent Bernie Sanders just 29. This situation probably won’t last, and no doubt plenty of group heads, GMs and sales managers hope it won’t. As several group heads have reminded us, political advertising on radio is largely something that happens in the second half of the year, and particularly fourth quarter.
SBS radio revs down 2% in first quarter, due to lower network sales.
It’s a bit surprising to see “decrease in network sales” listed as the first factor in Monday’s press release. The AIRE (“EYE-ruh”) Radio Networks operation has been a star in recent quarters. No explanations yet, but hopefully tomorrow’s conference call with management will illuminate the story. At the station level, SBS says both national and local sales were up in New York and L.A. Local was up in Miami, while national improved in Puerto Rico. Radio net revenues slipped $700,000 to $28.5 million. The much smaller Mega TV did 6% better, to $3.1 million. Another thing the analysts may pester Spanish Broadcasting System about on tomorrow’s call is its participation in the FCC reverse auction of TV spectrum. The company’s not supposed to say anything, but we’ll be listening to see if there are any winks or nods. Also affecting radio and TV revenues was “lower concert activity,” and management may have more to say about that. All told, SBS revenues were down 2% to $31.6 million. Cash flow as measured by OIBDA (operating income before depreciation and amortization) fell 11% at radio to $9 million. But the overall OIBDA number fell 29% to $5 million. Much of that was due to higher expenses at Miami-based corporate.
Ft. Wayne’s WOWO/1190 observes its 90th anniversary in sound, with a series of podcasts from Pathfinder’s news/talk station. 90 years ago, Main Auto Supply was the driver at the sign-on, and current programmer Ryan Wrecker not only goes back to the original March 31 sign-on date, he unearths a newspaper clipping about the “trick call letters” of WOWO. Listen/download the history from here.
The campaign for FM chips on phones in Canada moves online, where there’s now a Canadian counterpart to the broadcaster-funded “Free Radio On My Phone” campaign and website. Just as in the U.S., some Canadian broadcasters are trying to stir up a grassroots movement, with this Canadian-only website. So far, they’re just at the starting line. The status for Android phones services by Rogers, Bell, Telus and Shaw is the same as those for regional carriers like Sasktel – “Not enabled, contact carrier to demand they turn it on!” Canada’s CBC News has more here. You can check on the U.S. “Free Radio On My Phone” site – much more progress than north of the border, thanks to Sprint and T-Mobile – here. The U.S. campaign is stoked by Emmis-founded and funded NextRadio – and Emmis chief Jeff Smulyan recently evangelized about the virtues of the FM chip on smartphones when he addressed Canadian Music Week in Toronto.
It’s burger/fast-food wars, in the latest weekly ranking of national radio advertisers by Media Monitors. The striking thing is that Burger King bought 29,316 spots last week, moving up from #11 two weeks ago to the #3 position – ahead of McDonald’s (#4 to #5). Wendy’s bought over 15,300 spots to place at #11. The #1 and #2 national slots continue to be occupied by Home Depot and GEICO – and Sprint’s buy of 22,900 national spots propels the wireless carrier from #79 to #8.
“Bob” returns to Waco, says Radio Insight, three years after the same owner shelved the variety hits format of that name on an AM/translator combo. This time M & M Broadcasters revives Bob on a different translator (K283CD at 104.5) and feeds it with the HD3 signal of KBHT Bellemead/104.9. In between March 2013 and now, M & M (owner Gary Moss) ran with a couple of post-Bob formats, most recently rhythmic AC “Jammin’ 104.5.” That lasted just seven months, and missed making the Fall 2015 Nielsen diary book.
Wenatchee’s AC “99.5 the Apple” KAAP climbs up the ladder to become hot AC “The Bridge,” carrying new call letters of KQBG. The Class A signal licensed to Rock Island, Washington is owned by Cherry Creek Radio. They’re running ad-free in the daytime, through the end of the month. The syndicated Murphy, Sam & Jodi show is imported for mornings. Cherry Creek programming minds Mark Elliott (Senior VP of Programming), Chuck Geiger (Ops manager for the cluster that includes Wenatchee) and John Connor (PD of sister top 40 “KW3” KWWW) are involved in the new “Bridge.” Website is here.
Saga re-brands an HD radio-fed translator in Keene, New Hampshire as “The Mountain.” Previous branding was “Keene Classics,” and Radio Insight says that presentation featured a “syndicated airstaff.” The new iteration as “The Mountain” is jockless, carried on 250-watt translator W276CB and supplied by the HD3 signal of Saga’s WKNE/103.7. New slogan is “The rock station for grownups.”
A Brownsville, Texas FM popped up on Craigslist for sale, and our thanks to the NOW Reader who shared that posting. But something happened after that, and it’s now been pulled off the Brownsville Craigslist site. The station is Class A non-com KVJS at 88.1, licensed to Arroyo, and here’s part of the original listing – “KVJS for sale…currently off the air” – though there’s no request for Special Temporary Authority at the FCC covering that. The listing continues, “The land is ready for a small double wide. We were going to live on this site and operate this station as my retirement project and ministry. After $250,000 invested, my wife said no more money, shut it down and sell it.” KVJS had been on-air for three years, and the lister says “it took seven years to get it on,” including securing permission from the Mexican government, since it’s in the border zone.
Near the Red River in southwestern Oklahoma, Monte Spearman’s High Plains Radio Network buys its fourth FM in just over a month. First there was the $750,000 purchase of three FMs from Altus FM, including country “108 Key FM” KEYB, near the Altus Air Force Base. This new deal is for “Coyote Country K96” KYBE, a Class C3 at 95.7 licensed to Frederick, Oklahoma. That’s southeast of Altus, and the seller is LKCM Radio. Price is $175,000, and note that the potential price on the earlier deal, with Altus FM could mount to $1 million, if Monte and Gentry Todd Spearman exercise their option to buy the studio building (April 5 NOW). So the Spearmans are pouring in as much as $1,175,000 into building their position around Hollis, Altus and Frederick, Oklahoma. Broker on “Coyote Country” KYBE – Media Services Group.
Spartanburg’s “Fox Sports 1400” WSPG sells for $350,000 to the group that’s apparently been LMAing it – “Fox Sports Broadcasting 2 LLC.” There are two “Ryans” in the buyer group, Ryan Delaney and Ryan Clary, and they’re paying cash for the 1,000-watt full-time station. A decade ago, Jose Roberto Ekonomo and Aida Esperanza Ekonomo’s Eko Media bought WSPG for $600,000 cash, and in January 2014, their tower collapsed. Now they’re selling to Delaney and Clary for $350,000. Broker for the seller – Media Services Group.
“Nebraska’s best alternative,” KFKX Hastings (90.1), is turning in its license next month. NBC Nebraska says students at Hastings College learned last week about the decision not to seek license renewal for the Class A facility. Journalism and Media Arts Director Chad Power says the factors include the low listenership to the student-programmed variety station, and fewer potential jobs in radio for grads. Hastings will continue to offer opportunities for podcasting and webcasting – but it won’t be doing any OTA broadcasting.
“You can count on the start of baseball season to deliver a springtime bump to the Sports-Talk stations in the major league markets,” says Nielsen’s dissection of its data from the 48 PPM markets of the April survey. Of course not all Major League Baseball flagships are all-sports stations, but Nielsen does take the occasion to check the progress of the all-sports format since the April 2013 book. It’s up with 25-54s and persons 6+ (though flat with 18-34s). Spanish language formats are also highlighted by Nielsen, especially Spanish contemporary. Check the charts from Nielsen for sports, Spanish language, and the top 5 formats across the 6+, 18-34 and 25-54 demos here.
Mark Ramsey ponders the effect on radio of “The death of the mobile phone antenna.” The researcher and blogger says “the hot rumor about the upcoming iPhone 7 is that it will lose” its headphone jack. He explains that if Apple does go wireless (using Bluetooth EarPods), it matters to radio. Because “the wires serve as an antenna for those mobile phones which contain activated FM chips. If you get rid of the antenna, you effectively disable the device’s ability to receive radio via traditional FM.” Though as things stand now, Apple has stayed a million miles away from the FM chip discussion, so a wireless iPhone 7 wouldn’t affect NextRadio in the present tense. But for the future? Ramsey says the trend to “move beyond wires, beyond cable and antennae” is something radio should follow closely. He warns that “the genie is out of the bottle.” Read “Death of the mobile phone antenna” here.
Marv Phillips retires tomorrow after more than 40 years in the biz, most recently as Cromwell Group’s general manager in Effingham, Illinois. Cromwell’s Bud Walters says “Marv and I started working together in 1979, when we began WPFR-FM in Terre Haute. Over the years he has managed and sold for us in Owensboro and Lexington.” Marv took a timeout and sold outdoor advertising, but 12 years ago he returned to Cromwell, in Effingham, at stations like “All American Country” WCRC-FM/95.7. Now Marv’s leaving radio for health reasons. Walters says “we are going to miss him.” For now, Sheila Myers is his interim replacement. To drop Marv a note, here’s his email – Mphillips@CromwellRadio.com.
Scott Goldberg won the national Edward R. Murrow Award last year for radio news writing, three years after joining ABC News Radio. Now its GM Steve Jones is selecting Scott as the new midday Information Network anchor for ABC News Radio – taking over for Cheri Preston, now handling morning drive. Taking the anchor job won’t keep Scott from racking up a few more reporting miles – he’s ticketed for Rio de Janeiro, to cover the Summer Olympics.
Take 2 – Getting the “Tiffany” right at ACM, the Academy of Country Music, the interim CEO is Tiffany Moon, not Tiffany Lewis. She’s been the Executive VP and managing director, and will steer the organization following last week’s unexpected departure of 12-year CEO Bob Romeo.
The news director had a little side-business – Bob Hughes says “I once worked at a station in southern California where the news director would keep a tape recorder running on all-news KNX in Los Angeles. He lifted news stories, and would just add in his voice, as the wraparound. I would hear him doing an interview from L.A. city hall, when he was sitting with me in the studio. He did it not only for our station, but he also sold them to a network. The owners of the station knew what he was doing, and I’ve always wondered if their allowing this activity was maybe the raise he never got. He was a star - in a roundabout way.” Have your own favorite “radio hanky-panky” story? We can scrub out names and call letters, so you’re comfortable with it in print. Email it to “You Can’t Make This Up” – Tom@RTK-Media.com.
Tracking iHeart, Cumulus, Pandora and the other companies that are in the news – and also watching the less dramatic day-to-day soap opera of radio. Like what you’re seeing in this Tom Taylor NOW Newsletter? Tell a friend, and help us keep growing. You can reach our slightly-addicted daily readership with your company’s marketing message. Contact our Kristy Scott - Kristy@RTK-media.com or phone 818-591-6815. See you back first thing tomorrow - Tom