April 2007

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INTERNET/BROADBAND
Reported Death Of The Internet Greatly Exaggerated
Economics 101: Web Giants Rule 'Democratized' Medium

MEDIA OWNERSHIP
DirecTV Hits Back at HITN

BROADCASTING/PAY SERVICES
Martin Floats DTV Carriage Plan
Lagging Online, TV Stations Get Moving
Opinions Rise on XM-Sirius Plan

ADVERTISING
Imus Struggling to Retain Sway as a Franchise
Marketers create their own shows

TELECOM
FTC Wants More Authority Over Communications Companies
Senators mull new taxes to fund 911 Net upgrade
Vonage, emergency responders support 911 bill

LABOR
Writers Guild President Starts the Countdown Toward Contract's End

QUICKLY -- Small radio's big appeal; China Conveys 'Regret' Over
Trade Complaints; Was that Kevin or Steve Martin?

INTERNET/BROADBAND

REPORTED DEATH OF THE INTERNET GREATLY EXAGGERATED
[SOURCE: TechDirt]
[Commentary] Remember a few months back when there was a Deloitte &
Touche report that was misread by some folks against network
neutrality rules to mean that the push to keep net neutrality was
going to kill the Internet? Someone decided to do a little digging
further into the Deloitte & Touche report, and while D&T wouldn't
provide any more details about their predictions, the reporter went
straight to the folks who manage the systems D&T predicted would run
into trouble -- and those people flat out denied that they're going
to run into any capacity problems any time soon. Basically, capacity
keeps growing and even though usage is growing faster than capacity
right now, there's plenty of room to spare, and plenty of time to
increase capacity should things look like they're getting tight. So,
basically, the reports of the Internet's impending destruction due to
things like YouTube or net neutrality supporters has been greatly exaggerated.
http://www.techdirt.com/articles/20070405/190255.shtml

ECONOMICS 101: WEB GIANTS RULE 'DEMOCRATIZED' MEDIUM
[SOURCE: AdAge, AUTHOR: Abbey Klaassen]
When it comes to online-advertising riches, the short tail is getting
shorter. A recent number crunch from consultancy group Marketspace
indicates the 10 biggest Internet players nabbed a whopping 99% of
gross online-ad revenue last year. If that's not enough to startle,
consider: That's up from 95% in 2005. The growth is notable by any
standard in any business, but particularly surprising in a medium
whose potential for fragmentation, at least audience-wise, is
seemingly limitless. It means the majority of the sites on the web
are left fighting over the remaining 1% of online ad revenue. Of
course, that's gross online ad revenue. On a net ad-revenue basis,
Marketspace estimates the Big Four of online sales -- Google, Yahoo,
AOL and MSN -- nab about 57% of total online ad outlays and the Big
10 about 70%. EMarketer estimates the Big Four will pull in about 66% in 2007.
http://adage.com/digital/article?article_id=115986

MEDIA OWNERSHIP

DIRECTV HITS BACK AT HITN
[SOURCE: Multichannel News, AUTHOR: Linda Moss]
DirecTV plans to drop the Hispanic Information & Telecommunications
Network, a Spanish-language public-interest channel, June 30,
according to the direct-broadcast satellite provider. DirecTV
disclosed its plans to replace HITN with another Spanish-language
service in comments Monday to the Federal Communications Commission
in a 23-page filing regarding Liberty Media's proposed $11 billion
acquisition of News Corp.'s 38.4% stake in the nation's largest DBS
provider. DirecTV has carried HITN as part of its public-interest
obligation as a DBS provider, under federal law, to set aside part of
its channel capacity, 4%, exclusively for noncommercial programming
of an educational or informational nature. HITN is among a group of
companies, including EchoStar Communications, which have filed
separate comments with the FCC opposing the Liberty-DirecTV deal.
According to DirecTV, it is in negotiations with V-me, a
Spanish-language multicast channel that debuted in March and airs
original programming, U.S. TV premieres and acquisitions. Educational
Broadcasting -- which holds the license for public broadcaster WNET
in New York -- is a minority investor in the network. The rest of the
network partnership is made up of private investors, including The
Baeza Group and Syncom Funds. V-me is getting a carriage boost in
part via a 2005 agreement between the National Cable &
Telecommunications Association and the Association of Public
Television Stations, which ensured that at least one local public TV
analog signal, plus four digital channels, would be carried by each
of the major cable operators.
http://www.multichannel.com/article/CA6432508.html?display=Breaking+News

BROADCASTING/PAY SERVICES

MARTIN FLOATS DTV CARRIAGE PLAN
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
In advance of next week's broadcaster convention in Las Vegas,
Federal Communications Commission chairman Kevin Martin is
circulating a plan that would allow TV stations to demand both
digital and analog carriage from cable operators starting in early
2009. In the same proposal, Martin would allow cable operators to
drop the analog format if all subscribers had the necessary reception
equipment to view local DTV signals. Few cable operators, however,
are expected to be all-digital in time to take advantage of the dual
carriage exemption. Without Martin's proposal, a DTV station that
elected must carry after Feb. 17, 2009 would be seen in cable homes
with digital set-top boxes and cable-ready DTV sets, but not in cable
homes that continued to rely on analog equipment. If the analog
cutoff came today, DTV stations without analog carriage rights would
lose access to 45% of cable homes.
http://www.multichannel.com/article/CA6432632.html?rssid=108

LAGGING ONLINE, TV STATIONS GET MOVING
[SOURCE: Wall Street Journal, AUTHOR: Brooks Barnes
brooks.barnes( at )wsj.com and Emily Steel]
Local TV stations are launching a blitz of Internet initiatives as
they race to catch up online. Once considered a license to print
money, TV stations have suffered body blows from the Web. Lucrative
11 p.m. newscasts are sinking in the ratings as more viewers go to
the Internet for cable channels to get weather and sports
information. Viewers no longer have to tune in to catch shows such as
ABC's "Lost" because networks are making programming available all
over the Web. And key TV advertisers such as auto manufacturers are
moving cash toward online campaigns. While newspapers have had
success building heavily trafficked Web sites, "people still don't
automatically think to visit a TV-station Web site," says Brent
Magid, chief executive officer of media consultancy Frank Magid
Associates Inc. "Stations need to do something online to get
noticed." Complacency and greed are two reasons station operators
have fallen so far behind, say media analysts and consultants. The
majority of local stations enjoyed 40% profit margins as recently as
the mid 1990s (compared with 25% to 30% today) because they had
little competition. Many didn't see a need to invest in their Web
operations as a result, says Magid. Some were leery of moving too
quickly online after getting burned when the dot-com bubble burst.
Others resisted building up their Web sites for fear of giving
viewers a reason to switch off the TV set.
http://online.wsj.com/article/SB117625938629265960.html?mod=todays_us_ma...
(requires subscription)

OPINIONS RISE ON XM-SIRIUS PLAN
[SOURCE: Washington Post, AUTHOR: Sam Diaz]
Industry experts and consumers are starting to chime in on the
proposed merger of the nation's two satellite radio companies, using
research studies to try to sway opinion in Washington, where Congress
will hold another hearing on the matter next week. One of the studies
-- by research firm Carmel Group hired by the National Association of
Broadcasters and released last week -- said a merger would harm
consumers, citing the potential for higher prices and less content.
But late Monday, an independent report by TMF Associates, another
research firm, blasted that study, referring to some of its arguments
as "ludicrous." As the Senate Committee on Commerce gears up for the
fourth Capitol Hill hearing on the merger since it was proposed in
February, the companies and their opponents are pressing arguments in
support of their positions on the state of audio competition. Both
sides are pointing to blogger debate on the issue, as well as expert
opinions that take their sides. Such regulators as the Department of
Justice and the Federal Communications Commission must decide whether
Internet radio, MP3 players and traditional AM and FM radio compete
with satellite radio, and whether a single satellite radio provider
would harm consumers.
http://www.washingtonpost.com/wp-dyn/content/article/2007/04/10/AR200704...
(requires registration)

ADVERTISING

IMUS STRUGGLING TO RETAIN SWAY AS A FRANCHISE
[SOURCE: New York Times, AUTHOR: Jacques Steinberg]
That Don Imus can be abrasive and offensive is undeniable, but he is
also one of the most successful and influential pitchmen in the
history of radio, if not broadcasting. His program generates in
excess of $20 million in annual revenue for CBS Radio, his primary
employer, and his flagship New York station, WFAN. When advertising
revenue for affiliates and MSNBC, which simulcasts the program, is
included, the figure exceeds $50 million. But yesterday, the third
day Mr. Imus spent asking for forgiveness for a racially disparaging
remark about the Rutgers women's basketball team, he demonstrated
that the brand he was having the hardest time selling was his own. As
CNN broadcast pictures of the players arrayed on a stage behind their
coach, their faces long and at times streaked with tears, several
prominent advertisers announced plans to distance themselves from the
talk show host. In the wake of the firestorm over his remark, Mr.
Imus has pledged to purge the most offensive humor from his program.
http://www.nytimes.com/2007/04/11/business/media/11imus.html?ref=todaysp...
* Imus flap a matter of black, white and green
http://www.usatoday.com/printedition/news/20070411/1a_cover11_dom.art.htm
* Don Imus, Suspended, Still Talking
Don Imus was suspended. But it looked as though NBC had suspended the
suspension. This scandal-harried radio host and MSNBC star was free
to appear on "Today" yesterday and explain himself again and again:
His interview with Matt Lauer and his debate with the Rev. Al
Sharpton, their second, were shown simultaneously on the MSNBC show
"Imus in the Morning."
http://www.nytimes.com/2007/04/11/arts/television/11watc.html
(requires registration)
* Advertisers Pull Out of Imus Show
http://www.washingtonpost.com/wp-dyn/content/article/2007/04/10/AR200704...
* Imus's Enablers
Why do all those prominent journalists and politicians go on his show
knowing that they will be featured along with degrading and allegedly
humorous one-liners about blacks, gays, Jews and women?
http://online.wsj.com/article/SB117625954738765969.html?mod=todays_us_op...
* No One to Talk To?
http://www.washingtonpost.com/wp-dyn/content/article/2007/04/10/AR200704...
* Don Imus: the good-natured racist
http://www.latimes.com/news/printedition/opinion/la-oe-rice11apr11,1,317...

MARKETERS CREATE THEIR OWN SHOWS
[SOURCE: USAToday, AUTHOR: Laura Petrecca]
Problem: TV watchers don't want their shows interrupted by ads.
Solution: Make the show the ad. That's one approach being used by
marketers as they try to keep consumers' attention. Gillette is
producing an ABC prime-time reality series starring the group of
NASCAR drivers -- dubbed the "Young Guns" -- who are featured in its
TV ads and online. Gillette is a NASCAR sponsor for each driver and
his race team. Gillette's ad agency, BBDO New York, came up with the
idea for a reality show in which the pro drivers would teach
celebrities how to race cars. The result: Fast Cars and Superstars:
Gillette Young Guns Celebrity Race, in which stars such as William
Shatner and Jewel will compete in time-trial driving tests. The
program -- akin to Dancing with the Stars but with race cars -- will
begin June 7. Gillette paid ABC for the air time and pulled in TV
production experts and a talent agency to create the show. The unit
of Procter & Gamble won't say what the time cost or what it's paying
the drivers or celebrities.
http://www.usatoday.com/money/advertising/2007-04-10-gillette-usat_N.htm

TELECOM

FTC WANTS MORE AUTHORITY OVER COMMUNICATIONS COMPANIES
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Federal Trade Commission Chairman Deborah Platt Majoras and the other
commissioners unanimously endorse giving the FTC authority over
common carriers. That came in response to a question from Sen Byron
Dorgan (D-ND) at an FTC oversight hearing in the Senate Commerce
Committee Tuesday, a hearing at which Sen Dorgan urged the FTC to
better enforce its regulations. Chairman Majoras said that with
communications companies increasingly bundling broadband and
traditional phone service, the exemption of FTC oversight from the
latter is problematic. With the converging of media, the
commissioners agreed the exemption was an anachronism and an artifact
of a 70-year-old regulatory regime. Majoras raised the hypothetical
of the commission wanting to look at a potentially deceptive
broadband-delivered ad but being stymied by the bundling of that
service with phone.
http://www.broadcastingcable.com/article/CA6432324.html
* For more on the hearing see
http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&...

SENATORS MULL NEW TAXES TO FUND 911 NET UPGRADE
[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
Americans may face new taxes on their phone bills to help finance a
potentially expensive overhaul of the 911 emergency system to an
Internet-based network. During a hearing on Tuesday, U.S. senators
said it's still unclear how this transition will work in practice.
But they indicated it may be necessary to levy new charges on all
telephone bills--including landlines, mobile and Internet phones--to
help public safety officials cover the costs. "I don't think we can
go into a markup to pass a bill that has no future unless you have
money," Sen. Daniel Inouye (D-Hawaii) said at a Senate Commerce
hearing here about the future of 911 systems. Inouye was referring to
a bill that would encourage the switchover but allocates no tax
dollars to pay for it. Sen. Ted Stevens (R-Alaska) called for
suggestions on how to ensure the cost of the upgrades is spread out
as broadly as possible, which could sweep in categories of phones
such as voice over Internet Protocol, or VoIP. (Vonage, for instance
collects 911 fees in 23 states and says it does so voluntarily
because no law requires it.)
http://news.com.com/Senators+mull+new+taxes+to+fund+911+Net+upgrade/2100...

VONAGE, EMERGENCY RESPONDERS SUPPORT 911 BILL
[SOURCE: InfoWorld, AUTHOR: Grant Gross, IDG News Service]
Emergency dispatchers and VoIP provider Vonage on Tuesday urged U.S.
senators to pass a bill intended to ensure that all VoIP customers
can dial the emergency 911 service. About 5 percent of Vonage's
customers do not have access to 911 service, even though the Federal
Communications Commission voted in May 2005 to require it from most
VoIP providers. The problem is that Vonage can't get access to the
911 facilities controlled by competitors or because some dispatch
centers are worried about legal liability if VoIP 911 calls fail,
said Sharon O'Leary, executive vice president and chief legal officer
for Vonage. But the IP-Enabled Voice Communications and Public Safety
Act, introduced in January by Senator Bill Nelson, would fix those
problems, O'Leary said. The bill would fix problems out of VoIP
providers' control by requiring telecom companies that control 911
facilities to connect to VoIP providers and protecting dispatch
centers from legal liability. The bill would also require VoIP
providers to give a clear and conspicuous notice to customers who
cannot receive 911 service.
http://www.infoworld.com/cgi-bin/redirect?source=rss&url=http://www.info...

LABOR

WRITERS GUILD PRESIDENT STARTS THE COUNTDOWN TOWARD CONTRACT'S END
[SOURCE: New York Times, AUTHOR: Michael Cieply]
Patric Verrone -- president of the Writers Guild of America West --
his union and its East Coast counterpart will begin what are expected
to be exceedingly difficult negotiations with the conglomerates that
own the networks and studios. Whether the entertainment business
continues to operate as usual over the next year will depend in no
small part on how he handles the encounter. Hollywood's last extended
shutdown occurred in 1988, when the writers began a five-month
walkout over residual payments for the foreign sale of television
shows, among other issues. The sides now face a potentially deeper
dispute. The main areas of contention are the expansion of nonunion
work by units of large media conglomerates like Viacom and News
Corporation, and the way artists will be compensated for their work
for the Web, mobile devices and other technologies still falling into
place. Company executives have argued that it is impossible to devise
pay formulas for systems that are still in flux. But Mr. Verrone is
clearly intent on pinning down as much as possible now -- and on
avoiding the kind of arrangements (like the one regarding home video)
that many in Hollywood's creative world believe deprived them of
rightful gains in the past.
http://www.nytimes.com/2007/04/11/movies/11guil.html
(requires registration)

QUICKLY

SMALL RADIO'S BIG APPEAL
[SOURCE: Los Angeles Times, AUTHOR: Alana Semuels]
Each Mapleton station has a unique identity, allowing it to stand out
in an industry that's criticized for a uniform sound. Mapleton is
California's second-largest radio group after Clear Channel.
http://www.latimes.com/business/printedition/la-fi-radio11apr11,1,578244...
(requires registration)

CHINA CONVEYS 'REGRET' OVER TRADE COMPLAINTS
[SOURCE: New York Times, AUTHOR: Keith Bradsher]
The Chinese government expressed "deep regret and strong
dissatisfaction" on Tuesday with the Bush administration's decision
to file two complaints against China with the World Trade
Organization. Facing criticism from Congress that more should be done
to address the widening United States trade deficit with China, the
Bush administration announced Monday that it would file complaints
with the W.T.O. The complaints, which were lodged at the
organization's headquarters in Geneva on Tuesday, accuse China of
tolerating widespread violations of trademarks and copyrights and of
unfairly limiting the importation of books, journals, movies, videos
and music to state-owned companies. Wang Xinpei, a Commerce Ministry
spokesman, denied the American allegations, saying that "the Chinese
government has always been firm in protecting intellectual property."
He added that until now, China and the United States had been "in
good communication and consultation with each other over access to
the Chinese publication market."
http://www.nytimes.com/2007/04/11/business/worldbusiness/11yuan.html
(requires registration)

WAS THAT KEVIN OR STEVE MARTIN?
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
[Commentary] Armed with a top 10 list--actually top seven--a la David
Letterman and a phone answering machine bit -- shades of that other
Button-down guy, Bob Newhart -- FCC Chairman Kevin Martin took gentle
aim at himself and his critics at the annual Federal Communications
Bar Association's chairman's dinner last night in Washington.
http://www.broadcastingcable.com/blog/1380000138/post/780008278.html
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