September 2008

Ad Bounty Hasn't Arrived

As the presidential campaigns wage war over the economy, they're starting to dump advertising revenue on broadcast stations and cable systems. But surprisingly, the widely anticipated massive increase in individual market spending hasn't materialized. Broadcasters in several battleground states say the presidential campaign is generating significant revenue—especially in a down economy—but they've been a little surprised and disappointed so far. "It's not the tsunami that many thought would occur," said Bob Bee, director of sales for Hearst-Argyle's WTAE-TV in Pittsburgh. Evan Tracey, chief operating officer of TNS Media Intelligence's Campaign Media Analysis Group, noted that even with a sluggish start to the fall campaigns, the $3 billion in political spending he anticipates from all candidates and for all issues for this election is $600 million or 25% more than the $2.4 billion spent last time. Tracey said $180 million has been spent on 337,000 airings of political commercials since the middle of June, with the Obama campaign spending $70 million, the McCain campaign $63 million and the rest coming from other candidates or issues. Tracey said on average, $2.7 million a day is being spent on political ads. He said he now anticipates the $3 billion will be the maximum rather than the minimum, as had been thought.

Digital TV transition concerns get technical

Even if all goes smoothly, next February's digital television shift is likely to generate hundreds of thousands of complaints from television viewers around the country. A smaller digital footprint may affect as many as 15 percent of television markets in the US. The Federal Communications Commission is still calculating what impact that may have nationwide. It's not certain what -- if anything -- the FCC or broadcasters can do for affected viewers, short of recommending that they buy a bigger antenna.

Inouye Urges Agencies to Redouble DTV Transition Efforts

With February 17, 2009 less than five months away, the Senate Commerce Committee held an oversight hearing to assess the Federal Communications Commission and the National Telecommunications Information Administration's efforts to promote broadcaster and consumer preparedness, as well as the recent test pilot in Wilmington, North Carolina. Committee Chairman Daniel Inouye (D-Hawaii) expressed concern about a possible flood of coupon requests and calls that we can expect just before and after the transition. He also said a failed transition should not be something a President Obama or president mccain has to deal with in just the 29th day of their term. FCC Chairman Kevin Martin said the commission had learned some things from its early analog shutoff in Wilmington which would help it going forward, including taking steps to fix issues with changing TV-station coverage areas and putting more emphasis on helping viewers to set up the boxes, scan for the new channels and understand what antenna issues they may have. But he agreed with Inouye that Congress had not provided sufficient funding for transition education, saying that the FCC needed at least $20 million more. Inouye said he would try to make sure the FCC gets the extra money. NTIA acting head Meredith Attwell Baker outlined progress in sending out DTV-to-analog converter-box coupons and its request for more money to administer the program given the expected "surge" in coupon requests as the deadline approaches. The Government Accountability Office also reprised its findings from last week's House hearing that the government may not have done enough to prevent some folks from losing their TV picture Feb. 17, 2009, when the national DTV switch occurs, or to plan for the coupon surge.

The Financial Meltdown & Media Deregulation Connection

[Commentary] Much of journalism has a `deer-caught-in-the-headlights' quality as it reports on the current fiscal crisis. Why was this issue off the radar screen for so many reporters and producers? Part of it is that the very system that underlies professional reporting is connected (and funded) by the very forces that have helped wreck the economy. But over the last ten years, journalism in the U.S. has undergone a further serious deterioration, with its ranks thinned. Investigative reporting is on the endangered professions list (with investment bankers perhaps now joining that list as well). Media consolidation has helped play a role here, further contributing to a news culture where reporters and their parent news organizations really don't spend time examining beneath the surface of events. All the media mergers we have witnessed since the 1996 Telecom Act has decimated newsrooms, slashed news budgets, and has left journalism on life support (at best).

DOJ lays out concerns to Yahoo and Google, no lawsuit threats yet

Federal antitrust regulators have clearly laid out their concerns to Yahoo and Google regarding their controversial search advertising agreement, but discussions of potential remedies have yet to come up, according to a source familiar with the discussions. Antitrust regulators with the Department of Justice have largely narrowed their concerns into two buckets, one centering on the potential affect on advertising pricing in the short run and to what extent there would be a negative impact on the industry, and the second being will the agreement eventually lead to Yahoo exiting the search advertising business altogether, the source noted. Currently, the parties are discussing those concerns, but the conversations have not yet migrated to a point where the DOJ is saying they are illegal and the agency is contemplating filing a lawsuit to block the partnership, the source said. In most cases, once the DOJ indicates it may file a lawsuit, the agency leaves it up to the companies to suggest possible remedies to mitigate regulators' concerns, said the source. Yahoo and Google have not offered up any potential remedies to mitigate the DOJ's concerns, according to the source. Within the coming weeks, it will be clear whether such action is needed.

Antitrust group urges limits on Google, Yahoo deal

Google and Yahoo's deal to let Google place some ads on Yahoo's search pages, which the Justice Department is reviewing, should be allowed with limits, the American Antitrust Institute said on Tuesday. Because the search advertising market is already extremely concentrated with Google by far the dominant firm, the institute argued that consumers would be best served if No. 2 Yahoo remained independent. "Prohibiting Yahoo from using Google ads could result in Yahoo's acquisition by Microsoft, which would effectively remove Yahoo from the market," wrote Norman Hawker, who teaches at Western Michigan University and is a fellow at the AAI.

Google Android is about advertising, not the enterprise

Even though three companies hosted the launch event and the software is backed by a consortium, the introduction of the first Android phone made it very clear that Android is about one company: Google. Android is Google's attempt to dominate the mobile advertising market, just as it has dominated the online PC advertising market, said Craig Wigginton, industry leader for Deloitte's telecommunications practice. "Their number-one driver for pushing this is the advertising model," he said. But in order to grab a major share of the mobile advertising market, Google will have to convince a large number of people -- including business users -- to buy Android phones. That's a significant challenge in the increasingly crowded mobile phone market.

Music industry online royalty disputes

The different parts of the music industry are in harmony, at least when it comes to some online royalties. In an agreement hailed as a "breakthrough that will facilitate new ways to offer music to consumers online," groups representing songwriters, music publishers, record labels and digital music websites have ended a seven-year dispute over two types of music royalties. Unfortunately, neither of those is the controversial performance royalty for Internet radio. That remains the subject of a high-stakes stalemate between SoundExchange, which collects the fees for artists and record companies, and Internet radio sites such as Pandora and Live365. The agreement resolves some contentious issues that were the subject of a six-month trial earlier this year before the Copyright Royalty Board, a group of judges charged by Congress with tackling these disputes. The groups -- the Digital Media Assn., the National Music Publishers' Assn., the Recording Industry Assn. of America, the Nashville Songwriters Assn. International, and the Songwriters Guild of America -- have agreed on so-called "mechanical royalties" for interactive streaming music and limited music downloads. It's all pretty complicated, but the groups said the deal should help lead to more cutting-edge music services.

Martin: Voluntary Ad Efforts Not Enough

Federal Communications Commission Chairman Kevin Martin testified before the Senate Committee on Appropriations Subcommittees on Labor, Health and Human Services, and Education, and Related Agencies and Financial Services and General Government. The subject was marketing food products to children. Chairman Martin said that the Joint Task Force on Media and Childhood Obesity succeeded in producing some significant voluntary commitments aimed at reducing the negative impact of the media on children's eating habits and increasing its positive influence on their behavior, ultimately it did not reach an agreement on two key issues: 1) a uniform standard of what constitutes healthy versus unhealthy foods; and 2) the willingness of most media companies to place any limit on the advertising of unhealthy foods on children's programs. While it was Martin's hope that the government would not have to resort to actual requirements, and he strongly encouraged the media companies to propose some voluntary limitations on advertising targeting our children, in the end no widespread voluntary commitment on behalf of the media industry was forthcoming. He concluded, "On the voluntary side, I am left to conclude that, sadly, no limit was even close to being presented."

FTC Testifies on Report Regarding Food Marketing to Children and Adolescents

Commissioner Jon Leibowitz testified that the report, Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation, found 44 major food and beverage marketers spent $1.6 billion to promote their products to children under 12 and adolescents ages 12 to 17 in the United States in 2006. The Commission recommends that all food and beverage companies adopt and adhere to meaningful nutrition-based standards for marketing their products to children under 12.

A useful first step would be to join the CBBB [Council of Better Business Bureaus] Initiative. In other words, all companies should take measures to limit their food and beverage promotions directed to children to those for healthier products.

Second, given the integrated nature of most marketing campaigns, the Commission also recommends that these nutrition-based standards be extended beyond television, radio, print, and Internet advertising, to cover the full spectrum of marketing activities to children, including product packaging, advertising displays at the retail site, premium distribution, celebrity endorsements, and other promotional activities.

Third, the Commission also recommends that all companies stop in-school promotion of foods and beverages that do not meet meaningful nutrition-based standards. In addition, all companies that sell 'competitive' food or beverage products in schools (outside of the school meal program) should join the Alliance for a Healthier Generation or otherwise adopt and adhere to meaningful nutrition-based standards for foods and beverages sold in schools, such as those recommended by the Institute of Medicine.

Fourth, the Report contains many other specific recommendations for the food industry, which address the nutritional profile of product offerings, nutrition labeling, healthy messages, and marketing in schools. Finally, in light of the character licensing and extensive cross promotion of foods with films and children's television programs, the Report also recommends actions by media and entertainment companies. Included among these is a recommendation that media and entertainment companies should consider instituting their own self-regulatory initiative and working with the CBBB in this endeavor."

Benton

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