On Tuesday, former Federal Communications Commission Chairman Richard Wiley predicted relatively smooth sailing for the digital conversion next February. Instead, he offered, people should be nervous about the soon-to-be Democratic-led FCC ("more regulation"), Congress ("may be tough on the media"), and deregulation of white spaces in rural areas which might risk "the wonder of the broadcasting industry" [whoops! there goes the pattern].
Goldman Sachs & Co. has compiled a list of high-tech companies that are rich in cash, meaning that cash constitutes 20% or more of their market cap. The investment bank argues that the carnage in the stock market of late has thrown "babies out with the bath water," slamming values of companies across the board, whether they're swimming in cash or drowning in debt. This trend has become more pronounced in recent months, creating some compelling opportunities for investors, and presumably acquirers, as well. Goldman's list of today's cash rich companies could evolve into next year's juiciest acquisition targets.
eMarketer, a market-research firm, predicted that online-advertising spending in America, which makes up about half the global total, will increase by 8.9% in 2009, rather than the 14.5% it had forecast in August. The firm thinks search advertising will grow by 14.9% and rich-media ads by 7.5%, whereas display ads will grow by 6.6%. In short, online advertising will continue to expand in the recession -- just not as quickly as previously expected. Online marketing increasingly aims for awareness, consideration, preference and loyalty all at once. Marketing managers can therefore defend their online budgets as being both above and below the line. The industry is also cautiously excited about two new forms of online advertising. The first is video and the second is social networks. Two years ago 11% of time spent online was at Yahoo! and MSN, two web portals; now their share is down to 5%, and 5% of online time is spent at YouTube and Facebook. Online traffic, in other words, is moving towards sites where advertising has so far proved ineffective and is therefore cheap. This, says Ms Meeker, presents an opportunity for innovation and arbitrage by clever marketing managers as they cut their conventional ad budgets. It may also provide a glimmer of hope for the advertising industry as it enters recession.
Influential Merrill Lynch media analyst Jessica Reif Cohen painted a somewhat gloomy picture for the overall economy at an industry conference, but added that the downturn could present a big opportunity for cable companies. Cohen said that Merrill's own economists are bearish on the state of the economy, predicting that the recently-called recession could be "one of the longest and deepest in our lifetime." And while those same economists are estimating that the country should brace itself for at least another four quarters of negative growth in the Gross Domestic Product, cable investors should find some solace in the fact that their holdings have already taken a big hit. Cable stocks historically hit bottom faster than the overall market and in turn recover sooner. While stopping short of saying cable stocks are recession-proof she said they were more recession resistant she predicted the sector would outperform the rest of the market, turning in mid-single digit revenue, cash flow and free cash flow growth.
BIA Advisory Services, a subsidiary of BIA Financial Network, predicts radio industry revenue to drop 7 percent this year to $16.7 billion, the lowest total in more than five years. Next year radio revenue could plummet 10 percent, going as low as $15 billion. Positive growth isn't forecast until 2010 with a very modest 1.5 percent gain. Radio station values are down and transactions have significantly slowed. Between Jan. 1 and the end of October, some 641 radio stations were sold in transactions valued at $698 million, a 34 percent decline in the number of stations sold compared to the first 10 months of 2007 and a 44 percent decline in value, the lowest level since 1992.
[Commentary] Historically, the Federal Communications Commission has applied a three-part screen to identify those geographic areas that receive more detailed examination for spectrum allocation and divestiture in merger proceedings. The FCC's standard competitive analysis practice is first to define the relevant product and geographic markets, then to apply an initial screen to the spectrum holdings of the applicants, and then to conduct a market-by-market analysis of the markets captured by the initial screen. On Nov 4, the FCC noted its intention going forward to expand the commission's use of the three-part screen. In the decision, the FCC for the first time stated that it "intend[s] to apply prospectively [its] standard competitive analysis to spectrum acquired via auction as well as via transactions." In other words, from now on, the FCC will apply its 95 MHz spectrum screen to both forms of spectrum acquisition — via auction and acquisition. One must wonder why, after all the "prime beach front property" spectrum has been captured, the commission is now finally willing to establish this broader analysis. One must also wonder what the actual benefit will be to the tier-two and tier-three wireless carriers who have attempted to acquire spectrum at auction, only to be outbid by the unfettered resources of certain tier-one competitors. It may take some time to answer these questions. However, what is clear is that the FCC should have taken such action a long time ago.
(Eric Peterson is Executive Director of the Rural Cellular Association.)
In an effort to crack down on bandwidth hogs, AT&T last month kicked off a test in Reno (NV) that limited monthly usage to 150 Gbytes. That test was expanded to Beaumont (TX) on Monday. New residential AT&T high-speed Internet customers in Reno and Beaumont will now receive a bandwidth usage amount between 20 GB and 150 GB, depending on their broadband speed tier. Existing Reno and Beaumont customers who exceed that 150-GB threshold in one month will automatically become part of the trial later this year. Customers who exceed 150 GB will be given a one-month grace period for their first offense, but will incur charges of $1 per GB thereafter. Customers will be notified when they reach 70 percent of their usage amount, and service will not be cut off. AT&T is not the first company to target Beaumont customers. In January, Time Warner Cable announced that it was testing a usage-based system in the Texas town. Participants were placed on metered billing plans, and Time Warner started with four tiers of 5, 10, 20 and 40 GB. AT&T declined to comment on whether Time Warner's presence in Beaumont had anything to do with its choice to also test that market.
[Commentary] Facebook has recently announced the rollout of a new feature called Facebook Connect, which will allow users to login to other websites using their Facebook identity and information and which will then potentially feed back to a users Facebook network information about their actions on the site. Sold as an identity management system, and similar to programs announced this year by other major Internet players like MySpace and Google, and these features purport to save the user time and energy by allowing them to port over personal information and in the case of Facebook, privacy features, as well as to up the social nature of the use of these secondary sites by allowing users to "bring their friends along." However, these new tools seem to ignore a fundamental disconnect between our online and offline identities. In the offline world, we don't present ourselves in the same way to all people in our lives - we show different sides of ourselves to our mothers, our friends, our employers. And even in the age of fine-grained privacy tools, those tools do not eliminate the complexity of figuring out how to best present oneself in a multi-use public space, particularly for those who have personal, professional and family contacts on these sites.
TNS Media Intelligence estimates that between $2.5 billion and $2.7 billion were spent on political ads this election season. Television's share was $2.2 billion. The total figure is slightly short of the projected $3 billion take, in part because of a shortened general election season, but up from $1.7 billion back in 2004. In what will no doubt be welcome news for beleaguered TV executives, Evan Tracey, president of TMS' Campaign Media Analysis Group said, "2009 is going to be another record setting cycle. There's no reason to think there's going to be any decline." Issue advocacy also predicted to be big business in 2009 as groups do table setting for issue fights on healthcare down the line. "The Obama campaign built an organization that extends outside of Washington. Anybody serious about engaging on legislation will have to do it outside of Washington," said Tracey. "You won't have the back room deals with this administration so you'll have to rely on people putting pressure on elected officials and advertising is the strongest vehicle for that." There will be 36 gubernatorial races in 2010.
The National Highway Traffic Safety Administration is unlawfully withholding records that detail the relationship between driver cell phone use and traffic fatalities, Public Citizen claimed late Monday in a lawsuit filed under the Freedom of Information Act in the U.S. District Court for the District of Columbia. The nonprofit Center for Auto Safety first requested the documents in March but NHTSA attorneys rejected the request, saying the records were exempt from disclosure. Public Citizen's complaint asks the court to order NHTSA to release the records. The analysis stems from a 2003 letter from then-Transportation Secretary Norman Mineta urging governors to take action against hand-held and hands-free cell phones. The Center for Auto Safety claims the letter was never sent and the study on which it was based was buried.
© 1994-2024 Benton Institute for Broadband & Society. All Rights Reserved.
