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Radio Business News

In a filing with the FCC, Arbitron says the Commission has "absolutely no authority" to impose regulations on Arbitron's new Portable People Meter (PPM) technology that measures radio station listening habits. The ratings giant says Congress has considered "on multiple occasions" whether to put media audience measurement services under federal government regulation, and just as often has rejected doing so.

"The Commission itself has concluded that it lacks jurisdiction over services such as Arbitron," the company said in the filing. "There is no provision in the Communications Act of 1934 that grants such authority to the Commission, and the courts have repeatedly rebuffed attempts by the Commission to assert jurisdiction over specific kinds of communications-related activities that are not themselves addressed in the Act."

Arbitron said that the contents of its FCC filing would demonstrate not only the agency's lack of jurisdiction, but that the PPM service represents significant technological advancements over the decades-old diary system. Arbitron added that it is "actively and continuously seeking out suggestions for improvements in the PPM methodology."

Additionally, Arbitron pointed out that the radio industry is in danger of falling behind other media platforms, such as television, the Internet and personalized mobile audio delivery services (mp3/iPod). Even some forms of outdoor media are moving towards measuring their audiences using the same kind of near-passive, electronics-based methods that PPM uses.

The Arbitron filing also discussed the Media Rating Council's role after being formed some 40 years ago in response to Congressional hearings into media audience measurement services. Arbitron said its commercialization of the PPM service is both consistent with the MRC's Voluntary Code of Conduct and established industry practices by providers other than Arbitron.

When it comes to PPM, Arbitron claims that there is no consistent pattern of stations experiencing only losses in their diary-based market rankings or audience ratings. It points out that minority-targeted stations that have seen their market ranking, and/or their audience rating, fluctuate from the last diary-based report to more recent PPM-based reports, with some stations showing improvements, others staying about the same, and some showing drop-offs, but with variations from one PPM-report to the next.

Some stations that feature formats appealing to Hispanic and Black listeners have shown longer-term upward trends in their market rank and/or their audience ratings, says Arbitron, and some have not. "The facts do not support the proposition that PPM-based reports uniformly and categorically result in reductions in the reported listenership of stations that cater to minorities," the company concluded. (07-02-09)

In a filing with the FCC, the PPM Coalition says that because of PPM, Arbitron's new electronic measurement system, ratings for minority broadcasters in New York have fallen 40-60% since October. The PPMC claims that PPM has several fundamental problems leading to "flawed and unreliable sampling of minority and other audiences."

PPMC's filing also alleges that Arbitron's telephone-based sample includes only households with listed landline numbers. "Those with unlisted numbers, no telephones, and cell-phone-only users are excluded from the main sample," PPMC alleges. "Arbitron has deemed that address-based methodology too expensive" and has "rolled out the cheaper service that has repeatedly flunked accreditation."

The coalition also claims that Arbitron's separate cell-phone-only sample is too small and that the ratings company "drastically under-samples cell-phone-only households, which are disproportionately young and minority." 25% of Hispanics live in cell phone-only households, as do 21.4% of African Americans, and 41.5% of those aged 25-29. "Yet Arbitron's sample panel currently includes only 10% cell-phone-only users," PPMC maintains.

The filing also alleges that "Arbitron has proved unable to meet its own internal metrics for minority participation in its sample panels." For example, the filing says, "Arbitron recruited only 64% of the Black panelists it was seeking in Los Angeles in April and just 59% of the Black panelists it was seeking in Detroit."

In conclusion, PPMC says measurement as currently marketed by Arbitron is not "accurate or reliable." "Arbitron has violated the trust that the Commission, Congress and the broadcast industry have placed in it by deploying a new deeply flawed PPM methodology," said PPMC. (07-02-09)

Arbitron announced Wednesday double digit gains in its Designated Delivery Index (DDI) sample quality metric for young adults age 18-34 in the first month of cell-phone-only sampling from 151 Spring 2009 diary markets. Arbitron's DDI metric gained 17 points versus the prior survey for Persons 18-34 in two-book markets and 11 points in four-book markets.

"Cell-phone-only sampling is a major step forward for diary markets and we are pleased it has helped produce double-digit growth in DDI for Persons 18-34 so far in the Spring 2009 survey," said Executive VP/Customer Solutions Bob Henrick. "The solid gains in black and Hispanic are also very encouraging. Arbitron remains highly committed to raising the bar on diary market sample quality with our program of continuous improvement."

Arbitron introduced CPO sampling in 151 diary markets with its Spring, 2009 survey to measure people who have "cut the cord" and can not be reached by landline. Looking at sample quality metrics and listening effects for April, the first month of its three-month radio listening survey, there were nearly 6,000 diaries from CPO households.

In four-book markets, the Persons 18-34 Designated Delivery Index (DDI) averaged 70.7 in April, a gain of eleven points versus the Winter 2009 survey. In two-book markets, the increase for Persons 18-34 was even larger moving up to an average DDI of 73.1 in April equaling a seventeen point gain versus the Fall 2008 survey.

Persons 18-54 also showed improvement. Among the four-book markets, the DDI for Persons 18-54 gained two points in April (average of 86.3) compared with the Winter 2009 survey and in the two-book markets the Persons 18-54 DDI for April (average of 93.2) was eleven points higher than the Fall 2008 survey.

The DDI for Black Persons 12+ remained stable at an average of roughly 93 among the 20 four-book markets with black sample controls. However, the DDI for Black Persons 12+ gained 7 points in April to an average of 92.9 compared with the Fall, 2008 survey among the twenty-six two-book markets with black sample controls.

For Hispanic Persons 12+, the DDI gained 16.5 points in April (average of 78.2) compared with the Winter 2009 survey among the eleven four-book markets with Hispanic sample controls. Among the 25 two-book markets with Hispanic sample controls, the Hispanic DDI improved 4.4 points (average of 74.1) versus the prior Fall, 2008 survey.

Among Persons 12+, seven of twelve formats had no change in AQH rating (Monday-Sunday 6am-midnight) when comparing the format rating for all (cell-phone-only with landline households) versus the rating for landline only households. The seven formats with no change in 12+ AQH rating were Country, AC, Religious, Oldies, Alternative, Spanish and Smooth Jazz.

Four formats had a one-tenth of an AQH rating gain including Rock, CHR, Urban and Adult Hits. The changes represent a 10% increase for Rock, 12.5% change for CHR, 14% for Urban and 50% gain for Adult Hits. News/Talk had a one-tenth rating point decline representing a 4.3% change among persons 12+.

The format rating for Alternative and Adult Contemporary gained among persons 18-24 and 25-34 while CHR and Oldies increased among 35-54 when cell-phone-only was added to Landline. The format rating for News/Talk and Spanish declined by one-tenth of a point among persons 18-34. (07-01-09)

In a filing with the FCC, the Media Rating Council (MRC) said in a 73-page document that the FCC is not qualified to handle a review of Arbitron's Portable People Meter (PPM) services. MRC CEO George Ivie says in the filing that it would be "difficult if not impossible" for any other agency to complete a probe or review.

According to Ivie, the Federal Trade Commission (FTC) was confident in its processes in 2005, while the Department of Justice (DOJ) approved MRC's code of conduct in April by reaffirming the Council's mission and role when it comes to overseeing measurement services. (07-01-09)

The Miami/Dade County board of county commissioners has passed a resolution urging Congress, as well as Florida legislators and the State Attorney General to investigate Arbitron's PPM ratings service. The board is alleging that PPM under-represents minority radio listeners and that it has "methodological flaws."

The resolution also alleges that PPM includes "serious shortcomings in the accuracy and reliability of the system given its inadequate representation of Hispanic, African-American and other minority listeners." The resolution claims that PPM "significantly undercounts" listening habits of minority consumers, and "does not present a valid and fair representation of the diversity of radio markets in different states."

Additionally, the board is asking Florida's Attorney General to investigate the use of the PPM system in the state to determine whether it is being improved and corrected under the benchmarks established when Arbitron settled with the Attorneys General in New York, New Jersey and Maryland.

On the other side of the fence, Entercom CEO David Field has been a strong proponet of the PPM system. In a letter to the FCC, he describes the service the "best electronic radio audience measurement system currently on the market." He also noted that radio would be at a great disadvantage to other measured media without electronic measurement. (06-30-09)

The FCC has issued a Notice of Apparent Liability for Forfeiture (NAL) to Cox Radio's Miami group for $9000 for failing to comply with the Commission's Equal Employment Opportunity (EEO) recruitment and self-assessment requirements. Also receiving NAL's for poor EEO recruitment were Cumulus Media Partners/Houston for $3000 and Entravision's group in McAllen-Brownsville for $12,000.

The Commission concluded that Cox, CMP and Entravision failed to properly recruit for every fulltime vacancy, instead relying on industry and employee referrals to fill one fulltime vacancy. The FCC ruled that relying only on a licensee's own employees or its own private contacts does not constitute recruitment under the Commission's rules, which require public outreach.

All three licensees now face "reporting conditions," so the Commission can ensure that the stations maintain an adequate EEO program in compliance with the FCC rules. The reporting conditions will apply to the stations, and to all other stations that are part of their employment unit. (06-30-09)

In a letter to FCC Commissioner Michael Copps, U.S. House Committee on Oversight and Government Reform Chairman Edolphus Towns (D-NY) has requested information regarding the impact of the Arbitron's Portable People Meter (PPM) on radio listening estimates. In response, Arbitron said in a statement that it welcomed the opportunity to discuss the effectiveness of PPM with Congress.

"I remain deeply concerned that without deliberate and timely investigations into this matter, the increased used of PPM will further threaten the financial viability of minority-targeted radio stations," Towns wrote.

"Arbitron welcomes any opportunity to discuss the importance of electronic measurement, the effectiveness of the PPM technology, the value of the data it produces and our disciplined approach to the deployment of the service across the United States," said President/CEO Michael Skarzynski. "Arbitron looks forward to sharing with the committee our expertise and insights based on our long history and extensive experience in gathering, distributing and supporting the currency that is used throughout the radio industry by broadcasters, advertisers and agencies."

The ratings company also said that while it continues to commercialize its PPM service across the country, Arbitron is seeking input from its stakeholders and in the midst of adding more cell-phone only panelists and increased targets for minority listeners in PPM samples.

"We maintain an ongoing dialogue with broadcasters, industry groups, advertising agencies, the Federal Communications Commission, and Congress as part of our commitment to continuous improvement program for the PPM service and technologies," added Skarzynski. (06-29-09)

New FCC Chairman Julius Genachowski took office on Monday and announced several members of his staff. He appointed two senior advisors and two legal advisors to assist him on the full range of policy issues. Edward P. Lazarus will serve as Chief of Staff. He comes to the FCC from Akin, Gump, Strauss, Hauer & Feld, where he was co-head of the firm-wide global litigation practice, overseeing more than 800 lawyers.

Colin Crowell will serve as Senior Counselor to the Chairman, while Bruce Liang Gottlieb will become Chief Counsel to the Chairman and senior legal advisor. Priya Aiyar will serve as Legal Advisor, with particular responsibility for wireline competition and international issues. Sherrese Smith is also named as Legal Advisor, with particular responsibility for media, consumer and enforcement issues.

Sherry Gelfand will serve as Confidential Assistant to the Chairman, while Daniel Ornstein will serve as Special Assistant to the Chairman. Mary Beth Richards will handle Special Counsel to the Chairman for FCC Reform, and Ruth Milkman will lead the transition effort in the Chairman's office.

"The FCC should be a model for excellence in government, and this extraordinarily accomplished team will help us achieve that," said Chairman Genachowski. "The agency will benefit enormously from their leadership, from their private and public sector experience, and from their dedication to public service." (06-29-09)

The FCC has adopted changes in its FM translator rules to allow AM stations to use currently licensed FM translator stations to retransmit their AM service within the AM station's current coverage area. In addition, AM broadcast licensees with class D facilities will be allowed to originate programming on FM translators during periods when their AM station is not operating -- effectively granting an AM daytimer an opportunity to deliver a nighttime signal.

"We take these steps to permit AM broadcasters to better serve their local communities and thus promote the Commission's bedrock goals of localism, competition, and diversity in the broadcast media," the Commission said its Report & Order. "We concluded that authorizing FM translators to rebroadcast AM signals may exacerbate the fundamental problems of the service, rather than ameliorate them."

In previous times, the Commission's rules precluded an FM translator from rebroadcasting the signal of any station other than that of an FM radio broadcast station or FM translator. The general belief was that AM stations did not have coverage holes necessitating fill-in service because primary AM signals are ground waves that are not impeded by irregular terrain.

"Based on the comments received in response to the NAB petition and the NPRM, we have reached the conclusion that our efforts to improve conditions on the AM band have been useful, but those efforts simply cannot overcome the technical limitations of the AM band. Accordingly, we find that significant changes in the environment in which AM stations operate warrant a fresh look at allowing AM stations to use FM translators as a fill-in service," the agency said. (06-29-09)

Cumulus Media has entered into an amendment to its senior secured credit facility, which it says was "overwhelmingly approved by the lenders." The amendment provides Cumulus with compliance relief from its principal financial covenants, including leverage and fixed charge ratios, until March 31, 2011.

Chairman and President/CEO Lew Dickey, commented, "We value the partnership with our lenders and appreciate their constructive approach that enables us to operate through the current economic environment. It was a mutually beneficial outcome for our lenders and shareholders."

Under the amendment, Cumulus will be required to maintain minimum liquidity and consolidated EBITDA levels through December 31, 2010. In connection with the amendment, the company has voluntarily prepaid $32.5 million of the outstanding amount of the term loan. As of June 29, Cumulus had outstanding borrowings of $647.9 million under the senior secured credit facility. (06-29-09)

Arbitron has released cumulative (cume) audience estimates for the 58 RADAR-rated networks. The most current estimates shows that network radio delivers more listeners across major buying demos as compared to the prior report. The June report revealed 278,000 more listeners adults 25-54, while adults 18-49 showed an increase of more than 230,000.

"Compared to RADAR 97 one year ago, this month's RADAR reveals an increase of more than 2.9 million listeners aged 12 and older listen to radio weekly," said Arbitron National Radio Services Manager Bruce Supovitz. "The continuing transition to electronic measurement in top ranked local markets persistently highlights radio's promise as an effective reach medium."

RADAR 101 released in June is the seventh RADAR release to include both Arbitron PPM and diary respondents. The PPM respondents included in the RADAR 101 release are from Houston and Philadelphia markets for the Spring 2008, Summer 2008, Fall 2008 and Winter 2009 surveys. PPM results from New York, Los Angeles, Riverside, Chicago and San Francisco-San Jose. For the Summer 2008, Fall 2008 and Winter 2009 surveys, from Dallas, Atlanta, Washington, DC and Detroit. For the Fall 2008 and Winter 2009 survey and from Boston from the Winter 2009 survey. (06-29-09)

News/Talk KYNO-AM/Fresno has filed suit against crosstown Peak Broadcasting for cyber-squatting and trademark violations. Owners Katie and John Ostlund claim that Peak has registered two domain names that include KYNO's call letters and pointed them to the web site of Peak's News/Talk KMJ-AM/Fresno.

The suit, filed in Superior Court of California in Fresno County, alleges Peak had "used and misappropriated" the KYNO trademark in its Internet addresses and web site." The Ostlunds also claim that the use of KYNO is "likely to cause confusion, mistake, or deception among consumers as to the source and/or origin of... KYNO."

Additionally, the suit alleges that Peak received both oral and written notices to cease and desist the use of its trademark, and that Peak has profited from the "confusion, deception and/or mistake" while KYNO has "been deprived of substantial sales."

The suit seeks an immediate temporary restraining order to stop Peak from using KYNO along with monetary damages. (06-29-09)

Westwood One has announced that it would reconvene its Special Meeting of stockholders held earlier Friday. The meeting was adjourned to provide the company's stockholders with supplemental information on proposals in a proxy statement and, if necessary, to file an amendment to the proxy statement.

The company's stockholders are considering proposals to increase the number of authorized shares of common stock from 300 million to 5 billion. Holders are also pondering a reverse stock split of the company's outstanding common stock at a ratio of two hundred to one (200:1).

A motion was approved to adjourn the Special Meeting without taking action on any of the proposals in the proxy statement. The reconvened Special Meeting will be determined by the company's board of firectors. Only stockholders of record at the close of business on June 3, the original record date, remain entitled to vote. (06-26-09)

According to a Nielsen report, "How Teens Use Media," teens listen to the radio, read newspapers and even like advertising more than most. Even though nearly four-in-ten teens say the iPod or MP3 player is their primary method of consuming music, radio is still the first choice for a sizable number.

The study found that radio is still the primary source of music consumption for 16% of teens and a secondary source for 21% of teens." Many teens listen in cars where mp3 access remains low. And, while radio, records, 8-tracks, cassettes and CD players had their generations, Nielsen says this is the generation of the MP3 player.

39% of teens globally say mp3s are their primary method of listening to music, followed not by CDs or radio, but the home computer, which is the primary source of music for 33% of teens globally. 45% of teens globally say they listen to five or more hours of music per week on their computer; 12% say they listen to 20 hours or more.

While not the most popular source of audio consumption, radio preferences can still give us a broader perspective into the musical tastes of today's teens. In the U.S., a 2008 study by Scarborough Research showed that "Pop Contemporary Hit Radio" was the most popular format among older teens 18–20 (listened to by 40% of this segment), followed by Rhythmic Contemporary and Country. (06-26-09)

Last month, Arbitron said it would delay the New York PPM for one week after a data-entry error was discovered. Ultimately it was manually entered population data, that was transposed, that caused the error, affecting New York estimates from Holiday 2008 through March 2009. Now comes word that PPM data processing in Los Angeles and a few other markets has hit a snafu.

The ratings giant said some data for the first two weeks of the May PPM report didn't match in Arbitron's PPM Analysis Tool and its Weeklies service in several markets. However, the only market to be "substantially affected" is Los Angeles. In an e-mail alert, Arbitron said May monthly numbers were not impacted, or any other individual weeks.

Arbitron also said that "process upgrades are in place designed to avoid further instances of this error." (06-26-09)

On the tentative agenda for the next open FCC meeting scheduled for July 2 is the use of FM translators by AM radio outlets as a fill-in service, effectively boosting their service areas. The NAB is supporting the change and says the use of translators would provide listeners improved AM programming.

The trade association also says permitting AM stations to operate FM translators would would further the Commission's policy goals of promoting competition, diversity, and localism.

The Commission's most recent reports on minority and female broadcast ownership show that there are at least 154 minority owners and at least 161 female owners that hold AM licensees for 438 stations. Improving AM service, NAB adds, can improve the public's access to information from these diverse sources.

Even though some parties have speculated that allowing AM stations using FM translators will somehow diminish the amounts of spectrum available for new Low Power FM services, NAB says there is no reason to believe that new LPFM services would have lesser access to spectrum. (06-26-09)

The Senate voted Thursday to confirm the nominations of Julius Genachowski as the new Chairman of the FCC and a second term for Republican Commissioner Robert McDowell. Genachowski, a technology vet and former Harvard classmate of President Obama, replaces Acting Chairman Michael Copps. Genachowski previously served as former FCC Chairman Reed Hundt's chief legal counsel and as a staff member under the Clinton administration from 1994-97.

Commenting on Genachowski's appointment, McDowell said, "I congratulate Julius Genachowski on his confirmation by the Senate to be Chairman of the Federal Communications Commission. As many have noted, the agency stands to benefit from Julius' strong background in both the public and private sectors. I look forward to working with him and his team as we move forward on the many matters facing American consumers and the Commission."

Copps said in a statement, "I congratulate Julius Genachowski on his Senate confirmation. I believe Julius brings just the right blend of talent, experience and dedication to lead the FCC toward the more active role it must play if all our citizens are to enjoy the blessings and bounties of Twenty-first century communications. I look forward to welcoming both Julius and his family into our FCC family. And I look forward to working with Julius and all my colleagues at the Commission in tenacious pursuit of a communications policy that truly puts the public interest first."

On the Robert McDowell Senate confirmation, Copps added, "I've said many times before how much I value Rob's friendship, his collegiality, and the dedicated way he goes about his work. Rob's many talents were evidenced during his first term here and I look forward to working with him during his second. Best wishes as well to his wonderful family -- I know that Rob's ability to serve at the Commission would not be possible without a team effort."

Genachowski is a 20-year veteran of the telecommunications industry and has held various positions at IAC/InterActiveCorp, as well as other technology posts. Additionally, he served as law clerk to Supreme Court justices David Souter and William Brennan in the early 1990s.

Also on Thursday, the White House officially nominated Meredith Attwell Baker for the open Republican seat. If confirmed, she will replace Deborah Taylor Tate, who left earlier this year. The Obama administration also offically nominated Mignon Clyburn to succeed Commissioner Jonathan Adelstein, who is leaving to take a post with the Department of Agriculture. (06-25-09)

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