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Record-breaking digital revenue highlights radio’s Q2 report card. The radio industry posted its best digital growth
in two years during the second quarter, delivering not only the channel’s largest revenue quarter but also its best first half
since the segment has been reported. The Radio Advertising Bureau says digital revenue jumped 16% to $222 million,
besting the previous high-water mark set at the end of last year by 8%. “If people still don’t think digital is real, it is and it
continues to be radio’s fastest-growing sector,” RAB president Erica Farber says. She points to a growing body of research
that shows listeners are increasingly using the web to connect with radio on smartphones and other mobile devices. “As
we’re seeing that change of how people are consuming the product, the digital assets are financially growing hand-in-hand,”
Farber says. Digital represented 5% of second quarter revenue and a similar portion of first half billings with year-to-date
digital revenue totaling $401 million. Because there’s not yet a standard reporting
method for desktop, mobile, audio, display or text, it’s not yet possible to say which
part of digital is steering the increases.
Revenue repeat as RAB reports another flat second quarter. While digital
billings are racing along, the pace of spot business has been a lot tougher to read
so far in 2013. “The months still aren’t consistent because a month will go up and
a month will go down. It’s really just all over the board,” RAB president Erica Farber
says. “But even with all of this, I think we should be thankful that it turned out flat.”
The RAB says total second quarter revenue was $4.7 billion, on par with 2012. Spot
revenue, including both local and national sales, was also flat. It totaled $3.7 billion
or 80% of industry revenue for the quarter. With a dispute about revenue reporting
among the radio networks apparently resolved, network operators have again agreed
to disclose their quarterly sales figures. “Now we can get our arms around all the money coming into broadcast, which
helps us with our story,” Farber says. For the second quarter and the first half, network business was off 4% compared to
last year. Like spot sales, off-air/non-traditional revenue was flat in the second quarter but up 2% in the first half. Off-air
remains roughly twice the size of digital, although that gap continues to close. Showing just how erratic an ad environment
salespeople are working in, seven of radio’s top 10 advertisers increased their budgets in second quarter, while seven of
the top 10 ad categories posted year-over-year declines. The RAB data is based on a pool of more than 100 markets as
reported by the accounting firm of Miller Kaplan Arase and extrapolated to the entire U.S.
Cellular is the radio comeback story of 2013, displacing auto as radio’s top ad category. AT&T was the radio industry’s
biggest advertiser during the April-June period, pushing Comcast out of the top spot that it held a quarter earlier. The RAB
reports four of the industry’s top 10 advertisers were wireless carriers. T-Mobile moved from No. 6 in first quarter to No. 3,
ahead of McDonald’s. Verizon Wireless went from No. 10 to No. 5. Sprint came in at No. 8. Three of the four hiked their radio
spending double-digits while one — Sprint — upped its commitment by 153%. For a category that was all but off radio two
years ago, the RAB says cellular spending overall was up 27% during second quarter. Automotive ad spending has slowed
a bit this year, although it remains one of the most important categories for radio. Professional
news INSIDE >>
services, such as cleaning services and hair salons, remain one of radio’s fastest-growing
categories, up another 28% during the quarter. ServiceMaster Clean swept up with a 714%
>>Why Sprint picked
year-to-year increase in its radio budget. RAB president Erica Farber says she’s particularly
HTC One for FM
buoyed by the department-discount store category, which posted a 33% increase in Q2. It’s a
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PAGE 1
NEWS
Monday, August 19, 2013
category that typically performs best for radio later in the year, especially during the holiday retail season. “One of the great
things about radio is that not only are we closest to purchase time, but we bring people right into the store,” Farber says.
Digital mechanic may be required to tune-up radio’s auto category. Many radio groups have said automotive ad buys have
been all over the road this year. The latest RAB numbers reflect that. Auto spending fell 11% during the second quarter, and
the category slipped to No. 2 for the industry. The quarter’s bright spot drove in behind the wheel of a Ford. The automaker
increased its radio spending 70% while the Ford Dealers Association, already the No. 1 auto spender, hiked its budget another
18% compared to last year. But there were declines among General Motors, Toyota and Chrysler and RAB president Erica
Farber says it’s becoming increasingly clear that radio needs to accelerate its digital positioning to carmakers and dealers
who are shifting budgets online. “The big issue for auto is digital. They’re looking at how consumers are going online to
do their research. But we have a great opportunity to show them how radio absolutely supports that behavior,” she says.
Farber says research has shown how well radio and digital can work in tandem, with radio driving listeners to websites. “So
far radio has a great story that we need to be consistently telling locally and nationally to the automotive industry,” she says.
The revenue data shows tier one manufacturers have made the biggest adjustments to their buying strategies, giving radio
a brief window to get that message to hometown auto dealers. “Local automotive dealers know radio works,” Farber says.
“And on the national and regional basis it’s how do we continue to show to them that we are moving the needle for them.”
Why Sprint chose the HTC One to begin its NextRadio rollout. Sprint says the NextRadio
app will become “a prevalent feature” across its smartphone portfolio in the coming months
and into 2014. The launch began Friday with two HTC devices — the recently launched
HTC One and the older HTC Evo 4G LTE — because the handset manufacturer was rolling
out a new color for the HTC One on Friday and the timing worked. “It’s an evolution,” Sprint
VP of product management and logistics David Owens tells Inside Radio. “You have to start
somewhere. HTC has done a really good job and the red color for the One was launching at
the right time.” Owens calls the phone “an iconic device in our lineup” that’s doing well in the marketplace. “Many consider the
HTC One to be one of the top phones in the industry,” he says. Owens says Sprint is very pleased with the work done by the
National Association of Broadcasters and Emmis Communications on building the NextRadio app, which allows consumers
to receive over-the-air FM radio broadcasts and interact with stations, personalities and advertised products through an IP
back channel. “We see the good and the bad of apps all the time and this is a really great application,” Owens says. He
believes it will make it easier for consumers to listen to FM radio. Outside of the car, “it’s not simple for them today because
they’re not in a position where they’ve got a radio that’s easily accessible to them,” he says. “But their mobile device is always
accessible.” Owens believes NextRado’s benefits go beyond mere convenience. “It’s one of those things that are good from
a safety perspective,” he says. “From a governmental perspective, I’m sure they’re pretty happy that a carrier has jumped in
and supported the FM radio and broadcast communities.”
NAB’s Gordon Smith still hopes for royalty deal all can live with. A performance royalty bill is waiting in the wings for
when Congress returns from its August recess. National Association of Broadcasters president Gordon Smith, who still calls
it a “tax” on stations, says he realizes what works for FM/AM broadcasters isn’t working for musicians. “But if you provide
a rate that destroys local radio, that is a bad thing. We can’t stand idly by for that,” he said during an interview on C-Span.
Increasingly webcasters are facing similar issues, and while the music industry is pushing for more in royalties from pureplays
like Pandora, Smith said webcasters already face an unsustainable business model. “Hopefully the day will arrive when
both the digital and terrestrial platform can come up with a model that actually grows music,” he said. Rep. Mel Watt (N-NC)
had pledged to introduce a new radio performance royalty bill before lawmakers left town for their five-week summer break.
That didn’t happen, but Capitol Hill staffers tell Inside Radio that Watt is still working on the language of the legislation and
adding more cosponsors. Smith suggested direct deals between broadcasters like Clear Channel, Entercom and Beasley
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Monday, August 19, 2013
Broadcast Group with record labels and artists could be the solution for the industries. “A market is starting to develop,” he
said. Resolutions in the House and Senate opposing a fee have added the support of 13 House members, bringing the total
to 152 who’ve come out against a radio royalty. Eleven Senators are also on record opposing a performance royalty for FM/
AM radio.
Smith: New FCC chief knows NAB’s political pull in Washington. The National
Association of Broadcasters is on record supporting the pick of Tom Wheeler to lead the
Federal Communications Commission. But his background at two other trade associations
in Washington has some wondering whether Wheeler will be more foe than friend. He
headed up the wireless and cable television industry trade groups, neither of which has
had particularly cozy relationships with broadcasters in recent years. “On the surface
there’s reason to be concerned,” NAB president Gordon Smith said. “But I’m not worried
because what I know of Tom Wheeler is he’s a smart guy and he understands the duty
that trade associations have to represent their members.” In an interview with C-Span,
Smith said as someone who ran a trade group, succeeded in business, and has a good understanding of politics, he’s pretty
sure Wheeler will be familiar with the NAB. “He’ll know the heft we have in this town and hopefully he’ll work with us in a way
that makes him successful,” Smith said. Smith also disclosed that Wheeler’s wife, Carol, used to work as a vice president of
government affairs at the NAB, joking, “Hopefully there’s some residual allegiance there.” As a two-term senator who sat on
the pivotal Commerce Committee himself, Smith said until Republican nominee Michael O’Reilly gets through the confirmation
process, anything but a final vote on both nominees is unlikely. “That’s just the way it works there and I can’t imagine that
changing,” he says. “Sometime this fall, hopefully before Christmas, we’ll have a fully staffed Commission.”
AM and wireless towers are more often neighbors, so the FCC adopts new rules. Federal Communications Commission
acting chair Mignon Clyburn is making good on her promise to continue to get work done while the agency is down to three
commissioners. The latest decision may not be as flashy as indecency, but the FCC says it’s one that “harmonizes and
streamlines” rules about tower construction near AM stations — a growing issue in the cellular world. First, the Commission
is creating a single protection scheme for tower construction and modification near AM tower arrays. It’s also designating
“moment method” computer modeling as the principal way of determining whether a nearby tower impacts or distorts an AM
station’s radiation pattern. It replaces the more time-consuming and expensive traditional direct measurement procedures
for modeling directional AM field strength. As more and more wireless towers dot the landscape, AM signal disruption has
become a growing issue for radio engineers. The FCC calls the changes a “significant step forward” in its “modernization”
effort, acknowledging the agency lags how radio engineers are now doing their jobs. The changes adopted were largely
crafted by the AM Directional Antenna Performance Verification Coalition, a group of two dozen broadcasters, as well as
equipment manufacturers and consulting engineers. The wireless tower industry also largely backed the changes. They’ll
now need to give an AM station a 30-day notice before they build a new tower. Broadcasters will have two years to notify the
FCC if a wireless tower is distorting their AM’s signal. The FCC rejected proposals to limit the notification window, saying
“a time limit of less than two years will not allow an AM station licensee sufficient time to ascertain that its pattern has been
adversely affected, identify the source of the pattern disruption, and prepare and submit an adverse impact showing.” While
some broadcasters asked the FCC to apply the new rules to any tower put atop a building, the commissioners opted to limit
it to only the tallest buildings. Read details of the new rules HERE.
Cox fires back at ex-Birmingham manager. If nothing else, Cox Media Group remained on message as it used the word
“denies” 73 times in its response to a lawsuit brought by former Birmingham market manager Dave DuBose. He claims
he’s owed more than $300,000 for a retention bonus and work he did on signal upgrades at Cox stations. But in a 21-page
response, Cox says it’s DuBose who owes money to the company for an ill-fated sports radio shake-up in the market. The
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Monday, August 19, 2013
filing says each Cox manager was offered the opportunity to earn a “special retention bonus” if they remained on the job
while five clusters were sold to Summit Media and the stations hit certain revenue targets. It says DuBose “did not satisfy
the conditions” of that offer so he wasn’t paid any bonus. But Cox doesn’t stop there, claiming that during the sale process
no “significant decisions” could be made without approval of VP of revenue Paul Curran. Cox argues that DuBose violated
that directive when, without corporate permission, he hired Cumulus Media “Jox-FM” WJOX-FM & AM (94.5, 690) program
director Ryan Haney. Cox says the move was designed to attract star talk host Paul Finebaum to follow him across the street
to “ESPN 97.3 The Zone” WZNN. But Cox hadn’t yet decided whether it wanted to pursue Finebaum. “DuBose’s employment
of Haney was solely for DuBose’s own and Summit’s benefit,” it claims. Cumulus quickly went to court seeking to enforce its
non-compete with Haney, all the while Cox bosses were finding out what was happening in Birmingham through press reports.
Making matters worse, from Cox’s standpoint, Haney’s contract said his new employer would have to pick up his legal tab.
The case was settled and Cox says it faced “substantial” legal bills and had to make payments to both Cumulus and Haney,
who ultimately returned to WJOX-FM. Outraged, Cox EVP Neil Johnston decided to fire DuBose. When he called Summit
Media CEO Carl Parmer to let him know, Parmer convinced him not to go through with the plan. In the middle of all this
Cox agreed to sell the five market clusters to Summit for $66.25 million. DuBose also suggested he was shortchanged for
his work on signal upgrades after former Cox Radio Group CEO Bob Neil calculated the signal improvements helped raise
the value of the division by $200 million. But Cox says it paid him $50,000 for his work and it never agreed to compensate
DuBose based on how much it raised the value of its stations.
Inside Radio News Ticker…Listeners notice Pandora ads…Three-quarters (77%) of Pandora users say they’re aware the
streaming service runs commercials. Two-thirds (68%) know all too well that there are pop-ads too. That’s according to an
Ipsos Media survey of 18-49 year olds conducted in July. No data was released on other streaming services. Pandora says
it’s not ramping up its inventory loads, just selling more of the available inventory…End of ‘The End’ in Salt Lake… Cumulus
Media has flipped adult alternative “101.9 The End” KENZ, Salt Lake City to “Classic Hits 101.9.” Cumulus is making a headon format challenge to Bonneville’s “103.5 The Arrow” KRSP-FM, which had a 4.7 share (6+) in the July Arbitron ratings.
The move leaves the adult alternative format to Clear Channel’s “My 99.5” which airs on a translator and the HD2 channel of
KJMY. It scored a 0.3 in the latest ratings. It is actually a second death for “The End” which went off the air in April 2010 for
the ‘90s-based GenX format. But Cumulus recaptured the triple A position eight months later. “They did it again,” longtime
morning personality Jimmy Chunga told listeners Friday on Facebook…SAG-AFTRA elects leaders…Radio’s biggest labor
union, SAG-AFTRA, will keep its current leadership for another two years. Members have elected president Ken Howard
and national secretary-treasurer Amy Aquino to a new term. Both are actors and both previously served the Screen Actors
Guild for two consecutive terms prior to the 2012 merger with AFTRA. Besides repping radio personalities, SAG-AFTRA also
reps voiceover talent used in commercials...People Moves... Joan Gerberding retires and an Ohio morning man returns to
the airwaves. Read the latest People Moves HERE.
Frank Ski to return to radio. Longtime Atlanta morning personality Frank Ski will today announce details of his return to
radio. “Celebrating the signing of my new radio contract,” Ski said on Twitter over the weekend. Ski left CBS Radio’s urban
“V-103” WVEE after 14 years at the end of 2012, reportedly because he wanted to seek out a syndication deal. Ski most
recently did what was described as an on-air tryout in PM drive at Howard University’s urban AC WHUR, Washington (96.3)
in April after Michael Baisden’s timeslot opened up. The station has still not filled the time slot.
“Free” ends up costing New Mexico Public Radio. The University of New Mexico will pay what amounts to a $7,500 fine
and step up training at its five stations under an agreement with the FCC to settle alleged violations of underwriting limits.
The consent decree requires UNM to agree to a three-year compliance plan that requires it to set up a training program for
station staff. UNM will also have a compliance officer in place to review underwriting practices and write a manual for staff to
follow. And UNM will file compliance reports with the FCC through 2016. “We find that the public interest would be served by
adopting the Consent Decree and terminating the investigation,” Enforcement Bureau acting chief Robert Ratcliffe concludes.
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Monday, August 19, 2013
The case was based on a December 2008 complaint that alleged KUNM, Albuquerque, NM and its four repeater stations
around the state aired an underwriting announcement that included the word “free.” The FCC concludes that “appears to
exceed the bounds of what is permissible” under its rules that specifically say underwriting mentions cannot include calls to
action, or inducements to buy.
Firefighters sound the alarm after a pirate FM becomes its neighbor. The Boston suburb of Brockton, MA has become
a hotbed of pirate stations targeting the community’s Haitian population. As Inside Radio first reported last winter, by one
estimate as many as 10 have been on the air at once. The Brockton Fire Department says one upstart pirate was interfering
with emergency radio reception. The signal blasting at 88.9 FM was so strong it was pumping music out of the loud speakers
at the fire station meant to alert firefighters of incoming calls. Firefighters called the city’s police department last week,
which showed up with a frequency finder and traced back the signal to the pirate operation. They didn’t need to go far. They
found a satellite dish and an unlicensed 60-foot FM antenna across the street from the fire house. Cops used wire cutters to
silence the station. “They got the hint that we meant business” officer Scott Uhlman tells the Brockton Enterprise. The next
day the transmitter and antenna were gone. But it’s a good bet the pirates are relocating to a less conspicuous location. It’s
not just fire radios — police say the pirate was probably also interfering with Emerson College’s WERS (88.9). Earlier this
year federal agents shut down another Brockton pirate. That station was causing interference to one of the primary channels
used by the Federal Aviation Administration to communicate with pilots.
St. Louis classical upstart makes it official with deal to buy FM signal. When “Classic 99” KFUO was sold in 2009
and flipped to a contemporary Christian format, it left St. Louis without a fulltime classical music outlet for the first time in 50
years. The format returned last summer on an HD2 station. It has since returned to the FM dial thanks to a $110,000 deal
for a Missouri River Christian Broadcasting-owned translator. The Radio Arts Foundation — or RAF — has filed to buy the
translator K297BI at 107.3 FM, a signal it has been using since April. That’s allowed the classical format to relay off of the
HD2 channel it leases from Emmis classic hits “K-Hits 96.3” KIHT. What’s now branded “RAF STL” still has access to the
old KFUO library, but classical WRR, Dallas also shared 7,000 musical tracks with the upstart. While a local staff has been
hired, RAF is also using the WFMT Radio Network.
Inside Radio Deal Digest —
Winston-Salem, NC — Curtis Media Group has struck a $150,000 deal to buy the Mocksville, NC-licensed translator W267AM
at 101.3 FM. Seller Triad Family Network has already obtained a construction permit to boost the power to 250-watts and
move the signal into the Greensboro-Winston-Salem-High Point, NC market. Curtis Media plans to simulcast talk WSJS
(600) on the translator. Broker: Bob Heymann, Media Services Group
Sarasota-Bradenton, FL — Meryl Heinemeyer’s Southwest Florida Radio Broadcasting files to buy “The Sports Fanatic”
WTMY (1280) from Walter Kotaba’s Polnet Communications for $75,000. It’s a first station for Heinemeyer.
Minnesota — Quarnstrom Stations has filed a $75,000 deal to buy an FM translator for country WBHA (1190) in the Rochester,
MN area. It’ll pick up the Alma, WI-licensed translator W206BA at 89.1 FM. Since that’s a noncommercial frequency, seller
Faith Sound has applied to relocate the translator to Wabasha, MN at 99.7 FM off the tower site used by Alan Quarnstrom’s
“Bluff Country 1250” KCUE, Red Wing, MN.
Morgantown, WV — AJG Broadcasting has filed to buy rock WCLG-FM (100.1) and “Classic Hits 13” WCLG from Bowers
Broadcasting for $1.8 million. Linda Bowers last week sought control of the pair from the estate of her late husband Garry
Bowers, and that transfer will first need to be approved by the FCC. The West Virginia Gazette says the transfer to AJC may
face a more thorough review due to the business connections it has with West Virginia Radio Corp., which already owns
seven stations in the market. But the FCC has already allowed AJC to buy country WKKW (97.9) and classic hits WFGM-FM
(93.1) in the market, so those issues may have already been resolved in the eyes of the Media Bureau.
— Read More News, People Moves, Ratings and Job Listings at www.InsideRadio.com —
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CLASSIFIEDS
qual
CONTENT DIRECTOR - ALBUQUERQUE
Univision Radio Albuquerque is seeking our next
Content Director (Program Director) for our
heritage Classic Rock KIOT-FM “Coyote 102.5”
Qualified candidates must possess strong strategic disciplines along
with a prior record of success in the format – or similar.
You will be responsible for on-air, on-line, web and social
engagement of our audience.
Come live in the sun – and rock the high desert.
Qualified candidates,
please email your resume to:
Larry Lemanski, V.P., G.M.
[email protected]
Univision Radio is an
Equal Opportunity Employer
DIRECTOR OF SALES — NRG MEDIA, OMAHA
This rare opportunity is tailor-made for a highly versatile and
experienced broadcast sales manager for its seven radio station
cluster. Candidates must have a proven track record of performance
in maximizing a full complement of marketing inventory and
multimedia marketing solutions. Specific hiring criteria includes:
•
•
•
•
•
•
Minimum two years of DOS or GSM radio experience in managing multiple stations and managing multiple sales managers
Comprehensive understanding of digital media trends and capable of packaging digital assets
Experience in the maximization of all cluster sales assets for client implementation
Hyper-organized, able to manage multiple projects with ease
Strategic thinker and visionary
Detail-orientation a must
Find more information and a list of other responsibilities online at
www.insideradio.com. If qualifed,
send your resume and performance
highlights to Judy Polacek:
[email protected]. EOE
qual
MARKET MANAGER - WISCONSIN
Cumulus-Appleton/Oshkosh (perennially ranked among
“Best Places to Live in the U.S.”) is currently conducting a search
for a Market Manager. The winning candidate will be operating
a cluster touching critical market segments while utilizing our well
positioned assets which includes the exciting new NASH-Country
brand. Our search will identify proven players from among the
market management ranks, and those truly accomplished DOS’
and GSM’s ready for the big stage of full market responsibility
will also be considered. Inquiries will be held in the strictest
confidence: [email protected]. E.O.E.
Monday, August 19, 2013
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GENERAL SALES MANAGER
LAS VEGAS
The World’s Largest Media and
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Cover letter and resume to:
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INSIDE RADIO, Copyright 2013. All rights reserved. No part of this publication may be copied, reproduced, or retransmitted in any form. . This
publication cannot be distributed beyond the physical address of the named subscriber. Address: P.O. Box 567925, Atlanta, GA 31156. Classifieds,
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