Message From Michael
January 29, 2007
THE SECRET REPORTS OF THE F-C-C
F-C-C FACTOIDS ON WOMEN AND MINORITIES
THE MOST POWERFUL MARKETING TOOL
BILL GATES LAUGHS AT TV
TWO SIDES OF THE BLOGGING COIN
COCKTAIL CHATTER -- IPODS AND WOMEN

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THE SECRET REPORTS OF THE F-C-C: After all the kafuffle about the reports about media cross ownership not being made public, the release was anti-climactic. Let me see if I can sum up the 20-plus, 33 Megabyte series of reports in brief: The public sees problems with media consolidation but the FCC staff and industry don’t. At least that seems to be the interpretation.For example, the FCC’s former lead economist, Leslie M. Marx, argues in his paper on newspaper-broadcaster cross ownership that although he “assumes” cross ownership has the “potential” for negative impact, he starts from the premise that in large markets with a large number of independent media outlets, he does not expect cross ownership to harm competition, diversity and localism. Marx who is also a business professor at the University of North Carolina adds another premise, that in very small markets, cross ownership may be necessary to guarantee the survival of the news outlets that exist. The question, he says, centers on whether cross ownership is appropriate for the mid-sized markets. In the end, he proposes more studies, although he does cite 60 markets in which the competition is low and 42 markets in which there has been news “curtailment.” In a report titled the “evolving structure and changing boundaries of the U.S. television market in the digital area,” deputy chief economist Jonathon Levy and policy analyst Anne Levine note that although the share and absolute size of the broadcast audience has declined as more video programming has become available, the advertising revenues have not dropped proportionately. After reviewing everything from VOD to ITV to DVR, they conclude that while the “direction” of these new technologies is relatively clear, the size of the impact AND how broadcasters will respond is not so clear. They end with the somewhat trite note that, “the future profitability of the broadcast industry will depend on its ability to provide valuable, cost-effective programming and to harness new technologies like DTV and interactive services to its benefit.” In a study of the ‘multi channel video industry’ (cable operators), FCC staffer Andrew S. Wise says vertical integration has clear efficiency benefits and that “whatever harms are observed seem to be minor, uncertain and attenuated.” Side Note #1: Many of the newly released documents on the FCC website ended up being articles from newspapers or magazines or just letters from consumers. But several of the documents would serve as good backgrounders on television, radio, even newspapers and the Internet. For example, one was titled “background on localism in broadcasting” while another was “financial health of the newspaper industry.” If you would like to see them, the website is http://www.fcc.gov/ownership/additional.html.Site Note #2: Many of the reports were stamped draft, not TO be cited, not public, etc., but my favorite was the one from the FCC’’s Media Bureau staffer Peter Alexander who writes in the cover page to his analysis of the cable industry, “I do not anticipate you will gain any insight from this.” Even better, he then adds a disclaimer/ caveat that “the enclosed draft is extremely crude, superficial, incomplete and contains numerous errors and mistakes. At best it should be viewed as my set of working notes. Please do not distribute or cite in any fashion.” He then goes on to do an analysis with innumerable equations along the lines of E (Greek letter) V/m (En+1) – E4/ 1) – E (Greek letter) (Vm (En+1 – E 4/1) +Tn+1/ m,i).

F-C-C Factoids: One of the many articles on the F-C-C site reports that of the 1,748 commercial and education television stations in the United States, only 15 are owned by minorities while 60 are owned by women. Of those TV stations 8 are owned by Hispanics, 4 by Asians, 2 by Native Americans and one by an African American. There are 6 Hispanic women who own TV stations and 3 Asian women who own TV stations. Of the 8,729 commercial and educational FM radio stations, there are 123 owned by minorities and 357 owned by women. There are 9 African American women who own FM radio stations, 8 Hispanic women, 8 Asian women, 3 Native American women and 3 Native Hawaiian women. Of the 4,770 AM radio stations, 212 are owned by minorities and 335 are owned by women. There are 24 Hispanic women who own AM radio stations, 10 Asian women, 9 African American women, but no American Indian or Native Hawaiian.

THE MOST POWERFUL MARKETING TOOL: It’s the oldest form of consumer generated content, according to research firm BigResearch’s 9th annual Simultaneous Media Usage Report. It’s… ta-da -- Word of Mouth. It’s also the single most influential source of consumer decision making. Word of mouth can be translated into social networks, online buzz and viral marketing but the most powerful is the simplest -- recommendations from friends and family. And in what may be the most interesting line to think about, the report says, “consumers’ choices are rarely in line with advertisers’ expenditures.” If it’s any consolation to my broadcast friends, TV was the second most influential source. On a very much related note, a report on the Word of Mouth Marketing Association (yes, there is such a group) website (womma.org) cites a study by Compete Inc., that says half of those surveyed say they used Consumer Generated Media to mark or narrow their buying decision. A quarter (23%) say they use CGM to confirm a decision while one in six (15%) say it is the way they decide their top choice. It appears though that the definition of CGM is pretty broad in this survey, as it includes customer ratings.Back to the BigResearch study – its survey confirms previous surveys (by both BigResearch and Knowledge Networks) that two thirds (67.9%) use other media while watching TV or while reading a newspaper (68.9%) or while browsing online (70.7%). The Nielsen-funded Council for Research Excellence has commissioned Ball State University (which did the original Middletown Media Studies on Concurrent Media Exposure) to do another study.

BILL GATES LAUGHS AT TV: Or, at least, TV in its present form. The Microsoft chairman and philanthropist told business leaders and politicians at the prestigious World Economic Forum over the weekend that the Internet is set to revolutionize TV in the next five years. He says the issue is the flexibility of video availability as opposed to the rigid programming times of TV. And with telephone companies already building the infrastructure, he says the merging of the two is coming and that, “five years from now, people will laugh at what we’ve had.” Reuters also reports from the forum that Chad Hurley, co-founder of YouTube, says part of the revolution will be in the advertising model with far more targeted ads tailored to each viewer’s profile.

TWO SIDES OF THE BLOGGING COIN: For the first time in a federal court, two of the 100 seats reserved for journalists will be assigned to bloggers. The Washington Post reports that the Media Bloggers Association (Yes, there is such an association) negotiated the deal to get a freelance writer and a documentary filmmaker into the court. On the flip side, The New York Times reports that Microsoft provided 90 Acer Ferrari laptop computers to bloggers who write about technology which, at least one blogger said, was not a bribe. Thomas Kunkel, dean of the University of Maryland’s journalism school, told the Washington Post the Internet today is like the American West in the 1880’s: “It’s wild, it’s crazy and everybody’s got a gun.” As a side note, the Wall Street Journal notes the announcement by top Democrats that they are running for the Presidency is a recognition of the increasingly powerful role of bloggers and the Internet. And as a side note to the side note, Forbes magazine has created a list of the “Web Celeb 25” and topping the list – Jessica Lee Rose a/k/a lonelygirl15.

COCKTAIL CHATTER: The website Superbowl.com has moved up 2,475 positions among all websites visited by U.S. Internet users and increased its market share of visits by 812%. Apple sold a staggering 21 Million iPods over the holiday season. Despite the fact that the personal savings rate has fallen into negative territory for the first time in history, a Pew Research survey says three quarters (77%) of Americans describe themselves as someone who is always looking to save money. Celebrity fashion designer Bradley Bayou says in his book, You Book: Your unique sexy style that the average American woman is 5-foot-4-inches tall and weighs 164 pounds.

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