Broadcaster Blues

It hasn't been an easy week for broadcasters. They've been put down, shut down, lambasted and ... horror of horrors! ... the shakier pieces of their business models have been strung out like entrails for all to see.

If you think this sounds unlike the usual broadcast fare ... wherein key public figures rush to their aid, defending their right to profit and bearing gifts of free bandwidth ... then we've gotta agree: Something strange is going on and we're definitely keeping a weather eye on the horizon.

But back to the subject: The week started horribly as the Justice Department slapped its stamp of approval on the XM/Sirius merger. Despite the broadcasters' repeated protestations, anyone with half an ear knows that satellite radio DOES compete with the terrestrial variety and a combined XM/Sirius is sure to be stronger than a separate DARS duo. But that's not even the worst news for the radio side of broadcasting. As a recent (and very interesting) note from the folks at Bernstein Research points out, the radio dudes were in deep trouble long before XM/Sirius got the DOJ's blessing. According to Bernstein, over the past six months radio ad revs have "cratered to an annualized growth rate of -4.7 percent." When early stage online revenue and non-cash barter items are removed from the mix, the annualized growth dips further to -5.8 percent.

Why this drop? Bernstein points to continuing problems with audience measurement for radio but we suspect that everyone's favorite monster in the closet (AKA the internet) has something to do with it too.

On the video side of broadcast, things weren't a whole lot better. Indeed a long, festering split between big and little broadcasters burst into the open as the Community Broadcasters Assn, which reps low-power TV stations, filed a petition asking the FCC to ban all those nifty digital-conversion boxes UNLESS they are equipped to receive analog signals. The low-power folks will still be transmitting in analog after the 2/19/09 digital conversion. And since there's a law on the books which says that TV reception devices must be able to pick up "all frequencies allocated by the (FCC) to television broadcasting," they appear to have the proverbial leg to stand on. Of course, only six of the thus-far approved converter boxes are designed to handle analog as well as digital, so the CBA could just have thrown a monkey wrench into the whole DTV shebang.

To add insult to injury, the broadcasters also got regaled last week by a Wall Street Journal article gushing over Mark Thompson, the current head of Britain's BBC. Seems the publicly financied Beeb has thrown caution to the winds, putting all its programming up for grabs via Apple's iPlayer. The strategy has been a smashing success (17 million BBC shows downloaded in the seven weeks after launch) and U.S. broadcasters, who are (not unreasonably) fixated on making money via the web can hardly be jumping for joy.