Airwaves: March 17, 2006
Emmis Communications CEO Jeff Smulyan loves sports. So much so that he led a group to buy baseball's Seattle Mariners back in 1989, selling it three years later.
Apparently the baseball bug stayed with him. Smulyan is now looking to have Emmis itself buy the Washington Nationals, saying that it would be good for Emmis and good for baseball, though he won't say how.
Analysts aren't so sure. Shares of Emmis stock have fallen since the announcement, and some stockholders have expressed concern that Smulyan is using Emmis money rather than his own to fund his hobby.
"We believe this is a lose-lose situation for Major League Baseball and Emmis' shareholders," Richard Lane of FMI Focus Fund told industry newspaper Radio and Records. "Major League Baseball should know (that Smulyan is) dragging along unwilling partners," added Peter Lautmann of Kitzinger Lautmann Capital Management.
Lane and Lautmann are money managers at their respective companies and own a combined 4.3% of Emmis stock.
Smulyan has stated at various times that he believes it to be a good investment and won't take Emmis' attention away from broadcasting. Locally, Emmis owns Power 106 and Country KZLA.
Radio ratings determination, for the most part, hasn't changed since Arbitron perfected it years ago. Yet it has one fatal flaw: it relies on the memory of the selected listener, who must write down all listening for every quarter hour for two weeks in a diary.
That's one of the reasons for billboards and busboards around cities everywhere advertising stations. Not to get new listeners, necessarily, but to "remind" them -- if they are diary holders -- to write down that station.
Arbitron knows problems with the system, and is finally doing something about it. Starting in July, the company will begin the rollout of what it calls the Portable People Meter System, which totally replaces the written diary system.
The People Meter is a small passive measuring device that automatically tracks listener habits and exposure to media and entertainment. Not just radio, but cable, satellite television and radio, and even ads run in movie theaters.
This could drastically change the radio ratings landscape by removing human memory error and allowing all listening to be noted, not just what gets written down. It will be interesting to watch, though I'm glad I (currently, at least) don't own a top-rated station.
One million people are expected to be able to own digital HD Radios by the end of 2007, according to Bridge Ratings. The company went on to say that satellite radio should have roughly 9 million subscribers by the end of 2006.
The battle has just begun ...
Copyright © 2006 Richard Wagoner and The Copley Press.
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