The RBR-TVBR crystal ball was polished to a high sheen last year, and gave us a crystal clear picture of what was to come for the broadcasting industry – if you think 60%-70% is the mark of stellar prognostication. Of course, we did swing and miss when it came to revenues – in retrospect our prediction that the easy comparables presented to the Year 2009 by the Year 2008 would result in at least one month in the black. All we can say is that nobody else saw the entire economy going over a cliff, either. In all, we took a stab at 20 predictions. We nailed 12, missed 6 and had somewhat inconclusive results on two. Here is our blow-by-blow accounting:
* The DTV transition will be a huge story for two weeks, with glitches capturing the headlines, but will calm down as most left-behind consumers restore their television service one way or another.
Correct: Had we bothered to mention a date, we might have had to mark this at least partially wrong, since it happened about five months later than planned, but basically broadcasters were prepared and the DTV transition went incredibly smoothly.
* Lots of daily newspapers will be put up for sale. Most will not find buyers. In the end, a few will simply shut down.
Partially correct: Many newspapers were put up for sale, but Cox Enterprises was surprisingly successful in finding buyers for most of the ones it decided to shed. Very few other dailies actually bit the dust.
* Many broadcasting companies will trip on loan covenants in 2009. Most, though, will get waivers or renegotiated terms.
Correct: Public companies announced amendments to their loan terms and many private ones quietly did the same. Not all had it so easy, with Young Broadcasting, New Vision and Ion Media Networks among those accessing the federal bankruptcy courts for reorganization. However, Clear Channel is still maneuvering to remain in compliance; Citadel Broadcasting is on the verge of a Chapter 11 filing and Regent Communications is trying to come to terms with its lenders so it can again access its credit line.
* There will be no attempt in Congress or at the FCC to restore the Fairness Doctrine.
Correct: And lately, it only occasionally is even mentioned. And even if you subscribe to the theory that the FCC’s localism proceeding will include back door Fairness elements, nothing public took place in relation to it.
* Broadcasting will become an afterthought as the Obama FCC focuses on broadband and net neutrality issues.
Correct: There was a big three-day FCC broadcast event ahead of the upcoming 2010 Quadrennial Review, but other than that, it’s pretty much been broadband, more broadband and for a change of pace, an extra helping of broadband.
* Broadcasters, on the other hand, will have their hands full staving off reinstatement of long-discarded FCC localism initiatives, possibly resulting in the NAB taking the issue to the courts.
Neither: We don’t feel like giving ourselves a wrong answer on this – broadcasters are still mounting a defense; however, the issues have largely been percolating below the surface, leading to a lack of any overt action from either the FCC or broadcasters.
* The Radio Advertising Bureau/Miller Kaplan Arase monthly radio revenue report will finally get into the black for a month on top of the less-than-challenging comps of 2008.
WRONG: We were so far off on this we will highlight it in all caps. Not only did the RAB not find a month in the black, the results it was getting were so bleak that it abandoned monthly reporting entirely and only puts this information out once a quarter now.
* Whole station groups will merge as a way to clean up their balance sheets in an environment where financing for outright purchases is hard to find.
Wrong: We were right that financing would be scarce; there just weren’t any big mergers.
* Syndication will have a growth year in both radio and TV as stations look to cut costs by taking more syndicated programming.
Correct: Radio stations, in particular, turned to multi-market personalities to replace local voices. TV syndication remains strong, but some stations have actually been increasing local news programming, while others have gone the other way and added more syndicated content.
* There will be a great hullabaloo in at least one market where a strong and stable TV station moves to add a major network affiliation for a multicast channel at the expense of a weaker in-market station.
Correct: The great hullabaloo is taking place right now in Macon, GA.
* We will see many more retransmission consent fights, but those that reach the point of stations being pulled from a cable or satellite operator will be settled quickly in the face of viewer complaints to their subscription video providers.
Correct, for now: But a stand-off of titans is facing a New Year’s Eve deadline as Time Warner Cable and News Corporation are yet to come to terms.
* Yes, there will be more Chapter 11 filings and state court receiverships than in most years, but new owners will be found for all stations in financial dire straits.
Correct: In some cases, the new owners have been less-than-willing lenders converting debt to equity, but only a few AM stations, which were minor players in their markets, have actually turned in their licenses and shut down.
* Nielsen will announce plans to take its US radio ratings service beyond the initial 51 markets. (We really didn’t need a crystal ball for this one.)
Wrong: Amazingly, no additional markets have yet been announced. But stay turned.
*HD Radio licenses will not be renewed with many broadcasters.
Correct: At least on AM. Across the nation, 2009 saw AM’s shutting off the HD signal for lack of interest; interference problems and small area of coverage. We saw companies like Radio One shut off quite a few FM HD signals as well.
* Sirius XM will handle its $194 million refinancing due in February, but after that the financial picture gets dicier. Our best guess is that satellite radio will still survive as 2009 comes to a close, but barely, with a Chapter 11 filing a real possibility.
Wrong: Give Mel Karmazin credit for pitting John Malone against Charlie Ergen and coming up with a refi package (from Malone) by that February deadline that not only kept Sirius XM out of bankruptcy court, but on firm financial footing.
* Sirius-XM will come up with an ad-supported model to avoid bankruptcy.
Wrong: Not yet, at least
* Radio will strengthen its trend for calling itself WXXX.COM, instead of FM, AM or HD.
Correct: This was a trend that really started before 2009, continued throughout the year and will keep on going. With all of the mobile devices sporting apps for radio listening, such as RadioTime and IHeartRadio, the tower is becoming less and less important in getting your signal to listeners and the internet/mobile broadband more and more.
* Cable TV MSOs will get a huge boost in business from the analog shutoff.
Correct: But maybe not “huge.” Millions had to switch to cable or satellite just to get their local affiliates. Let’s face it – DTV signals have very limited coverage vs. analog. While many viewers used to put up with a little snow or ghosting on their analog sets with rabbit ears on top, now they get nothing at all – even with a DTV converter box and indoor antenna. The only way for those folks in the suburbs and rim counties of many metros to get DTV is to put an antenna on the roof – professionally installed with a rotor if you want most of the local stations to be receivable without pixelation. The percentage of folks taking that option is small. We’ve also heard numerous stories of the low-income elderly just giving up and listening to radio – too bad they are not a prized demo! Great job on following your mandate of keeping the public informed, FCC.
* The FCC’s December 2007 attempt to loosen broadcast/newspaper cross-ownership rules for the top 20 DMAs will still be in dispute and will not have force.
Correct: The Genachowski FCC has told the Third Circuit that it would prefer to address the matter in the Quadrennial Review, since it has to address it there in that proceeding anyway.
* Congress will reinstate the minority tax certificate to encourage broadcast ownership diversity.
Wrong: Still not happening.
Next week: On Monday, 12/28/09, we’ll reveal what we think is going to happen in 2010.
