Experts at Merrill Lynch predict national ad spending will increase between 2.8 and 3.5 percent in 2007, while rival Miller Kaplan Arase puts it between 2 and 4 percent.
Mary Beth Garber, president of the Southern California Broadcasters Association, favors the Miller Kaplan numbers and believes “Los Angeles will echo those predictions.”
Focusing on radio, she notes that five categories automotive, financial services, television, communications/utilities, and restaurants account for more than 40 percent of ad revenues.
Two of those sectors, auto and finance, will face an uphill climb this year. Domestic automakers must reinvent their business model, including the advertising angle, to remain competitive. The finance industry meanwhile must adjust to a higher interest rate environment.
In other categories, “TV will be fighting for every eyeball, and the ability to include Internet and messaging components to a radio campaign would make (radio) even more attractive to networks, stations and producers,” Garber stated. However, “there will be virtually no political spending in 2007, sending TV stations and cable interconnects out to replace hundreds of millions of dollars” in lost revenues compared to 2006.
Merrill Lynch estimates Internet spending will grow 22 percent in 2007, the most of any ad medium. That money will come out of budgets for more traditional media. According to Garber, marketers “are loathe to give up their TV weights radio is the logical place to rob to make up the differences.”
Radio’s image as an old-fashioned medium works against it, despite the potential for radio on the Internet. Moving the social network of a radio station’s audience online opens up new revenue streams. For example, if people want to know about a local store’s sales, they would never turn on the radio, but they could go to the station’s Web site and get that info, including downloading coupons.
“Radio people need to understand that they provide audio content and engagement. It doesn’t matter whether it goes over the radio, the Internet, a mobile phone, or iPods,” said Garber.
She predicts that radio revenue will remain flat in 2007. “Spot business may lag behind 2006, but will be somewhat offset because L.A. stations are ramping up their streaming Internet availabilities, access to ‘insider’ club databases and more, and are selling it to savvy agencies and clients. I look for NTR (non-traditional revenues) to continue to grow at a 7 to 10 percent pace,” she said.
Airplay Wars
Mediabase, a firm that tracks radio airplay, has released year-end charts for the most played songs, artists and record labels in 2006. Overall, “Be Without You” by Mary J. Blige received more radio spins last year than any other tune. Los Angeles-based Geffen Records distributed the song.
But as an artist, Blige ranked ninth in terms of total songs aired. Kelly Clarkson, winner of Fox Television’s “American Idol” competition in 2002, took the top spot with nearly 1 million songs played during the year.
Natasha Bedingfield’s “Unwritten”, released by Sony’s Epic label, had more airtime than any other song on Top 40 stations. Blige’s “Be Without You” held the same title in the urban format, while the Red Hot Chili Peppers’ “Dani California,” distributed by Burbank-based Warner Bros. Music, was the favorite song in alternative rock.
In the Latin space, icons Alejandra Guzman and Marc Anthony ranked as the top artists in the Spanish contemporary and Spanish tropical formats, respectively. On Mexican regional stations, the eight-man group K-Paz de la Sierra led the pack.
L.A.-based operations claimed few victories in the top label contest. New York-based Island Def Jam ranked as the top overall, Top 40 and hot adult contemporary distributor. “Led by such acts as Nickelback, Ludacris, Ne-Yo, and Rihanna, IDJMG topped all labels with a 14.1 percent share of the total airplay pie,” according to the Mediabase report. New York’s Atlantic label ranked second with 12 percent of the market.
L.A.’s own Interscope ruled the alternative rock format and ranked third overall with an 8.4 percent market share. The label handles acts like All-American Rejects, Black Eyed Peas, Fergie, and Nine Inch Nails.
Chinese ‘Millionaire’
Asia Global Holdings Corp. has reached an agreement to produce and broadcast in China a local version of the show “Who Wants to be a Millionaire?”
One of the first questions to be answered is whether even a TV hit can revive the fortunes of Asia Global, which has offices in China and Los Angeles.
The deal stretches from London to Beijing. First, Asia Global found common ground with Celador International Limited, the British company that originated the show’s format. Then on the distribution end, Asia Global secured a plan to broadcast the show in major Chinese cities on local stations owned by the government.
The Chinese “Millionaire” has a guaranteed run of 104 episodes. The broadcasts begin on May 1 and continue for one year with an option for a second season.
Asia Global Holdings started as a mining company and moved into media through acquisitions. Its stock trades over-the-counter at a price of about 7 cents per share. According to filings with the Securities and Exchange Commission, on Sept. 30 the company had cash and cash equivalents totaling only $30,596.
News & Notes
1105 Media Inc. plans to acquire San Mateo-based Fawcette Technical Publications Inc. The Chatsworth-based business-to-business magazine publisher and conference organizer will become part of 1105’s Redmond Media Group, which publishes similar business-to-business media products, Web sites and magazines. Hustler TV has signed an exclusive agreement to distribute the products of Third Degree Films. According to Joseph Wilson, chief executive at Third Degree, deals like his have allowed adult studios to expand beyond the traditional direct-to-DVD distribution model and move into video on demand and pay per view.
Staff reporter Joel Russell can be reached at
[email protected]
or at (323) 549-5225, ext. 237.
