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Chriss Scherer Scherer has been the editor of Radio magazine since 1997. His experience in radio includes work as chief engineer at stations in Cleveland (WMMS-FM, WHK-AM, WZJM-FM, WJMO-AM...more

Archive for February, 2010

The Buggles Were Wrong

I saw an item in the New York Daily News discussing MTV’s recent admission that it is not a music channel. Thanks for letting us know, MTV. It’s been this way since at least 1990.

MTV went on the wire (it’s a cable channel, so saying “on the air” sounds wrong) on Aug. 1, 1981. The first video the channel played was the Buggles’ Video Killed the Radio Star. In 1981, many thought this was a prophecy. Three decades later, we know it hasn’t come to pass.

Even with media iPods, Youtube, Pandora and many other outlets, radio is still making a mark. We’re not in the heyday of the golden oldies and boss jocks, but we’re still doing ok.

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Opposing the Performance Fee

It seems the promos the NAB has provided to radio stations about eliminating terrestrial radio’s exemption from paying the music performance fee are being heard. My non-broadcast coworkers and friends are all asking me about the tax (as the NAB calls it) being proposed for radio stations.

First, I clarify the term “tax.” While an assessed fee can technically be called a tax, most people understand a tax to be a fee levied by the government to subsidize the government’s actions. The issue at hand is for radio stations to pay a royalty that it so far has been exempt from paying.

But listeners only hear the tax portion. Good for the NAB; the message is at least being heard.

However, it’s not being understood. It’s raising awareness, but it’s not answering questions. And as far as I can tell, no one is going to the website the NAB created to see what it’s about.

Seems like it’s time for phase two of the message.

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A pre-packaged chapter 11

I have received several inquiries about the Chapter 11 filing made by Penton Media, the company that owns Radio magazine. For a company to file Chapter 11 raises thoughts of doom and gloom to most people. In this case, Chapter 11 is only part of the story. What was filed was a pre-packaged Chapter 11.

During the past year, Penton’s management team and board of directors focused on strengthening the company financially and operationally as part of its commitment to making sure we are best positioned to meet the needs of our customers when the economy turns.

We have made solid progress, which has allowed us to remain profitable. However, Penton still faces the burden of a heavy debt load at a time when difficult economic conditions are putting pressure on the entire industry. This debt is simply not sustainable. As a result, Penton proactively engaged in discussions with our current owners and lenders, and we reached an agreement on a capital restructuring that will strengthen our balance sheet and significantly improve our financial position. Once it is implemented, the restructuring will result in:

  • eliminating $270 million of the company’s debt;
  • our owners making an additional investment in Penton which we will be able to use to improve and grow our business; and
  • an extension of the maturity on Penton’s senior secured credit facility through 2014.

    Together with the company’s lenders, Penton agreed that the best way to implement this restructuring agreement is through what is called a “pre-packaged” Chapter 11, which means we have already finalized a plan of reorganization that has been approved by our lenders. The plan has been filed with the court, and it should be a very quick process. We expect the plan to be approved by the court within 30 to 45 days.

    The most important item to note is that Penton Media is not going out of business. In fact, the company has been and continues to be profitable. This is simply a capital restructuring under Chapter 11, an action that will be taken voluntarily because it will make the entire Penton organization more financially stable.

    It is equally important for you to know that during the restructuring process it will be business as usual. The entire organization remains committed to providing the trusted print publication, website and digital products that you rely on. There is no change to our readers or advertisers. There is no change to the Radio magazine staff either.

    I appreciate the notes of concern I have received, but it’s still business as usual for us.

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    Pushing Radio to Consumers

    I just finished a long weekend trip. I had a rental car this time, so I had the fun of setting up the radio so it was listenable before I left the lot. (Who turns the bass all the way down and the treble all the way up?) This radio included Sirius as well. I don’t subscribe to sat radio, so it was a good chance to check it out again.

    I have always liked the depth of programming on many of the channels. It’s a nice change, but I don’t drive enough to justify paying the monthly fee for the service. Plus, I can’t stand the audio encoding. All that swishing of the encoder drives me crazy.

    But this is not rant about the evils of sat radio.

    While I was driving, I tuned around the FM band. I was in three medium-sized markets on my trip, so I had time to sample lots of stations.

    What surprised me was that the car radio had a graphic display for Sirius, but it did not have RBDS. I saw a large numeric display of the frequency, but nothing more. That disappointed me. RBDS is far from a new technology; why isn’t it in every car radio receiver?

    While I missed not having RBDS, the fact that satellite radio was included made me think that it would have been nice to have HD Radio available. What great way to introduce consumers to the newest terrestrial radio technology.

    This car radio had an auxiliary input jack and a USB power jack. I could have bypassed radio altogether and listened to my media player if I wanted to.

    Again, terrestrial radio is missing a huge opportunity to show consumers what is available.

    The end of POTS lines?

    When ISDN was introduced, it was believed it would be the next common wired communications service. I remember looking at an office phone system and being told that POTS lines would go away and ISDN would be the norm.

    20 years later, ISDN is fading away. It’s unavailable in many areas already. Funny how POTS has managed to stick around.

    Or has it?

    AT&T filed comments with the FCC that say for broadband deployment to continue, the legacy circuit-switched network must be phased out to make room for broadband and IP. A main argument is that as demand and usage of POTS lines decreases, the cost to maintain that network increases. The money spent on maintaining the circuit-switched network could be better applied to broadband services.

    I can’t say I totally disagree with the general idea. We’re using IP connectivity for almost everything already. It’s also much more efficient than circuit-switched networks. But still, the idea of not have any tip-ring anywhere? It’s almost hard to believe.

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