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800.275.2840 MORE NEWS» insideradio.com THE MOST TRUSTED NEWS IN RADIO THURSDAY, JANUARY 29, 2015 In down market, radio held on to its share of holiday retail spending. While Americans trimmed their tree, retailers were quietly trimming their holiday ad budgets. Kantar Media data shows $4.04 billion was spent in November and December by retailers, a 16% decline from a year earlier. The good news for radio was that while media plans were scaled back, radio’s share of dollars held steady. Kantar says retailers allocated 7.2% of their holiday ad budget to radio, amounting to $290.2 million. The data shows radio held onto share gains made in 2013. Two media picked up share during November and December. Kantar says television netted half (49.6%) of retailers’ holiday spending. That was up five points from 2013. Digital grew by the same amount, capturing 21.8% of ad budgets. “Concurrent with the shift in shopping from brick and mortar stores to online, there’s a shift in marketing to consumers when they are online,” Kantar chief research officer Jon Swallen says. Those gains primarily came at the expense of newspapers which saw its share decline to 13.3%, a drop of 8% from 2013. Scaled-back retail spending may have been in response to less-than-robust action at the cash register during December. The U.S. Commerce Department says retail sales decreased 0.9% last month compared to November. National Retail Federation chief economist Jack Kleinhenz says that may’ve been a “disappointing” outcome, but retailers are upbeat. “We expect to see consumers continue to benefit from the extra income gained from an improved job market and the dramatic fall in gas prices,” he says. Which retail clients spent the most? Kantar Media analysis shows Macy’s spent the most on holiday retail: $260 million, followed by Wal-Mart ($248M), Target ($190M), JC Penney ($125M) and Best Buy ($104M). Each also was among national radio’s biggest retail clients during the Christmas season. Kantar chief research officer Jon Swallen tells Inside Radio that retailers often use radio for early-season advertising, shifting budgets toward TV and the web in the later weeks. Kantar’s new report also shows that, across-the-board, retailers depleted 45% of their budgets prior to Black Friday, with 18% spent the week of the post-Thanksgiving blitz, and another 38% earmarked for the weeks after Black Friday. There are some advertisers who sit out the sale week tsunami, however. Kantar says Best Buy spent roughly half of its holiday marketing budget before Black Friday and the other half after — opting to essentially sit that week out from advertising. And in an era where gift cards are popular gifts, several retailers also remained on the air more than in the past in the days after Christmas. Kantar data reveals Macy’s, JC Penney and Sears took to the less-cluttered airwaves with post-holiday sales campaigns. BIA: more radio sales announced in 2014. BIA/Kelsey has finished crunching the numbers and it puts the number of radio station sales announced last year at 935. That’s an 8.7% increase compared to the 860 station sales announced in the prior year. The total value of those deals, according to the firm, was $950 million last year, an 8.3% decline from the more than $1 billion worth of station sales that found buyers in 2013. In comparison, BIA/Kelsey says the number of television station deals announces slid 38% last year with the total value of TV sales cut by more than half to $4.6 billion. Read Inside Radio’s Deal Digest on Page 5. Radio’s weathering media storm well: analyst. Radio has “held up fairly well despite longer-term forecasts that expect decline.” That is how GE Capital — the lender and financial services firm helping fuel many of the largest media companies, [email protected] | 800.275.2840 PG 1 NEWS insideradio.com THURSDAY, JANUARY 29, 2015 including radio — is assessing the industry. In a quarterly review of the media marketplace, GE Capital senior analyst Ben Abramovitz says radio revenue remained “essentially flat” through 2013 and 2014 while digital revenue continue to grow “at a brisk pace.” While the slow post-recession period has failed to attract some other lenders back to the business, GE Capital has remained active in the space. Topping the list of 2014 radio deals was Digity Media’s combination of Palm Beach Broadcasting and GoodRadio.TV and Digity’s subsequent buyouts of NextMedia and Three Eagles Communications, valued at a combined $118 million. Overall, the finance unit of parent General Electric reports it bankrolled more than 50 transactions totaling over $5 billion in the media, telecom and technology sector last year. New Congress seems intent on updating telecom laws. The radio industry should know by spring what, if any, regulatory relief Republican lawmakers in Congress have planned for the industry as part of a proposed update to the law that’s been regulating the business since 1932. “Updating the Communications Act is no small undertaking, but it would be a dereliction of duty if Congress did not at least try to modernize the law,” Senate Commerce Committee chair John Thune (R-SD) said yesterday during a speech to the American Enterprise Institute in Washington. Thune didn’t say whether they’ll look at radio-related issues, although he said there are “a number of policy areas that the committee will investigate” in the coming months. Former station owner Rep. Greg Walden (R-OR) is part of the leadership in the House, and that could increase the odds that radio will at least get a look. Thune signaled he may be open to change, saying the regulations that broadcast TV stations face are “great examples of how old laws can calcify and eventually undermine their original intent.” As many broadcasters remember from the months leading up to passage of the 1996 Telecom Act, sweeping changes are hard to get through Congress. So Thune may break things into smaller, issue-specific bills that will be easier for lawmakers to manage. “It is too early to say what the final product of this modernization effort might look like,” he added. If Thune gets his way, Congress will not only make changes to the law governing the telecom sector but also the agency that regulates it. He thinks a review is “ripe” for how the FCC operates and is structured, including putting the agency on a shorter leash. “I would like to see if we can get Congress back in the habit of regularly reauthorizing the Commission,” Thune said. The last time the Congress formally reauthorized the FCC’s existence was in 1990. Yes, that was a 2016 political ad you just heard. In what appear to be the first commercial time buys of the upcoming presidential race, a pro-Mitt Romney group has made a pair of media buys going after several Republicans considering a run for the White House. The former Massachusetts governor hasn’t said whether he’s going to enter the race, but TMR Multimedia president and Romney supporter Jay Schorr has pledged to release a new commercial every week until Election Day 2016. “Mitt has to take an aggressive approach for the 2016 presidential election campaign,” Schorr tells The Examiner. No word on how much is being spent on the Florida-targeted ad buys. Most radio groups haven’t said how much they believe the 2016 campaign will impact their bottom line but Entravision CFO Chris Young told the Noble Financial investor conference he expects to see some “pre-election” spending in 2015. He estimates it could add up to as much as $2 million for Entravision since the company operates in number of swing states. Super Bowl has a special status when it comes to political advertising. It’s not just the hype and halftime show that makes the Super Bowl something special. It is also one of the rare instances where stations can justify telling a politician they won’t sell them airtime. FCC Political Programming Branch chief Bobby Baker says that the Super Bowl — like newscasts — is programming stations have the option of keeping free and clear of federal political ads since a station would never be able to create a way for another candidate to match a buy made during the game. “That’s because it is a single event and there is no other event like it because of its audience size,” he explained during a wide-ranging discussion about political ad issues at last fall’s Radio Show. The February 2016 Super Bowl is certain to have a lot more interest from candidates and political action groups — especially in New Hampshire where it falls just two days before the first-in-the-nation presidential primary. Even so, this year there’s some political dollars being spent in some markets right now. Ahead of next month’s mayoral election in Chicago, incumbent Rahm Emanuel and Willie Wilson are both on radio looking for votes. [email protected] | 800.275.2840 PG 2 NEWS insideradio.com THURSDAY, JANUARY 29, 2015 Sound Exchange reports record digital royalty payouts. As the radio industry works to strike a new streaming royalty deal with SoundExchange, the performance rights organization says it paid out a record $773 million to record labels and artists last year. That was a 31% increase from the $590 million in the prior year. It’s also more than 38 times the $20 million distributed a decade earlier. SoundExchange refused to say what portion of 2014 royalty collections came from radio station web simulcasts.