Allocation Phase Rebuttal Case of the Commercial Television Claimants

Electronically Filed Docket: 14-CRB-0010-CD (2010-2013) Filing Date: 09/15/2017 04:43:08 PM EDT Before The COPYRIGHT ROYALTY JUDGES The Library of Congress ) In re ) ) CONSOLIDATED PROCEEDING DISTRIBUTION OF CABLE ) NO. 14-CRB-0010-CD (2010-13) ROYALTY FUNDS ) ) ALLOCATION PHASE REBUTTAL CASE OF THE COMMERCIAL TELEVISION CLAIMANTS The Commercial Television Claimants Group (“CTV”) hereby submits its rebuttal case evidence in the Allocation Phase of the 2010-2013 Cable Copyright Royalty Distribution Proceeding. CTV’s rebuttal case evidence consists of the testimony of the following witnesses, along with associated exhibits: Dr. Gregory Crawford, Professor of Economics and Director of Graduate Studies, University of Zurich Department of Economics. o Dr. Crawford will present testimony rebutting the written direct testimony of Program Suppliers witnesses Gray, Hamilton, and Pasquale, and demonstrate that data regarding subscriber viewing of distant signal programming is neither a useful nor an appropriate measure for determining the relative value of that programming. o Dr. Crawford will also present testimony rebutting the written direct testimony of SDC witness Erdem, and demonstrate that regression analyses are a useful and appropriate means of determining the relative value of distant signal programming, and that Dr. Erdem’s criticisms and proposed alternative analyses are erroneous. CTV Rebuttal Case (Allocation) 2010-2013 Page 1 Dr. Christopher Bennett, Principal, Bates White Economic Consulting. o Dr. Bennett will present testimony rebutting the written direct testimony of Program Suppliers witness Gray, and demonstrate, among other things, that Dr. Gray’s multiple errors in sampling, program categorization, and weighting, and his replacement of actual measures of distant viewing with projections based on a flawed and unreliable regression methodology, produce results that are unreliable, imprecise, and demonstrably biased. The multiple overlapping errors mean that Dr. Gray’s study is not a usable or reliable measure of distant signal viewing in 2010-2013. o Dr. Bennett will also present testimony rebutting the written direct testimony of Program Supplier witness Horowitz, and demonstrate that several of the WGN programs Mr. Horowitz identified in his survey questionnaires as examples of categories of programming attributable to Program Suppliers were actually programs attributable to the Commercial Television category. o Dr. Bennett will also present several charts regarding patterns of distant signal carriage and viewing by market size that will be referred to in the rebuttal testimony of CTV witness Ceril Shagrin. Ms. Ceril Shagrin, independent consultant on audience measurement. o Ms. Shagrin is a former senior executive at Univision and at Nielsen Media Research and a leading member of industry organizations focused on audience measurement, including the Media Rating Council, the Committee on Local Television Measurement, and the Council for Research Excellence. She will present testimony rebutting the written direct testimony of Program Suppliers witnesses Gray and Lindstrom, and demonstrate that because of the design of the National People Meter Sample from which Dr. Gray draws his viewing data, and his failure properly to weight the data obtained from those households, his study does not provide a valid or reliable measure of the actual viewing to distant signal programming that occurred in 2010-2013. Ms. Shagrin will also contrast the viewing data reported by Dr. Gray with the Nielsen CTV Rebuttal Case (Allocation) 2010-2013 Page 2 ratings data that are widely used as the basis for advertising sales in the television industry. In addition to the testimony of these three witnesses, CTV hereby designates as evidence in this proceeding the Testimony of Jerald N. Fritz and associated exhibits in the 2004-2005 Phase I Cable Distribution Proceeding, Docket No. 2007-3 CRB CD 2004-2005 (filed June 1, 2009 and corrected on October 1, 2009, and admitted as Settling Parties Exhibits 19, 20, 21, 22, and 23), as well as his complete Oral Testimony in that proceeding, Hearing Transcript pp. 959- 1001 (October 13, 2009). Respectfully submitted, COMMERCIAL TELEVISION CLAIMANTS NATIONAL ASSOCIATION OF BROADCASTERS By: /s/ John I. Stewart, Jr. John I. Stewart, Jr. (DC Bar No. 913905) David Ervin (DC Bar No. 445013) Ann Mace (DC Bar No. 980845) Brendan Sepulveda (DC Bar 1025074) CROWELL & MORING LLP 1001 Pennsylvania Ave., NW Washington, DC 20004-2595 Telephone: (202) 624-2685 [email protected]; [email protected]; [email protected] Its Counsel Of Counsel: Bart Stringham, Esq. NATIONAL ASSOCIATION OF BROADCASTERS 1771 N Street, N.W. Washington, D.C. 20036 September 15, 2017 CTV Rebuttal Case (Allocation) 2010-2013 Page 3 CERTIFICATE OF SERVICE I hereby certify that on this 15th day of September, 2017, a copy of Allocation Phase Rebuttal Case of the Commercial Television Claimants was served on all case participants via the Copyright Royalty Board’s eCRB system, and via e-mail to the parties on the attached service list. /s Ann Mace Ann Mace DCACTIVE-35400025.4 SERVICE LIST JOINT SPORTS CLAIMANTS MOTION PICTURE ASSOCIATION OF AMERICA ARNOLD & PORTER KAYE SCHOLER 601 Massachusetts Ave., NW Gregory O. Olaniran Washington, DC 20001-3743 Lucy Holmes Plovnick [email protected] Alesha Dominque [email protected] MITCHELL SILBERBERG & KNUPP [email protected] 1818 N Street NW, 8th Floor [email protected] Washington, DC 20036 [email protected] [email protected] Phillip R. Hochberg [email protected] LAW OFFICES OF PHILLIP R. HOCHBERG 12505 Park Potomac Avenue, 6th Floor Potomac, MD 20854 [email protected] Ritchie T. Thomas SQUIRE, SANDERS & DEMPSEY LLP 1201 Pennsylvania Ave., NW Washington, DC 20004 [email protected] SETTLING DEVOTIONAL CLAIMANTS CANADIAN CLAIMANTS GROUP Arnold P. Lutzker L. Kendall Satterfield Benjamin Sternberg SATTERFIELD PLLC LUTZKER & LUTZKER LLP 1077 30th Street, NW 1233 20th Street, NW, Suite 703 Washington, DC 20007 Washington, DC 20036 [email protected] [email protected] [email protected] Victor Cosentino LARSON & GATSON LLP Clifford M. Harrington 200 S. Los Robles Ave., Suite 530 Matthew J. MacLean Pasadena, CA 91101 PILLSBURY WINTHROP SHAW PITTMAN LLP [email protected] 1200 Seventeenth Street NW Washington, DC 20036 [email protected] [email protected] DCACTIVE-35400025.4 PUBLIC TELEVISION CLAIMANTS MUSIC CLAIMANTS Ronald G. Dove, Jr. Samuel Mosenkis Lindsey L. Tonsager ASCAP Dustin Cho One Lincoln Plaza COVINGTON & BURLING LLP New York, NY 10023 One CityCenter [email protected] 850 Tenth Street, NW Washington, DC 20001 Joseph J. DiMona [email protected] BROADCAST MUSIC, INC. [email protected] 7 World Trade Center [email protected] 250 Greenwich Street New York, NY 10007-0030 [email protected] Brian A. Coleman Jennifer T. Criss NATIONAL PUBLIC RADIO, INC. DRINKER BIDDLE & REATH LLP 1500 K Street, NW – Suite 1100 Jonathan D. Hart Washington, DC 20005 Gregory A. Lewis [email protected] NATIONAL PUBLIC RADIO, INC. [email protected] 1111 North Capitol Street, NE Washington, DC 20002 John C. Beiter [email protected] LEAVENS, STRAND, & GLOVER, [email protected] LLC 1102 17th Avenue South, Suite 306 Nashville, TN 37212 [email protected] Christos P. Badavas SESAC 152 West 57th Street 57th Floor New York, NY 10019 [email protected] DCACTIVE-35400025.4 MULTIGROUP CLAIMANTS/ WORLDWIDE SUBSIDY GROUP LLC DBA INDEPENDENT PRODUCERS GROUP SPANISH LANGUAGE PRODUCERS Brian D. Boydston PICK & BOYDSTON LLP 10786 Le Conte Avenue Los Angeles, CA 90024 [email protected] DCACTIVE-35400025.4 Before the COPYRIGHT ROYALTY JUDGES WASHINGTON, D.C. ______________________________________ ) In the Matter of ) ) CONSOLIDATED PROCEEDING Distribution of Cable Royalty Funds ) No. 14-CRB-0010-CD (2010-13) ______________________________________ ) REBUTTAL TESTIMONY OF GREGORY S. CRAWFORD, PHD September 15, 2017 Table of contents I. Introduction .......................................................................................................................................................... 1 I.A. Summary of qualifications and experience ................................................................................................ 1 I.B. Executive Summary ................................................................................................................................... 1 I.B.1. Scope of Charge ............................................................................................................................. 1 I.B.2. Summary of Opinion ........................................................................................................................ 2 II. Viewing is not an appropriate basis for determining the relative value of alternative programming types carried on distant broadcast signals ................................................................................................................ 3 II.A. A summary of Dr. Gray’s arguments for the use of relative viewing as a measure of relative marketplace value ..................................................................................................................................... 3 II.B. Dr. Gray’s use of relative viewing to value programming is simply wrong, as it doesn’t reflect the economic environment in which cable systems make decisions about distant signal carriage ................. 5 II.B.1. Distant Broadcast Signal Economics Redux .................................................................................

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