VAB NEWSLETTER OCTOBER 2009TWISTED TAILSHEADQUARTERED IN SAFE OFFSHORE HAVENS,THE FOUR FAT CATS OF THE RECORD LABELSENJOYED MANY YEARS ATOP MOUNTINGPROFITS.Something hasto be done.A FAMILY. A RECORDING EMPIRE. BUILTON PROFITS -- FROM MUSIC PLAYEDAND PROMOTED BY LOCAL RADIO.BUT THE OPERATION HAS HIT A SNAG.PEOPLE AREN'T BUYING ENOUGH PRICEY CDS.LOCAL RADIO IS CALLED TO THE MAT.THEY PUT THE SQUEEZE ON RADIO.are youplayin'the music?are you promotingconcerts?all the time?where'sour profit?we'll get it outtayou somehow.i...i...i'm playingthe music!call it a "performance right."…cover our tracks.IT LOOKS BAD FOR RADIO.IT LOOKS BAD FOR MUSIC.who's gonnaplay the music?GET THE REALSTORY OF THEPERFORMANCE TAX.NOPERFORMANCETAX.ORG
VAB NEWSLETTER OCTOBER 2009NAB Counters CEA-Funded Spectrum StudyThe National Association of Broadcastershas dismissed a recent studyfunded by the Consumer Electronics Association(CEA) estimating the marketvalueof broadcast television spectrum.The study was filed with the FederalCommunications Commission late Friday,and while CEA commissioned thestudy, the group also told the federalagency that it “does not necessarily endorse”the results.Commenting on the study, NAB ExecutiveVice President Dennis Whartonissued the following statement:“CEA’s study ignores the immeasurablepublic benefit of a vibrant freeand local broadcasting system that isubiquitous, reliable as a lifeline service intimes of emergency, and flexible enoughto include HDTV, diverse multicastprogramming and mobile DTV. ThatCEA itself does not endorse its owncommissioned study reinforces its isolationas primarily an academic exercise.Meanwhile, broadcasters and forwardthinkingCEA member companies haveembraced mobile DTV to enable deliveryof live and local TV to cellphones, laptopsand the back seats of cars.“Notably, television broadcastersjust returned a third of our spectrumto government as part of our historicDTV transition; as the FCC’s processto recommend a National BroadbandPlan moves forward, NAB believes it isimperative that policymakers explorespectrum efficiency choices that don’tlimit consumer access to the full potentialof digital broadcasting.”NAB also filed comments with theFederal Communications Commissionlate Friday concerning the agency’srequest for information on spectrummanagement practices as they relate tothe rollout of nationwide broadband.NAB’s comments were filed jointly withthe Association for Maximum ServiceTelevision (MSTV).NAB and MSTV encouraged theFCC to consider all frequencies that maybe suitable for wireless broadband, notingthat frequencies above 3.7 GHz havebeen allocated for a variety of wirelessservices, including broadband applications.NAB also noted that broadcastersrecently freed up more than 100 MHzof spectrum through the digital TVtransition.“The multi-billion dollar investmentsby broadcast television stations,equipment manufacturers, the governmentand consumers have enabled theintensive use of each television station’s 6MHz channel to deliver a variety of highdefinition and multicast programming,mobile DTV and other ancillary andsupplemental services -- all while freeingup more than 100 MHz of spectrum forwireless broadband and other new commercialand public safety uses.” vHulu May Soon Start Charging ViewersClosed CaptioningNew board member Chase Careysaid Hulu, the popular TV and videostreaming site, must start charging forat least some of its content as early asnext year, according to Broadcasting &Cable.At an event hosted by the publication,Carey said that the pay wall couldbe limited to special or advance programming,but that Hulu in general “needs toevolve to have a meaningful subscriptionmodel as part of its business.”“It’s time to start getting paid forbroadcast content online,” said ChaseCarey, deputy chairman on News Corp.,which owns Fox TV and The Post.“Hulu concurs with that,” Carey toldan industry conference in New York. “Itneeds to evolve to have a meaningfulsubscription model as part of its business.”Hulu is jointly owned by NBC, ABCand Fox, which have all been postingtheir shows on the site soon after theyair on broadcast TV.Carey suggested that some showson the site would remain free but thatothers would be available only to thosewho paid a fee.Meanwhile NBC’s TV chief, MarcGraboff, was telling another industrygroup that Hulu was exploring a numberof options to make more money-- including increasing the number ofcommercials online.Graboff admitted that the networksmay have been too hasty in offering theirshows for free to counter online piracy.But otherwise, the Hulu experimenthas worked, he said. “Our researchindicates that making shows availableonline has not cannibalized but has beenadditive,” he said.This comes after reports severalmonths ago that Hulu was planningseveral tiers of programming in orderto draw in cable networks reluctant toparticipate in anything that could affecttheir subscriber base. But as the reportpoints out, the announcement highlightshow broadcasters are now looking fornew revenue streams specifically fromcontent distributors in order to supplementtraditional sources of income fromadvertisers. vThe next FCC closed captioningbenchmark goes into effect on January1, 2010, and requires 100% of new, nonexemptSpanish language programming,whether broadcast in analog or digitalformat, to be closed captioned. As ofJanuary 1, 2012, and thereafter, 75%of each station’s pre-rule, nonexemptSpanish language programming must beprovided with closed captioning duringeach calendar quarter.The new 100% captioning thresholdrepresents an increase over the captioningrequirements for Spanish languageprogramming for the period 2007 to2009, during which time stations wererequired to caption only 1350 hours oftheir new, nonexempt Spanish languageprogramming per calendar quarter.Because fines for failure to complywith the closed captioning requirementscan be expensive, stations should taketime now to ensure their compliancestrategies are ready for implementationof the new, nonexempt Spanish languagerequirement on January 1. v© 2009 Brooks, Pierce, McLendon,Humphrey & Leonard, L.L.P.
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