MediaFile

How bad is advertising? Think 1950s

Everyone seems to have accepted (like it or not) that advertising spending will be in bad shape in the fourth quarter and well into next year. But just how bad is a matter of debate — every new piece of research marks another downward revision to the advertising outlook.

Case in point is Citi’s Catriona Fallon, who issued a new report saying that U.S. advertising spending would drop by 1.8 percent in 2008 and 3.6 percent in 2009. So what? Well, consider this: that would mark the first back-to-back annual declines since at the 1950s. The 1950s! We’re talking The Cold War, Fats Domino, Gidget, Cadillac Eldorado — you get the picture.

Here’s a bit from Fallon’s research report, where she discussed the thought behind cutting the 2008 outlook from growth of 0.2 percent to a decline of 1.8 percent :

Essentially, we made a dramatic reduction in our Internet advertising growth expectations and also see steeper declines in local ad-focused media categories, including newspapers, radio, and yellow pages. Internet advertising had been one of the few shining lights coming into 2008, but overall economic softness has lowered 2009 expected growth rates in this medium to the single digits. Meanwhile, Q3 results for publicly-traded newspaper, magazine and yellow pages companies, and CIR forecasts for the radio industry show that the ad revenue declines in these businesses have
sharpened over the course of the year.

Anyone seen my Elvis Presley albums?

Keep an eye on:

    More bad new for Sirius XM Radio — as if trading at 27 cents a share isn’t bad enough. The company posted a $4.8 billion write-down and made some more ominous comments about the auto industry (Reuters) A nine-car NASCAR pileup may have wrecked a vehicle sponsored by the Federal Communications Commission, but it gave the agency more mileage in advertising the imminent switch to digital TV signals (Reuters) Blu-ray backers are banking on falling prices, summer blockbusters and an ad blitz to get consumers to make the leap to high-definition (NY Post) Time Inc has asked for volunteers to get bought out from People, Time, Sports Illustrated, Fortune and Money, as it goes into job cutting mode (AdAge.com)

(Photo: Reuters)

Timeline: Sirius and XM Satellite Radio

A Russian Proton with a satellite for Sirius Satellite Radio is lifted into place at its launching pad at the Baikonur Cosmodrome, Kazakhstan, on September 1, 2000, while (L to R) Bob Prevaux, Program Director for Space Systems Loral talks with Rob Briskman, Executive Vice President for Sirius Satellite Radio and Ted Sitek, Mission Manager for International Launch Services. (Reuters/Karl Ronstrom)******Federal regulators have cleared the last remaining hurdle for Sirius Satellite Radio’s proposed acquisition of XM Satellite Radio Holdings, a deal that will combine rivals in the nascent U.S. pay-radio market.******The U.S. Federal Communications Commission reached an agreement to conditionally approve the deal on Thursday, four months after the Department of Justice gave its blessing, and 18 months after XM and Sirius agreed to combine. Experts say that new services from a combined company could come in a few months, but suggest their holiday subscription growth may be hurt by the delayed deal closing.******Here are are some important dates in the history of the satellite radio industry.******* 1994 – CD Radio goes public at about $3.15.******* Oct. 1999 – XM goes public at $12 a share.******XM and Sirius Price chart - 3 years******* Nov. 1999 – CD Radio changes its name to Sirius Satellite.******A Pioneer Xm2go Inno satellite radio is displayed in a car at a trade show* Nov. 2001 – XM starts national radio service, after launching its first two satellites — “Rock” and “Roll” — earlier in the year.***

    **** 2002 – Sirius launches national satellite radio service.******* Oct 2003 – XM reaches 1 million subscribers.******* Dec 2003 – Sirius signs 7-year, $220 million pact with the National Football League.******xm-sirius-logo.jpg* Oct 2004 – Shock Jocks Opie and Anthony begin broadcasting on XM, on a premium channel.******* Oct 2004 – XM signs 11-year, $650 million pact with Major League Baseball; deal starts with the 2005 season.******* Oct 2004 – XM unveils Delphi MyFi, its first portable radio receiver.******* Dec 2004 – Sirius reached 1 million subscribers********** Shock Jock Howard SternOct 2004 – Sirius signs shock jock Howard Stern to 5-year, $500 million deal.******* April 2005 – XM raises subscription price to $12.95 a month from $9.99, matching Sirius.*******Sept 2005 – XM surpasses 5 million subscribers.******* Feb 2006 – XM signs 3-year, $55 million deal with Oprah Winfrey.******* Sept 2006 – Sirius tops 5 million subscribers.******* Jan 2006 – Sirius starts broadcasts of Howard Stern.******* Feb 2007 – Sirius and XM propose merger; Deal requires approval of their respective shareholders, the U.S. Federal Communications Commission and the U.S. Justice Department. Sirius CEO Mel Karmazin to be CEO of new company, XM Chairman Gary Parson to become Chairman.******Lifestyle diva Martha Stewart (R) stands next to Mel Karmazin, CEO of SIRIUS Satellite Radio******* July 2007 – CEO Hugh Panero says he is stepping down in August; COO Nate Davis to become Interim CEO.******* Nov 2007 – XM and Sirius shareholders approve the deal.******* Gary Parsons, Chairman of XM Satellite RadioMar 2008 – The Justice Department approves the deal.************* June 16, 2008 – FCC Chairman Kevin Martin announced his recommendation to approve the merger with conditions.******* June 30, 2008 – Sirius ends the second quarter with 8.9 million subscribers, up 25 percent from a year earlier. XM had 9.65 million subscribers at the end of June, up 17 percent from a year earlier.******* July 25, 2008 – FCC Commissioners approve the deal with conditions, clearing the way for a deal that will leave just one U.S. satellite radio service. Analysts expect the deal to close within days or weeks of the regulatory approval.******(Sources: XM, Sirius, Hoover’s, Reuters)******(Top picture: A Russian Proton with a satellite for Sirius Satellite Radio is lifted into place at its launching pad at the Baikonur Cosmodrome, Kazakhstan, on September 1, 2000, while (L to R) Bob Prevaux, Program Director for Space Systems Loral talks with Rob Briskman, Executive Vice President for Sirius Satellite Radio and Ted Sitek, Mission Manager for International Launch Services. (Reuters/Karl Ronstrom))

    Sirius and XM: so close, and yet…

    Nate Davis, XM’s President and Chief Executive OfficerSirius Satellite Radio and XM Satelite Radio want the FCC to know that they are ready.

    Like REALLY REALLY READY.

    Sure, combined they racked up $230 million in losses in the first quarter. And they added 600,000 net subscribers, to make a combined total of over 17 million.

    So what?

    What everyone wants to know is when their proposed merger — you know the one announced back in the 1990s in February 2007 will finally close. After 15-months, the individual performance of each company, while important, takes a backseat to knowing when they can combine their efforts. Or,  should the deal fall apart, when they can go back to scratching and clawing for the next hot media property (like the “Dr. Phil Channel” or “The 24-hour World Series of Poker Channel.”)

    Client 9: not a businessman; “a business, Man”

    spitzerad.jpgA cottage industry has risen from the ashes of Eliot Spitzer’s career and, well, life. Echoing Jay-Z’s words, Client 9 “is no businessman…he’s a business, man.”

    Ok, maybe not an industry in the traditional sense. But certain opportunists companies are at least looking to make a quick buck on the former “Wall Street Sheriff’s” woes. It didn’t take long for Virgin Mobile Canada and Sirius Satellite Radio to add their takes on Client 9, Spitzer’s infamous court document alias.

    “When you call us we’ll treat you like a person, not a client. Whether you’re #9 or #900, you’ll get hooked up with somebody who’ll finally treat you just how you want to be treated,” Virgin Mobile Canada promised.