Thursday's Radio & Media News - August 22, 2013

Pandora Reports 'Record' Fiscal Q2 Revenue - Up 55% Pandora reports "record" financial results for the second quarter of their fiscal 2014 year. Total revenue was up 55 percent from a year earlier to $157.4 million. Ad revenue for the quarter was $128.5 million, a 44 percent increase from fiscal Q2 2013. Non-GAAP total mobile revenue was up 92 percent to $116 million. So they did well, right? Not exactly. The streaming music service saw its net loss in the quarter increase from $5.4 million a year ago to $7.8 million this year. Total listener hours grew 18 percent to 3.88 billion for the quarter, compared to 3.3 billion for Q2 of fiscal 2013. Pandora also claims a 7.08 percent share of total U.S. radio listening, up from 6.02 percent a year ago. Active users reached 71.2 million, a 30 percent increase year-to-year. Says CEO Joe Kennedy, "Our second fiscal quarter was an important inflection point in Pandora's history. Strong momentum in our mobile business, with non-GAAP total mobile revenue growing 92% year-over-year to $116 million, clearly demonstrates the leverage in Pandora's business model. To drive future growth, we are accelerating investment in new technologies, channels and capabilities that maximize the value Pandora delivers." The company also offers this guidance, "Based on information available as of August 22, 2013, the company is providing financial guidance for the third quarter and full fiscal year of 2014 as follows: 3Q14 Guidance: Non-GAAP revenue is expected to be in the range of $174 million to $179 million. Non-GAAP diluted EPS is expected to be between $0.03 and $0.06. Non-GAAP diluted EPS includes revenue relating to our subscription return reserve, excludes stock-based compensation expense, assumes minimal tax expense given our net operating loss position, and is based on 198 million diluted weighted average shares outstanding for the third quarter of fiscal 2014." Read Pandora's full report on the Q2 results here. iBiquity: 5.4 Million HD Radio Receivers Will Be Sold In 2013 HD Radio developer iBiquity Digital President/CEO Bob Struble says HD Radio receiver sales continue to increase, projecting that 5.4 million of them will be sold by the end of the company's fiscal 2013. Charting annual HD Radio receiver sales growth, there was 50 percent annual growth from 2010 to 2013, primarily driven by sales of autos equipped with the technology. In a new blog post, Struble writes that most of the HD Radio growth is "driven by automotive uptake" with "almost 30% of new cars" shipping with the receivers in 2013, "and by next year, there won’t be an auto dealer in America that does not have HD Radio equipped vehicles on the lot." Although many remain skeptical about the future of the IBOC (in band/on channel) digital technology, Struble (at least publicly) remains upbeat. "We forecast similar results for the next several years. It sure looks like that famous inflection point experienced by many successful technologies, where sales trundle along for several years and then break through and head straight north." He adds, "So unquestionably, with a lot of effort and patience, we are getting there. And, as we’ve discussed in the past, broadcasters are making money on their HD Radio investments in a variety of ways -- advertising, sponsorships and leasing of HD2/HD3/HD4 channels, and most recently, by broadcasting real time traffic services to navigation systems over HD Radio signals. With receivers flooding the market, these opportunities increase dramatically over time." Struble's blog post highlights the "chicken or egg" theory, as applied to HD Radio -- "Beating the Chicken and Egg Dilemma" as he titles the article -- noting "The chicken and egg syndrome has impacted every major broadcast rollout." Says Struble, "Broadcasters are reluctant to spend the money to create new content before there are a lot of receivers in the market capable of getting that new content. But device makers won’t invest to build new devices until there is content out to support them. Who goes first, the chicken or the egg?" But, pointing to past such dilemnas, he says HD Radio can overcome that. "I count five mass market over-the-air broadcast technologies which broke through chicken and egg: AM and FM radio, black and white and color TV, and digital TV. [One could add satellite radio or TV to the list, but let's focus on 'open' systems used by hundreds of broadcasters.] All these transitions took over twenty years to go fully mainstream. Proponents employed various methods, including a government mandate and analog turn off date with digital TV, but they all got it done. At least one technology, AM stereo, never made it." Struble also looks at the growing popularity and success of HD Radio-on-Translator stations around the country. And he's positive about the recently launched NextRadio-Sprint deal to put FM radio into mobile devices. "We are tremendously enthusiastic about the deal bringing FM chips to Sprint mobile phones. As I've discussed in past columns, getting FM into phones is essential to radio’s long term competitiveness, and this deal is an important first step." Read his full post here. Clear Channel Denver Appoints Tim Hager VP of Sales Clear Channel Denver appoints Tim Hager to be VP of Sales, effective September 3. He will oversee all sales operations for the eight-station cluster. Most recently Hager was General Sales Manager at CBS Radio's KMOX-AM, St. Louis. He previously was with Clear Channel, as Account Executive, Sports Sales Manager and ultimately GSM. Says Hager, "I could not be more thrilled to return to the greatest media company in the world with the most extensive portfolio of integrated media solutions for our advertisers. The landscape of radio continues to change every day and Clear Channel Media and Entertainment leads this charge with unparalleled digital opportunities including iHeartRadio. I am humbled and honored to lead this great cluster's sales efforts and rejoin the most talented and passionate media professionals in the business." Says Clear Channel Denver President and Market Manager Pat Connor, "Tim's extensive multi-platform marketing experience and focus on providing the best value solutions for our advertising partners will be a great addition to our business here in Denver. He will provide leadership and strategic direction as we continue our growth in the industry." CCME EVP of Operations Hartley Adkins tells us, "It is great to have Tim back on the Clear Channel Media and Entertainment team. He rejoins a stellar organization that reaches more people in Denver than any TV station, print vehicle or radio group. A role this big comes with great responsibility and we knew right away Tim would be the ideal leader." Another Lawsuit Accuses Clear Channel New Orleans of Racial Bias Seven African-American Account Executives Sue for Discrimination Clear Channel's New Orleans cluster is now facing another racial discrimination lawsuit filed by seven African-American account executives. This is the latest suit claiming discriminatory sales compensation methods. This comes as the cluster continues to fight a suit by former AE Prixie Montgomery. Two others were quietly settled. Montgomery and six other sales representativess, either fired or still employed by the company, have filed the new suit in U.S. District Court for the Eastern District of Louisiana. According to that filing -- "Watson et al v. Clear Channel Broadcasting, Inc." -- the plaintiffs are Wil Watson, Gary C Watson, Prixie Montgomery, Ave Gaines, Darnetta Mahaffy-Nelson, Dinah Campbell and Brandin Campbell. The nature of the suit is listed as "Civil Rights - Employment" with the "cause" specified as "Job Discrimination (Employment)." The filing shows a "jury demanded" by the plantiffs. They claim they all had earned five or six figure salaries in 2008, but that after the company changed its plan and redistributed accounts in the wake of the economic downturn, "whether intentional or negligent, African-American account executives were disparately, and negatively, impacted, to their severe economic detriment as compared to their Caucasian counterparts." Overall, African-American Account Executives lost an average of more than 40% of their income, according to the suit. Montgomery is said to have lost more than 50% -- going from "$130,000 in salary and commissions" to "$63,000." But "Caucasian Account Executives lost no more than about 15% of their 2008 income, on average, during the same period of time." The plaintiffs say that they complained about the "race-conscious account shifts" within a month of the changes to Market Manager Dick Lewis, Director of Sales Mike Scott, and Regional VP Mark Koppelman (all of whom are white), but the situation was not addressed. The suit says some of the advertising salespeople were fired in retaliation for complaining. The lawsuit claims "whites dominated key accounts, and of the top 20 accounts, black AEs are assigned only out-of-town agencies" -- and that discriminatory system continues to "the present moment." The seven plantiffs are seeking back income, punitive and general damages, and legal fees. National Photo Group Sues Townsquare Media for Infringement Townsquare Media is being sued by National Photo Group for alleged copyright violations using unauthorized copyrighted photographs on the company's websites. The suit, filed in U.S. District Court in Connecticut, alleges use of copyrighted photos by Townsquare's national PopCrush.com and local Country WFRG-FM ("Big Frog 104"), Utica, and AC WLZW-FM ("Lite 98.7"), Utica, websites. The suit against Townsquare follows NPG's suit against Clear Channel for similar alleged violations, as we reported in late June, and another last month against Midwest Communications. The new legal action against Townsquare seeks "statutory damages" of $150,000 per infringement or actual damages and wrongful profits, plus attorney's fees and other relief. Joining NPG as a plantiff is BWP Media for images it owns that are claimed to have been used without permission or authorization. The suit tells us that the "copyright holders" have screenshots of their images used without authorization on Townsquare websites. The suit was filed by "personal injury lawyers" The Sanders Firm of Garden City, Long Island, which claims to be "one of the largest New York law firms specializing in protecting the rights of innocent victims." WGN.FM (Not WGN-FM) Is Here with A Splash! Chicago's WGN Radio, after announcing plans for a new WGN.FM (not yet WGN-FM), has launched a website for the new brand. For now, WGN.FM is just a splash screen with the new logo and a promise that the website is "coming soon." How soon is not yet known, but WGN Radio (WGN-AM) has told us that with Jonathan Brandmeier exiting the morning show on "Radio 720" -- with a new schedule featuring Steve Cochran taking over mornings September 3 -- Brandmeier will move to the new wgn-dot-fm website which could eventually become a new on-air station, if and when Tribune Broadcasting obtains an FM signal. As we reported Tuesday, Brandmeier, whose final morning show on the station could air this Friday, is expected to reappear, after a break, on a live streaming webcast and eventually may turn up on a new FM signal. New WGN Radio President and General Manager Jimmy de Castro, on the job for just three months, announced "the next step for his intended revival" of the Tribune Broadcasting station. Plans include not only a new roster of familiar faces and voices on the legendary 50,000-watt AM, "but a robust presence online and -- sometime down the road -- an additional programming venue on an FM frequency." So far, Brandmeier is the only personality announced for the new wgn.fm online station, but de Castro reportedly has others in mind, including several former WGN-AM veterans. Along with the splash screen now online, visitors can click the logo to view a video promoting "Freeform Media" to be featured on the new website, branded as "The G" as well as WGN.FM. Central NJ's WCTC-AM Overhauls Programming Greater Media's "Talk Radio 1450" WCTC-AM, New Brunswick, NJ, announces a new line-up starting next week that will make the station "more local" and "cost effective." Program Director Bert Baron tells us "there's a thirst for local content in this market," as he announces the revamped on-air schedule for the station that bills itself as "The Voice of Central New Jersey.” Baron is moving from afternoons to mornings, Laura Ingraham's syndicated show will air 9am-12noon, local host Tommy G will air 12noon-3pm, followed by Steve Malzberg (formerly of WABC-AM, New York) from 3-6pm. "BTN Live" will be heard 6-7pm. Alan Colmes remains at 10pm-1am, followed by "Red Eye Radio" from 1-6am. The syndicated Mancow show exits the station, as the new schedule starts Monday (Aug. 26). Baron will host "Jersey Central with Bert Baron" from 6-9am. He tells us that his new show will include "everything you need to know in New Jersey – news, sports, events, entertainment, politics, lifestyle, traffic and weather." Baron tells us Malzberg's show, syndicated by Newsmax, will be carried live each afternoon. "Steve is a name in the area,” and despite being a national show, it’s expected Malzberg will discuss "a fair amount of local and regional news and topics." According to Baron, the fully revamped on-air lineup means the station "will be much more local in our approach to serving our listeners -- from our shows to remote (broadcasts) and our community involvement. For us it will be cost effective. We will make noise in the radio landscape." FCC Rejects 3 Daughters WLNI-FM/Roanoke Transfer Challenge The FCC has rejected a petition seeking to deny approval for the proposed transfer of News Talk WLNI-FM, Roanoke-Lynchburg, Virginia, from Centennial Licensing to Mel Wheeler Inc. Gary Burns' 3 Daughters Media sought to have the FCC deny approval of the deal, claiming that, if allowed, MWI's market revenue share will exceed 50 percent and that it would own the top five stations in the market. The Commission ruled that 3 Daughter's challenge ultimately fails to show that a grant of the application would be prima facie inconsistent with the public interest. The FCC says that MWI currently holds interests in 4 FM and 2 AM radio stations in the Roanoke Metro. Its proposed acquisition of WLNI-FM would result in it owning 5 FM and 2 AM stations. The FCC said this is permissible under the local radio ownership rule, and that based on the evidence, it concluded that the applicants were fully qualified and that grant of the transfer would serve the public interest. Centennial and MWI contended that 3 Daughters lacked standing to object to the sale, but the Commission ruled that 3 Daughters was a party in interest as a competitor in the market, while utlimately rejecting the challenge. Burns says he is "disappointed" with the Commission's ruling. He tells us, "I have not decided whether or not I will appeal this decision." '101 ESPN' St. Louis Announces Rams Radio Analysts Hubbard Radio's "101 ESPN" WXOS-FM, St. Louis, the flagship station for St. Louis Rams football, announces the 2013-2014 Rams radio analysts and insiders team. Beginning September 10, Rams wide receiver Chris Givens will join Randy Karraker and D'Marco Farr on "The Fast Lane" for a weekly call to discuss the previous week's game and to provide insight for upcoming match-ups. Along with Givens, WXOS-FM has a lineup of analysts and NFL experts who weigh-in with regular appearances and call-ins on their daily Sports Talk and specialty shows. Says Program Director Chris "Hoss" Neupert, "We're ready to cover the 2013-2014 season like no other radio station can. Our team's in-depth knowledge of the NFL and experience with the St. Louis Rams will give our listeners unsurpassed coverage and inside information about the teams, coaches, players and league news." Analysts include former NFL Coach Rick Venturi (also a station host), NFL Kicker Neil Rackers, former Arizona Cardinal and NFL Linebacker Michael Young, NFL Fullback Carey Davis, and former Rams Offensive Line Coach Jim Hanifan, among others. Behind the Microphone: The Ins and Outs of Radio Jackie Selby is the new 7pm-12midnight host at Classic Rock "K-Fox" simulcast KUFX-FM, San Jose and KUZX-FM, San Francisco ... Anthony "Roach" Proffitt joins Alternative Rock "93X" WXNX-FM, Fort Meyers-Naples, Florida, as Assistant PD and Music Director ... Adult Variety Hits "Bob FM" KNOB-FM, Santa Rosa, California, flips to "Sonoma County's New Alternative 96X" with Dray Lopez as Program Director. Lopez adds that duty to his PD chores at sister Rhythmic CHR "Y 100.9" KSXY-FM ... Sonia Jimenez, APD/MD at Hot AC/Adult Top 40 "Now 100.5" KZZO-FM, Sacramento, resigns to become the new Promotion Manager Fox's KTXL-TV, Sacramento ... CHR/Top 40 "Y 93" KYYY-FM, Bismarck, North Dakota, hires former crosstown "Hot 97.5" KKCT-FM Program Director Mia as PD and afternoon host. She replaces Todd Mitchell, who remains Operations Manager for the Clear Channel Bismarck cluster, and PD/afternoon host for News Talk KFYR-AM.