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EIB WEB PAGE DISGRONIFIER

Loss of Auto Ads Leads Minority Broadcasters to Plead for Bailout

BEGIN TRANSCRIPT

RUSH: Ladies and gentlemen, I seldom talk about the broadcast business or people in it because in my mind there's nobody else in it but me. But secondly it's Inside Baseball. You know, we do what we do here. We don't talk about how we do it. The only time we talk about how we do it is when people are doing profiles and they want to know the ins and outs of procedures and philosophies and so forth. But I must break from this tradition today because there's controversy raging out there over the way radio ratings are now taken. In the old days -- and many of you have participated in this system and know about it -- Arbitron is the company that rates radio stations and listening, and in the old days -- and it's still in use in many markets, although it's starting to change now -- is the diary system. They would pick out a sample population, sample of people that represent the population at large.

In New York, for example, a city of eight million, and depending on how wide the survey area it could be a number of 16 million, they would have a sample of 1,200 people, and these people would be mailed diaries, and they would be required to fill out, not as they were listening, they could if they wanted to, but to fill out what they listened to at each time of the day. And there were all kinds of hints that they could use. They could put down the name of the guy or girl on the radio, they could use the station call letters. If a station was running a promotion, like, "We're going to give you a house today," and that's all the listener could remember, the station could report to Arbitron, if somebody says they're listening to the station giving away a house, they give us credit. There are any number of ways, but any time you require people, unsupervised, to write down what they're listening to, and some of them would wait for the whole week and try to reconstruct it, very few would do it while they're actually listening. Some would. It was the best we got. I think it was as accurate as anything out there, but it still left a lot of room to be desired.

Also, there was something that happened along the way in this process, and that is a mathematical algorithm was attached to the end results, and they called it weighting, w-e-i-g-h-t-i-n-g. And in the case of minority program stations, like all Hispanic or Chinese opera or black R&B stations, just as there was affirmative action in society, Arbitron would weight the listenership of minority stations on the basis that the minority population in the market is smaller and so, to be fair, what they would actually end up doing would be add to, by way of educated guess, they said, the number of people listening to minority stations, who might not have been listening. It evolved because minorities did not respond to the diary program. They didn't fill out the diaries as completely and you couldn't leave 'em out, so the process began of weighting, and in some cases the weighting approached 30%. They would be given an audience of 30% more than they got. Well, everything changes. For the longest time television has been rated by Nielsen with boxes on television sets in select Nielsen homes so there was no question what was being watched.

You tune your TV to channel X and that got reported to Nielsen and there was no way you could fudge it. Every time you change channels it got sent to Nelson and the argument against Nielsen ratings was, "A thousand people across the country are determining which shows are watched more than by anybody else?" It was a small sample that they had a problem. So Arbitron has rolled out in the last couple of years this thing called PPM, the Personal People Meter. It's a pager. The participant actually wears the PPM device, on a belt, takes it with them, in their car, wherever. It measures precisely and exactly what people are listening to. The information is then fed electronically to the massive computers at Arbitron, and they publish the results, and there you go. Well, what's happened is, ever since the PPM went into effect, admitted listenership to minority radio stations has plummeted. It's probably no different than what it's always been because they weighted, they added, they guessed. So this resulted all these years of weighting the listenership to minority radio stations gave them credit for more listeners than they had, they went out to advertisers, and they sold advertising at rates based on this listenership.

Now the PPM hits, and, lo and behold, minority listenership is not as high as it was reported all these years in the diary programs, not just in New York, but around the country where the PPM is in effect, and they're also finding out that talk radio is much more listened to than the diary programs produced, particularly the cume, which is the total number of people over any length of time, well, measured in a week. I don't want to get too technical with this. This had led minority owners to sue Arbitron because their system is somehow short selling them, even though this is the most accurate one they have. There's been a task force of minority-owned stations who then went to the Obama FCC and they are raising holy hell, and they're trying to get the PPM system thrown out because they say it's biased. There's no way you can cheat the PPM system. If you're not listening to a station, the station won't get credit. If you are listening to it, the station will get credit if you are one of the participants using the Portable People Meter.

So there is a story today that these broadcasters, minority broadcasters are asking for two things. They want the FCC to change this, and they also want TARP money to rescue minority broadcasters. There is now a request for federal bailout money for broadcasters. Now, just listen to me on this: "'Democrats Seek Financial Rescue of Minority-Owned Broadcasters' -- High-ranking House Democrats are urging the Treasury Department to prop up minority-owned broadcasters suffering from a lack of capital and lost advertising revenue amid the economic slump." Now, wait. Stick with me on this because the irony here is delicious. When Tim Geithner and Barack Obama buy companies, they run them. What's happening here, this is about statists owning media. This is the first step toward Obama and the government owning minority radio stations. Crisis is an opportunity, after all, remember? "High-ranking House Democrats are urging the Treasury department to prop up --" I mean they propped up GM, they own it, right? They propped up the banks, they own it, the mortgages, they own it, right? Propped up minority-owned broadcasters suffering from lack of capital and lost advertising revenue.

Now, later in the story, here's the irony: "In addition to the credit crisis, also weighing heavily on minority broadcasters is a significant decline in advertising revenues, particularly the loss of automobile advertising." Ha! Make me laugh! It is Obama who has slashed the advertising budgets of the auto companies! Obama, the first black president, has cut the Chrysler ad budget in half; he's going to do the same thing to General Motors. That hurts the media, and particularly the minority-owned media, according to this story. So Obama will get an opportunity to buy into the broadcasting business. This is shades of Hugo Chavez. But the unintended consequences of these people taking over the automobile companies -- they haven't stopped to think. Shutting down all of these dealerships? Did they know how important to communities dealerships are, these owners, what they do, they donate to charity, they prop up the local symphony, they do a lot of things, and they're being shut down. The lack of revenue in local communities that will result from these dealerships being shut down is going to be devastating. It's going to mean more people out of work, not just at the dealership. It's going to mean less charitable operating revenue in these communities, all so that Obama can get you driving a lawn mower with a couple of seats on it.

END TRANSCRIPT

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