Facebook Nears Ad-Only Business Model

By David Ingram | SAN FRANCISCO

Reuters) -- Facebook Inc's growth into a digital advertising power is showing a flip side: The social network is more dependent than ever on the cyclical ad market, even as its rival Google finds new revenue streams in hardware and software.

Facebook reported on Wednesday that 98 percent of its quarterly revenue came from advertising, up from 97 percent a year earlier and 84 percent in 2012. Revenue from non-advertising sources fell to $175 million in the quarter, from $181 million a year earlier.

Facebook has warned for some time about declining non-ad revenue. That part of its business consists almost entirely of video game players on desktop computers buying virtual currency, and it has fallen as gaming has moved to smartphones.

Facebook takes 30 percent of purchases, with the balance going to companies such as Zynga Inc, maker of the game Farmville.

The company's dependence on advertising is a long-term concern but it has time to find other revenue while building its core ad business, said Clement Thibault, a senior analyst at Investing.com.

"We have to remember it's still a fairly young business. It's not like they're an old-fashioned business that needs to move soon," he said.

A Facebook spokeswoman declined to comment.

Facebook's share price hit an all-time high of $153.60 on Tuesday before dipping to close at $150.85 on Thursday.

The lack of diversification stands in contrast to Google, a unit of Alphabet Inc. Its non-advertising revenue, from sources such as cloud services and Pixel smartphones, posted a 49.4 percent jump to $3.1 billion in the most recent quarter and now represents 13 percent of Google's total revenue, up from 10 percent a year earlier.

Facebook Chief Operating Officer Sheryl Sandberg said during a conference call in February that the company was diversifying revenue by expanding its base of advertisers across geographic regions and industries.

Facebook's non-advertising products, such as its Oculus virtual reality headset and the Workplace office software, currently generate little revenue.

Some companies diversify through acquisitions, but most of Facebook's purchases such as Instagram and WhatsApp have been in adjacent markets.

Chief Financial Officer David Wehner said in a conference call for investors on Wednesday that Facebook was not breaking out Instagram revenue as a separate line in financial reports because Instagram ads are sold through the same interface as Facebook ads.

Miley Cyrus Pivots Her Career

Miley Cyrus

(Reuters) -- Miley Cyrus says she is steering away from marijuana, alcohol and nipple pasties and rolling out a new sound that could help people take her more seriously after she was dubbed one of pop music's bad girls.

Speaking to Billboard Magazine in an interview published late on Wednesday, the former Disney star, 24, said she wanted to be "super clear and sharp" and focus on a new collection of songs that takes her back to her country music roots.

"I haven't smoked weed in three weeks, which is the longest I've ever [gone without it]. I'm not doing drugs, I'm not drinking, I'm completely clean right now! That was just something that I wanted to do," Cyrus said.

The singer, whose father is country music singer Billy Ray Cyrus and whose godmother is Dolly Parton, will release new single "Malibu" on May 11. Billboard said it was a love song inspired by her fiance, actor Liam Hemsworth, with whom she reunited last year after a 2013 breakup.

Cyrus, who rose to fame on the Disney Channel show "Hannah Montana," ditched her innocent image in 2013, admitting to drug use and appearing scantily clad in public and in music videos.

She grabbed headlines when she dressed in latex lingerie and twerked on stage with R&B singer Robin Thicke at the 2013 MTV Video Music Awards, in a performance that landed her the title of pop music's bad girl.

Her upcoming new album will feature more acoustic songs and melodies written by Cyrus, and will include a song for Hillary Clinton, whom she supported in last year's U.S. presidential election, and another anthem dedicated to women in the workplace, Billboard said.

Discussing politics, Cyrus, who will return as a judge on NBC reality singing show "The Voice" later this year, said she wanted to reach out to her more conservative fans.

"I like talking to people that don't agree with me, but I don’t think I can do that in an aggressive way," the singer said.

"I don't think those people are going to listen to me when I'm sitting there in nipple pasties, you know?," she added.

CRS Unveils New Agenda Committee Members

Country Radio Seminar has announced 12 new members of the 2017-18 Seminar Agenda Committee.

Along with the returning majority, these industry professionals will lead the discussion in planning the agenda for next year's Country Radio Seminar 2018 that is scheduled for February 5-7, 2018 at the Omni Hotel in Nashville.

The newly selected individuals joining the 2017-18 CRS Agenda Committee are: Josh Bennett (Nielsen Music), EJ Bernas (Social Pulse Media), Bill Macky (Black River Entertainment), Brent Michaels (KUZZ/KRJK/Buck Owens Prod.), Lou Ramirez (Warner Music Nashville), Larry Rosin (Edison Research) Toby Tucker (Neuhoff Media), Monta Vaden (All Access), Lisa Wall (WLHK/Emmis), Robin Ward (KFRG), Erich West (iHeartMedia/WDRM), and Sue Wilson (Rubber City Radio Group/WQMX).

Returning committee members are: Lee Adams (Broken Bow Records), Sam Alex (Townsquare Media), Andrew Curran (DMR/Interactive), Tim Gerst (Thinkswell), Carolyn Gilbert (NuVoodoo Media), Jeff James (Signet Interactive), Bruce Logan (CBS Radio), Billy McKim (Texas A&M University), Eric Michaels (WTHI-Midwest Communications), Terry Phillips (CBS/WYCD), J.R. Schumann (SiriusXM), Jenny Shields (Premiere Radio Networks), and Brook Stephens (Leighton Broadcasting).

The CRS Agenda Committee is comprised of industry professionals from all areas of Country radio and records. The committee is responsible for planning the educational panels for the upcoming year’s Country Radio Seminar. Heading up this year’s agenda committee is Greg Frey (Cumulus) serving as Chairman, alongside Co-Chairmen Judy Lakin (Cox) and Jay Cruze (iHeartMedia).

May 5 Radio History

➦In 1899...Radio actor, Freeman Gosden, was born in Richmond, Virginia. He was "Amos" on the famed "Amos 'n' Andy" Radio show.

Freeman Gosden was born in Richmond, Virginia. During World War I he served in the United States Navy as a wireless operator, which prompted his great interest in the young medium of radio. While attending school in Richmond, Gozzie worked part-time in Tarrant's Drug Store at 1 West Broad Street.

Freeman Gosden, Charles Correll

In 1921, Gosden first teamed up with Charles Correll to do radio work, presenting comedy acts, sketches, and hosting variety shows. They met in Durham, North Carolina, both working for the Joe Bren Producing Company. Their first regular show came in 1925 with their WEBH Chicago show Correll and Gosden, the Life of the Party. On this show the two told jokes, sang, and played music (Correll played piano and Gosden banjo).

In 1926, Gosden and Correll had a hit with their radio show Sam & Henry on Chicago radio station WGN. Sam & Henry is considered by some historians to have been the first situation comedy.

From 1928 to 1960, Gosden and Correll broadcast their Amos 'n' Andy show, which was one of the most famous and popular shows on radio in the 1930s. Gosden voiced the characters "Amos", "George 'Kingfish' Stevens", "Lightning", "Brother Crawford", and some dozen other characters.

In 1969, Gosden was honored with a star on the Hollywood Walk of Fame for his work in radio. He died from congestive heart failure in Los Angeles, California in 1982 at the age of 83


➦In 1900...The Billboard, a magazine for the music and entertainment industries, began weekly publication after six years as a monthly. The name was later shortened to Billboard.

Perry Como - circa Early '40s

➦In 1970...in New York City Perry Como recorded “It’s Impossible.” When it peaked a few months later at #10 on the pop music chart, it meant Perry had notched hits in four consecutive decades – the 1940s, ’50s, ’60s and ’70s. He added another hit single in 1973 with his recording of Don McLean’s “And I Love You So,” which peaked at #29.


➦In 1986…Rock and Roll Hall of Fame chairman Ahmet Ertegen announced that Cleveland, Ohio had been chosen as the city where the Hall would be built.


➦In 2008...John R. Gambling rejoins WOR 710 AM NYC.

When WOR ended Rambling with Gambling in 2000 after 75 years on the air, John R. Gambling moved up the dial to WABC, taking over the post-morning-drive 10 a.m. - noon slot. Gambling was fired by WABC on February 29, 2008 in a cost-cutting move.  On April 30, 2008, WOR announced the return of John R. Gambling to its air waves in his old morning-drive timeslot starting May 5, 2008.

Int. Outdoor A Drag On iHeartMedia 1Q Revenue

iHeartMedia, Inc. today reported financial results for the first quarter ended March 31, 2017.

Bob Pittman

“We are a true multi-platform, 21st-century media company, leveraging our leading broadcast radio, digital, outdoor, mobile, social, live events and data businesses to continue to innovate for the benefit of our marketing partners,” said Bob Pittman, Chairman and Chief Executive Officer of iHeartMedia, Inc. “This quarter the iHeartMedia segment improved its innovative programmatic solution by introducing SmartAudio - a digital data product for advertisers that combines the massive scale of broadcast radio with the power of digital data and more informed audience targeting. At Outdoor, we continue to enhance our data analytics capabilities and automated ad-buying while staying focused on building out our digital networks.”

Rich Bressler, President, Chief Operating Officer and Chief Financial Officer, said: “Our consolidated revenues, operating income and OIBDAN declined in the first quarter. Adjusting for sales and foreign exchange, however, our revenues increased.  At the iHeartMedia segment, this quarter marked the sixteenth consecutive quarter of year-over-year increases in revenue.  We remain focused on balancing financial discipline with investments to grow our businesses while continuing to work on our capital structure.”

Key Financial Highlights

The Company’s key financial highlights for the first quarter of 2017 include:

• Consolidated revenue decreased 2.4%. Consolidated revenue increased 1.6%, after adjusting for a $12.8 million impact from movements in foreign exchange rates and the $40.6 million impact of the outdoor markets and businesses sold. 
• iHM revenues increased $18.3 million, or 2.5%. Revenues increased $27.3 million, or 3.8%, excluding political revenue. 
• Americas outdoor revenues decreased $3.1 million, or 1.1%. Revenues increased $0.7 million, or 0.2%, after adjusting for a $1.4 million impact from movements in foreign exchange rates and a $5.2 million impact from the sale of nonstrategic markets. 
• International outdoor revenues decreased $41.2 million, or 13.4%. Revenues increased $8.3 million, or 3.1%, after adjusting for a $14.2 million impact from movements in foreign exchange rates and a $35.4 million impact from the sale of our businesses in Australia and Turkey. 
• Operating income decreased $306.7 million, or 72.9%, primarily due to the net gain of $278.3 million on the sale of nonstrategic Americas outdoor markets in the first quarter of 2016 compared to the net gain of $28.6 million on the sale of our Americas outdoor Indianapolis market in the first quarter of 2017. 
• OIBDAN decreased 21.3% and decreased 19.0%, excluding the impact from movements in foreign exchange rates and the impact of the outdoor markets and businesses sold.

Restructuring Predicted for iHeartMedia

“There’s going to be some kind of restructuring,’’ said Scott Van den Bosch, a senior credit officer at Moody’s Investors Service Inc. who follows the company. iHeartMedia is over-leveraged, he told The Boston Globe, and “That’s not sustainable. We don’t think the company can grow into this capital structure.”

“If you could get leverage down and reduce interest expenses, that could allow the company additional time to improve results,’’ Van den Bosch said.

It’s been nearly a decade since the buyout was completed, a deal that came together under duress as the credit markets already were showing signs of stress. That’s longer than Bain and Lee generally like to own companies they acquire. But soon after they got into the radio business, the economy, and the company, began to stumble.

Mark Fratrick, chief economist with the media research and consulting firm BIA/Kelsey, based in Chantilly, Va., said it’s easy to lament the halcyon days of radio, but station owners have had to face deep financial challenges. iHeart has been losing money for years.

Mark Fratrick

“You have this incredible competition for listeners as well as for advertisers,’’ Fratrick said. “You couple that with the recession. Those two forces were profound and were happening at the same time.”

Some analysts believe there’s a natural way to split the company, by selling its radio and billboard operations to different buyers. Such transactions could lead to gains for both stockholders and bondholders. But any exit plan, whether through a breakup or sale, can’t happen until the debt crunch gets sorted, analysts and people with knowledge of the company say.

The negotiations are complex, and investors are jockeying to be first in line to get their money under various scenarios.

George W. Tetler III, an attorney at Bowditch & Dewey in Worcester, who has worked on complex bankruptcy cases in the past, says the iHeart situation is unusual, mostly because of the way the financing was set up.

“There are innumerable layers of debt that have been part of this structure for quite a period of time,’’ Tetler said.

Viacom Earnings Handily Beat Estimates

(Reuters) -- Viacom Inc, the owner of MTV, Comedy Central and Nickelodeon, reported quarterly profit and revenue that handily beat estimates, helped in part by the success of its latest movie "xXx: The Return of Xander Cage".

Revenue from Viacom's film business jumped 37 percent to $895 million in the company's second quarter ended March 31. Analysts on average had expected the business to generate revenue of $676.5 million, according to financial data and analytics firm FactSet.

Viacom said action thriller "xXx: Return of Xander Cage", starring Vin Diesel, grossed more than $346 million at the worldwide box office.

The media company in February said it would focus on six of its brands as part of a turnaround plan orchestrated by Chief Executive Bob Bakish. The brands are: Paramount, BET, Comedy Central, MTV, Nickelodeon and Nick Jr.

Additionally, Bakish has said he is focused on improving relations with Viacom's affiliates, and licensing less content to video streaming companies like Netflix and Hulu.

Net profit attributable to Viacom fell to $121 million, or 30 cents per share, in the company's second quarter, from $303 million, or 76 cents per share, a year earlier.

The company took a $174 million charge related to restructuring in the second quarter.

Excluding items, Viacom earned 79 cents per share, beating analysts' average estimate of 59 cents per share, according to Thomson Reuters I/B/E/S.

Viacom's revenue rose 8.5 percent to $3.26 billion. Analysts had expected $3.02 billion.

Shares of the company were up slightly in light premarket trading.

Saga Reports 4.1 Percent Revenue Drop

Saga Communications, Inc. today announced that its Board of Directors declared a quarterly cash dividend of $0.30 per share.  The dividend will be paid on June 9, 2017 to shareholders of record on May 22, 2017.  The aggregate amount of the payment to be made in connection with the quarterly dividend will be approximately $1.8 million.  The quarterly cash dividend will be funded by cash on the Company's balance sheet.

The Company also reported that primarily due to a reduction in political revenue of $1.3 million from the same period last year net revenue decreased 4.1% ($1.3 million) to $31.4 million for the quarter ended March 31, 2017.  Station operating expense increased 1.5% to $25.1 million (station operating expense includes depreciation and amortization attributable to the stations).  Operating Income decreased $1.9 million to $3.5 million.  Free cash flow for the quarter was $3.2 million.

Capital expenditures were $1.4 million in the first quarter compared to $1.0 million for the same period last year. The Company expects to spend approximately $5.0 million to $5.5 million for capital expenditures during 2017.

Radio One Reports 1Q Loss

Radio One Inc. on Thursday reported a loss of $2.3 million in its first quarter. The Silver Spring, Maryland-based company said it had a loss of 5 cents per share.

The broadcast media company that serves African-American and urban listeners posted revenue of $101.3 million in the period.

The company's shares closed at $2.85. A year ago, they were trading at $2.20.

Broadcast and digital operating income was approximately $34.9 million, a decrease of 11.9% from the same period in 2016. The Company reported operating income of approximately $16.5 million for the three months ended March 31, 2017, compared to $18.8 million for the same period in 2016. Net loss was approximately $2.3 million or $0.05 per share (basic) compared to approximately $3.9 million or $0.08 per share (basic) for the same period in 2016.

Alfred C. Liggins III

Alfred C. Liggins, III, Radio One's CEO and President stated, "A combination of tough political comps in radio, and non-recurring major client spending at Reach Media, made for a weak start to the year in radio advertising.

"TV One ratings held up well overall (+4% Household, and flat 24-54 total day), although we were down in the younger-end demographic. Despite this, we were able to post growth in Adjusted EBITDA for the division. Our digital business will be bolstered by the acquisition of the Bossip and Madame Noire brands, which will be immediately accretive. MGM National Harbor continues to perform well, and we have accrued approximately $1.5 million of income in the first quarter.

"We remain committed to growing our cash flow in 2017, despite the slow start to the year. Our name change to Urban One will become effective on May 5th, and will better reflect our diversified multimedia platform."

Crude Joke By Colbert Triggers Pro/Con Response

(Reuters) -- A crude joke about U.S. President Donald Trump and Russian President Vladimir Putin has sparked a social media storm with calls for late-night TV show host Stephen Colbert to be fired competing with praise for his outspoken remarks.

Stephen Colbert

Colbert, host of the "The Late Show" on CBS, made an oral sex joke on Monday night about Trump and Putin during a scathing diatribe against the U.S. president.

It triggered a #FireColbert trending Twitter hashtag, with Trump supporters on Wednesday calling for a boycott of CBS Corp advertisers, some people accusing Colbert of being homophobic, others accusing left-wingers of hypocrisy, and still more defending the comedian.

"Colbert's homophobia rant was disgusting and we won't tolerate this anti-LGBTQ behavior," wrote Scott Presler, chairman of Virginia Beach Young Republicans, on Twitter.

"#FireColbert? Please... I wish I could buy him a drink," tweeted a user with the handle @kingofsorrow954.

CBS on Wednesday declined to comment on Colbert's remarks, which follow a surge in popularity for "The Late Show" since the host stepped up his scathing nightly attacks on Trump. Colbert has also remained silent on the social media reaction.

The bleeped oral sex joke, which referenced Trump's oft-stated admiration for Putin during the 2016 election campaign, came at the end of an insult-heavy monologue by Colbert.

Addressing Trump, Colbert said, "Sir, you attract more skinheads than free Rogaine. You have more people marching against you than cancer. You talk like a sign language gorilla that got hit in the head."

Colbert told his audience that he was responding to Trump's appearance on the CBS political show "Face the Nation" over the weekend, when the Republican president walked out after telling host John Dickerson that he liked to call the Sunday morning news show "Deface the Nation."

The White House did not immediately return a request for comment on Colbert's monologue.

Colbert, 52, has been attracting the biggest audiences for late-night U.S. television in recent months with his blistering attacks on Trump.

Some 3 million people watch "The Late Show," according to ratings data, which has challenged the genial formula of topical jokes, games and celebrity guests seen on NBC rival "The Tonight Show" with Jimmy Fallon.

"If we don't go after his network sponsors or affect their ratings base, he will just get more popular," tweeted a user called @hackenbush77.

Social media monitoring company Brandwatch said on Wednesday that the #FireColbert hashtag had been used 200,000 times since Monday and there had been more than 10,000 tweets about persuading brands to pull their ad dollars from CBS.

Stephen Colbert addressed the controversial jokes about President Donald Trump that sparked a #FireColbert campaign over the past two days… but stopped short of an apology.

“Welcome to ‘The Late Show.’ I’m your host, Stephen Colbert,” he says at the top of Wednesday night’s show, according to a transcript obtained from CBS. “Still? I am still the host? I’m still the host!!”

“Now, if you saw my monologue Monday, you know that I was a little upset at Donald Trump for insulting a friend of mine,” he continues. “So at the end of that monologue I had a few choice insults for the president in return. I don’t regret that. He, I believe, can take care of himself. I have jokes; he has the launch codes. So, it’s a fair fight.”

The rant in question was sparked by Trump’s treatment of CBS News’ John Dickerson during an interview, when POTUS abruptly stopped the conversation after Dickerson questioned him about wire-tapping claims. Colbert took it upon himself to say to Trump the things Dickerson could not.

FCC Chair Comments On Colbert's Rant

Steve Malzberg, Ajit Pai

FCC Commissioner Ajit Pai went on with Steve Malzberg from Newsmax TV on Wednesday to discuss Stephen Colbert’s nasty, vulgar attacks on President Trump earlier this week.

The Gateway Pundit reports Ajit Pai told Steve that if Colbert’s comments were found obscene there would be consequences.

Stephen Colbert’s raunchy joke about President Donald Trump and Russian President Vladimir Putin engaging in a sex act is likely protected by the First Amendment, FCC Commissioner Ajit Pai told Newsmax TV on Wednesday.

“People are willing and able to say just about anything these days,” Pai, appointed by Trump to head the FCC in January, said in an interview with Newsmax’s Steve Malzberg on “America Talks Live.”



On Tuesday, Colbert, host of CBS’ “The Late Show,” used his opening monologue to take aim at Trump, implying the commander in chief had engaged in fellatio with Putin.

“You talk like a sign language gorilla that got hit in the head,” Colbert said of Trump. “In fact, the only thing your mouth is good for is being Vladimir Putin’s c##k holster.”…

…Pai said that unless the veteran comic’s cracks — aired on FCC-regulated broadcast television — were deemed to be obscene, there would be no consequences.

What Others Are Saying..Thursday

➤How Amazon Is Redefining Radio’s Retail Business

➤The Press ‘Hates Donald Trump’: Tucker Carlson Faces Off with WHCA President

➤In Conservative Prime Time, It’s Now Fox and Enemies

➤Fox’s Unfamiliar but Powerful Television Rival: Sinclair

➤TV Station Owners Rush to Seize on Relaxed FCC Rules

➤Entertainment Stocks Tumble on TV Sub Losses, Ad Trend Concerns

➤Lazy Millennials Are Now Attending Funerals Online