LOOKING BACK IN 3,504 WORDS AND 83 LINKS

The biggest TV story of 2007 is likely to be one of the biggest of 2008 as well.

On Nov. 5, members of the Writers Guild of America put down their pens and took up picket signs after last-ditch talks with the Alliance of Motion Picture and Television Producers failed to avert a strike—the first by the WGA since 1988. The first picket lines appeared at NBC’s Rockefeller Center in New York, then in Los Angeles.

The main issues are the writers’ demands for a bigger slice of DVD profits and revenue from the distribution of films and TV shows over the Internet.

Both sides see the dispute as a power struggle over the digital future.

The strike has caused repercussions throughout the industry. The longer it goes on, the more likely it could threaten the $9 billion upfront sales market that gets underway in May.

The strike has thrown a monkey wrench into the 2007-08 primetime season—less than three months after it began, there’s likely to be no clear winner among the networks.

It has already sent the networks scrambling to revise their midseason schedules, heavying up on non-scripted, reality programming.

A longer-range (perhaps positive) effect of the work stoppage may be the end of television’s traditional development cycle, something the networks and studios have sought for years. The strike may finally end the mad rush of pilot season and curb the skyrocketing costs of pilots.

Other issues causing confusion and consternation were changes to the ratings system.

In October, Nielsen Media Research started gathering data on commercial viewership and providing figures on audience use of DVRs to watch a show within a seven-day window after broadcast. These ratings are released 15 days after the broadcast week.

In addition, in January, Nielsen began to count college students in the ratings.

The struggle around program ratings, commercial ratings and engagement metrics as well as the issue of “live” vs. time-shifted viewing made for a jarring and disruptive TV upfront season.

MORE PROGRAMMING

The primetime season had problems even before the strike, getting off to a fairly unimpressive start. Most of the new entries failed to create much buzz, with the exception of Private Practice, Pushing Daisies and Samantha Who?

As the smallest of the networks, My Network TV had been struggling with its original telenovela lineup. MNT’s new schedule includes International Fight League matches on Mondays and theatrical movie showings on Friday and Saturday, with award shows or other specials running Thursday and reality and celebrity shows airing Tuesday and Wednesday.

First-run syndication hasn’t fared a lot better, although Warner Bros.’ TMZ and NBCU’s Steve Wilkos Show look as if they have staying power.

Perhaps next year will be kinder to the syndies. Among the shows set to debut in 2008 are Debmar-Mercury’s Trivial Pursuit: America Plays, CBS Television Distribution’s The Doctors (a Dr. Phil spinoff), Sony’s Judge Karen, Program Partners’ Family Court with Judge Penny and a daytime version of Deal or No Deal from NBCU Domestic Television.

Other syndication news didn’t involve a program, but a convention.

In October, CBS TV Distribution announced that it wouldn’t attend the 2008 NATPE convention. Sony Pictures Television, too, said that it would take a pass to concentrate on its big presence earlier in January at the CES.

NATPE got some good news, however, when Warner Bros. announced that it would be returning to the show floor.

In the network news arena, ABC and NBC exchanged the first-place honors throughout the year. NBC won the November sweeps, but ABC was the only one of the Big 3 to post year-to-year gains.

Third-place CBS tried to shake things up in March when it fired fire Rome Hartman, the executive producer of the struggling CBS Evening News with Katie Couric, and appointed former CNN and MSNBC President Rick Kaplan to the job.

BUSINESS

Broadcasters knew coming into 2007 that it would not be a good year. No Olympics and little political advertising meant that it would be a struggle to match last year’s revenue totals and few did.

And TV stations suffered along with other traditional media as advertisers sought new avenues to reach elusive younger consumers and the overall economy sagged. By year’s end, it seemed increasingly clear that if the country was not in a recession, it was headed in that direction.

According to TNS Media Intelligence’s chief researcher Jon Swallen, advertising expenditures on traditional media would grow less than 1 percent for the year, hardly any growth at all.

But the outlook for 2008 is relatively bright for TV stations, mostly because of an anticipated $2.6 billion in political spending. If everything breaks right for broadcasters and the presidential races stay tight, said TNS’s political advertising guru Evan Tracey, the political could go as high as $3 billion.

At its Forecast Conference in September, the Television Bureau of Advertising predicated spot TV revenue would grow as much as 10 percent next year, due in large part of the political boost. Local would jump 5 percent to 6 percent, while national could go as high as 16 percent.

In 2007, private equity firms created a broadcasting boom, but it didn’t last.

Attracted by TV stations’ handsome and reliable cash flows, private equity firms swarmed into the business early in the year with a willingness to pay high multiples for stations in either the public or private markets.

Consortia of private equity firms took Univision private and agreed to do the same for troubled Clear Channel Communications. (At deadline, the Clear Channel deal was still awaiting FCC approval.)

Private equity also accounted for the three biggest station deals in the first half of the year.

Providence Equity Partners agreed to buy the TV group that Clear Channel was spinning off for $1.2 billion.

For less than half that price—$575 million—Oak Hill Capital Partners bought nine stations in eight markets from the New York Times Co. Oak Hill has dubbed its TV operation Local TV and put former radio exec Randy Michaels in charge.

And Cerberus Capital Management bought seven stations in four markets from CBS for $185 million and has organized its broadcast unit as Four Points Media.

As a result of the private equity deals, the stock prices of publicly traded TV groups soared.

Hoping to seize the opportunity, two major groups—Nexstar Broadcasting and LIN Television—put themselves on the block and invited bids.

But they were a tad too late to market. The mortgage crisis and subsequent credit crunch undermined the equity firms’ability to borrow at low rates. Suddenly, the number didn’t add up anymore. The private equity players started pulling back.

Nexstar and LIN were forced to shut down their auctions.

Stock prices sank across the board. Nexstar, whose stock peaked in July at $15.41, is now trading at less than $9.

Likewise, LIN hit a high of $20.24 in the summer, but sunk to $9.05 in November and closed yesterday at $12.44.

Even companies that didn’t test the auction market rode the roller coaster.

Sinclair started the year at around $10, soared to a high of $17.67 in the spring and slowly came back to earth over the next several months. It closed yesterday at just $9.06.

Clear Channel Communications takeover by a private equity consortium is still on track as of this writing. But its spinoff of hundreds of radio stations to a private equity consortium has collapsed, and the sale of the TV group to Providence Equity is said to be in serious trouble.

According to BIAfn, sales of 208 full- and low-power TV stations were announced in the first half of the year, more than twice the number in the first half of 2006. The deals had the combined value of $2.3 billion. (The numbers include the troubled Clear Channel TV deal.)

Totals for station trading activity in the second half of the year from BIAfn are not in yet, but it’s certain they will not be anywhere near as big as those in the first half.

In the biggest deal of the second half, Raycom Media agreed to pay $583 million to Lincoln Financial for its three network affiliates and sports syndication business.

In another big one, New Vision Television bought Montecito Broadcast Group for $330 million.

Taking a cue from Nexstar and Sinclair, more mainstream station groups began demanding—and apparently getting—payments from cable operators in retransmission consent deals.

LIN and Hearst-Argyle are believed to have done cash deals, but they cite non-disclosure agreements in declining to discuss details.

Two traditional media companies with TV stations announced in October plans to split themselves in two.

First, Belo Corp. said it would become two companies—one (Belo Corp.) comprising its TV stations, the other (A.H. Belo Corp.) with the newspaper properties.

Just two weeks later, E.W. Scripps followed suit. Scripps Networks Interactive would include HGTV, the Food Network and other cable and Internet properties, while the E.W. Scripps Co. would hang on to newspapers and TV stations.

THE DTV TRANSITION

As the year went on, the deadline for the analog cut-off and switch to digital loomed larger and larger. According to the TVNewsCheck Countdown Clock, as of today, there are only 426 days left until Feb. 17, 2009.

Most broadcasters say they are ready or will be ready with the right channels and right transmitters and the right antennas.

The real question is, will consumers?

Fearing that they won’t be, Congress earmarked $1.5 billion for $40 coupons that consumers may use to buy digital-to-analog converters.

The converters are intended primarily for the estimated 20 million homes that rely on over-the-air reception of TV broadcast signals. They will need the converters to watch digital broadcasts on their old analog sets. (Of course, they also have the option of either buying a digital set or subscribing to satellite or cable.)

The Commerce Department’s NTIA is in charge of administering the coupon and converter program. So far, it has awarded IBM the contract for handling the coupons and it has certified several converters and hundreds of retailers to sell them.

The broadcasting industry is vowing to do its share to educate the public about the transition. In October, the NAB announced that it would contribute nearly $700 million in cash and kind to get the message across.

The NAB is hoping that its voluntary efforts will discourage the FCC from mandating that stations set aside time for educational PSAs.

TECHNOLOGY

Local HD news increased significantly during the year as a succession of stations threw the switch on HD studios. The number now exceeds 60 in markets from New York City to Reno, Nev.

Most were not yet shooting and editing HD in the field. Instead, they were shooting 16:9 SD and upconverting it to something approaching HD.

When stations decide to go for HD news acquisition, they will find ample equipment available. Panasonic and Sony have brought their ancient battle for ENG supremacy into the HD age.

Each of the competing formats has its fans and its pluses and minuses.

Sony offersr the XDCAM, which uses low-cost optical disks as a recording/storage medium. Panasonic’s P2 format takes an entirely different approach. It uses proprietary solid-state memory cards. They’re expensive, but you don’t have to spin them to download the video.

A viable third alternative emerged from JVC in June when the Scripps station group adopted its ProHD line for its 10 network affiliates. Scripps chief tech Michael Doback maintained that ProHD was less expensive and more versatile than its better known rivals.

Perhaps hedging its bets, Sony this year introduced the XDCAM EX camcorder, which uses off-the-shelf ExpressCard flash memory in place of the optical disc.

The local HD trend should continue into 2008 stations as increased revenue swell cap ex budgets and replacement cycles dictate equipment upgrades.

By now, every TV stations was to have converted its ENG microwave gear from analog to digital. But that day is still a long way off.

As part of a spectrum deal with the FCC, Sprint Nextel agreed to reimburse every TV station for upgrading to digital microwave. The broadcasters would be giving up a portion of their BAS spectrum, but should be able to enjoy the same level of service with the more efficient digital gear.

The program got underway in 2004 with a deadline of September 2007. But it quickly bogged down in paperwork and a legal and technical morass. Only 28 stations in 17 markets are expected to have made the conversion by year’s end.

Sprint Nextel, with the support of broadcasters, is now asking for more time, much more time—until August 2009. The FCC seems to have little choice but to grant an extension, although it could try to move up the deadline.

Can a TV technology company thrive without going to the NAB convention? Avid believes it can, and will test that theory next spring. The troubled company, best know for its nonlinear editing systems, says it will forego the “hellish din” of the convention and use its marketing dollars to get up close and personal with potential customers.

The Association for Maximum Service Television and the NAB worked hard to head off efforts by computer companies to open up the fallow broadcast channel in each market—so-called white space—for unlicensed wireless devices—PDAs, laptops and such.

The broadcasters challenged the proponents’ claims that that sensing technology would prevent the devices from interfering with digital broadcasts. Their concerns seemed to be justified after FCC released tests of the sensing prototypes last summer and found them wanting.

The FCC is now considering MSTV’s request for more lab and field testing.

Most broadcasters still don’t know what they want to do with their extra digital spectrum, but one idea that gained some traction this year is mobile video.

The Advanced Television Systems Committee is now working on a standard for in-band mobile video. Among the systems vying to be the standard are those developed by Harris/LG Electronics and Samsung/Rohde & Schwarz.

To keep the ball rolling, Ion Media’s Brandon Burgess organized the Open Mobile Video Coalition, a group of broadcasters that will push for an in-band mobile standards and mull business applications.

LAW AND REGULATION

How far can the FCC go in regulating broadcast indecency? That question is now on the doorstep of the Supreme Court.

In June, a federal appeals court sided 2-1 with Fox in its challenge of FCC fines for allowing “fleeting” expletives by celebrities to air during live awards shows.

The Justice Department asked the Supreme Court to review the case. A decision from the court on whether it will is expected early in the new year.

The litigation was really no more than fallout from the indecency crackdown launched by FCC Chairman Kevin Martin in 2006.

In 2007, the big Washington story was media ownership, specifically newspaper-broadcast crossownership.

The issue was brought to a head by the Tribune Co. The financially troubled company cut a deal with financier Sam Zell to go private, but to complete the transaction it needed the FCC either to relax the newspaper-broadcast crossownership rules or grant it a waiver.

The Martin-led FCC did both. First, it granted the waivers to Tribune, but then just yesterday it relaxed the rule to permit newspaper-broadcast combos in the top 20 markets.

With the backing of his two fellow Republicans, Martin took the action despite tremendous pressure from Capitol Hill not to.

But Martin has also shown that he was not a deregulatory zealot like other Republican chairmen over the past three decades.

For much of the year, broadcasters could sit back and enjoy Martin’s increasingly strident efforts to regulate cable and cap cable ownership.

But in November, Martin suddenly turned his sights on broadcasting.

In November, the FCC imposed new quarterly program reporting requirements on TV stations. And yesterday it launched a rulemaking to bring back local programming and ascertainment requirements, despite the protestations of broadcasters.

Broadcasters were also irked by the FCC’s decision to affirm the local duopoly rule, which bars common ownership of more than one station in small markets.

NEW MEDIA

New media marched onward in 2007, both at the station and network levels.

In October, News Corp. and NBCU debuted the public beta version of Hulu, their joint venture that attempts to transfer the free ad-supported TV model to the Internet.

NBCU pulled programming off Apple’s iTUNES in December, after Apple refused to charge more than $2.99 per episode. NBCU has also made a deal with TiVo to use the DVR company’s research and interactive advertising products. NBC Direct sends full episodes directly to consumers. A free subscription feature will provide a full season of shows.

And in an about-face, NBC picked up MySpace series Quarterlife, making it the first show to move from the Web to TV.

ABC’s O&Os relaunched their Web sites with new, large Flash video players to put more emphasis on video and make the sites less like those of newspapers.

Fox made a deal with digital download service Vudu to sell 24, Prison Break, NYPD Blue and other 20th Century Fox Television titles in beta mode using its set-top box technology.

At the station level, the big new media push in 2007 was for the high school crowd. In August, Hearst-Argyle announced its High School Playbook; Fox O&Os kicked off FoxHilites.com, Belo launched HSGametime.com; and radio broadcast group Emmis announced it was forming IHSAASports.com in conjunction with the Indiana High School Athletic Association.

In November, Hearst-Argyle TV became the first TV reseller of Google AdWords ad program, using station Web sites and Web sales force.

PEOPLE

NBCU named John Wallace president of the NBC owned-and-operated television stations, succeeding Jay Ireland.

Dave Lougee took over as president of Gannett’s broadcasting division of 23 TV stations, replacing Roger Ogden, who retired.

Belo Corp. promoted Dunia A. Shive, president of media operations, to president and chief operating officer.

My Network Television hired Greg Meidel as president and handed him marching orders to revamp the programming.

Spanish-language media giant Univision named Joe Uva, former president/CEO of OMD Worldwide, as its new CEO.

CBS tapped Drew Carey to replace silver-haired legend Bob Barker on the CBS daytime game show The Price is Right. Barker hosted the show for 35 years (6,586 episodes).

After Rosie O’Donnell flamed out as Meredith Vieira’s replacement on ABC’s syndicated The View, the show’s creator Barbara Walters turned to Whoopi Goldberg. And later in September, Sherri Shepherd was tapped to fill the final co-host seat.

C-SPAN founder Brian Lamb was among eight recipients of this year’s Presidential Media of Freedom. Winners also include former NAACP head and FCC Commissioner Benjamin Hooks.

Retirement Living TV hired Walter Cronkite to write editorials for the cable network.

Syndication legend Roger King, 63, the CEO of CBS Television Distribution and chairman of King World, died Dec. 7.

Merv Griffin, 82, the big band-era crooner turned impresario who parlayed his Jeopardy and Wheel of Fortune game shows into a multimillion-dollar empire, died Aug. 12.

Jack Valenti, 85, the former White House aide and film industry lobbyist who instituted the modern movie ratings system and guided Hollywood from the censorship era to the digital age, died April 26.

Former Cox Communications President and CEO Jim Robbins, 65, died Oct. 10.

Ray Timothy, who started working for NBC television as a tour guide and 34 years later retired as the network’s president, died Sept. 27 at age 75.

Tom Moore, 88, who as president of the ABC Television Network in the 1960s helped it narrow the ratings gap with NBC and CBS, died March 31.

Former Belo Corp. CEO James Moroney, 85, led the newspaper company’s expansion into broadcasting, died Feb. 18.

Charles E. Scripps, 87, who as chairman of the E. W. Scripps Co. for more than 40 years presided over the newspaper publisher’s entry into TV, cable and the Internet, died Feb. 3.

Longtime CBS executive Everard Kidder Meade, 87, died Sept. 17.

Phil Rizzuto, the Hall of Fame shortstop during the Yankees’ dynasty years and beloved by a generation of fans who delighted in hearing him exclaim ”Holy cow!” as a broadcaster, died Aug. 13.

I Love Lucy co-creator and writer Bob Carroll Jr., 87, died Jan. 27.

Robert Adler, 93, who won an Emmy Award along with fellow engineer Eugene Polley for inventing the TV remote control in 1956 for Zenith, died Feb. 15.

The Rev. Jerry Falwell, 73, the TV evangelist who founded the Moral Majority and built the religious right into a political force, died May 15.

Joel Siegel, 63, movie critic for ABC’s Good Morning America and WABC New York, died June 29.

Joey Bishop, 89, the stone-faced comedian who found success in nightclubs, television and movies but became most famous as a member of Frank Sinatra’s Rat Pack, died Oct. 17.

Two TV news helicopters covering a police pursuit crashed and burned in a central Phoenix park July 27, killing KTVK pilot Scott Bowerbank and photographer Jim Cox and KNXV pilot Craig Smith and photographer Rick Krolak.