Daily Press from Newport News, Virginia • Page 40

Daily PressThe Times-Herald, Monday, Jan. 28, 1991 COV Broadcasters feel pinch as advertisers tighten belts By JOSEPH PRYWELLER Staff Writer At radio station WWDE-FM (101.3) in Hampton, General Manager Larry Saun ders passed out bright red buttons for his sales staff to wear this winter. Above the 2WD logo, the buttons read, "Business Is Good." Those words seemed to belie the concern among area radio and television broadcasters: Business, in the form of advertising revenues, hasn't been too good "value-added advertising." For instance: WWDE recently enlisted advertisers to be official station sponsors of a Norfolk Scope performance by magician David Copperfield. WNOR (98.7 FM and 1230 AM) became the official area radio station for Bud Bowl HI, a Super Bowl promotion by Budweiser. WVEC-TV, Channel 13, has clients sponsoring locally produced entertainment specials, including a Hampton Roads version of the ABC television hit, "America's FUnniest Home Videos." "We have to do more than sell air time to advertisers now," said Mark Young, general sales manager at WVEC.

"They want more than that to advertise in a slow economy." During a recession, advertising can be one of the first expenses to go, said Kara Cheseby, a television analyst with Legg Mason Wood Walker in Baltimore. "When business products aren't selling to consumers, they naturally look first to advertising as a way to cut expenses," Cheseby said. "That seems to be happening now. It's a symptom of our economy." Douglas Adams, general manager of WAVYTV, Channel 10, said he saw the first signs of the oncoming recession in December 1989, when advertisers on WAVY placed commercials for a three-month time period instead of for the normal six-month duration. That's customarily the first signal of a slowdown," Adams said.

"Advertisers get cautious and conservative." Recession hasn't led to drastic mea sures at area television stations. There have been no layoffs, no wage freezes, little skimping on travel budgets. But the recession has hit in small ways. WVEC canceled its yearly Christmas party at an outside ballroom and, instead, held it at the station. WTKR-TV, Channel 3, didn't add stereophonic sound to its newscasts.

WAVY has clamped down on excess administrative costs. "It hasn't affected anything in our news operation," said General Manager Christopher Pike at WTKR. "But the recession has affected my ability to get a peaceful nighf sleep." Still, said one media editor, Ron Al ridge, the question remains how long can stations refrain from cutting news services when TV stations across the country, especially in the Northeast, already have trimmed staff sizes and frozen salaries? Alridge is editor of Electronic Media, a Chicago-based trade magazine. "It's been the prevailing trend," Alridge said. "Stations in some places have begun a wave of layoffs cutting into essential news operations.

It's definitely counterproductive." Locally, the stations' response to the possibility of news cutbacks has been typified by the comments of WVEC General Manager William Beindorf. "News is inviolate and stands alone," he said. "We guard zealously against cutting into it." The stations still spent extra money in the last half of 1990. WTKR doled out more than $40,000 to send a reporter and photographer to Saudi Arabia last fall and another $50,000 to buy equipment to add a local 5-minute newscast onto CNN Headline News each half-hour, Pike said WAVY and WVEC each purchased expensive Doppler radar weather forecasting equipment and WVEC build a new $60,000 news set. Part of the reason for the continuing purchases was to stay competitive.

The stations are in a neck-and-neck ratings battle for supremacy in 6 p.m. newscasts, Pike said. "We're in a critical three-station horse race right now," said Pike, who said his station's bottom-line expenses were edging perilously close to revenues for the latter half of 1990. "If we spend money now, we could break out of the pack later on." Executives at all three stations said advertising revenues during 1990 dropped by more than 5 percent compared with 1989 numbers. The drop was closer to 10 percent during the last quarter of the year, Pike said.

And at least one general manager, Beindorf, said he didn't expect 1991 to be any better unless war in the Persian Gulf ends quickly. While television stations have tried to maintain the status quo, there have been more noticeable changes in radio. A recent report by the Norfolk office of the accounting firm Price Waterhouse revealed that ad revenues at Hampton Roads radio stations declined by 5 percent for the first 11 months of 1990, compared with the same period for the previous year. Revenues at radio stations nationally during the same period fell by only 2 percent, according to the study. The revenue loss has affected radio programming.

Urban station WBSK-AM Please see Broadcasting, Page 14 smce September. While area broadcasters don't release financial figures, some executives said they saw a market drop in advertising dollars in the last quarter of the year of close to 10 percent from 1989. To make matters worse, the recession hit strong at the wrong time during the Christmas buying season. That's normally the season when dollars flood in from retailers, Saunders said. And with 40,000 military forces from the area now fighting in the war against Iraq, the situation doesn't appear to be getting any better in early 1991.

"We've had to recognize that we're in a recession," Saunders said. "We sweat a lot more, we work a little harder and think more creatively. We'll take a look at any idea on how we can help an ad client. That's how we stay ahead. And that's why business is good." Many area broadcasters say the landscape has changed since last year.

To earn advertising dollars now requires something more than merely offering time on radio or television. Sales staffs use a new industry buzzword to fit that description: Good times, bad times hit sister radio stations NORFOLK It's been the best of times and the worst of times for Emest Jackson general manager of urban stations WOWI-FM (102.9) and WBSK-AM (1350) in Norfolk. The best of times are at WOWI, which now dominates the Arbitron Co. ratings for the Hampton Roads market Jackson's company, Ragan Henry Broadcasting, bought WOWI in the fall of 1989, quickened the pace of the station and added more rap and dance music to the mix. WOWI's subsequent ratings have been among the strongest ever for the station.

The same's true for advertising revenue. But the top-rated station has a weak AM sister, WBSK. That mellower rhythm blues station has attracted little more than a 1 percent share of the audience. Advertising revenues were slipping away day by day on the AM station, Jackson said. WBSK was draining much of WOWI's profits, as well as Jackson's enthusiasm.

The problem stemmed from the combination of a soft economy, the weakness of AM stations to attract advertisers, and competition, he said. i Last fall, Jackson was faced with a decision. It came down to putting WBSK on a satellite network or on a constantly running, automated tape machine, he said. But Jackson, whose company doesn't release financial information, had a third option, On Jan. 1 the station's disc jockeys were fired and and cut our losses." WBSK preserved the music while halfing its operating costs, Jackson said.

"Advertisers were spending half as much with us, too," said Jackson, who added that the dropoff began in July of last year. "It became more of a tough sell as time wore on. So we had to work a little harder." The sales staff for both stations have put body and soul into cultivating new business, he said. They have worked with wholesalers such as electronics manufacturers, attempting to sell commercials for stereo systems instead of for one electronics store. They've tied in commercials for NAPA auto parts with various parts stores.

They have given away a money shopping spree 1 03 seconds to grab cash from the vault of an area bank and a trip to eat at a Wendy's restaurant in the Bahamas. But the economic situation still worries Jackson. "If the worst I've seen in 17 years in broadcasting," he said. "The money just seems to be drying up." He drew a circle on a-piece of paper. The circle represented a pie, arid Jackson began cutting it into pieces.

"This is each radio station's share of the advertising pie," he said. Jackson drew another, much smaller pie. "Here's the pie now," he said. "You still have to fight for the large pieces, but the pie isn't nearly as big as it used to be." JOSEPH PRYWELLER VALENflA PAMPRPI I Ci WkUWKUmiuynllQ, Despite the success of WOWI-FM, Ernest Jackson general manager, believes the economic situation in broadcasting is the worst in 17 years, replaced by part-time announcers who mainly start the tape machines and read the station identification at the top of each hour. The station cut out its promotional budget, including all contests and remote broadcasts "It tore me up to have to change it," said Jackson, a former general sales manager for a Memphis station Our FM overperformed, our AM underperformed.

We delicately wanted to preserve the integrity of our music.