think this hearing concerns trends affecting minority broadcast ownership and within it  several issues that to me are important  i know we have a number of votes coming up shortly mr chairman today we are considering among other things the effect of the federal communication commission the media ownership rules on competition and minority ownership of media outlets  caps on the number of television stations that a broadcast network can own nationwide as well as on the number of radio stations and television stations that in any particular market in addition the f c c imposes limits on when a broadcast station can a newspaper in a particular market and when a television station can own a radio station in a particular market these rules were put in place at a time when the options were limited to broadcast television over the air radio and newspapers in the last decade the option for receiving music sports news and other programming have increased dramatically it was not so long ago that listeners were confined to whatever channels they can receive on the am or f m band today consumers also have the internet channels dedicated to music high definition radio and can download legally music and other content of portable devices to enjoy whenever and wherever they want minority ownership is another one of the issues being considered today minority owned and other small radio stations face challenges from changes to the way that listenership is measured for advertising purposes recently arbitron which measures ready a listener ship has shifted to a new people the small stations are concerned that these changes disproportionately affect their listener ratings and make it harder for them to compete for advertising dollars specifically some claim that arbitrage method for recruiting young african americans and hispanics in their sample panel is faulty resulting in a lower ratings for the stations that these listeners prefer and minority on radio stations have expressed concerns about the effect of to the performance world destruction and may the chairman and i joined in requesting a creed or national origin whatever congress does in this arena should be done with an eye towards keeping radio and television accessible and attractive to all the many issues that are being raised by today's hearing or not re specific small locally owned radio stations face obstacles to access to capital lower ratings and potentially payment performance royalties regardless of whether the person who owns the station is white black hispanic male or female even local religious stations with a long history of devoted listeners mr chairman this issue extends beyond just my radio station is also about the survival of many small radio stations across the country i thank you for the time now you're back thank you very much states and focusing on the impact that the recession and like of access to capital and competition for advertising revenue and media consolidation and the change in marked up the bill already i think we probably do ourselves a disservice for that reason i've been able to separate the not that they have completely i don't think there's any question about that although i would certainly question any notion that passage of the bill out of the judiciary committee resulted in any collateral damage that has already taken place to minority ownership but i think i have the ability to separate efforts in fact at this very moment in financial services there is a hearing going on about bringing funding to main street  challenges that are facing minority broadcasters and perhaps stimulate some innovative thinking about how we can get back to a time when we use the tax recognizes that we have suffered a great loss to the musicians in the audience my deepest sympathy and understanding for this iconic figure that has left us but has left us with a legacy that we will forever cherish i think it speaks to the point that we are interrelated martin luther king said that we are with ality and we cannot do without each other and i hope the hearing today lect upon the greatness of someone like michael jackson who has been plagued consistently now for two weeks and as individuals have taken whatever mode or medium that they could to listen to his music that we recognize that music needs to be conveyed but the conveyer has to have music and so there is no doubt that we want to preserve what i have grown up to love and to appreciate and that is minority ready else we want to be balanced economically we want to have insight on how we can improve it to join with congress and want as many others in signing on a letter to ensure the  survivability of our minorities small women owned businesses legislation that is not be forced to pay clearly had a very very strong protection language for those individuals or ownership i happen to be a very strong supporter for battling advertisers to insist that they advertise on minority ready broadly speaking because those audiences communicate in the same kind of monetary  vehicle dollars unless they're trading in gold so i'm looking forward to this hearing because i want the insight to make me a better legislator for those who felt that they could not be present today  offices remain open for you to engage in dialogue with us and i cannot thank the chairman enough for being the kind of civil rights leader that is welcoming to all my last point is that i hope as we proceed mr chairman all the friends that we have made throughout all the years through our radio stations of which we've spent so much time in and out particularly our local minority radio stations all those anchors and friends i hope and all aspects of our society so i'm appreciative for this hearing today that may have been borne out of a bill that was in this committee having to do with performance right but today we are really talking about affecting minority broadcasters and this is extremely important this session as you know a lot is going on and there is a meltdown and to try and offer some help to people who have lost their jobs so that they can pay their mortgage payments with money going to regulate the banks and whatever institutions holding that paper and of course creating a housing trust because the homelessness and the need for housing so we're in a bad economic time and it is very appropriate talk about acting minority could protect and preserve minority institutions that all of them are all that all of my career all of my life that i've been involved in public policy i have with the minority broadcasters first of all most of our small relatively small certainly do not attract the kind of advertising dollars that are attracted by the majority financial institutions in the financial services committee thank you so much mr chairman i came today to say thank you to all of those that are that  decide to accept the invitation to be with us here this afternoon and to say to a broadcaster work with the broadcast and the owners of broadcast stations that you're always welcome here and you always have here and to say to those that measure audience participation we've always had issues with how well you measure audience participation and therefore impact the revenue  of those radio stations and t v stations in our community and by ability of which many times directly correlated with numbers that are issued in which we have very little or no control  old washington and that's the way it began that's my memory of it i know that today we have radio stations throughout the country in the latino community who are the first ones to be helpful whether we call public hearing whether we call public meetings whether we demand to public service announcements and radio that they are for us being present at the rallies and the activity and informing people and raising a level of consciousness and awareness among our people that we would not have i know that univision doesn't need our help they were prosperous making money and a powerful institution in terms of their both radio and television but i have to say that where would we be in the latino community and the immigrant community that's going through with all rights movement today with out without institutions like univision and telemundo and other smaller radio stations that help us each and every day reach a level of awareness and consciousness so we're here with you and i'm here to say that when i began this process here in this committee i kind of said to myself sounds to me like  of millions of dollars i'm not too worried about the but i am worried about other artists in our community for their fruit so that make sure that they have some compensation that everybody can go like jersey boys and put a musical play back on right like frankie valli and the four seasons the a million people that doesn't happen to be lucky if that could happen to other bands and it doesn't happen so where to say that my concern has always been and i know that the driving concern of this committee under the leadership of our chairman has always been for that those at the bottom rung getting them out of it but providing him the most sense attainment value and in many cases driving the whole industry with their music so that's where i'm at and i want to hear from those in the in the radio community we can best address their issues and their concerns as we move forward that we might find a way to also help those at the bottom rung which i'm sure  if we understand it we're all in it together and i do want to say one thing to the chairwoman and that is we will work on financial institutions together and we know that loans are being that every day and financially and we should take that into consideration as we move forward and we know that there are advertisers that the first place that they pull their advertising from is from minority owned radio stations and minority african american broadcast owners and improve the climate in which they must operate a neighbor of director since nineteen eighty two and is also a welcome you to come our first witness attorney w ok i thank you for inviting me to testify this afternoon in recent years we've seen a substantial decline in the number of minority companies owning broadcast stations i come before the committee today to discuss the issues that threaten to further erode minority broadcast station ownership as a result of these threats as i shall explain a bob request of the committee consider investigations of the principal lender to the broadcast industry and of arbitron ratings company which has a couple monopoly over radio ratings broadcast station advertising revenues have fallen drastically this year and minute minority broadcast companies often find themselves unable to maintain the minimum cash position required by their bank loan agreements these loan agreement define fair to maintain minimum cash positions as an event of a fault which means that a company can be placed into default even though it is not missed making a single loan payment this situation is made been made worse because of a new breed of lender in the broadcast industry funds because the banks brought hedge funds into their bank consortia many broadcast companies find themselves being threatened with foreclosure unless they sell stations at fire sale prices or tone over ownership and control of the companies to the lenders for some minority owned broadcast companies under chapter eleven of the bob bankruptcy code may be the only defense obviously the situation does not serve the goal of diversity of ownership in the broadcast industry therefore i am here today to request that this committee investigate the practices of the leading lenders to the broadcast industry such as goldman hedge fund in refusing to enter into work out arrangement that will provide minority broadcasters an opportunity to keep their companies intact and restructure their loans for a brief period until the economy turns around the reasonable  underscored by the fact that the banks are all beneficiaries of government relief through billions of dollars of troubled asset relief program tarp was the purpose of tarp was to provide these banks some relief so that they could return to clyburn letter to treasury secretary geithner requesting this assistance and we hope to work with you to pursue this request when we broadcast face an additional threat that is equally important to bring to your attention the second threats posed by arbitr an audience measurement company that for decades has been the sole provider of audience measurement data for the radio industry arbitron maintains a monopoly over the business of measuring the audience of radio stations which means that radio stations do not subscribe to arbitron rating service those stations have no devastating since p p m became operational in new york city in october two thousand and eight minority broadcasters experience an average forty to sixty percent drop in their arbitron ratings coupled with a corresponding drop in the average rate binary broadcasters  this means that while the market is down twenty eight percent inner city is down fifty eight percent as a result since the introduction of p p m in new york inner city has a staff with program departments and inner has seen its revenue fall dramatically over forty eight percent since was introduced in l a almost twice the average decline in the overall los angeles market which is estimated twenty nine percent let me repeat that the market is down twenty eight percent arbitron putting out a product in such a negative reaction from government investigators and its own customers this is a good question and the answer will not surprise you money many independent research of examine the p p m system and the n the radio business arbitron is an integral part of the radio industry with a strong record of community involvement we recognize the critical role and importance of black and hispanic on radio black and hispanic radio are the voice of their local communities and a trusted and credible source for news and information as the voice of the local community black and hispanic broadcasters are a vital link to democracy for our country there are three major challenges that taken together create a perfect storm for radio broadcasters these include number one the recession has caused a drastic decline in advertising number two this drop in advertising has created a precipitous decline in radio industry revenue and number three many radio broadcasters including black and hispanic broadcasters are highly leveraged and are having difficulty servicing their debt against this backdrop arbitron is standing with our customers to generate new ideas and solutions to help the industry weather this storm the radio business model is driven by advertising sales sixty percent of radio advertising comes from four industries automotive realestate financial services and tech these four sectors have been hit hard by the recession this hit to radio advertising has been devastating to all broadcasters but especially to black and hispanic broadcasters during the first quarter of two thousand and nine the entire radio industry including the general market as well as black and hispanic groups  have all had dramatic and devastating declines in revenue in the range of twenty percent to thirty percent as compared to the first quarter of two thousand and eight let me cite the declines in revenue for five companies c b s radio down twenty nine percent cumulus down twenty four percent spanish broadcasting system down twenty seven percent univision radio down twenty six percent radio one down twenty percent many rock radio broadcasters are struggling with debt loads that cannot they cannot sustain in the current economic environment these companies assume this data at a time when there was every expectation of continued economic growth in addition to these pressures radio broadcasters are now forced to compete with a host of new audio delivery platforms including podcasting and internet streaming these new media have the inherent ability to measure themselves electronically similar to the television industry radio broadcasters and advertisers have made it clear that for radio to survive it must have more detailed and timely audience information that only tronic measurement can provide arbitrage portable people meter or p p m is our company's innovative solution to address that  n has spent over sixteen years developing the p p m with input from my wide variety of industry players including radio broadcasters and ad agencies arbitron has been and continues to be engaged with and involved with members of the national association of black owned broadcasters and the spanish radio association to address their concerns and discuss improvements to the p p m measurement service participation of black and hispanic panelists by providing one on one coaching and adding recruitment and retention bonuses in this difficult environment all stakeholders in the radio industry broadcasters advertisers ad agencies must work together with policymakers investors and bank lenders to help the radio industry survive mr chairman allow me to repeat this very important point all stakeholders in the radio industry broadcasters advertisers ad agencies together with policymakers investors and bank lenders must work together to help the radio industry survive in is committed to working with all stakeholders in the radio industry to help radio broadcasters especially black and hispanic broadcasters survive and prosper in the face of this perfect storm of economic and financial challenges arbitron will work with all industry stakeholders to demonstrate the value of radio in today's competitive marketplace mr chairman arbitron welcomes the opportunity to work with you and members of this committee to address the challenge of broadcasters thank you very much thank you every now and then someone asks me why i have spent a large portion of the last thirty seven years trying to expand minority ownership and employment in the mass media and especially in broadcasting sometimes it is spoken sometimes not but what people really want to know is why is a white guy like you so concerned with expanding minority ownership in media here is why minority ownership matters to all americans ownership influence is content by controlling decisions on hiring format programming and public service as the supreme court has said it is the right of the public to receive suitable access to social political a static moral and other ideas and experiences which is crucial here a more diverse marketplace of ideas creates a more democratic society frankly minorities know a lot more about the lifestyle customs a tradition of the majority white culture than white people know about minority cultures ensure that on a need widespread minority ownership at least as much as minorities do i have just a few points to make this morning first i hope and expect that the internet will facilitate a more diverse mass media environment this does not make broadcasting less important for the forseeable future but with the air broadcasting continues to be the principal source of information for americans especially at the local level where the internet has yet to make a big difference you know a few facts some two hundred thirty five million americans listen to radio every week a number that has been increasing in this age of multitasking the amount of time that people watch over your t v is also going up almost half of all t v viewing is over or over the year channels even when cable and satellite offerings are available second when i say that levels of minority ownership or discretion lelo i wish i could provide copious detail i cannot do that because over the last eight years minority ownership was not a high priority for the f upgraded its data collection well useful information will be available in a year or so but right now the best data comes from a private source which shows that minorities own just seven point seven a full power commercial radio stations and one point two percent of full power commercial t v stations the single largest obstacle to expanding minority ownership and broadcasting by far is substantial deregulation of media ownership limits in the one nine hundred ninety six telecommunications act then a few years ago after passage broadcasting became dominated by a small number of large companies this is bid up the price of stations and created other barriers to entry for new and small competitors for years citizens groups led by the minority media telecommunications council called on the f c c to assess the impact of these changes on minority broadcasting but even after the u appeals agreed and directed the f c c to do so would stall fortunately new management has arrived in the f c c has already begun the task of completing the long delayed studies on historic patterns of discrimination what should be done a lot here are several of the most important things re imposed limits on national radio ownership and strengthen existing caps on local and national broadcast ownership reduce the license term to three years and force meaningful rules this will create opportunities for minorities to obtain the licenses that will be forfeited restore the tax certificate policy which was repealed in one thousand nine hundred five grant the pending application of robert johnson's innovative urban television proposal which would allow vastly increase minority ownership of digital t v multicast streams and enact h r eleven forty seven which will expand the low power f m radio service and serv platform for training a new generation of minority radio broadcasters finally i want to associate myself with mr winston's remarks about the p p m issue since the project of the of minority owned radio impacts all americans the introduction of the p p m technology is a matter of legitimate concern for the f c c in this committee the problem is more with the sampling techniques than with the technology itself so i'll limit my remarks to this while there's ample reason to be suspicious about the validity of ratings obtained using p p m the best case scenario for p p m is that the new ratings are more reliable that would mean that the diary based system used for decades was a fraud either way we need answers and we may well need to regulate to ensure the integrity of the system thank you thank you very much attorney kendall mentor and of the rhythm and blues foundation nonprofit co founder of the black entertainment and sports lawyer good afternoon chairman conyers members of the committee and i'd like to thank you for inviting me this afternoon to testify on issues affecting minority broadcast ownership my name is kendell mentor and i the pleasure of serving as chairman of the rhythm and blues foundation i stand on the shoulders  predecessor chairman jerry butler ray charles the army foundation was established about twenty years ago and continues to serve today as a sole organization worldwide that provides financial emergency assistance to pioneer r blues artists as well as honoring and recognizing the minds of those legendary artists and preserving the genre known as rather than blues in fact we assist those artists on the bottom rung that spoke about a little earlier and unfortunately but the reality is we provide everything from medical assistance to burial assistance to financial assistance for artists that are being evicted or foreclosed on there's no doubt of the significant progress made by minorities in the broadcast industry but there's also no doubt about some of the challenges and the opportunities that lie ahead and i look forward to addressing some of those issues with you today one of those issues of concern is that arbitrage p p m system and meter that we've spoken about earlier is under representing listeners for certain stations we understand however and we agree with broadcasters interested in receiving an accurate accounting of listener ship in order to receive the proper payment from advertisers arbitra phone could help level the playing field significantly and we ask and encourage this committee and the f c c to look into the effectiveness of modifying this device with a foundation stand with broadcasters on this point because we believe a simple axiom the use of someone else's property should be appropriately compensated when a broadcast signal is being used to broadcast or should be appropriately compensated for that use in that light the artist community hopes that we can count on broadcasters similarly to acknowledge our rights as artists to be compensated when artists music and property is played and used just as advertisers should pay for the appropriate amount to broadcasters when broadcasters play music art music to draw audience and broadcasters they should serve and share a small portion of that revenue derived from broadcast receipts with the creators of the music that provide the revenue source for them and just as broadcasters accurately represent the number of listeners of their stations we call upon the broadcast community to accurately represent the effect that the performance rights act which they are now calling the performance rights tax would have on them this legislation despite proclamations is not the end of black radio it is however an important component of fairness for minority artists including so many of the artist that we represent at the rhythm and blues foundation and we look for some kind of bridge that we can all grow together this is a segment of the symbiotic relationship between creators of music and the stations that use their valuable work so that we can be in business together as real partners i also want to take this opportunity to address the issue of consolidation and its effect on the diversity of music broadcasted diversity of music is ensured by devore city and ownership of stations the ability of different stations representing the broad array of within our community to select their own playlists and accommodate the preferences of their local listeners unfortunately however we have seen an increasing amount of consolidation within the broadcast industry as large radio corporations acquire those small individual stations that have traditionally provided us with a diversity that we need more alarming to those of us who champion the complements of black artists and ecology so our culture is a consolidation that has occurred within the black broadcasting community large radio corporations now threaten to destroy many of the gains minorities have made in our communities by watering down and marginalizing their programming that's unfortunate for a developing and aspiring artists and it's unfortunate for those tumors since the mid ninety's song rotations have quadrupled in the past the top ten song every four hours at best holding thirty five to forty spins in a seven day period today however is the most syndicated music format in the country black adults are twenty five times more likely to hear syndicated music than a white audience will syndication effectively does is limited pinions of local news local information and local music the very essence of what has made black radio special to hundreds of communities has been dramatically reduced through consolidation of large conglomerates terrestrial radio today is not the issue it's a question of rights and it's a question of  fairness there been several stations over the past two months that continuously broadcast misleading p s a or commercials that's awk about the reality of this bill and we would like to set the record straight the campaigns are one sided and accommodations a small broadcasters including minority all stations we thank you for your tireless efforts of work and work on behalf of thousands of minority artists who have created and made successful the music art form which has become not only the modern american music including the hear today but is also influenced the shape of music throughout the globe and we thank you for your ongoing efforts to include minority broadcasting representatives to ensure that they have a voice in these discussions and we look forward to working with you described the problems that live broadcast as a minority broadcasters are confronted with each one of you have described it in some particular way and i want you to know that some of the suggestions that i've heard can certainly be acted on and because i'm on the financial services committee along with several other people on this committee we are concerned about the banks and  with respect to what can we do to be helpful to black radio stations to show their value to advertisers we are in the process of developing and we'll have this month a prototype of an engagement metric which couples exposure to engagement so that if you were to examine a particular audience measurement of a particular station in l a and it was proven by the fact that this station had  great following among black males twenty six to forty five and the advertiser who is interested in targeting that demographic group could look at the exposure look at the engagement relative to the desired demographic target and then ideally not only  advertising buy but in our point of view also reward the station for a very focused targeted reach to that of one hundred eleven organizations including broadcasters for example one of the one of our customers is city broadcasting and inner city sir there are several treaties with the burn and run conventions that are already in effect which royalties are already being repatriated amongst the members of these conventions and these treaties they're not being repatriated back in the united states right now because of lack of reciprocity once the act is already in place once it gets passed by the full house and the full senate then the united states will take its rightful place with most other developed nations except to north korea and be part of the international fifteen years ago so i think the question is settled that there are constitutional back opportunity to use the legislative process and i think intentions of the founding fathers that we come to this place to solve problems and we are in fact representative of all of our country both those who agree or disagree with us and we find ourselves sometimes having to make hard decisions which maybe the majority of americans or a large portion of americans may be challenged to agree with and i cite as i have done often in this committee room that there was not a groundswell of support for the passage of the one hundred sixty four civil rights act or the one nine hundred sixty five voting rights act today we would ask how could we live without them so i want to find a way of coming together and a good friend of mine the congressman from chicago quoted another great philosopher i heard him saying as he was walking can we all get along big rodney king offered that suggestion some some time ago believe in that government regulation of arbitron which in essence has been itself mean the government criticized for maintaining a near monopoly would  helpful to solving the problems of the concerns of our constituents which are small broadcasters minority broadcasters are so that we can go to the heart of the issue the heart of the issue is that black radio latino hispanic radio in particular and now  growing market asian radio speak to the hearts and minds of particular community and those hearts and minds may not i don't know how they calculate but when they hear they run out and repeat how they run out and buy can we be fair to th say is that arbitron has happened in a number of markets despite rumors of the media ratings council which say that you should not institute a new technology until it is accredited may have received a quotation you know only two markets one of which is using a different sampling method than is being used in all the other markets which have been opened up the media ratings council is to be an insufficient basis to restrain the questionable activities of i would try then i think regulation would become appropriate and so if you're restrained in this present structure then we need to unrestrained you know that's right we should give the media ratings council a little more time but if there are unwilling to restrain the activities of arbitron and they're continuing to withhold accreditation then that means that the self regulation system hasn't worked to the comment that was made by mr schwarzman which was an incorrect comment under the rules of the media raiding council and a very large document was in the public domain that describes the media ratings council that was filed on june thirtieth with the f c c under a notice of inquiry so i'd be happy to make that available to the committee if that would be before it obtains accreditation as long as it's continuing to work towards accreditation let me turn to mr mentor but let me leave on the table mr willingness to talk with you i need to hear a bottom line of how we can get advertising dollars to chicago why don't you just told the right of artists and i can't help but know who's been being played these last three weeks what family has been played his last three weeks and economy everybody's affected we're very sympathetic with the concerns of radio but we look at the fact that revenues and advertising dollars are flowing into radio predominately of us not talk radio because of the music that's being played and on behalf of the artist community we're looking to be able to have some of those revenues flow through to the artists who are in the who have earned the right to be compensated for the airplay of their work the same as they are around the rest of the world this is no different they're already being compensated for the same work the same airplay on digital radio cable satellite and webcasting however the last seventy years the broadcasters on am and f m have been able to avoid this issue coming up and we're looking for fair compensation and at the same time we want  balanced dialogue so that we can take into concerns the issues that the broadcasters are putting in front of the committee today you would be willing to come back to the table and say for example look at a promotional value concept if they came back to the table so that we could move forward a unified unified manner absolutely every door is still open and we realize that the act has not been passed by the full house and full senate yet and is a lot of dialogue that needs to be conducted in the meantime and we remain open to have that dialogue at any time any place chairman if i just wanted to pose this last question because of the economy how much money do we need to just reinforce how much money is left on the table for american artists with then to come and invest in the united states by doing more production more studio millions billions maybe over the period of time on foreign shores because of our lack of responsiveness in the legislative construct because we don't have a fix if you will to get  i start out by something i looked at the memo that they would have this hearing and i know that we had a hearing on the same subject matter not that long ago and i was a bit surprised that we would have a hearing  for minority radio operators because i think all small business people are in a minority and base a lot of the same kind of problems so it raises a question in me and why we would do this and i was unable to hear all of your testimony on the review part of it so i'm to that mr schwartz when that supreme court decision that are dressed set asides or preferences so there were aware of the foundation of the discussion here yes mr congressm the decision is metro broadcasting versus federal communications commission and in that decision the f c c had to policies one which gave a lot of to minority owner sale to a minority to minority license it's not a question of whether it would not approve it it's a question of a policy to promote minority ownership as as i said in my it's that the nine hundred ninety six telecommunications act as explained in my testimony by allowing larger companies to buy up properties made up the prices and made it less available to new entrants and most especially to minorities and  broadcasting case continues to be good and you referenced a formula that would be used by that and my recollection on the two michigan cases was that the formulas were prohibited but in dealing with individuals there were they were allowed to use judgment exceptions broadcasting licenses are ministered under the public interest criteria of the federal communications commission and promoting a diversity of voices in the mass media is a central component of the public interest standard and that's why the f c c has considered intreated broadcasting is essentially different from other forms of ownership it's not really the answer the question but i understand your position and so i would like to understand if i could start  with mr winston and i know in business being short of capital and having difficulty in marketing advertising which is a revenue stream that you have to rely on that it  becomes people to people relations and networking relations in the difficult my life trying to build enough capital that i could compete against the big guys i'm very sympathetic to that and we have to have entrepreneurs that are planting the seeds out there to grow companies that are tenacious and their ability to challenge the establishment's whatever their particular ethnicity or race might be bill me a little bit on what you're faced with there are there are clear examples that you can help me adjust principal payments you work it out in this recession we're finding no response from the lenders and we're talking about the lenders who are the principal recipients of problem people have because of that exactly and that's the point that i want to understand and i don't make the point that however this might be resolved there will also be a lot of non minority people that will end up in a very difficult position very similar to the ones a year and enjoy the seniority that our years of service afford us to sit down and talk specifically about the financial situation that broadcasters and the owners of radio i think that's very important as we strive toward democracy i think we should always recordings i mean i understand that if you wrote it you get money but if you performed it you did it and i think we want to find a way to do that at the same time find out within the the economic situation that we find ourselves in as we have people withdrawing money that is if you are alone especially to those in the minority community and how is it that we get the money that is rightfully deserve to people so we understand that and we're going to work on that and i'm happy that you suggested and that you are willing to continue because i think that's what this hearing is all about and that is bringing people in i was i would have been hopeful that others that were invited would have come and would have participated because i think that does this not sound like a prope committee will come to order and the chair recognizes the distinguishes judge from texas mr guns mr chairman thank you very much and i want to thank the witnesses for their patience but i think it is important to have you here  written statements for future reference and your testimony today i am disappointed as has been expressed by other members that we don't have all the stakeholders that are out there that have something to add to this debate the reason you're here is to educate us to provide us with your point of view you have to advocate in your own behalf no one else is going to do it for you so when you drop out of the debate i can assure you the voices are not heard and no one can complain at a later date that many did i make every already expressed some of that my concern and this is probably more directed to mr minter and anybody else and that is just radio stations find themselves in a very technology the way to get their music as you're well aware of is totally different than it was years ago formats platforms everything's different and radio stations have certain costs in the way they deliver music that other delivery systems platforms and such don't when it comes to the public airwaves the big difference is that the listener gets it for free when it comes to satellite subscription so we start off with such an inherent difference in business model that advertising has to be the revenue source for those that use the public airwaves and so we fast forward economic times changing technologies and such and yet there is something that is so abundantly right about saying that someone should be compensated for their labor their creation their performance and we get into the only thing while a fire to that might be again promotional value my preference is always been to have someone that knows what they're doing evaluate what's going on out there and  and that is and i guess we can also mr joyner mr mr winston is the recording artist better serve with a greater number of radio stations out there public airwaves where people listen to it or fewer number out there because logic would tell me you got a lot more played you got more stations  gonzalez technically the answer is yes the parties that are performing the music are better served by having a broader audience and annoyance i can access that music for free the difficulty that we have is the playlist on the stations that are broadcasting that music these days are inherently be limited and restricted because they're doing consumer research that gives them the top twenty top thirty records that are active for that particular week which means very little access to a lot of the balloting artist and also  office attempt to get all the stakeholders in one room and we did and the only thing that took place was a discussion because there was no meeting of the minds the biggest question in this is going to be to mr since and that is we have minority radio station owners that truly believe the manner in which you have selected your sample both as it constituted in the quality of it is not truly representative of the audience out there and they are now suffering  earlier indicated these are tough times for him and it's impacting their advertising revenues on what they believe are not accurate figures that those advertisers are now going to be spending now you've indicated that this thing was rolled out because the m r c allows it to be rolled out even though it hasn't been accredited and i think that was the situation back then it was my understanding that they allowed the rollout as long as it was complemented by that which you had already in place which would be the diary system and such were awaited a year later after that somewhat frustrating experience over in the cannon office building congressman thank you for the question why i should note i've been with the company six months so i was not participating in that session one year ago he made a couple of different comments address the number one arbitron believes that we do have a rep i just did sample we worked very very hard to for example as we're looking at the san antonio market to get a representative sample that reflects the metro area of san antonio and two on the m r c accreditation process which i think you know very very well congressman as has two members of the committee the m r c accreditation process is not simply for radio but it's also for television or newspapers for other other services they are the policies the procedures of the media rate council is to allow audience measurement company to be in the market commercializing the service before accreditation is obtained the provision you mention congressman about keeping the previous service in place before you move into the new service is is the recommendation of the m r c and that is still in place the we we have a diary service we serve over three hundred markets in the united states measure measure three hundred markets in the united states the new p p m service is focused on the top fifty markets we're at eighteen of the top fifty at this moment in time and we still continue to maintain the diary service in markets fifty one through three hundred but when we're making a conversion from a diary market to a p p m market as planning to do in san antonio next year we keep the at the moment in time that it becomes commercial we keep the dot the previous service the diary in place for three months as the conversion occurs when your final point where is the company a respect to the improvements and others other members of congress asked for from one year ago i can report to you that we've made very good progress in improving the sample size and proving the sample quality we've made a commitment to improve the sample size on the matter of sample quality we've introduced a higher level of cellphone only sampling after the hispanic demographic or the black demographic we've improved the way that we make recruitment and further and the final point we have made a significant number of improvements around maintaining the panel when it's in place extra coaching extra training so those those would be some comments to your question thank you for your indulgence congressman made several points i think they're all very very good points number one the p p m device i'm holding one in my hand mr chairman is a device that was developed gosh more than ten years ago this is a device that looks something similar to a pager it has a little clip on the back you could put it on your belt congressman gee whiz i don't like to i don't even put my cellphone or your blackberry on my belt and i don't care to do that and my wife wouldn't put doesn't have a belt when she wears any particular outfit so this is not  easy to use it's also an a second comment it's not very interesting looking and other important comments he made were when i'm in different places when i'm traveling from my home district to my office here i'm on the move i have to remember to bring all of the equipment all of the chargers all of the car chargers at the time he had this experience which think was about a year and a half ago i don't think the company did a good enough job of getting extra travel chargers giving extra  stations so that if you were on the move or coming from your one area to another that you'd be covered and all of these points are very good points we have addr think the points on the accessories and travel chargers and from a year and a half ago to today i think we've addressed that quite nicely too to solve that problem on the matter of i don't want to wear it because it's not something i have or a woman doesn't want to wear this pager like device we have from a year and a half or two years ago developed a brooch  take this solution and put it into software so it fits into a cellphone or fits into a p d f and i guess we should give the congressman some credit for a new product planning that solution is exactly what we're responses to his question me i don't understand that congress made some comment and i remember what those comments were i was not asked to comment on them you've asked me to comment on them and i'm doing doing so now  panelists are using and the way we do so that it would fit on top of the table very easily the other equipment that is involved would be the encoding devices that we put on radio stations which you have to go to the radio stations to see in terms of how the data are brought back to us evening the panelist puts the p p m device into a docking station and at four in the morning all of the data that had been recorded are sent back to our servers and are collected  to see that data center operation would be similar to a data data center operation that you might be familiar with but i could bring to you and to other that if you have an accredited rating service that their guidelines maintain that process in in existence until the new process is accredited commercialized and  y jam i'm sorry you missed heard me the chart the word that under m r c guidelines the former service diary is maintained for three mister was in your position before you became c e o mr chairman a gentleman named steve moore as had been the c e o of a company he retired at the beginning of this year i can take a stab at that mr chairman as we keep track of the african american owned stations of the two hundred forty five african american owned radio stations in the country approximately ninety percent of those are formatted for african americans looking roughly slightly over two hundred african american owned stations that are formatted for african americans i advise that there are probably an additional number that are not african american owned that target african americans so i think the number might be somewhere in the four hundred range of we don't we don't keep the general chairman when you ask the question african american stations by african americans do you mean that they would own one hundred percent of it and they would not be using any capital from a third party  problems with lenders that are trying to exercise unwarranted control over african american  because that's never been approved by the federal communications commission a number of large group owners granted cumulus others that do programs of the african american urban communities which i think is the bigger picture that you're looking to as opposed to one hundred percent owned and controlled and veteran broadcast person clarence from new york and other parties and entering into a discussion of the problem of how we can resolve issues because of that figures into the continued continued support of the minority radio if that included some other resolution or performance i don't believe that is one that is going to be helpful to our future well if it's not helpful to your future that would be more reason for you to participate in it and help us understand how it would be  participate in the hearing that's going on in your contribution has been very thoughtful why can't we see the product of  of information that's been disseminated to the public and we in the artist community have consistently looked at some of the information that's been out and the broadcast community strategically and wisely for their position fulfillment of government programs for the community and this is actually a royalty it's not a tax it is a royalty that is already in effect in most of the other parts of the world and it does not go back to any government it goes to portion mr weston is absolutely correct that a portion of our landline individuals and a portion of our sample cell phone only households the method by which we contact someone who is a landline only prospect is through the method described through our call center but the f c c has set up a mandate i believe it was arbitron is not a monopoly but we do have a majority share it would vary congressman by market i mentioned earlier that there are we organize and think about the u s market in three hundred markets and nielsen focus nielsen just entered the business last year at the end of last year and they're focused on about twenty five percent of the business also do much more in person so a lot of people who climbed to talk to someone on the telephone because they don't know who they are and why they're trying to get information if someone comes up to the front door and extended visit with us today realize that we are serious about the multiple issues that are before us are in final look at your name i'm not going to get it correct so let me get it correct being unfair we've heard the issues that have given us a sense of balance what you do what the necessities of media access what they do and i will come back to my original premise i think we have solutions here i think the very fact that you're at the table together there are a reasoned response to what the concerns on the bottom line is opportune time is a business and you want to survive and be financially successful but you have a key that speaks to the constituency that mr winston represent because if your numbers are low you in essence can alter the destiny of this to winston's constituents because you will provide numbers to advertisers already zero stations will take your numbers and use them to accelerate or to enhance the amount of money they get from advertising or the range of advertising that they get so let me tell you what we're facing it's interesting  we actually are facing questions of systemic discrimination i'm sure people will run out of the room if i say racism but really as most people today would say it's not my fault i wasn't involved in it but it's the same it's a mindset that those who listen to previously called black radio but now when already ready are not purchasers they're not astute they don't listen to news and all of that now in the twenty first century has been dispensed with we know that the markets that small radio station and already radio stations are engaged in is a huge market so let me raise this question that one of the thought about this whole issue and you are here in a representation manner and i hope that you will the comments of the chairman  which is the idea of coming to sit around the table if you add my voice to it can we engage in discussions with some of the principals that chairman ed mentioned one of the ideas is to add does in terms of your bottom line is that a reasonable approach to begin looking at all these issues by discussing what can be done twenty i would love to have a conversation that was all these issues on the table  and as a lawyer of thirty years in a profession one that you could see how there is a possibility of that being intertwined and i correctly assessing your bottom line of what arbitron does to the whole advertising dollar these things are very much related and in your client is the advertising dial on the bottom line of your income or do you also get  you also count in the dollars that are to pay to get on the air there are very few artists i'm aware of that pay to get played i think the ninety nine percent of the revenue the broadcast stations earn is earned from advertising revenue but if we were in a meeting and we had these issues on the table such as be that artist pay we could reasonably be in a room to set that i know that in smaller markets i am to d that there are fees that are just paid to be played it may be a different terminology but it does occur yes i would i think that could be part of the conversation is there mr mentor and you heard what i've just stations some tax tax relief the whole idea of an arbitrage fix we don't know exactly what that might be but you understand that it does impact their bottom line about if their numbers are low advertisers don't want to address  advertise there you understand that but that is a reasonable issue discussing the given issue there is a performance right recognizing that performance right is not a tax and then the issue of putting all the money issues on the table such as i guess is called the that artist may have to pay to play now there's also another point that i didn't mention with mr winston which is the value of a promotional fee of sorts  putting a final package together even though as the bill has passed out of the committee absolutely matters madam congresswoman and i would add a couple of other items that will be subject to discussion that i think would move the discussion along in a productive manner  one would be for looking at the manager's amendment to extend the delay of the implementation of the payment dates so that we can get out of this economic crisis of the countries in currently right now which is on the minds of every business owner which is  very valid also by staggering the rates cable and satellite radio right now are paying approximately five to six percent of revenues there's no reason not to negotiation and discussion in good faith amongst all the parties why i would have to begin at that rate you could  begin at a very low rate and then increase gradually as the years go by to give everyone an opportunity to rebound economically but most importantly at that point recognising the intellectual property rights in valuing it versus not valuing at we recognise that you're in a business you're in your loosely regulated would you be willing to participate in a discussion for a construct that would allow you to do business but to in essence you're mr w s problem low numbers low revenue because it's advertises running for the hills can you see the need for some that addresses even beyond the technology that you're offering i think mr gutierrez has been mentioned several times he was eloquent in terms of how different communities respond to some of the preciseness that you need so that means you may lose my constituents get on buses at four and six in the morning so they are hard pressed to carry things around or find things a lot of them are working in jobs that don't allow them to keep phones on their on their belts or they go through security and they have to leave everything at the front door so there's a lot of different lifestyles that we're addressing can you see trying to look at a more regulatory structure for what you're  doing madam chair i'd be happy to work with you and members of the committee to work on such a construct and you have gotten from sitting here and they've been different things but you understand the bottom line is that when you produce your numbers some impact broadcasters to be successful and prosperous i thank you for that and let me and you've been very generous with the swordsman you have been a very articulate on these issues help me out on what i've just constructed here how can we how can we move this ball f ratings councils a quite a patient system continuing to roll out the services despite sidelines which as i understand it to do you know just for a moment the ratings council is how old how long they've been  playing since about one hundred sixty members come from there come from all manner of industries but their activities are secret and it's a closed system we know however that arbitron has been denied not just failed to obtain but has been denied accreditation in the very largest market but they continue to operate the p p m system and have discontinued the diary system so they're flouting an existing system so with regret i have to say that mr surance is that he's willing to cooperate with the system have to be compared with the failure to work with the with the ratings councils  but what is your solution what is your solution as an advisory council what is your solution legis what do you suggest that we do i think it's because and again although there was a little bit of a dance i'm not sure you were here for it  functions as a monopoly in the very largest markets in this country and has effectively no competition if the situation continues i think legislation will be necessary so there is an existing board that's been going on since managed in the twenty first century to operate in as an independently and without subjecting itself to the advisory comments or credit of the board is that my understanding that that's correct and indeed as i've said a sample sizes are far too small it would cost a lot of money which arbitron evidently doesn't want to do to increase the sample sizes with which would a remedial large number these problems and  you will be brief and i want to conclude and i thank the chairman the last three paragraphs that mr schwarzman uttered contained many false hoods and i would like the opportunity not now since we don't have the time if you if you have a brief answer the put on the record do you subject yourself to this advisory board that mister sportsman is making we do indeed we've been following the media ratings counsel for the entire existence of the company mr schwarzman doesn't know what he's talking about so he added a number of also as i would be happy to take the time with you and other members of the committee to go through it point by point i have delicate feelings so i'd i'd like you to say that thank you for my delicate sensitivities but but let me end on this note i would be happy to have that information as chairman i do believe that we have a mixture of a fix or a collaboration i respect all these gentlemen that are here and i think they offer so four corners of the moving forward because we have an economic team here everybody wants to survive and make money and i think there are some elements that would answer the concerns of mr winston's constituents  has a valuable purpose and a system like this is existed for a period of time and i'd like to hear more about what mr brzezinski could do to try to fix this and legislation has it has its strengths but i see that there's an opportunity for a meeting as well so my last question will be as they went and you'll come to a meeting to be part of a solution on behalf of your constituents have a constituency to represent in this but we welcome you anyhow and and as i've been studiously silent i have no position and and no expertise whatsoever with respect to one page one piece of this which is the performance right absolutely i'm more than willing to talk about things but i have nothing to contribute on the performance right issue but you have something to contribute on the overall arbitron issue if you do it this meeting is multipath so you would be willing to come yes  closing how many african american format stations are owned by african american chairman of the two hundred forty owned by a couple of i believe investment companies and or hedge funds tones from texas i think you are being at peace today but i i just wanted to add another point on the on the on the on the table here because it's about new artists and i know that i'm mixing apples and oranges but it's  mr mentors point on this when we have this roundtable i think it's important to get all of the different deficits the loss of revenue issues that are very important to minority radio stations because i want their doors open but also to try and have the financial structure that we need to understand that there is something called promotional money i have to have the right term upwards of two million dollars that will be paid to radio are all kinds of schematic calls that if we're to talk about fixing the overall structure we need to have all that information i understand is called an independent record promoters that have to hearing to be