AD AGE DATAPLACE: 100 LEADING MEDIA COMPANIES

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A steady stream of mergers and acquisitions, plus rapid growth in advertising and new media forms, delivered a healthy 13.3% kick to 1996 operating revenue of the nation's 100 Leading Media Companies.

That revenue hit $112.1 billion, led by a strong cable field, which posted $31.1 billion in operating revenue.

CABLE PASSES NEWSPAPERS

Cable became the only medium in the 18-year run of Advertising Age's 100 Leading Media Companies report to pass newspapers as the medium of choice. Newspapers gained 5.7%, to $28.7 billion.

Substantial though it was, cable's 18.2% gain in revenue trailed radio's 20.1%, and the 34.% of other media- the latter orbiting largely around online services and direct broadcast satellite operations that claimed seven of the 100 spots.

Heavy consolidation in last year's ranks triggered changes in this year's 100: New World Communications Group, No. 61 last year, was grabbed by News Corp.; Providence Journal Co., No. 72 a year ago, was bought by A. H. Belo Corp.; and 3M Media, formerly No. 73, went to Eller Media Co., No. 90 last year, before Eller itself was subsumed within Clear Channel Communications.

FRENZY CONTINUING

The feeding frenzy continues unabated: Heritage Media Corp. is under the knife, with radio and TV headed to Sinclair Broadcast-ing Group and Actmedia-largest provider of in-store promotions-to News Corp. provided the Justice Department changes its initial complaints.

Gaylord Entertainment Co. is selling its cable business-Nashville Network and Country Music Television-to CBS Corp.; Pat Robertson's religious-bent International Family Entertainment is being sold to News Corp.; and Evergreen Media Corp. is about to be folded into Chancellor Broadcasting.

The latter is radio's largest coupling since the Westinghouse (now CBS Corp.)/Infinity Broadcasting marriage. The changes would seem to indicate radio has consumed its fill, but that doesn't seem the case. "The only way to get top-shelf radio properties today is to buy wholesale and then swap," says Peter Bowman, VP at media consultancy BIA Consulting.

He predicts large independent stations are the next to be served up. He also expects radio markets below $10 million to come increasingly under siege by group owners like Capstar Broadcasting Partners, currently accumulating radio frequencies that give it 40%-50% of some cities' radio revenue pools.

The reduction in the capital gains tax recently passed by Congress can only spur the feeding.

Radio caught its mergers and acquisition fever when the Telecommunications Act of 1996 changed rules to allow a media company to own up to eight stations in a single market. Radio now accounts for just over 3% of the media total for the group compared with half that amount two years ago. Specifically, radio from 23 Top 100 companies grew 20.1% to $3.7 billion. Growth was 11% in '95. This group outperformed the industry's 8.2% ad growth.

The 30 cable operations of the Top 100 count more heavily on ad growth and market penetration to sustain growth. The ad take for all cable grew 13.1% to $6.04 billion in '96 as penetration expanded to 68.1% of TV households in '96 vs. 66.8% in '95, according to Cabletelevision Advertising Bureau.

Revenue from services in '96 grew 3.8% to an average $32.76 per household, according to Paul Kagan Associates. Components of that average included $24.41 for basic and $8.35 for pay cable, the latter below '95 levels-slippage caused by the value-enhancement of the pay-channel package and movement to basic by some pay-tier channels.

Meantime, newspaper growth lumbers. Because of declining circulation in most markets, revenue is tied to ad growth and new ventures. The 5.7% growth to $28.7 billion for the 38 Top 100 companies with newspapers-though down from 5.9% growth in '95-still looks good. Industrywide, advertising for newspapers advanced 5.8% in '96, according to Newspaper Advertising Association.

Newspaper ad movement in this year's first quarter is 8.9%; the retail segment, which accounts for about half of all newspaper ad revenue, was up 7.1%. That quarterly surge compared with a poor first quarter '96 when retail was off 1.6% from the comparable quarter in '95.

Of the 35 Top 100 companies with magazines, those magazine units grew 6.5% to $17.7 billion revenue in '96, down slightly from 8.7% in '95.

Magazine circulation, like that of newspapers, has been on a gently declining slope for several years. The subsequent flattening in revenues from single copy sales and subscriptions is leaving advertising as the industry growth engine.

Magazine advertising from consumer publications monitored by Publishers Information Bureau-most of which are represented in the Top 100-grew to $11.2 billion in '96, up 9.5%. First quarter '97 was even stronger, up 12.3%.

K-III Holdings outpaced the big publishers at 49.3% growth. Still, K-III has been in a divestiture mode, selling off its Krames health publications and New Women and putting on the block the Daily Racing Form.

The voracious consolidation of TV properties two years ago when both CBS-TV and ABC-TV came under new ownership, has settled and energies turned to maximizing operations. Revenue streams are steadily improving, to $21.9 billion in '96. That's 14.2% growth vs. 5.6% growth in '95 for the 37 top 100 media companies with TV operations.

This vaunted group dominates the national TV market, which hit $31.1 billion in advertising in '96, up 12.1%.

"Other" media, representing 22 varying "mediums" (outdoor, DBS, free-standing inserts, online services and newsletters) among the Top 100, grew a phenomenal 34.7% to $8.8 billion.

The unparalleled popularity of DBS is reason enough. Top 100 returnee DirecTV has been joined by its three competitors: Primestar, EchoStar Communications Corp. and U.S. Satellite Broadcasting. Collectively, they hit $2.14 billion in '96 revenue, up 129%, and claimed nearly 6 million subscribers-no doubt refugees from print.ing Group and ActMedia-largest provider of in-store promotions-to News Corp.

Gaylord Entertainment Co. is selling its cable business-The Nashville Network and Country Music Television-to CBS Corp.; Pat Robertson's religious-bent International Family Entertainment is being sold to News Corp.; and Evergreen Media Corp. is about to be folded into Chancellor Broadcasting.

The latter is radio's largest coupling since the CBS Corp./Infinity Broadcasting marriage. The changes would seem to indicate radio has consumed its fill, but that doesn't seem the case.

"The only way to get top-shelf radio properties today is to buy wholesale and then swap," says Peter Bowman, VP at consultancy BIA Consulting.

He predicts large independent stations are the next to be served up. He also expects radio markets below $10 million to come increasingly under siege by group owners like Capstar Broadcasting Partners, currently accumulating radio frequencies that give it 40%-50% of some cities' radio revenue pools.

CABLE ADVERTISING AT $6 BIL

The 30 cable operations of the 100 count heavily on ad growth and market penetration to sustain growth. The ad take for all cable grew 13.1% to $6.04 billion in '96 as penetration expanded to 68.1% of TV households in '96 vs. 66.8% in '95, according to Cabletelevision Advertising Bureau.

Revenue from services in '96 grew only 3.8% to an average $32.76 per household, according to Paul Kagan Associates. Paid's portion dropped.

By comparison, newspaper growth lumbers. Because of declining circulation in most markets, revenue is tied to ad growth and new ventures. The 5.7% growth to $28.7 billion for the 38 100 Leading Media Companies with newspapers-though down from 5.9% growth in '95-still looks good. Industrywide, advertising for newspapers advanced 5.8% in '96, according to Newspaper Advertising Association.

Newspaper ad movement in this year's first quarter is 8.9%; the retail segment, which accounts for about half of all newspaper ad revenue, was up 7.1%. That quarterly surge compares with a poor first quarter '96 when retail was off 1.6% from the comparable quarter in '95.

Of the 35 magazine units within the 100 media, those magazine operations grew 6.5% to $17.7 billion revenue in '96, down slightly from 8.7% in '95.

MAGAZINE CIRC DECLINING

Magazine circulation has been on a gently declining slope for several years. The subsequent flattening in revenues from single copy sales and subscriptions is leaving advertising as the growth engine.

Magazine advertising from consumer publications monitored by Publishers Information Bureau-most of which are represented in the 100 media-grew to $11.2 billion in '96, up 9.5%. First quarter '97 was even stronger, up 12.3%.

K-III Communications outpaced the big publishers at 49.3% growth. Still, K-III has been in a divestiture mode, selling off its Krames health publications and New Woman.

The voracious consolidation of TV properties two years ago when both CBS-TV and ABC-TV came under new ownership, has settled and energies turned to maximizing operations. Revenue streams are steadily improving, to $21.9 billion in '96. That's 14.2% growth vs. 5.6% growth in '95 for the 37 top 100 media companies with TV operations.

This group dominates the national TV market, which hit $31.1 billion in advertising in '96, up 12.1%.

"Other" media, representing 22 varying media (outdoor, DBS, free-standing inserts, online services and newsletters) among the 100 media, grew a phenomenal 34.7% to $8.8 billion.

The unparalleled popularity of DBS is reason enough. DirecTV, a returnee to the 100 list, has been joined by three competitors, Primestar, U.S. Satellite Broadcasting and EchoStar

Communications Corp. Collectively, the DBS leaders hit $2.14 billion in '96 revenue, up 129%, and claimed nearly 6 million subscribers-no doubt refugees

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