November 2006 Archive
As the world’s population increases, so does the need for clean water, both for drinking and for crop irrigation. And this demand is fueling interest in developing improved purification and desalination techniques by large corporations and by start-up companies.
That behemoths such as Siemens and GE are adding water treatment assets to their portfolios is evidence that this is a burgeoning market. Recent developments include GE Water’s acquisition of ZENON and Siemens Water Technologies’ development agreement with Israeli national water company Mekorot.
Investment firms are also seeing a few dollar signs in the water treatment businesses. Suez’s former water child, Nalco, is now owned by Blackstone, Apollo, and Goldman Sachs. Small-time players like Israeli start-up Atlantium, which has developed an ultraviolet purification system, are also sparking interest in the investment community.
Chemical companies like Dow are also pumping up the water volume, and university researchers are finding water purification R&D a worthwhile pursuit.
These efforts, both large and small, are mostly aimed at reducing the cost of purifying water and solving problems in water-scarce areas. Most technologies treat or filter wastewater, but the desalination of salt water is also increasing in popularity.
While most of these processes involve large-scale treatment plants, my personal favorite is the Lifestraw, a small tube that filters bacteria and parasites out of water. The idea, which was developed by Vestergaard Frandsen, is to halt the spread of water-borne diseases in third-world countries.
With water consumption as well as water pollution on the rise around the world, avoiding future shortages of drinkable water should be a global priority. Investments in purification and desalination efforts could be all-around wins for savvy investors.
Many radio listeners and station jocks were delighted earlier this month when Clear Channel announced that it had signed an agreement to be taken private in an $26.7 billion deal funded by private capital firms Thomas H. Lee Partners and Bain Capital.
Separately, the company announced that it planned to sell its television operations, as well as 448 (40% of its) radio stations located outside of the country’s top 100 radio markets.
The historic deal should result in more local content on the airwaves in the near future. Clear Channel controls of about 10% of the US radio market.
There are still a lot of questions, however. Will the company be sold off in pieces or remain a strong and solid private entity?
Thomas H. Lee Partners is known for its “friendly” buyout practices. But taking time to revamp Clear Channel’s pre-existing slickness is in direct contrast with Bain Capital’s “flip this company” approach. Along with the acquisition, Thomas H. Lee and Bain Capital will gain a 90% stake in outdoor advertising company Clear Channel Outdoor Holdings (NYSE: CCO). With outdoor advertising expected to grow rapidly over the next five years, it’s safe to speculate that this will be an asset that both firms hold dear to their bank accounts.
In an interview with David Lieberman, Clear Channel CEO Mark Mays indicated that the company is not planning a reduction in staff. Meanwhile, Radio & Records is publishing a column dedicated to announcements about recent layoffs and resignations.
Maybe by this time next year, truly “local” radio will be back in business — catering to actual listeners who live in the broadcast area. And radio news reporters, jockeys, and production personnel will be working in the business again.
Note to mega music award show organizers: Get it together.
2006 will be one of the most dismal for viewership when it comes to televised music awards programs. Fewer viewers means fewer advertising dollars, which could mean fewer CD sales for artists and record labels. The downward spiral could spell the end, or more likely a reconfiguration, of such extravagant productions.
Lately, these shows have billed themselves as not-to-be-missed spectacles. When the credits roll, however, they’ve garnered a fraction of the viewers they once did. Three recent victims come to mind – the MTV Video Music Awards, the Country Music Awards (CMA), and the Grammy Awards.
MTV’s annual to-do in August was the first casualty, pulling in a mere 5.77 million viewers, down from 8 million the year before. Viacom president Tom Freston, in his job for a piddling nine months, was unceremoniously handed his walking papers not long after.
Meanwhile, after its tremendously successful New York experiment in 2005, the CMAs returned to Nashville in November to the collective yawn of music fans everywhere. The super-hyped event proved a ratings flop for ABC — drawing 16 million viewers, the lowest in the show’s 4-decade history — according to Nielsen Media Research. What worked before – a fresh start in the Big Apple – could easily have been repeated elsewhere. Anywhere, really, except Nashville.
Grammy was also less than great in 2006. CBS drew a depressing 17 million viewers for the annual show according to Nielsen (little more than half of American Idol’s audience during the same week).
Declining ratings reflect the broader disappearance of network audiences, thanks in large part to the amount of entertainment now available to consumers. Online phenomena such as YouTube are partly to blame for the downshift in viewers, as more people and advertisers flock to such sites thanks to their free content and easy access.
So, in the midst of such depressive ratings news, how did Univision win big? Its Latin Grammy Awards reaped some 11.3 million viewers, making it the top program in its time period in several major markets. The show also happened to air on the opening night of the all-venerable November sweeps (incidentally, quarterly sweeps ratings help determine advertising rates). Univision’s surprising success might have something to do with the fact that it correctly identified its core demographic, the country’s growing Hispanic population.
I know what you’re thinking. The music industry is about as risk-averse as Keith Richards’ physician. Still, organizers like the Country Music Association and MTV can learn a thing or two from past experience. Don’t be afraid to shake things up (i.e. Seattle would be a terrific host for next year’s CMAs. Seriously.). And don’t forget your demographic.
Universal Music Group announced late last week it is suing MySpace for copyright violations, charging that the popular community Web site allows its users to post copyright protected music and videos. In other news, dog bites man; film at 11.
How much money have media companies spent litigating against Web sites and software companies in a blind effort to turn the clock back to 1950? Real piracy — people copying and selling DVDs or music — is one thing, some teenager posting her favorite Jay-Z song to her MySpace page is a completely different situation, yet music, film, and TV companies fail to see the difference.
A long list of litigants are already queuing up to file lawsuits against video-sharing site YouTube for other “violations” of copyright now that it is owned by deep-pocketed Google. They see a grave threat to their business models from fans posting clips and episodes from their favorite shows and movies, rather than a means to find new fans who might start tuning in during regular broadcasts.
Let’s be clear: The Grid and digital media are here to stay and even more powerful tools are on the way that will give end users more ways to copy, collect and distribute music and video. That means the world in which over-the-air TV and radio dictates popular culture is dead, the era of the CD is drawing to close and the lifespan of the DVD is not far behind. Centralized control of media content no longer exists.
Film and music companies, if they want to continue to thrive, need to recognize this shift in technology and consumer desires and work with it rather than against it. On MySpace, for example, when a user posts a copy of “Fergalicious,” why not include a way for someone to buy Fergie’s new album, The Dutchess? When a fan uploads a clip from a TV show to YouTube, why not place an ad on that same page directing interested viewers to where they can get more episodes from iTunes?
Only by coming out of their collective shell and stepping into the brave new world of digital communication will media companies be able to survive.
Last week the CEOs of Detroit’s big three automakers – Richard Wagoner (GM), Tom LaSorda (Chrysler Group), and Alan Mulally (Ford Motor) finally got some face time (about an hour’s worth) with President Bush after waiting nearly 18 months. Surpise! Not much was accomplished, although no one really expected much.
Rick, Al, and Tom have an agenda and they aren’t shy about pushing it. They want lower health care costs, wider availability of alternative fuels, and they want an even playing field with the Japanese. The President isn’t in a position to do much about these things, but a sympathetic ear is nice, I guess. Cue up the Stones’ “You Can’t Always Get What You Want.”
While the Japanese government shoulders much of the burden of health care costs for Japanese carmakers, that burden is squarely on the shoulders of GM, Chrysler, and Ford here in the US. The Big Three estimate they will spend more than $12 billion on health care in 2006 – or expressed another way, everyone who buys an American car gets to pay what amounts to a $1,000 bloated health-care-benefits tax.
And that’s only the start of the American automotive industry’s Japan-related woes. The Boys from Detroit also accuse the Japanese government of artificially deflating the value of the yen by messing around with currency markets. The weak yen makes competition nearly impossible as it translates to as much as a $9,000 per vehicle cost subsidy.
With health care and currency disparities factored in, there is as much as a ten-grand premium the US consumer has to pay for the privilege of driving, say, a Ford Focus.
But what of the newly empowered Democrats? Can they help? Maybe. The Detroit CEOs could get traction with the Dems on health care. What the CEOs would like is the closing of a Medicare prescription drug benefit loophole. The so-called “doughnut-hole” makes consumers pay up when their drug bill hits $2,250. The consumer has to make up the difference until they hit the $5,100 mark, at which point the program starts paying out again. If the consumer is a US autoworker, guess who picks up the shortfall between $2,250 and $5,100?
The big question is, how much trouble do you have to be in before you go to the US government in search of a workable solution to your problem? Oh well. I bet Rick, Tom, and Al got some cool White House swag, anyway.