Industry Roundup

Powell calls it quits: Federal Communications Commission (FCC) chairman Michael Powell has announced his departure from the regulatory agency. Powell will leave his post by March of this year, according to an announcement made January 21. The son of former Secretary of State Colin Powell, Michael Powell was appointed an FCC commissioner by then-President Clinton in 1997 and appointed chairman by President Bush in 2001.

A fan of high technology and an ostensible free-marketer, Powell encountered widespread opposition to his efforts to loosen market ownership caps, a move that would have made competition more difficult for smaller broadcasters. He ushered in regulations that improved the market for wireless communications, but he will best be remembered for his indignation over indecency in broadcasting, in particular his huffy response to Janet Jackson's two-second "wardrobe malfunction" at last year's Super Bowl halftime show and to "dirty" words spouted by radio shock jock Howard Stern. Both infractions cost their respective broadcasters fat fines. CBS is contesting its $550,000 fine for the Jackson incident, a fraction of the $7.7 million in indecency fines levied by the FCC last year. Stern is leaving over-the-air broadcasting for satellite radio in part as a response to the fines.

Powell's likely successors include FCC commissioner Kevin J. Martin; Becky Klein, former head of the Texas Public Utility Commission; Michael Gallagher, head of the National Telecommunications and Information Administration; and Pat Wood, current chairman of the Federal Energy Regulatory Commission. Powell will likely follow his predecessors into private practice.

Sony backtracks: On January 20, Sony Corporation announced revised projections for the 2005 fiscal year. Noting weakness in television sales and portable music players—traditionally two of its hottest market niches—Sony has re-estimated its net income for the year ending March 31 to ¥150 billion. That total would be 36% more than previously forecast and 69% more than it made in the 2004 fiscal year. The gains won't be due to improved sales but rather to lowered taxes, according to the financial press. Sony's lost market shares in TVs and portable music players are due to the company's slow ramp-up with flat-panel television and the popularity of Apple Computer's iPod, the hottest audio product in the world. Sony has also suffered from price erosion among some of its strongest products. The Japanese giant's full-year revenue forecast is ¥7.15 trillion—5% less than last year, with operating income down 31% from earlier estimates. Sony has a sweetheart deal with Samsung to produce flat-panel TVs beginning this year.

Where are they now? Thomas Dolby, 1980s pop star, is still cranking out the tunes—for cell phones. He hasn't had a hit since "She Blinded Me With Science" went to #5 on the pop charts 22 years ago, but the ringtone business is keeping him busy. It’s a lifesaver for composers and songwriters, as well as for telecom companies. Ringtones are a global business worth $2.2 billion annually and growing. "A hook is a hook is a hook," Dolby told an interviewer for Dow Jones Newswires. Ringtones are hugely profitable because there are no manufacturing or distribution costs.

Sports and audio: Sirius Satellite Radio, which reached the end of 2004 with more than its hoped-for one million subscribers, has inked a multiyear deal with the National Basketball Association (NBA) to broadcast up to 40 games per week. The deal will make Sirius more attractive to basketball fans. Rival service XM Satellite Radio broadcasts college football and basketball games, Major League Baseball games, and NASCAR events. Beginning this week, football fans will be able to enjoy replays of National Football League games on their iPods, thanks to an agreement reached between and the NFL. The recordings, including league playoff games from this week and last, will be available through Apple's iTunes Music Store.

Liberal radio comes back: Air America is back, having launched its Washington DC operation, bringing its total reach to 45 markets nationwide. The network is home to humorist Al Franken, Rush Limbaugh's nemesis. Air America ran short of cash last April, only six weeks after its birth. The startup earned the support of Clear Channel Communications, Inc. after raising $19 million from private investors. Limbaugh made a career of bashing Bill and Hillary Clinton; Franken and his colleague Randi Rhodes may be able to do likewise poking fun at George W. Bush. "What happened on November 2 may have been bad for America but it sure was good for Air America," said Air America chairman Rob Glaser.

Tape shortage: The recording industry is "reeling" from a shortage of 2" recording tape, caused by the unanticipated shutdown of the Quantegy plant in Opelika, Alabama. The tape is used in most professional open-reel recorders favored by "analog houses" and musicians who disdain digital artifacts. Quantegy is the most recent incarnation of Ampex, and was one of the world's last manufacturers of high-quality recording tape. Recording engineers are beating the bushes for undiscovered stocks of tape, according to a front-page story in the January 12 Wall Street Journal (and as confirmed by recent conversations with audio engineers like John Atkinson and Tony Faulkner, who are already feeling the pinch).

A January 5 story in Pro Sound News reported that while the company never filed for Chapter 11 bankruptcy protection, a restructured version is expected to reopen. According to PSN, "Customers, dealers, and industry associations are … said to have offered support and assistance to Quantegy during its restructuring."