In his 12 years of analyzing broadcasting companies at Bear Stearns, and nine before that in Chase Manhattan's media and telecom group, what Victor Miller said had major clout on Wall Street.
Now, Miller is applying his vast media-business knowledge to GodTube.com. The Christian social networking site, owned by Big Jump Media, launched in March 2007 and has some 2.5 million unique users.
Miller, 44, is GodTube's chief service officer. He speaks with B&C's Michael Malone about the demise of Bear, the future of media and what attracted him to GodTube.
Are you surprised by how badly many stations are doing?
In February 2007 we [Bear Stearns] wrote a piece called “An Odd-Odd Year” where we thought TV stocks actually do pretty well in the odd-numbered years, despite the lack of political advertising. That was because of factors like retransmission consent starting to come into the stocks. There was also a lot of M&A (mergers and acquisitions) activity.
If I had to write a piece now, I'd say 2008 is an odd even year where you just don't have much follow-through in terms of the advertising cycle. I think what you're probably seeing is companies adjusting to what might happen in '09 when you potentially have the stress of the auto business, which is 20%-25% of the revenue of the industry. Retail is another 15%. Take out the political and Olympic tailwind, and I think a lot of the TV companies are looking ahead, saying, “2008 did not pencil in like everyone thought it would, so now we gotta be proactive.”
Was joining GodTube a business decision or a spiritual one?
It was both. If you read the interview we did with Radio Ink, they asked me what book I was reading. I talked about the Bible. They asked me what person I'd like to meet throughout history; I said Jesus. My spiritual side has always been very important to me. Mixing my business/media expertise and my spirituality is a natural mix.
How do you rate the broadcast business today?
When we'd dropped coverage, we'd had an underweight on the radio group and an equal rate on the TV space. The reason we liked the TV business a little more was, TV's got retransmission consent, and as broadband rolls out, the video portion should be very robust for local TV. They still get about 85% of the political dollars. Overall viewership trends continue to be strong relative to other media.
When you put all those things together—the multiple revenue streams TV stations enjoy, compared to essentially the single advertising stream that radio has—you have that advantage for television.
Who do you see emerging as a buyer or seller in terms of stations?
The issues in the M&A world are, 1) the existing leverage on some of these companies, and 2), the overall unwillingness for banks to lend. So I don't see a heck of a lot of M&A activity in the near future.
When did you realize Bear Stearns was in serious trouble?
I imagine the same day everybody did, when there was a $2-per-share bid on the Monday after our [March 9-12] media conference.
How do you describe GodTube?
It’s a social network on the Internet. GodTube is also a technology platform that enables churches, ministries, record labels, publishing companies, charities and all the different constituencies of the Christian community to communicate with each other. If you’re an individual that’s on GodTube, you’ll be able to, in time, be able to speak with all the constituencies of Christiandom.
GodTube is for-profit. Is that taboo in the Christian community--like the book of Matthew, where Jesus drives the money changers out of the temple?
It’s a social network which is expected to generate advertising, sponsorship and e-commerce dollars. We don’t believe there will be any backlash in that we happen to be a for-profit model. Our philosophy is closer to the parable of the ten talents. [Matthew 25:14-30]
Which broadcast groups are worth watching in terms of retransmission?
You have two [groups] who have done excellent jobs longer term, and that’s Sinclair and Nexstar. Nexstar’s into its next cycle. They’ve successfully done the last two-year cycle and now they’re busy renegotiating the second cycle. It’ll be interesting to see if they’re able to renegotiate their existing base of deals upward, which I think they will be able to do.
LIN TV is going to put a good majority of its retrans money to bed in 2008. Univision, whose retrans is a very low base at this point, can be a fairly sizable amount; we should know about that by the fourth quarter of ’08. Entravision is probably going to negotiate with Univision. They have basically zero retrans, so it’s going to be a significant increase for them.
Companies like Gray are going to get into the game this year and next year. Belo and Hearst-Argyle have made great strides too.