January 2, 2006
Part I
From Jim Metrock:
Channel One is done.
It’s not “dead” but the American public does not need to wait for this controversial company to actually go out of business in order to celebrate. I have been following this company for ten
years. There is little chance they can remain viable and reverse their loss of audience and revenue.
The best way to describe where Channel One News finds itself in 2006 is to picture in your mind Wile E. Coyote, of Roadrunner cartoon fame, running off a cliff.
He doesn’t fall immediately. He usually turns to the viewer and pulls out a dialogue sign that says “Yipes” or “Goodbye.” He looks down and we see what he sees – a long fall to the bottom. In cartoons, the laws of physics are often suspended, but they are not permanently suspended. The cartoon character’s feet fall first and his hand holding the sign are the last we see disappear.
Tonight January 2, 2006, the company called Channel One Communications Corporation that produces the TV show Channel One News is on the wrong side of a cliff standing with no support over a deep valley. Channel One will continue to be broadcast, but they will most definitely fall and disappear.
Channel One News has become irrelevant. That alone is a tremendous victory for parents, students, activists, teachers and other taxpayers that have battled against the overwhelming might of Channel One’s money.
The company has lost between 500,000 and a million students over the last few years. That is the amount they have admitted losing. The real loss is more.
Channel One’s own press releases document a near 30% lost of classrooms since 2000. (from 440,000 to a vague “over 300,000”)
Channel One’s chief lobbyist Jack Abramoff has been indicted and will stand trial soon in Miami. His legal troubles came from his work with other clients, but reporters have been asking
me questions about Abramoff’s and Ralph Reed’s work for Channel One. Channel One has limped along for years because of their lobbying clout. To a very large degree, that clout has evaporated.
Big advertisers have fled the show. Ad rates have plunged.
Government agencies are pulling their money from the show.
The company has been plagued with inept managers. Last year, instead of hiring a turn-around CEO, which the company desperately needed, they hired a “caretaker” executive who had never run a company before.
Channel One was asleep at the wheel for years as technology passed them by. Maybe at one time a 19″ Magnavox TV set was to “kill for” but not now. Channel One has an inventory of hundreds of thousands of ancient TV sets that few schools care about anymore. I heard for years that the company was going to come out with a new Interactive Channel One. It had a nice ring to it. It was going to revitalize the company. It never happened. There was no way it could. It was just Public Relations – something to tease advertisers with and to prop up the morale of their own employees.
All these facts are crippling to Channel One, but they are not why Channel One is Channel Done.
(to be continued)
Next: Shocking emails and documents sent to Obligation by a person who claims to be an “insider.”
January 6, 2006
Part II
A fast food restaurant generates revenue when a person in a drive-thru or at the counter makes a decision to exchange their money for the restaurant’s food. The more individual decisions made to exchange money for food, the more revenue. Most businesses generate revenue, and hopefully profits, by selling a product or service.
The “revenue moment” is that point in time when the “deal is sealed.” That happens in the movie theater line, at the gas pump, and the moment you press a key to make a purchase on the Internet.
The moment of greatest import for Channel One is much different. Channel One’s important moment is when a superintendent signs the Channel One contract. The contracts are the bedrock of Channel One News.
Those signed contracts are then presented to potential advertisers who will pay a certain amount of money for “x” number of young eyeballs to see their ads.
In the broad scheme of things, the individual advertiser is not important – they come and go and change like the direction of the wind. M&Ms drops off Channel One and is replaced by Hostess Twinkies. The companies advertising are of secondary importance. The contracts are the Holy Grail. Channel One’s wealth is contained in the filing cabinets that house all the contracts they have with school districts.
Channel One has not taken care of their contracts. Channel One News is dying because their contracts have become virtually worthless.
The early 90’s were Channel One’s growth years. They promised “free TVs” to school boards. Most of Channel One’s current school contracts were signed before 1994. Few school board members who might have voted for approving the Channel One contract are still on these boards. The Superintendent who signed the contracts may also be gone. Obligation has seen many instances where current school board members in a district with Channel One had no idea the TV show was in their schools.
Channel One’s contract has been forgotten by many and ignored by most. The old TV sets are merely fixtures in the classroom. Few think about them being owned by a New York company.
If the show is not shown on any particular day, there is no punishment. There’s not even a slap on the wrist. There is no downside to not showing Channel One News even though the old contract somewhere in the storage closet said somewhere that the school promised to show the program 90% of school days.
The contract is ignored. Since 1996, Obligation has never found a school district in our home state of Alabama that honors the contract.
When we have asked to see the Channel One contract, some schools say there was never a contract. (There was. They just never knew of one.) Some schools knew of the contract but can’t find it. When Obligation asked the Vestavia Board of Education (Birmingham, AL) for a copy of the contract, the superintendent gave us a copy with “Whittle Communications” at the top of the contract. Even though it was 1997 at the time and PRIMEDIA had owned the company for three years, no new contracts were issued. In 2003, Obligation obtained a contract from a Georgia school system and it was an old Whittle contract. PRIMEDIA evidently didn’t want to “open up a can of worms” by changing the old Whittle contracts.
The next year, the Channel One issue came up in Vestavia and the board attorney, asked Obligation for a copy of the contract for the school system he was suppose to be representing. He could not find the contract in the school’s files. The superintendent who had given me a copy had left the district. This is typical. We have seen school board attorneys in Pennsylvania, Georgia, Arkansas, and Indiana who had little knowledge of the Channel One contract until the community wanted it out of their schools.
Channel One will occasionally send out a letter to a school that is not showing the program according the the contract, but Channel One themselves don’t think much of the contract.
The Pizitz Letter is known around the country (Obligation distributed over a thousand copies at the 2004 National Association of Secondary School Principals convention). If anyone had any doubts about Channel One’s contract being a sham, reading the letter from this middle school principal and the bizarre reply from Channel One’s president will remove those doubts.
The Pizitz LetterChannel One’s president confirms their contract is meaningless.
We are not honoring your contract. That’s fine with us. Ritts ignores what the principal says and gives approval for wholesale disregard for the contract. |
When a school signs up for Channel One News, they sign a School Agreement form. This Agreement refers to the Terms and Conditions that state what Channel One is expected to do and what the school is expected to do.
The Agreement contains one line that says, “Students will view CHANNEL ONE NEWS daily at ____:____ / __ am __pm on at least 90% of school days.”
In the Terms and Conditions, Channel One says,
“4) The School agrees to receive the Channel One News programs from COCC (Channel One Communications Corporation) and to show the entire daily newscast on all installed television sets. The School will show Channel One News at a time or times of its choosing, provided that (1) Channel One News must be shown on at least 90% of the days that school is in session and Channel One News is broadcast, (2) Channel One News must be shown when students are present in a homeroom or classroom (i.e. not before school, after school or during lunch) and (3) if Channel One News is not shown at a single time, it will be shown in accordance with the viewing schedule as described on the School Agreement.”
In another Terms and Conditions section, Channel One states:
“3) This Agreement does not require that all teachers use Channel One News or that all students or any particular student view Channel One News. The School may at its discretion develop appropriate procedures to accommodate students who do not wish to view Channel One News or whose parents do not wish them to view Channel One News.”
What we have is a contract that has a loophole the size of Alaska. No student has to watch the show. They imply that arrangements can be made for any student or students to leave a classroom showing Channel One. (Awfully good of Channel One to allow a school to control their own students.) But it also states that no teacher is required to use Channel One News. If a teacher “opts out” then that classroom doesn’t watch Channel One. All teachers are given permission to not show Channel One.
There is no minimum percentage of classrooms or students that must watch the show.
It is ludicrous. On one hand Channel One says all classroom TVs must show the program but then they say that isn’t a requirement.
The only definite thing a school has to do is show the program at least 90% of school days. It can show the program 90% of days to 100% of students, or 90% of days to 90% of students or 90% of days to 5% of students or it can show the program 90% of school days to zero percent of students. Technically, if the school media specialist runs the program on the TV set in her office and no one sees the show, the contract terms are being met.
It is no wonder schools treat Channel One’s contract with disdain.
We have reported before on schools that show Channel One before school starts so no student has to be exposed to it. Schools are very open about showing only part of Channel One by giving just a few minutes of the school day to the show.
Here is one recent example.
Few schools are more pro-Channel One than Bartow High School in Florida. This school has often provided student-produced video footage to Channel One. Bartow is a “Flagship” school for Channel One. In December, Bartow received an award from the Student Television Network (an organization backed by Channel One’s money). One would think a school like Bartow would certainly be honoring the contract.
Here is Bartow’s current bell schedule.
8:54 to 9:04 is when Channel One News is shown. That’s a problem right away because Channel One is at least 12 1/2 minutes long and only ten minutes is allotted. To make it worse, “YJP” is also during this period. Search as we could on Bartow’s site, there is no mention of what “YJP” stands for. Since the school received its award for its student-produced news show, we have to assume that stands for their own school broadcast. We have no idea how long YJP runs and it doesn’t matter. What matters is this is one of Channel One’s favorite schools and the contract is treated like a joke.
[Note: “YJP” stands for “Yellow Jacket Productions.” Ken McNatt of NCACO found the web page after we posted this article. It appears that students may see 5/6th of the Friday Channel One show and less than that or none on the other school days.]
Channel One is Channel Done.
Channel One executives must know students are not watching and teachers are turning their show off and principals are telling their teachers not to worry about Channel One News. Anyone who has ever stepped foot in a “Channel One school” knows the TV show is of little concern to students or educators.
The advertisers paid for an audience of a certain size. Obligation believes Channel One News is in big trouble with advertisers for inflating their audience numbers.
If it all stopped right there, Channel One is in terrible, terminal trouble. Their poorly written contract is, as far as we can tell, unenforceable and schools openly violate the contract.
Advertisers are, and will continue, to leave the program because the contract is in shambles.
But there is more.
Over a year ago, Obligation was sent several emails from a person who said he worked for Convergent Media Systems. This company has a very close relationship with Channel One. They install, deinstall and maintain the TV equipment for Channel One. They also are the “enforcers” for Channel One. If a school isn’t doing what they are suppose to, the Convergent field service representative (FSR) “tells” on them and Channel One might write the school a letter. It doesn’t go much further than that. Channel One can’t afford for any school to leave because then the number of eyeballs will be decreased and advertisers will pay less for their ads. Channel One would rather not know if a school is not honoring the contract. After all the advertiser is continuing to pay, what does it matter if their ads aren’t being seen by the number of students Channel One promised?
The emails from this person were unsolicited. He sent them on his own. The person’s identity is not important. We will call him Mr. X. We have covered over (with red) any information that would indicate the person’s name,any other person’s name or location where this information came from. If this information has any truth to it, then it is probably true in other areas of the country.
What is important is what he talking about. We have no way of knowing if what he is saying is true or not. We have no idea if he made up the documents he sent us. That is for Channel One and other interested parties to determine. One interested party is obviously the Federal Government who is a major advertiser on the show.
Obligation is very impressed with this person’s knowledge.He sounds like he is the real thing. He knows things that we know of and that people unfamiliar with Channel One or Convergent would not know. This could be an extremely elaborate practical joke. If it is not, Channel One and their partner Convergent may have already experience the happiest days of 2006.
Here is one section of an email attachment he sent to us.
(to be continued.)
Next: Stunning emails from Mr. X.
January 13, 2006
Part III
Obligation helped prepared a memo that laid out the allegations made by a person who sent unsolicited emails to Obligation in 2004 and 2005.( We have “X”ed out the names of the two schools and locations mention in one of his emails.) This is part of that memo:
| One of us (Metrock) has been corresponding with a person (Mr. X), who was a field service representative (FSR) for Convergent Media Systems. Convergent contracts with Channel One to maintain Channel One’s TV sets and satellite equipment in schools across the country. (more information about this contract is available at: www.convergent.com/news_events/press_channelone.html.) Convergent’s field service representatives also verify that the Channel One programming is actually being shown to children, and that the children are watching it. In an email, Mr. X alleges that some field service representatives regularly falsify the Channel One viewing verification forms regarding whether students really watch the program in schools. “The FSR’s (Convergent Media System employees) in the field will forge or falsify verification forms, I have proof,” Mr. X wrote. Mr. X implies that Convergent’s incentive structure encouraged such falsifications and apparent fraud. “The more schools that do not watch, the better for the FSR, less calls and a bigger quarterly bonus check.” Mr. X described “a school that had only two classrooms watching it with Ch1’s approval, the advertisers do not know that.” “I will tell you that most classrooms are not watching it [Channel One] as they unplug the TV’s and it is in the best interest if the FSR to keep there [sic] mouth shut. Less work makes them more efficiant [sic] and a bigger bonus.” The Channel One school verification forms include the question: “Ask 3 teachers who are supposed to show CH1 in their class if they actually do show it to students on a daily basis.” About this question, Mr. X writes “The part where you ask three teachers about viewing Ch1 does not happen as every FSR I have met just checks them yes with an occasional no as to not draw suspician [sic]. Forgery is also a BIG issue.” Mr. X also alleges that Channel One inflates its viewership by being slow to define schools as non-compliant (failing to watch Channel One.) “I would write up schools as non-comliant [sic] and it could be a year before job would be opened to de-install [the TV sets in classrooms.]” Mr. X writes. “Ch1 does not want advertisers to see the real numbers [of schools and children that actually view Channel One] so they keep them on the books.”
…. He writes, “… Convergent Media, they are the ones who falsify verification forms to make there #1customer” CH1″ look good. The advertisers, if you like them or not, are the real victims.” Given the close ties between Channel One and Convergent, and Channel One’s incentive to pad its viewership, we believe that it is unlikely that
|
It was Mr. X that sent Obligation the example of what he claims are forged signatures on the Channel One verification form (our January 6 article). Obligation has been unsuccessful in our attempts to meet and share this information with PRIMEDIA, Channel One’s parent company.
Obligation’s Jim Metrock said, “This information fits with what I personally know about Channel One and Convergent. For example, I visited a school north of Montgomery, Alabama in March 2005. Convergent hadn’t been out to repair their satellite dish since it was damaged during Hurricane Ivan in September 2004. Did Convergent tell Channel One that this school wasn’t watching the program and commercials for several months? We think not, but that is for advertisers, mainly the U.S. Federal Government to find out.
“In October 2005, I stopped to talk with the media technology person with the Talladega County school system in eastern Alabama. He was in charge of Channel One in all the county’s schools. I asked how many schools were showing Channel One. He said “all of them.” I asked how many and he said, “19”. That seemed like a lot and I said that elementary schools didn’t have Channel One. He said, ‘Oh, then we have it in 12 schools.’
“If the man in charge of Channel One didn’t know it wasn’t in the elementary schools, I knew this was a ‘Channel One school district’ in name only. When I asked when Channel One News was shown to students in the middle and high schools, he said before the first bell. I asked if that meant it was before the first ‘warning bell’ and he said that was the case. Nothing unusual here. I had seen it many times before. Channel One News was being aired before students were in school. An entire county has no qualms about violating the unenforceable Channel One contract. Advertisers were paying for eyeballs that weren’t there to see.
Talladega is not alone. I know of no county or city school system in Alabama that honors the Channel One contract. The second largest school district in Alabama is Jefferson County. This one county represents 23,000 audience members for Channel One’s advertisers. The trouble is, the Superintendent has given each principal permission to not show the program if that is their personal desire. That is not permitted by the contract, but Jefferson County considers the contract a joke. Is Channel One letting the U.S. Army know about this breach of their
contract? The U. S. Army and others will have to investigate. A good place to start is Alabama, but we believe schools across the country are massively breaching the Channel One contract.”
(to be continued.)
Next: “What did they know and when did they know it.”
February
25, 2006
Part
IV (last): Did Channel One do enough to make sure audience numbers were legit?
The Inevitable Fall
What Did They Know? And When Did They Know it?
How tricky has Channel One been?
Inflated audience numbers could have cost American taxpayers dearly.
Possibly Channel One’s biggest success will be the very thing that gets them in the most trouble.
With the help of lobbyist Jack Abramoff, Channel One in the late 90’s started to sign huge advertising contracts with the US Army, Marines, Navy, Air Force, Centers for Disease Control (CDC), and the Office for National Drug Control Policy (ONDCP). The money from these government sources was like manna from heaven.
It was easy money.
It was taxpayer money. There was more than enough to make people wealthier than they ever dreamed.
A lot of advertisers, such as J.C. Penney, Sears, Mars, Polaroid and Reebok, left Channel One in the 90’s. However, taxpayer money more than made up for the loss of these corporate advertisers.
Barrel loads of taxpayer funds flowed into Channel One’s bank accounts. The salaries of top executives swelled. The last C1N president was Jim Ritts. While employees suffered under a salary freeze, he walked away with wads of cash.
Companies pay a certain amount of money to run advertisements on television whether that be network television or Channel One. The amount they are charged depends on 1. the number of ads actually aired and 2. the amount of eyeballs watching the ads. The ad rate or cost per ad is, of course, a function of the number of viewers.
The number of spots aired on the program is, of course, the easy part. The size of the audience is a different matter. Regular TV has Nielsen ratings. Measuring an audience in a middle school or high school is much more difficult.
Channel One has had a contract with Nielsen Media Research for at least 7 years. It is believed the monitoring of classroom audiences has been a flop. Channel One only had Nielsen in about 500 of their 12,000 schools.
Channel One executives most certainly know that many schools breach their contract. Schools show Channel One before school starts, during lunch (students are in the cafeteria as Channel One News automatically comes on and plays in its entirety to an empty classroom), or they show it one or two days a week or they simple don’t show the program at all.
These executives are also aware of the long delays in removing TV sets from schools that are ending their relationship with Channel One. Does Channel One immediately remove these student population from the audience numbers on which they bill their advertisers? or do they “let it ride” for a month or two or a year? Is the U.S. Army with limited funds to run recruitment ads beingcharged by Channel One for ads that can’t be seen by students?
As reported and documented throughout Obligation’s web site,schools are openly breaching the contract. If Channel One is informing advertisers of this fact and is charging much lower ad rates based on a much smaller audience, then Channel One is probably clean and there is nothing to fear from an investigation.
As we have stated, this massive non-compliance with the terms of the Channel One contracts cheats advertisers which includes the federal government. If it can be shown that Channel One executives in past or current positions knew that audience numbers were too high and invoices were sent to to the U.S. Government based on inflated numbers, then a great wrong has been done.
The government has to investigate Channel One, especially their Atlanta office, and their maintenance contractor Convergent Media Systems also of Atlanta. The information that was sent to Obligation by a supposed ex-Convergent employee was chilling. This “insider” said advertisers were being cheated. This person said signatures on verification forms (used to help set ad rates) were routinely forged. Jpegs of documents were sent to Obligation. We don’t know if they are real of if the person is legit. All this needs to be checked out by the appropriate agencies in the U.S. government.
The truth needs to be discovered.
