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May 15th, 2008

At Fox, two new dramas; half as many commercials

Posted by: Paul Thomasch

peter.jpgTired of all those commercials? Don’t have a DVR? Fox reckons it has something for you. Forget the name (they’re calling it Remote Free TV) and concentrate on the concept: a big tentpole drama with half the normal commercials and promotional time.

Fox will first try out this idea with “Fringe,” an FBI, mystery, science-fiction, thriller, supernatural drama from J.J. Abrams that’s rolling out this fall.  Come midseason, it will do the commercial shrinking thing with ”Dollhouse” from Joss Whedon, who was behind teen supernatural hit “Buffy the Vampire Slayer.”

Fox Entertainment Chairman Peter Liguori — after calling his network scrappy and populist — told advertisers at the upfront that he refused to let things get boring. “We’re the number one network. We’re the rebel innovators.”

Here’s his plan: “With both of our scheduled dramas of the season, we’re going to try something different, something a little unusual. We are going to redefine the viewing experience. All season long we’ll air these two series with less commercials, less promotional time, and above all, less reason to grab the remote and change the channel.”

What’s that mean? ”These two series will run with half the normal commercial and promotional time all season long,” he said. “Some people might think this is a scary financial prospect. We really see it as an investment. We need to give viewers a new reason to come to broadcast TV.”

Sure, viewers may love it. We’ll see what advertisers have to say. 

(Reuters photo of Peter Liguori)

May 14th, 2008

Zucker upbeat on offbeat upfront

Posted by: Paul Thomasch

zucker.jpgIn one of the busiest weeks for network TV executives, NBCU’s Jeff Zucker nonetheless stopped by an Avenue A/Razorfish event for a question-and-answer session with the ad company’s vice president of media & entertainment, Domenic Venuto.

Not surprisingly, given it is upfront week, one of the first questions put to Zucker centered on his media company’s rather untraditional upfront.

(A quick refresher: NBC unveiled its lineup for 2008-09 last month, and Monday skipped its usual splashy upfront presentation at Radio City in favor of what it called the NBCU Experience over at 30 Rockefeller Center. For more details click here). 

Zucker said that while the Experience wasn’t perfect, it was certainly a success and accomplished what he had hoped, namely showing off the company’s businesses beyond the NBC network.

“I feel very, very good about how we did on Monday,” said Zucker, before joking that it was unlikely someone would roast the event to his face.

“Nobody ever wants to tell me the truth,” he cracked. “On Monday, what most people said, and many were probably drunk, is thanks and congratulations on doing something different.”

“But, really, the feedback was really positive,” he told the crowd.

He said the same thing on another topic: the reaction to video sharing site Hulu. 

“The user experience is fantastic,” he said. “That has been the No. 1 goal.”

But success comes at some cost, Zucker said.

“Frankly, all of our internal sites have a lot to learn from what Hulu has done.”

(Photo: Reuters)

May 13th, 2008

ABC upfront has a little fun with Kimmel

Posted by: Paul Thomasch

kimmel.jpgMuch has been made about ABC, Fox, NBC and CBS taking a low-key approach to their upfront presentations this year. Still, ABC brought out Jimmy Kimmel for a few jokes in a reminder of what these events were like in past years.

Here are a few of Kimmel’s better lines for advertisers:

- This year, as you’ve noticed, we scaled back a lot. There’s no party, no food. ABC may be the worst date ever. We expect you to put out and we’re not even buying you a drink.

- We’ve decided to concentrate less on the afterparty and more on shows that aren’t ‘Cavemen.’

- By the way, there’s about a 40 percent chance you’ll see me at the Fox upfront on Thursday.

- Here at ABC we are very excited about both our new shows.

- TV sets are bigger than ever, kids are fatter than ever and gas has never been more expensive. We have the whole country on their couches right now. If we can’t sell them stuff, we should all be very ashamed of ourselves.

(Reuters photo of Jimmy Kimmel hosting 2007 ESPY Awards)

May 13th, 2008

The yin and yang of TV ad pricing

Posted by: Paul Thomasch

shaw.jpgWhy have prime-time network TV advertising prices been so strong in the scatter market — up in the double digits — after a rather lackluster upfront in 2007?

ABC’s head of sales, Mike Shaw, offered a few answers for the discrepancy between the shorter term scatter market and the longer term upfronts.  But he said a lot of it can be blamed on networks selling advertising too cheaply in last year’s upfront.

Shaw said he’d rather see a far smaller gap in prices between the two markets. “I’d like to see less of a swing in the pendulum between the upfront market and the scatter,” he told reporters after ABC unveiled a very modest 2008-09 schedule.

This year, however, the networks could face a big pushback if they try to raise prices, given the state of the economy. Shaw, while saying it was too early to predict, nonetheless seemed relatively confident when asked about upfront pricing. “We don’t see a huge change in the short term,” he said of advertising budgets.

One reason is that Shaw believes it has been “proven again and again” that companies would do better to advertise their way through an economic downturn, rather than risk losing brand recognition and customers with marketing cutbacks. “It’s much wiser to maintain share,” he said.

As for timing of deals this year (some buyers are predicting a big slowdown), Shaw said ABC had talked with advertisers but that didn’t necessarily indicate actual deals would be reached more quickly or slowly than normal.

“We’ve had conversations, but that’s not new. If you wanted to go out and write early money, you could.”

(Photo: ABC)

May 13th, 2008

Living the NBCU “Experience”

Posted by: Paul Thomasch

rock-center.jpgInstead of a big, crazy upfront presentation at Radio City, NBC Universal this year invited advertisers and media to its Experience at 30 Rockefeller Center. Here’s a guided tour:

First off, you’re greeted by a TV screen featuring clips from NBC stars like Tina Fey and Brian Williams, who make some jokes and ham it up and basically tell you to move along, which you were really going to do anyway since you’re just standing there in the hallway.

There really isn’t a lot to see in the first few rooms (promotional videos, etc) except that walking around are a bunch of people dressed in all black with, if you can picture it, video screens on their chests.

The screens had games that you could play; one told you what character you’d be in “The Office,” and another asked you some trivia questions (I approached it like school, took some wild guesses and got two out of three).

Things soon picked up. First a screening room featuring trailers of some of the upcoming releases like “Momma Mia” and “The Incredible Hulk,” then a “Deal or No Deal” exhibit featuring the gameshow’s models walking about in sequined red dresses.

And later there was KITT, the car from Knight Rider; a couple huge American Gladiators doing battle with one of those stuffed medieval looking weapons; a mock voting booth (the computer was on the blink when I walked past, so nobody was actually casting a vote); dozens of TVs showing scenes from the Olympics; a Champagne bar.

Plus, there were a ton of giveaways, which usually please a crowd. Here’s what was pushed at me: USA Network M&Ms; a “Today” earth-friendly bag; a picture between two mummies (they don’t look very frightening, I look sort of confused); a little taster of duck and mushroom from the “Top Chef” booth; a “Friday Night Lights” button; a golf ball; a chocolate bar, and a football signed by Tiki Barber, John Madden, Cris Collingsworth, Jerome “The Bus” Bettis, and Al Michaels.

I also got a picture with Janice Dickinson, who was there promoting her show on Oxygen and inviting all comers to jump up on the stage with her and snap a photo. So I did. Why not?

Unfortunately, the picture didn’t take the first time, so I had to get back up on Ms. Dickinson’s stage for another attempt. She was very kind about it (”Oh, I screwed it up on purpose, so you’d come back,” she joked) though the scene was still a little awkward and I found myself wishing that I’d just skipped that particular stop.

But none of that — the entertainment, the giveaways, the shift away from the traditional upfront — means much in the end. What counts is not whether advertisers enjoyed the NBC Universal Experience, but whether they’ll hand over the big bucks for commercial deals.

(Photo of Rockefeller Center: Reuters)

May 9th, 2008

Flying blind into the upfronts?

Posted by: Paul Thomasch

drone.jpgOne thing you can bank on next week is that the TV networks won’t be showing off dazzling pilots of new shows at the upfronts, as we highlighted in a preview.

Executives have made no secret of the fact that pilots are costly, and, it seems, not all that useful. Already, NBC previewed their season with little more than a few very, very short clips. CBS, ABC and Fox aren’t expected to offer a whole lot more.

So what do advertising buyers think of this brave new world without pilots? Are they and their clients comfortable shelling out big bucks without seeing a full episode of a new comedy or drama.

Here’s what several had to say on the subject:

Aaron Cohen, Director of Broadcast at Horizon Media:

It worries me, but it’s similar to when replacements are made for programs that aren’t working.

It hasn’t been for a while that you’ve been able to lay down a schedule and say ‘This is what I’m buying and it’s going to be there for four quarters.’ You know you want to reach this particular demographic and you know they have an affinity to watch these forms of programming more than others. That’s what you’re looking for.

   
Stacey Shepatin, Senior Vice President, Director of National Broadcast at Hill Holliday:

It always makes you feel better when you can see the full pilot. The goal will be to be able to see a full episode to make sure that it is appropriate for our brands, there are no content issues and the storyline fits with what our consumers are looking for. So that will all come into play when we look at what shows to purchase.

You’re not going to just run blindly into something, you’re going to want to see what the production quality is, what the storylines are, all of that.

Donna Wolfe, Chief Negotiations Officer at Universal McCann:

The interesting thing is for years we were able to view new pilots. but the failure rate for new shows was extremely high. On average, 70 percent of the new shows fail. All the testing that the networks do, and all the pilots, it doesn’t necessarily spell success.

But I think we have to be comfortable that the content will be appropriate for our clients. It’s in their best interest and the network’s.

(Photo: Reuters) 

May 7th, 2008

Grand Theft Auto IV is cruising

Posted by: Paul Thomasch

grand-theft-auto.jpgThat was fast. Already, in its first week, Grand Theft Auto IV sold more than 6 million copies globally, rocketing past expectations that were hardly modest to begin with.

So what is it with this game? Well, for one thing, it has been praised by gamers and critics alike who hail it as satirical and multi-layered, the equal of films like “The Godfather” or TV shows like “The Sopranos.”

Made by Take-Two Interactive Software’’s Rockstar studio, the game also has its share of detractors, who say it’s too violent and sends the wrong message to kids and young adults. Given the big sales the first week, the criticism doesn’t appear to have hurt its popularity.

But the real question is what does more than $500 million of first week sales of GTA IV mean for Take-Two?

Silicon Alley Insider says this: “Take-Two management has long argued that Wall Street didn’t understand what a hit GTAIV would be. When they did, the argument held, they’d bid the shares up. Time to find out. ”

And the Wall Street Journal points out, “Depending on how the sales figures impact shares of Take-Two, they could strengthen the company’s argument that videogames rival Electronic Arts Inc. needs to raise its unsolicited bid for Take-Two above $2 billion. EA has launched a hostile tender offer of $25.74 for Take-Two shares, which Take-Two has rejected as too low.”

Keep an eye on:

  • Cablevision Systems will acquire Sundance Channel from General Electric Co’s NBC Universal, CBS Corp’s Showtime Networks and entities controlled by Hollywood actor and director Robert Redford.
  • Clearwire Corp and Sprint Nextel Corp plan to combine their next-generation wireless broadband businesses to form a new $14.5 billion communications company (Reuters)
  • Major studios and the Screen Actors Guild broke off three weeks of contract talks without agreement, stoking fears of renewed Hollywood labor unrest after a 100-day writers strike that ended in February (Reuters)
  • Five years have passed since the Jayson Blair scandal shook the New York Times and the media world. MarketWatch’s Jon Friedman takes a look at how media organizations have fared in trying protect themselves from a similar situation (MarketWatch).

(Photo: Reuters)

May 6th, 2008

WPP won’t be left out of takeover drama

Posted by: Paul Thomasch

It may not seem as sexy as Yahoo-Microsoft, but there is another notable takeover saga brewing in media. This one is between WPP, the British advertising group, and Taylor Nelson Sofres, the market research firm.

Why does WPP want TNS badly enough that it continued to urge the research firm to engage in talks even after its $1.9 billion bid had been rejected?

It’s partly because research has become so much more essential to advertising these days. With so many media outlets, it doesn’t come as a shock that advertisers are desperate for more information about their products and markets.

WPP Chief Executive Martin Sorrell expressed surpise and disappointment that the board of TNS turned down WPP’s offer. But perhaps this is just a bit of cat-and-mouse, with WPP prepared to come back with a bigger number for TNS, which is also talking with Germany’s Gfk. 

“Given the potential for greater returns, we believe WPP could afford a higher offer,” analysts at UBS said in a note to clients.

Of course, nearly everyone was saying the same thing about Microsoft over the last few weeks, and we know where that went.

(Reuters)

Keep an eye on:

  • NBC Universal has reach an exclusive deal with with the “Project Runway” production team, less than a month after it was outbid for rights to the cable show by Lifetime Networks. Now a new production team has to be put in place. (LA Times
  • Microsoft is adding TV shows to its Zune marketplace, offering rougly 800 TV shows, each for $1.99, for download from places such as Comedy Central, MTV and NBCU. (paidContent)
  • CBS Radio CEO Dan Mason, meeting with advertisers, dismissed the notion that the iPod and satellite radio will kill radio. “To say that an iPod or satellite radio, with little or no human connection will ever replace radio is absurd.” (paidContent)

(Photo: Reuters)

May 1st, 2008

Cablevision sweet on Newsday; suitors circling

Posted by: Paul Thomasch

madison-square-garden.jpgWho says the newspaper business is doomed? Circulation and advertising may be in the dumps, sure, but judging from the bidders lining up to buy Newsday there are plenty of moguls still keen on newspapers.

The latest development: The Wall Street Journal reports that Cablevision is planning to bid as much as $650 million for the Long Island daily, which likely catapults it ahead of other bidders like News Corp, which owns the New York Post, and Mortimer Zuckerman, who owns the Daily News.

Cablevision’s bid could come within two days, the report said, adding that it was unclear whether whether Cablevision is working with New York Observer owner Jared Kushner in its offer. Beyond Cablevision’s cable assets, it owns the New York Knicks, the New York Rangers, Madison Square Garden and Radio City Music Hall.

The New York Times offered a different view. It, too, said Cablevision is preparing a bid, but it reported that the owners of the New York Observer have dropped out of the race.

Cablevision? Zuckerman? New York Observer? News Corp? What’s going on here?

These are smart, successful media companies and executives, so they must know something. Indeed, the New York Times reported that people briefed on its finances says that Newsday last year generated more than $80 million in income and about $500 million in revenue.

And it is, after all, the key paper in a relatively affluent area.

But get this: The New York Times also reports that some executives at companies interested in Newsday “learned over the last month that its printing, trucking and subscription operations were more troubled and inefficient than they knew. Paradoxically, that has persuaded them that the paper was worth more than they initially thought.”

Go figure.

Keep an eye on:

  • With time running out a self-imposed deadline in contract talks with actors, major Hollywood studios say the two sides remained far from a deal and that excessive union demands are to blame (Reuters)
  • Comcast Corp, the largest U.S. cable operator, on Thursday posted a fall in first-quarter net profit as it lost basic video subscribers because of fierce competition from phone and satellite companies (Reuters)
  • Microsoft indicated a willingness to up its bid for Yahoo to $33 per share, but Chief Executive Steve Ballmer has also appeared ready to walk away from the deal altogether if need be, the Wall Street Journal reports , quoting people with knowledge of the situation. It reported that Microsoft’s board met Wednesday without reaching a decision.
  • Talk at the 2008 leadership conference of the American Association of Advertising Agencies centered on politics and the economy (The New York Times)

(Photo: Reuters)

April 30th, 2008

Advertising budgets: What’s the deal there?

Posted by: Paul Thomasch

scissors.jpgQuarter after quarter, analysts and the financial press keep pressing advertising executives about the economy and spending. For good reason, too, since corporations often take scissors to advertising budgets during downturns.

Thing is, the chief executives of the big ad holding companies so far have given very much the same answer during conference calls and interviews: everyone is worried, nobody is cutting spending.

Interpublic CEO Michael Roth is no exception. Here’s what he said on Wednesday about the economy/spending issue during his company’s earnings call:

“Of course, it goes without saying clients remain cautious due to broader economic concerns. To date we are not seeing signs of a pullback. But we continue to monitor the situation closely so as to be able to response quickly should the need arise.”

Here’s Publicis Groupe’s Maurice Levy:

“Not one single client has changed its plans. We continue to work with our clients according to plans.”

And Omnicom’s John Wren:

“Like most of our clients, we remain cautious about the economy, but to date, as I said, we have not seen any significant reduction in client spending.”

Havas’s Herve Philippe had this to say:

“Today we do not see any impact on our numbers from the international environment.”

So everyone seems to agree that nothing is happening — yet.

What’s that mean? It could be the industry is painting the brightest picture possible, which isn’t unheard of in advertising. Or it could mean companies aren’t yet feeling the full effects of the slowdown, and don’t need to take scissors to ad budgets. Or perhaps the thinking in the corporate world has shifted, and executives believe marketing is too important to cut. Or maybe the big cuts are just working their way through the system and will show up next quarter.

Give us your best guess. We’re interested.

(Photo: Reuters)