Discovery Channel upstaged by murderers, stalkers
If the low ratings at Oprah Winfrey’s OWN weren’t evidence enough of viewer disinterest in programming that inspires, then perhaps the massive ratings growth at Investigation Discovery, a network whose shows are almost exclusively populated by murderers and stalkers, can provide convincing.
Investigation Discovery, the crime-themed cable channel that launched in January 2008, is not just getting better ratings than OWN, it is also doing better than the Discovery Channel itself. Over the last two weeks, ID averaged 275,000 total viewers, or 8,000 more than the 267,000 viewers that Discovery averaged, according to Nielsen. OWN, which launched in January 2011, only averaged 180,000 total daily viewers during the fourth quarter.
Given those ratings, who needs to spend millions on shows like “Planet Earth” when you can just air cheesy non-fiction crime programming like “I (Almost) Got Away With It” and “Who The (Bleep) Did I Marry. Those kind of shows have the fingerprints of ID president Henry Schleiff all over them. After all, Schleiff built Court TV into a cable network powerhouse on the back of similar programming.
According to a report from investment bank Barclays, the momentum behind ID could give parent company Discovery Communications “substantial leverage” when it negotiates new distribution agreements with cable and satellite operators next year. Currently, analysts estimate that ID only earns 8 cent per subscriber in carriage fees while Discovery commands 36 cents per subscriber.
As the flagship network, however, the fact that Discovery Channel is losing steam could spell trouble for its parent company, which is not only seeing poor results from OWN, but also was forced to recently rebrand the struggling environmental focused network “Planet Green” as “Destination America.”
Could a Netflix-cable alliance spur HBO to go rogue?
A potential alliance between online video streaming company Netflix Inc <NFLX.O> and cable companies could spur cable television’s biggest premium player HBO to consider its options beyond the set-top box and go directly to customers on the Web.
But not anytime soon.
Analysts say Time Warner Inc’s HBO, which has more than 28 million customers through its cable, satellite and phone partners, would be in no hurry to risk hurting their very profitable business based on a perceived threat from Netflix or any other newcomers. “Why fix it if it’s not broke,” said Standard & Poor’s analyst Tuna Amobi. “You’re virtually jeopardizing billions of dollars, it seems remote from our perspective.” People familiar with HBO executives’ thinking say this has been looked at and they ‘have done the math’ and are even more sceptical it makes sense. Yet the question, which is often asked, comes up again with the news that Netflix Chief Executive Reed Hastings has opened early talks with cable operators for a partnership.
If these Netflix talks come to fruition the alliance could start out as a billing partnership — with Netflix appearing as a line on cable customers’ bills. But the talks have also encompassed the possibility of Netflix shows one day being offered on-demand say people familiar with the talks. On a financial basis the two could not be more different. Netflix has warned investors it will likely turn in a loss this year, while HBO will likely grow its $1.5 billion in operating profits. In creative terms, Netflix is dipping its toe into producing original shows, while HBO is a record-breaking Emmy-award winner nearly every year. The concern for cable investors is that even though Netflix is still seen as a poor man’s HBO, with its package of older TV series and movies with few original shows, it will compete on a level playing field in the battle for customers’ time on a set-top box. Hastings frequently says Netflix will look more like HBO in the future. Last month, his company launched ‘Lilyhammer‘, the first of five new original series on its service and likely will look at more as it tries to give its customers reasons to stay on even as programming costs rise. But in a potential partnership with cable, Hastings focus will primarily be on pay television’s 100 million home distribution. “We believe distribution agreements with the cable providers could materially increase Netflix’s subscriber base in a relatively short period of time,” said Barclays Capital analyst Anthony DiClemente. “The question for Netflix, however, is how to reach greater scale without sacrificing all the economics to its cable partners.” Such a partnership could also lower acquisition costs and improve profitability he added. Even after guessing a fairly high overlap between Netflix’s 23 million subscribers and those homes. There would still be plenty of room for growth if Netflix is offered as some sort of discounted add-on deal to consumers. “Netflix is at a point where they are trying to get as much distribution as possible. However, I think Netflix needs the cable distributors more than vice versa,” Morningstar analyst Michael Corty said. Such a deal would not be a million miles away from something Comcast Corp <CMCSA.O> has already been announced the launch of Streampix, a Web-based extension of its on-demand programming with a wide range of older TV shows and movies. Perhaps the earliest example of how this could work is seen with the lastest version of Apple Inc’s <AAPL.O> Apple TV set-top box, which now allows users to sign up and get billed directly for Netflix through the box.
All in all, HBO bosses might end up having to take heed from a character in their award-winning show ‘The Wire’ and understand the “game done changed.”
No NBA games on TV? American Chopper still rolling
The NBA season should have begun last night. The big match-up was supposed to be between the Dallas Mavericks and the Chicago Bulls. But of course that never materialized.
It’s unfortunately nearing the point where the league will be hard-pressed to play a full season, even if an agreement is reached soon. Only so many games can be squeezed into January, February and March.
So what is a fan to do? Look around for other entertainment, probably, whether that’s NCAA basketball or ice hockey. Or Storm Chasers. Or American Chopper.
In fact, Discovery Communications Chief Executive David Zaslav, whose networks broadcast those two shows plus a host of other adventure and science programs that draw a male 18-49 demographic, could be a beneficiary of the NBA lockout. He was asked just that question on a conference call.
“Look, on the NBA front, having male audience available is an opportunity for us,” he said while discussing his company’s quarterly earnings .”We do have an overlap with sports viewership, it should work out to our advantage, but we’re taking a wait and see attitude.”
The hope is that viewers would find shows like “American Chopper,” get hooked and stay with them even when the NBA gets back to business.
Time Warner is coming at the lockout from another angle. It stands to be one of the losers if more games are cancelled, since TNT is a chief broadcaster of NBA games. It cautioned on Wednesday that the loss of games in the fourth quarter would weigh on advertising sales at Turner — which oversees TNT – although executives also noted that there would be some offset because of lower programming costs.
The league decided years ago to emphasize and glorify individual players over team play. This of course led to the selfish arrogant “me” first and “me always” play the NBA embodies today. Watching football, soccer, baseball or hockey where team play is so valued by players and fans alike, I can only wish the league and its pouty selfcentered players would go away and never come back.
ex-nbafan
Disney TV heads north to reach millennials
Millennials, the massive generation of teens and young adults aged 15 to 34, are luring Disney television north of the border.
The California-based global media and theme-park giant announced a new, 24-hour network in Canada called ABC Spark targeting that age group - like the successful ABC Family cable channel does in the United States.
A partnership between Disney/ABC Television Group and Canadian media company Corus Entertainment, the new network will broadcast ABC Family shows such as “Switched at Birth,” “The Lying Game,” and “The Secret Life of the American Teenager.” Corus also will provide Canadian original programming, as regulations require 15 percent Canadian content. The network’s launch is set for spring 2012.Disney knows a growth opportunity when it sees one. There are more than 1.7 billion millennials on the planet, with 85 million of them in the United States and 10 million in Canada, according to a statement from the Mouse House, representing “the largest demographic bubble in both U.S. and Canadian history.” No financial terms of the deal were disclosed.
Photo credit: Reuters/Mike Cassese
File under acceptance: CBS knows it must pay up for the NFL
This time of year, it seems everybody loves football. The players, the fans, and, of course, the TV executives. And what’s not to like about football if you’re running a TV network, provided you have a deal with the NFL? Check it out, a total of 107 million viewers tuned into games between Thursday and Sunday on CBS, ESPN, Fox and NBC.
So it should come as no surprise that CBS Chief Executive Les Moonves, while speaking at today’s Bank of America conference, said he intended to renew the contract with the NFL when it expires in three years. “No surprise there,” he said. Indeed. The bigger question is what will CBS end up paying? Just last week, ESPN signed a new contract with the NFL at $1.9 billion a year. Repeat: $1.9 billion. That is about 73 percent more than ESPN previously paid the NFL.
As The New York Post’s Claire Atkinson points out in a story today, the ESPN deal has come under some heavy fire, particularly from the pay-TV industry, worried that it’s going to jack up rates.
“ESPN is a different animal,” Moonves said at today’s conference. “It’s really apples and oranges. There are a lot of other things involved than just the games. There’s a lot of content, and ESPN can maximize it. We have three years left on our NFL deal. We intend to keep the NFL, no surprise there. I’m sure there will be an increase — I hope it’s not the increase that they paid.”
Other comments from the always-upbeat Moonves:
- Advertising is fine at CBS. Done worry. There’s no slowdown
- CBS is not about to go crazy on big, blockbuster movies. Keeping it small, keeping it real
- Not joining Hulu was a totally fantastic decision
- Forget all that negative stuff you hear about CNET. “We’re pleased with the way it’s going”
- Political advertising is going to rock, even if the politics are ugly business
- More digital distribution deals — like the Netflix one — could be considered, “but with caution”
- Outdoor — ummm, I’m pretty sure he said something about that
- Publishing is more profitable than a year ago, even with revenue under pressure
Should media owners rethink Hulu sale plan?
BTIG’s Rich Greenfield is an analyst who seems to have never met a contrarian debate on the media business he didn’t like. This morning, he turned his attention towards online video site Hulu, arguing in a research note that its owners should think twice about selling the business (subscription needed). First round bid for Hulu, which is owned by News Corp., Disney, Comcast, and Providence Equity Partners, are due Wednesday and are expected to reach as high as $2 billion.
In his note, Greenfield, known for his embrace of hyperbole, says selling Hulu is “a mistake of epic proportions.” He says Hulu is the perfect weapon for combating cable TV’s excessive ad load, supercharging on-demand TV, and for integrating social media’s impact on how consumers watch TV.
Greenfield asks why Hulu owners would sell now, at a time when Hulu is growing viewers, advertising and subscription revenues. As he sees it, on-demand online video is clearly the future and big media would be better served having a say in how the future of video distribution over the long-term is shaped rather than handing Hulu over to Google, Amazon, Yahoo or some of the companies that are supposed to be interested.
The site’s success has clearly left Hulu’ owners conflicted over how to proceed with the sale and there is even talk about whether a sale will happen at all. For instance, prospective buyers we’ve spoke with are uncertain about the Hulu’s value, particularly after the owners appear to be caving into pressure from pay-TV distributors to restrict the newest TV shows to paying subscribers.
“All you’re getting is a bunch of rights, and if they’re restricting those rights you have to ask what is the value of what they’re selling,” said one source we spoke with on background.
More to come.
Bob Rubin: Wall Street? America needs Sesame Street
Former Treasury Secretary Robert Rubin was so worried about the current state of political discourse that he went to a billionaire buddy to try to get him to bankroll a TV show, but the deep-pocketed friend turned him down.
Rubin told conference-goers at the Aspen Ideas Festival that both he and former deputy secretary of state Strobe Talbott had approached a friend Rubin declined to name. Their idea, which he told Reuters after the event was never developed, was to appeal to the public the same way “Sesame Street” appealed to youngsters.
But the friend, busy with other projects, said no.
Rubin still believes the media could do more to explain issues, particularly when it comes to the fiscal crisis.
“There’s been a massive communications failure by your party” in explaining budget issues, on-stage interviewer and Reuters digital editor Chrystia Freeland said.
“There’s been a massive communications failure by your profession,” Rubin shot right back. The two joshed for a few seconds about whether the blame should be 50-50 or 80-20.
Rubin, who after leaving the Clinton administration joined Citigroup as a board member and served temporarily as its chair before eventually resigning in early 2009 after his performance was criticized, still hasn’t given up on his dream of finding some philanthropist mogul to somehow save the day.
Lost in all that is the real truth: for-profit media will always carry bias and have a stake in NOT explaining things so people keep tuning in for the latest shred of insight. The only way to create an honest dialogue in the media is through outside channel and non-profit groups… then maybe the issues will get a fair shake, calmer heads will prevail, and opposing viewpoint can meet rather than pass like ships in the night.
When it comes to NFL, TV executives put on brave face
Shrewd? Prescient? Delusional? Tough to know, but top TV executives this week all seemed relatively confident — even off the record — when asked about the chances that NFL games would be played this fall.
The background, of course, is that NFL team owners and players are at odds over salary caps and other issues, raising the possibility of a lockout and the cancellation of some or all of the 2011 football season. Very bad news, if you’re a fan or a network executive.
As Yinka Adegoke and Liana Baker wrote in a piece this spring, “It is difficult to overstate the importance of the NFL to the revenue and profits of broadcasters like CBS Corp, Walt Disney’s ESPN, Comcast Corp’s NBC and News Corp’s Fox.”
Consider this: The broadcast and cable networks that share the NFL rights sell about $3 billion in advertising time for games each season. That’s $3 billion that’s up for grabs.
As TV executives made the rounds this week to introduce their 2011-12 prime-time schedules, they couldn’t escape the 800-pound linebacker in the room. It’s noteworthy that all of them — even if they were privately sweating — put on a brave face. Here’s a taste… “They’re going to play,” said John Skipper, who oversees content for ESPN. “I don’t know when they are going to play, but eventually they will play, and we will show it on Monday nights.”
If you really want brass, check out the what Entertainment Chairman Bob Greenblatt had to say over at NBC, which counts on the NFL for blockbuster ratings every Sunday night. “We’ve obviously pretty close to what’s going on with this situation. We’re feeling pretty optimistic that football will be there. Worst case scenarios is we might have delay of games for a few weeks, in which case we’ve got a contingency plan to produce several high quality live event reality type shows that will fill out Sunday. But we’re feeling pretty good about where we’re going to be with the NFL.”
And Fox? A bit more wishy-washy, but hardly any signs of panic. “I think they’re planning for there to be an NFL season and at the same time working on contingencies if there’s not,” said Fox Networks Entertainment Chairman Peter Rice.
CBS: Get used to growth
CBS put on a big show in yesterday’s quarterly report, blowing out estimates on both profit and revenue. On the call that followed, Sumner Redstone called Les Moonves a “genius,” and Moonves called broadcast TV “the best game in town.”
Here are some notes from last night’s call:
- CBS, which said it would double its dividend, also plans to repurchase $250 million in stock this quarter. A nice bonus for shareholders who have already seen the stock rise by about 35 percent this year.
- Scatter rates, or prices for last-minute commercial buys, are up more than 40 percent in some cases for CBS. That’s a stunning number. Given those sorts of prices, Moonves is talking about “solid” double digit increases in upfront ad market next month.
- CBS is putting together six or seven fewer pilots than normal this year, showing that it’s pretty happy with its schedule right now (So far this season, CBS has declined the least of the big four broadcast networks in total household audience)
- Basically, investors and analysts should get used to these sorts of results, CBS suggested. Moonves said he was “confident” the first quarter’s performance would be “sustainable.”
What’s all this about TV cord cutting?
When media bigwigs argue that they haven’t seen any evidence of real cord-cutting — and, believe us, they love to argue this point – they can back it up with some new statistics from researchers over at SNL Kagan. For those of you who have fallen behind with industry jargon, cord-cutting is the idea that Americans are canceling cable and satellite television subscriptions because so many movies and TV shows can now be found on the Web — for far less than the cost of pay-TV. Huge issue, obviously, since these subscripti0ns are a pillar of today’s TV business. Not only are they the chief source of revenue for cable and satellite companies, but they help line the pockets of media companies such as Time Warner or Disney who collect fees for the TV shows they create.
Understandably, industry executives often downplay cord-cutting, attributing subscriber losses to factors like a bad housing market and high unemployment. For sure, it’s hard to know exactly why the industry lost hundreds of thousands of subscribers over the second and third quarters of last year. But SNL Kagan’s figures suggest the picture may not be as bleak as many feared.
The numbers show that while the pay-TV industry — including cable, satellite and telecommunications companies — lost about 335,000 subscribers in the middle of 2010, the losses subsided by the final months of the year. In fact, the industry added 65,000 subscribers in the fourth quarter, the data suggests. In all, the industry ended the quarter with 100.1 million subscribers, up slightly from both the third quarter and the fourth quarter of 2009.
From the SNL Kagan release…
Despite the inconclusive trend lines between sub adds and sub penetration rates, the fourth-quarter gains do reinforce the importance of multichannel video, and we project more stable macroeconomic conditions will guide the way for absolute video sub adds if not gains in penetration. However, the greater underlying issue remains more screens and alternative platforms competing for users’ attention than ever before. The changing content landscape impacts the potential pool of video subs negatively so we expect intra-multichannel competition to escalate while video penetration rates decline over the long-term.
In other words, don’t go breaking out the champagne.
Cord cutting is the trend. As more people experience online tv services like Tvdevo.com , Netflix, etc. they’ll find that it’s easier to use and, in some ways, superior to traditional cable. Bottom line is that Cable tv companies are hurting because the internet is eating into their market. The same thing happened to the video rental business and many other industries. They can’t stop the tide of change.
