MediaFile

Time Warner: It’s the hits, stupid

Far be it for us to be the umpteenth person to assail Wired editor Chris Anderson’s much quoted and yet much maligned book, The Long Tail, but Time Warner would rather keep churning out more “Dark Knights” and “Harry Potters” than fiddling down its long tail, thank you very much

The Long Tail, as you may recall, argues that thanks to the digitization of content and much lower cost of distribution, content producers will see more of their sales and profits being generated by niche content i.e. the long tail of their sales graph.

But Time Warner, by many measures the world’s largest media company, says that while it is seeing more niche content sales, it would rather the humongous profits you can make with a super hit like “The Dark Knight.”

The executive charged with minding the tills,  Chief Financial Officer John Martin, told a Citi investor conference that the future of Time Warner is in the big hits — even on digital outlets like iTunes, where he said it is beginning to see sales trends getting closer to the physical stores’ with their focus on blockbusters.

As consumers have more flexibility and more control over the way they actually consume media, we see more and more of the usage going to the long tail niche content and more and more of the usage going to the long tail and more and more of the usage moving to the very very biggest hits and the biggest brands and that’s really the space we’re playing in.

How much are those front-page Times ads?

Don’t ask The New York Times how much its new front-page display ads cost. The paper won’t say. That didn’t stop the New York Post from asking ad buyers. Here’s the answer based on anonymous sources:

$75,000 on weekdays and $100,000 on Sundays.

Assuming that the Post counts Saturday as a weekday, and assuming no discounts or other special deals (and assuming this blog post is not written by a reporter who nearly failed at least one high school math class), this works out to $28.6 million a year: $23.4 million for 52 weeks of Monday through Saturday and $5.2 million for a year’s worth of Sundays.

Despite the TImes’s silence, the ad cost sounds about right. The Wall Street Journal charges $90,000 for its front-page ads, not counting special discounts. Other details sound similar too. Here’s the Post:

You guessed it: Viacom and Time Warner settle

Who was the big winner in the Time Warner Cable-Viacom dispute? A few newspapers, it seems, since they got a little extra holiday cash when Viacom decided to take out some advertisements and take their fight with the cable operator public.

Otherwise, the outcome is what many expected: the two sides reached a deal and nobody missed a single episode of “The Hills” or “Dora the Explorer.”

Indeed, here’s what Bernstein analyst Michael Nathanson predicted on New Year’s Eve, just when the fight between Viacom and Time Warner over fees was really heating up:  “As has been the norm, we would expect a settlement — terms undisclosed — in a relatively quick manner, as both sides may not want to see if this battle results in mutually assured destruction, as Viacom loses ad dollars and Time Warner loses subscribers.”

Viacom, Time Warner Cable help get people out of the house

Viacom and Time Warner Cable are doing their best to make sure that television addicts around the country get a chance to go outside and stretch their legs come New Year’s Day. Of course, the reason they’re doing their part for physical fitness has little to do with ensuring the health of their viewers.******As Reuters reports, Viacom — the company run by financially challenged media mogul Sumner Redstone — provides programming to cable networks like Time Warner Cable for a fee. Now we’re at a time when Viacom and Time Warner Cable are renegotiating the fee, a regular occurrence. Equally regular are the disputes that arise as the negotiators try to determine what a fair price is.******The ultimate loser turns out to be you, the faithful TV watcher, because the last resort of companies like Viacom is to pull their programs off the air. The idea is that sends watchers into paroxysms of rage, usually directed at the cable company that they give all their money to every month. Eventually, the idea goes, the cable company cries Uncle! and agrees to pay more money to bring you the programming. Yes, your bill goes up too, as it always does.******Here’s a sample of what will stop being broadcast on Jan. 1: Dora the Explorer, SpongeBob SquarePants, The Colbert Report, The Daily Show with Jon Stewart and The Hills.******And here’s a sample of the pre-packaged righteous indignation that you hear at times like this from the companies:***

Viacom: Time Warner Cable has dismissed our efforts at a fair compromise… As a result, we are sorry to say that for Time Warner Cable customers our networks will go dark as of 12:01 on January 1st.

***

Time Warner Cable, via spokesman Alex Dudley: “It just smacks of desperation from a company that is trying to make up for a failing business model on our subscribers’ backs, and we’re not going to take it.”

******Don’t worry C-SPAN will continue uninterrupted.******Keep an eye on***

    *** Speaking of cable, the 24-hour news channels got record ratings this year, though it looks like they would have made Obama race against McCain for another year, if just to keep them relevant until the financial crisis is expected to ease. (Los Angeles Times)

    *** The Village Voice continues to shed the names that made its name so famous. The latest axe casualty is Nat Hentoff, the influential jazz critic who started there in 1958. Sketches of Pain, anyone? (The New York Times)

    *** Vicki Iseman, intentionally or not, was kind enough to wait until after John McCain lost his 2008 presidential bid to sue The New York Times over its February 2008 article that the lobbyist said suggested that she and the Arizona senator were carrying on inappropriately in more ways than one. (Reuters)

    ***

No more free TVs ding FiOS growth

dennystrigl-verizoncoo.jpgVerizon’s new fiber optic (FiOS) TV service added fewer subscribers this quarter with just 176,000 compared with 263,000 in the first quarter. This  surprised some analysts who had expected FiOS to continue its same rapid pace of growth, backed by Verizon’s huge marketing spend and aggressive push.

But Verizon Chief Operating Officer Denny Strigl (pictured)  told analysts the slowdown in FiOS TV growth was explained by the end of Verizon’s popular promotion giving away free high definition television sets.

On the plus side, not giving away TV sets helped keep mounting subscriber acquisition costs under control thereby boosting its bottom line, the No. 2 U.S. phone company told Wall Street.

FiOS: Bad news in Big Apple for Time Warner Cable?

newyorkcityview.jpgPali Research analyst Richard Greenfield downgraded Time Warner Cable on Monday with one eye on Verizon’s launch of FiOS TV in New York (You have to register to read the link).

Verizon got approval to roll out FiOS TV just last week and is expected to begin installations as soon as August. Reuters ran an analysis last week that showed that Verizon’s roll-out of FiOS will be expensive for the phone company and its cable competitors, particularly Time Warner Cable.

Greenfield said New York City represents only 10 percent of Time Warner Cable’s subscriber base, but its average revenue per user is well above average.

Who’s winning pay-TV war this quarter?

brianrobertsandglennbritt.jpgSo who’s winning the pay-TV so far this year? With days to go until two of the biggest cable operators (Time Warner Cable on Wednesday and Comcast on Thursday)  report first quarter financial results, Reuters canvassed eight Wall Street analysts for their estimates of subscriber net additions during the period.

At first glance it doesn’t look like it will be a good quarter with these analysts forecasting Comcast, Time Warner Cable and Cablevision to lose around 100,000 basic TV subscribers collectively, while satellite TV plays DIRECTV Group and DISH Network will add around 320,000.

Even more worrisome for cable companies?  AT&T and Verizon added around 410,000 new TV subscribers between them during the quarter.

Cable, Sprint up ante on rivals

cellphone-guy.jpgTwo sectors may be getting a new lease on life after the Wall Street Journal reported news that a handful of the top U.S. cable operators are exploring a joint venture with Sprint Nextel and Clearwire to create a national high-speed wireless network to fight off the telcos for subscribers.

Without a big infusion of cash, WiMax technology could be a non-starter in the U.S. So far, Sprint has planned to introduce the service in three markets.

Expanding beyond that may prove a tough sell for Sprint shareholders who had widely criticized its commitment last year to spend $5 billion on WiMax by 2010. Sprint is also struggling to keep its existing customers from leaving.