TV 2012: A tale of two sets
It was the best of times, it was the worst of times. It was the era of big, it was the hour of small. It was the age of complexity, it was the era of simplicity. It was an epoch of freedom, it was a time of tyranny. It was the season of two dimensions, it was the moment of 3D. Everything was before us — and we have seen it all.
With apologies to Dickens, there’s a whole lot going on in the world of television, the medium that has dominated the world’s attention for three generations and was supposed to — at the very least — become an also-ran to the Internet. Convergence (in the 1990s’ sense of the word) is happening, but with no clear winner: Computers became TVs, and TVs are becoming internet-connected computers.
Likewise, TV programming has been in something of a renaissance for a decade — yeah, sure, for every Mad Men there’s a Work It (or 20 of them) — and even the experimentation in programs has something to do with technology, which has made it possible to watch on demand, and in places and at times of our choosing, and enabled new competition that entertains us with things that aren’t on TV at all.
But the real innovation is going on with what we used to call “TV sets.” They have gotten immense at the same time they have gotten tiny. They are components of complicated hardware systems, and they are also apps. These two delightfully disruptive strains — size and place — are coexisting in a remarkable way that suggests we are merely in the early part of a story arc that can only benefit the consumer.
It’s a sure sign of welcome chaos that innovation is happening at, well, both ends of the spectrum.
But that doesn’t mean there won’t be ugly missteps. For two straight years (blessedly not for a third, though), the lords of the Consumer Electronics Show tried to seduce us into believing that 3D TV should be a consumer device (they aren’t giving up, but that’s a tale for another day). This year “smart TV” was the buzz phrase in Las Vegas. Every major manufacturer is incorporating internet access and apps as we mercifully inch past the era of the clunky set-top box and other peripherals, but still place a premium on padding the nest — er, living room.
At the same time, TV is going anywhere and everywhere. By leveraging the smartphone and tablet revolution, it is newly portable, fueled by hotspots, ubiquitous data networks, and “old” standbys like SlingBox.
Who wants a college sports TV network? Who doesn’t?
Sure it was obvious, but I applaud the decision by whoever organized the IMG Intercollegiate Athletics Forum to pipe The Cars “Shake It Up” through the loudspeakers of a bland room in New York’s Marriott Marquis as the conference wrapped up.
College sports — and here I’m the one being obvious — are going through a serious transition. Conferences are realigning, TV deals are being struck, and feelings are getting hurt.
“This has been a painful, stinging two years,” said Chris Plonsky, Women’s Athletic Director at University of Texas, which this year launched its own regional sports network, The Longhorn Network. The battling “belongs on the field”, she said. “When it comes to business, let’s play nicely in the sandbox.”
Easier said than done, given the big money at stake. Check out these estimates from IMG: College sports have 173 million fans; 79 million of them are female and 29 million of them earn at least $100,000 a year. Those are the kind of numbers that make a TV executive’s head spin.
Sharing the stage with UT’s Plonsky were NBC Sports President Jon Litner, University of Notre Dame Athletic Director Jack Swarbrick, and Chris Bevilacqua, a well-known dealmaker who helped put together the Pac-12 TV network. It was no surprise, then, that Swarbrick was asked about Notre Dame’s own plans for a TV network. (At the moment, Notre Dame, with its huge following, has a long-term deal with NBC reportedly worth around $9 million year).
“The Longhorn Network does not have a bigger fan than me,” said Swarbrick. “But it’s not a model that works for Notre Dame.” The problem, he said, was geography. The Longhorn Network can reach a concentration of fans in the school’s home state (which happens to the market size of some European countries).
“We don’t have that. What I have is interest everywhere, so we need to take another approach.”
Are kids wringing out SpongeBob?
Back in September, right before the quarter ended, Viacom trimmed its advertising revenue outlook to high single digit growth from double digit growth. One of only a few media conglomerates to take that step–News Corp, Time Warner, and CBS were much more upbeat–the move prompted some concern among media watchers that advertisers were beginning to slash their budgets on macro-economic concerns.
But that wasn’t the case. It turns out the problem was Viacom specific. As the Sumner Redstone-controlled company disclosed during its fiscal fourth quarter results Thursday, domestic advertising revenue growth slowed in part because of a mid-September ratings plunge kids network Nickelodeon. Total domestic ad revenue across Viacom’s cable networks, which also includes MTV, VH1, and Comedy Central, for FQ4 was up 7 percent versus the third quarter’s climb of 12 percent.
What’s more is that Viacom CEO Philippe Dauman threw audience measurement company Nielsen Co under the bus on Thursday’s earnings call, saying the ratings drop at Nickelodeon was “inexplicable.” He said Nielsen’s data did not match Viacom’s own set top box data for viewers. The company is currently in discussions with Nielsen– the dominant company that tracks TV ratings that determine ad rates — and the watchdog organization Media Ratings Council to resolve the situation.
Here’s Dauman on the call: “Let’s just say that we wouldn’t have had to have any conversatoin with either of them based on the set-top box data they are examining. That is the reason everybody believes there is an anomaly.”
Nielsen responded with this statement: “It is the longstanding policy of Nielsen not to comment on specific client business issues. As Viacom stated on their earnings call this morning, we have worked closely with Nickelodeon and the Media Ratings Council to conduct an exhaustive assessment of the methodoligical and market factors reflected in national TV ratings. To date, the review process confirms that our measurement methodology, operations and related reporting processes are working as expected.”
Battling with media companies over ratings data is unfamiliar territory for Nielsen. Broadly speaking, the company has been criticized by some media conglomerates that claim its methodology for tracking consumers’ viewing habits is outdated. For instance, last November former NBC chief executive Jeff Zucker said Nielsen’s sample size was a problem, explaining that CNBC’s ratings fell after only three people were taken out of a 300-person Nielsen sample.
But, as it related to Nickelodeon, the problem may have nothing to do with Nielsen at all. Maybe it’s that children have turned against TVs. Hard as that is to imagine, that’s the takeaway from a note issued by Barclays Capital analyst Anthony DiClemente Thursday looking at a ratings rundown titled: “What are the kids watching these days?”
AT&T’s ad spending outpaces Verizon’s — by a long stretch
Anybody who wondered how AT&T managed to stand up against the Verizon Wireless February iPhone launch wasn’t paying much attention to their TV set.
AT&T had been assuring investors for much of 2010 that its numbers wouldn’t fall off a cliff if arch-rival Verizon Wireless got its hands on iPhone, ending its exclusivity. The logic was that customers wouldn’t want to break their two-year contracts. Most customers were also tied to AT&T via family plans, making it even more tricky for them to leave.
Still, AT&T wasn’t about to leave it to chance. So it went about things the old-fashioned way: it threw money into advertising.
New figures show AT&T’s first-quarter wireless marketing budget was double that of Verizon Wireless. In the first three months of the year AT&T spent a whopping $451.83 million on wireless advertising compared with Verizon’s relatively modest $227 million spend, according to a report from advertising research firm Kantar Media.
And when it came to iPhone-specific ads AT&T’s spending stood out even more, at triple that of Verizon’s. AT&T spent $100.9 million on iPhone advertising in the first quarter compared with a $34.5 million outlay at bigger rival Verizon Wireless, according to Kantar, which said the vast majority was spent on TV ads.
While Verizon’s iPhone ad spend peaked in February with a $22 million outlay and dropped to $2.9 million in March, AT&T’s iPhone spending crept up steadily. After starting at $13.4 million in January it ended the quarter with a March spend of $55.4 million, Kantar said.
Hearst board additions feel… papery
You have to give Hearst some credit for sticking to what it knows. Check the short biographies of the four company executives who are joining the publisher (and broadcaster’s) board:
- George R. Hearst III, publisher of the Albany Times Union. Newspapers. Papery.
- Richard P. Malloch, president of Hearst Business Media and senior vice president of Hearst Corporation. He used to run Hearst’s consumer books business before selling it to HarperCollins. Papery.
- Scott M. Sassa, president of Hearst Entertainment & Syndication and senior vice president of Hearst Corporation. OK — a former Internet startup and venture capital guy, not to mention his career at NBC — maybe not so papery.
- Steven R. Swartz, president of Hearst Newspapers and senior vice president of Hearst Corporation. He also ran the yellow pages business, though he seems less papery when you find out that he helped start the newspaper consortium with Yahoo. That has been a well meaning if not game-changing attempt to get newspapers and Yahoo to the point where they both feed each other big advertising profits.
Now, Hearst might be experiencing some tough times in the newspaper business, having closed the Seattle Post-Intelligencer and having thought publicly about dropping the San Francisco Chronicle. At the same time, it’s not trying to save itself by changing everything it does and acting like a new media company.
One bit of possible wisdom that I hear people saying these days is: Why not manage your media business to deal with what it knows? The print business might be declining but, if managed properly, there might be a graceful way to run things that doesn’t erode what cash the business is making with no clear way of replacing it. Maybe these print guys know something after all.
Here comes Windows Unicorn
Thousands of Microsofties yucked it up at the expense of rival Apple at their annual get-together at Seattle’s Safeco field on Thursday.
Saturday Night Live star Seth Meyers set about the old foe, which had its own festival of self-congratulation yesterday.
“Who at Apple let an 8-year-old girl name their new operating system Snow Leopard?,” Meyers asked, according to one employee spreading the good word on Facebook. “What, was Unicorn taken? Was Pony not available?”
Fair point, perhaps. But what’s this? A preview of the first TV ad for Microsoft’s new Windows 7 operating system, airing on prime time tonight. It features a young girl and a — admittedly kitsch — unicorn.
Couldn’t pay me enough to go back to Windows and its Worms and Viruses…Just put em out to pasture.
Good days for cable TV
A year ago, the big story around Emmy nominations was the acclaim showered on cable programs like “Mad Men” and “Damages.” A quick glance at today’s nominations indicates little has changed.
Just look at the best drama category, where Fox’s “House” and ABC’s “Lost” will face stiff competition from cable’s “Big Love” (HBO), “Mad Men” (AMC), “Damages” (FX), and “Breaking Bad” (AMC).
While the Emmy awards aren’t everything — ratings are still the holy grail — they certainly don’t hurt. Particularly when it comes to cable networks, which have built a reputation for developing more sophisticated, bolder programs than the broadcast counterparts.
While ABC, NBC, CBS and Fox are under heavy pressure from advertisers (and their corporate parents) to show immediate results, the cable networks can take more care with their programs. After all, they draw some revenue from carriage deals and subscriptions, which buys shows like “Breaking Bad” some time to develop.
That seems to be paying dividends — and not only when it comes to awards. While broadcast TV advertising rates are still at a sizable premium to cable, most advertising executives say the gap is shrinking. Couple that with carriage fees and a generally lower cost structure and you see why TV executives like NBC Universal’s Jeff Zucker spend so much time talking up their cable assets.
Keep an eye on:
It’s still different when you watch in HDTV compared to Web TV.
Friday media highlights
Here are some of the day’s top stories in the media industry:
TV Networks Fight Drug-Ad Measure (WSJ) “Advertising costs are deductible to any company as a business expense. The plan being considered by Rep. Rangel’s Ways and Means committee would eliminate the deduction with respect to prescription drug advertising,” writes Martin Vaughan.
Big media seek 21st century business models (Reuters) “Media moguls at this week’s Sun Valley conference have spent as much time discussing how to reconfigure business models disrupted by the Web as they have worrying about the weak economy,” reports Yinka Adegoke.
Zucker Says Marketplace Has Reached Bottom (B&C) Ben Grossman writes: “NBC Universal chief Jeff Zucker said Thursday that while the overall marketplace is still challenged, he thinks it may have bottomed out. ‘It’s still quite uncertain and we don’t really see the full recovery we are all hoping for,’ he said. ’It’s still tough out there, but I think we have seen a bottom.’”
The Financial Times and New York Times make further syndication deals (Editors Weblog) “Both the Financial Times and the New York Times have announced their international syndications will include additional countries. The FT has confirmed content sharing arrangements with publications based in Turkey, France, and South Korea,” writes Christie Silk.
NBC Reveals Displeasure as U.S.O.C. Unveils Plan (NYT) Richard Sandomir writes: “The head of NBC Sports said Thursday that he broke off talks in April about combining the Olympic channel that it partly owns with the one being planned by the United States Olympic Committee.”
AP Works Toward Universal Online News Format (Mediapost) Gavin O’Malley writes: “The Associated Press, along with fellow non-profit The Media Standards Trust, on Friday unveiled a digital news “microformat” to effectively encapsulate the content and key meta-data of every news story online.”
Thursday media highlights
Here are some of the day’s top stories in the media industry:
New York Times Asks Subscribers: Is It Wrong to Charge for Online Content? (Poynter) Bill Mitchell writes: “The New York Times is testing a price point of $5 a month for access to nytimes.com, with a 50 percent discount for print subscribers. The Times e-mailed a survey to print subscribers Thursday afternoon inviting their reaction to that pricing plan and asking a range of questions about online pricing.”
Murdoch papers paid £1m to gag phone-hacking victims (Guardian) “The payments secured secrecy over out-of-court settlements in three cases that threatened to expose evidence of Murdoch journalists using private investigators who illegally hacked into the mobile phone messages of numerous public figures to gain unlawful access to confidential personal data, including tax records, social security files, bank statements and itemised phone bills,” writes Nick Davies. > UK police won’t reopen Murdoch paper phonetap case (Reuters)
A is for abattoir; Z is for ZULU: All in the Handbook of Journalism (Reuters) Dean Wright writes: “The handbook is the guidance Reuters journalists live by — and we’re proud of it. Until now, it hasn’t been freely available to the public. In the early 1990s, a printed handbook was published and in 2006 the Reuters Foundation published a relatively short PDF online that gave some basic guidance to reporters. But it’s only now that we’re putting the full handbook online.”
As Gannett’s Newspapers Suffer, Digital Side Sees Growth, More Hiring And Acquisitions (paidContent) “As Gannett continues to be roiled with huge debt problems, an absent CEO, and hundreds more layoffs across its community newspapers, its digital division appears to be a sea of calm. In fact [...] things are going just fine on their respective ends,” writes David Kaplan.
Analyst Admits to Being ‘Dead Wrong’ After Disney’s ‘Up’ Is Big Earner (NYT) “Dead wrong” is how Richard Greenfield of Pali Research put his related analysis in a research note. “The recent success of Pixar’s ‘Up’ (well ahead of our forecasts) has renewed investor confidence in Disney’s creative capabilities,” he added. “Up” has so far sold $265.9 million in tickets in North America and $35.4 million overseas, where it has only begun to arrive in theaters,” writes Brooks Barnes.
TiVo, Best Buy Form Alliance To Boost DVRs Available In Stores (WSJ) David B. Wilkerson writes: “Best Buy also will use TiVo’s platform to market directly to consumers, offering tips and other information to help customers get more out of the two-way possibilities TV now offers. The company said it will ‘substantially increase the levels of marketing and merchandising of retail TiVo DVR devices, as well as other devices that may feature the TiVo user interface and platform in the future.’”
Wednesday media highlights
News about the media industry:
Netflix looks to future but still going strong with DVD rentals (USA Today) “Netflix CEO and co-founder Reed Hastings doesn’t think his 58 distribution centers are in immediate danger of becoming obsolete, but he knows that day will come. He believes DVD rentals have four to nine years to keep growing, despite inroads in Internet delivery of movies to set-top TV boxes and other video-on-demand options,” writes Jefferson Graham.
Is the bell tolling for Clear Channel? (San Antonio Express-News) David Hendricks writes: “Analysts believe Clear Channel, now with about $22 billion in total debts, will have trouble making scheduled payments later this year. The company, already down to about 800 stations from its peak of about 1,200 stations, either will have to start selling stations itself or go into bankruptcy, where lenders will put stations up for sale.”
Foes No More, Ad Agencies Unite With Internet Firms (NYT) Eric Pfanner writes: “With consumers spending more and more time online, analysts say Internet companies and ad agencies have no choice but to work together to develop ways to make money from digital media.”
In other news:
