| Wednesday, Feb 10, 2010 |
What's inside:
Today's Media News
1. Happy Face: Disney Cable, Broadcast Rise, Scatter Market Up by Wayne Friedman
2. Latest Bankruptcy: Penton Enters Chapter 11 by Erik Sass
3. Crunch Time: Doritos Scores Commercial Triumph: Most-Watched Ad Ever by Wayne Friedman
4. McClatchy Newspapers Reject Online Pay Walls by David Goetzl
5. PGA: Ad Pages Rise 41% In Early '10 by Erik Sass
6. Broadcast Sites Grab Millions, NBC Emerges No. 1 by Wayne Friedman
7. Outside.in Helps Newspapers Create Hyper-local News Pages by Erik Sass
8. MediaCom Names Jarvie COO by Fern Siegel
9. truTV Super Bowl Spot Helpful, No Touchdown by David Goetzl
News Briefs
10. O'Hara To CEO, Topps Company
Today's News
1. Happy Face: Disney Cable, Broadcast Rise, Scatter Market Up
by Wayne Friedman
Walt Disney's television networks, film and TV production studios improved profitability, helping to keep the media company's earnings stable versus the same quarterly period a year ago.
Disney pulled in $844 million for the fiscal first quarter versus $845 million for the fiscal first quarter a year ago. Revenues improved slightly -- 1% to $9.74 billion from $9.65 billion.
Disney's media networks gained 11% in operating income to $724 million, and 7% in revenue to $4.2 billion.
Breaking this down, cable networks improved 5% in operating income to $544 million, with its broadcasting businesses rising 30% to $180 million. Cable networks' revenue was up 8% to $2.6 billion, and broadcasting was 5% higher to $1.5 billion.
Disney noted some difficulties, however. ABC Television Network had lower prime-time ratings and advertising revenues -- although scatter deals on a CPM viewer basis were 20% above deals made during last summer's upfront.
Jay Rasulo, senior executive vice president and CFO of Walt Disney, says first-quarter 2010 scatter deals are now running 30% higher on CPMs. He added that advertisers continue to make decisions closer to air date, which means a tougher time in gauging future ad projections.
ABC-owned television stations had lower advertising revenue, due to higher political advertising sales in the prior-year quarter. But those stations are pacing strong results in the first-quarter calendar year versus a year ago.
Despite current recall car problems at Toyota, Bob Iger, president and CEO of Walt Disney Co., says the company "has not seen any impact due to Toyota's issues" across any of its TV businesses. Overall, Iger says the ad market continues to be "not as strong as it was 18 months ago."
Both ESPN and Disney Channel gained affiliate revenues -- and contributed to the strong cable network results. ESPN gained mid-single-digit increases in ad sales over the same quarter of a year ago. ESPN continues to pace 5% ahead of first quarter calendar results of a year ago.
Studio entertainment rose 30% in operating income to $243 million, but slipped 1% to $1.9 billion. Higher operating income came from domestic home entertainment, partially offset by decreases in domestic theatrical distribution and music distribution.
Parks and Resorts revenues were essentially flat at $2.7 billion, but operating income decreased 2% to $375 million. Disney said there was a decrease in business from Disneyland Paris in terms of attendance and lower hotel occupancy.
Room reservations were 10% behind the pace of a year ago, according to Rasulo. Consumers are making decisions closer to travel dates.
2. Latest Bankruptcy: Penton Enters Chapter 11
by Erik Sass
Another big publisher has entered bankruptcy, with Penton Media's announcement Tuesday that it is filing for Chapter 11 bankruptcy protection, having worked out a "pre-packaged" plan approved by its lenders that will forgive a portion of its debt and bring another round of investment in the company.
Penton, a business-to-business publisher -- which owns titles like Business Finance, Air Transport World, and Broadcast Engineering -- plans to exit bankruptcy sometime in March.
Although details of the pre-packaged plan weren't released, Penton did disclose that it will cut debt by about $270 million, extend the senior credit maturity date to 2014, and raise more money from investors to fund operations and improve liquidity.
In other bankruptcies, these sorts of moves have usually been accompanied by a transfer of some amount of the company's equity to creditors -- but if this is the case with Penton, it is only a minority stake. The company stated "there will be no management changes or change in control."
The last few years have seen a spate of bankruptcies or creditors taking ownership at big newspaper and magazine publishers.
In the magazine world, in August 2009 the Reader's Digest Association filed for Chapter 11 bankruptcy protection, saying it would seek to reduce its debt from about $2.2 billion to about $550 million through negotiations with creditors.
Quadrangle Capital Partners lost control of Maxim to one of its main creditors, Cerberus Capital Management, in July. In April Source Interlink, a magazine publisher and wholesaler, went private in a deal that will relieve it of about $1 billion in debt and provide $100 million to fund continuing operations, as part of a Chapter 11 reorganization plan.
On the newspaper front, in January, MediaNews Group, publisher of The Denver Post, Oakland Tribune, San Jose Mercury News, and Detroit News, entered Chapter 11 bankruptcy protection, also with a "pre-packaged" plan approved by lenders.
Tribune Co., which assumed $8.5 billion in debt to go private in 2007, was forced to declare bankruptcy in 2008. Now several groups of competing creditors are trying to wrest control of the company from Sam Zell, who engineered the deal to transform it into an employee-owned company.
February 2009 brought a bankruptcy declaration by Philadelphia Newspapers, a subsidiary of Philadelphia Media Holdings, which bought The Philadelphia Inquirer and Philadelphia Daily News from McClatchy in a $562 million deal engineered by ad and PR mogul Brian Tierney in 2006. Like Tribune, PMH's management is now battling creditors in court for control of the newspapers.
The Journal Register Co., owner of a chain of local newspapers, was handed over to creditors in early 2009.
3. Crunch Time: Doritos Scores Commercial Triumph: Most-Watched Ad Ever
by Wayne Friedman
This past Super Bowl was the most-watched TV show of all time -- with 106.5 million average viewers. This has resulted in viewership records for Super Bowl commercials, as well.
The Nielsen Company now says the Doritos commercial featuring two men attacked in a gym for stealing someone else's Doritos was seen by an estimated 116.2 million viewers, which makes it the most-watched TV commercial of all time.
Audi's Green Police came in second with 115.6 million and Electronic Arts' Dante's Inferno spot came in third place at 115.0 million.
Focus on the Family's controversial ad featuring Tim Tebow tied for the least-viewed ad of Super Bowl XLIV, according to Nielsen. The commercial got heavy pre-game buzz going into the game. This coincides with what many social-networking analyses have revealed -- most of the attention for the campaign happened before the Super Bowl.
As for other spots, CBS's much-discussed 15-second promo for CBS' "Late Show with David Letterman," featuring cameo appearances by Jay Leno and Oprah Winfrey, was seen by an estimated 110.4 million viewers.
| Most Viewed Ads During Super Bowl XLIV | |||
| RANK | Commercial | Time of Air (ET) | # of Viewers |
| 1 | DORITOS/Gym | 9:30:01 PM | 116,231,920 |
| 2 | AUDI/Green Police | 9:26:29 PM | 115,647,840 |
| 3 | ELECTRONIC ARTS/Dante's Inferno | 9:15:22 PM | 115,063,760 |
| 4 | HONDA/Squirrel | 9:20:20 PM | 114,771,720 |
| 5 | TACO BELL/It Rocks | 9:27:29 PM | 114,771,720 |
| 6 | BUD LIGHT/Book Party | 9:32:13 PM | 114,771,720 |
| 7 | HYUNDAI/Built By Hand | 9:32:43 PM | 114,771,720 |
| 8 | BUDWEISER/Horse Fence | 9:15:52 PM | 113,603,560 |
| 9 | US CENSUS BUREAU/Production Mtg | 8:49:23 PM | 113,019,480 |
| 10 | E*TRADE/5 Babies | 9:33:13 PM | 112,727,440 |
| Source: The Nielsen Company | |||
4. McClatchy Newspapers Reject Online Pay Walls
by David Goetzl
As debate percolates around newspapers charging for Web content, count on the Miami Herald and Kansas City Star sites to stay free. McClatchy Co. CEO Gary Pruitt said Tuesday the company is "comfortable" with an ad-supported model without pay walls.
"We don't view it as fatally flawed," he said.
With less traffic, McClatchy believes pay walls would bring fewer ad dollars than it would gain from subscription fees. "If we could make more revenue with paid products, we would," he said.
Still, McClatchy will continue to experiment with one-offs, including a paid offering around state government news (targeted partly at wealthy lobbyists) at its Raleigh, N.C. paper. And Pruitt added that if The New York Times and papers owned by News Corp. yield successful pay models, McClatchy might copy some of their tactics.
"We will continue to evolve and learn from others," he said.
McClatchy owns 30 daily papers, including Miami and Kansas City. On Tuesday, he appeared at a Borrell Associates local online ad event in New York.
At McClatchy, digital revenues are growing, yielding 16.2% of total ad dollars last year -- up from 11.6% in 2009. Plus, profit margins are higher than in the legacy print business, Pruitt said. How much will online growth continue? Pruitt said flat-out he didn't know.
For the most part, Internet advertisers continue to be the same ones that advertise in print, he noted. But over time, he expects smaller marketers to increasingly take advantage of lower costs on the Web.
Turning to the bulk of McClatchy's operations, Pruitt said print remains challenging. But one advantage for the company: There is generally only one newspaper in a particular market. Breaking news, he said, attracts an audience, and the local paper has the largest newsgathering operation. It also boasts a "powerful" local brand advertisers want to align with.
"It's a difficult thing to establish," he said, noting that Microsoft and AT&T have unsuccessfully attempted local content forays.
One challenge is making print relevant to a younger audience, but Pruitt said research shows when the content is targeted at 18- to 34-year-olds, the changes also appeal to older readers.
5. PGA: Ad Pages Rise 41% In Early '10
by Erik Sass
In what may be the best news yet for magazines in 2010, on Tuesday the Publishing Group of America -- which publishes newspaper-distributed magazines, including American Profile, Relish, Spry -- revealed that ad pages are up 41% in the first quarter compared to the same period in 2009.
Although these results aren't representative of the magazine business overall in the first quarter, the broad picture is still one of improvement, as most consumer mags have posted smaller losses or modest gains in the first two months.
PGA said its flagship publication American Profile enjoyed 54% growth in ad pages during the first quarter of 2010 compared to the first quarter of 2009. Food title Relish increased 20% and Spry, targeting baby boomers in middle age with healthy lifestyle content, jumped 24%.
American Profile is distributed nationally by 1,400 newspapers with a combined circulation of 10 million. Relish is distributed by newspapers with a circulation of 16 million and Spry has a circ of 9 million.
Moreover, these results followed positive figures in the fourth quarter, when American Profile saw ad pages increase 16%, Relish 16% as well, and Spry 48%.
PGA cited the connection with consumers through their local newspapers, combined with multimedia offerings, as the main drivers of growth. According to PGA, a number of new advertisers signed up in the first quarter of 2010, including ConAgra, Glaxo SmithKline and Kimberly Clark.
The magazine business in general seems to have finally bottomed out after one of the most severe and prolonged contractions in history. According to the Media Industry Newsletter, monthly magazines' ad pages are down about 9% in January and February compared to the same months last year.
Although this is still a negative comparison, it's actually a positive development after losses in 2009, when, according to the Publisher's Information Bureau, total ad pages declined 25.9% in the first quarter, 29.4% in the second, 26.6% in the third and 21.6% in the fourth.
PGA serves more than 1,600 community newspapers across the U.S.
6. Broadcast Sites Grab Millions, NBC Emerges No. 1
by Wayne Friedman
Its traditional TV platform might need some work, but among all TV networks' individual Web sites, the NBC brand name comes out on top for 2009.
Last year, NBC.com averaged just over 7.0 million unique visitors every month -- just a bit better than ABC.com, which was at 6.9 million. This yearly data comes from Internet research measuring companies, Omniture and comScore Media Metrix.
The real difference for NBC comes from the total minutes spent during an average 30 day period: 91 total minutes per visitor, which comes to 6.6 average minutes per visit. NBC said it gained 11% in total minutes over 2008.
ABC was a distant second with 79 total minutes, and 4.6 average minutes per visit. CBS came in third place, 5.0 million unique monthly visitors, 76 total minutes, and a 5.1 average minute per visit.
These results do not include data from Hulu.com, or any associated sites the networks use to syndicate their content. CBS, for example, heavy syndicates its content to hundreds of Web sites.
Many individual branded-network sites contain more than just full-length videos to be screened. Those areas typically include clips, photo galleries, promotion and other content.
For its specific shows, "The Biggest Loser" was NBC.com's No. 1 show site in page views, 239 million. On NBC.com, "The Office" was tops in monthly average unique visitors: 2.1 million, and total video streams, 116 million. "Saturday Night Live" was the top NBC.com site for the year in short-form streams, 63 million, and widget streams and 14 million.
Though Fox is the No. 1 network currently among 18-49 viewers, its Fox.com slotted in at fourth place, with 3.7 million average unique monthly visitors, where 31 total minutes are viewed per person. This comes to 5.7 minutes per visit. The CW's CWTV.com had 2.4 million unique visitors, 32 total minutes per person, and 3.9 average minutes per visit.
TV Network Web Site Sctivity For 2009
Total Unique Visitors Total Minutes Average Minutes per Visit
NBC.com 7,008 91 6.6
ABC.com 6,945 79 4.6
CBS.com 5,000 76 5.1
Fox.com 3,658 31 3.9
CWTV.com 2,429 32 5.7
Source: Omniture and comScore Media Metrix, January - December 2009
7. Outside.in Helps Newspapers Create Hyper-local News Pages
by Erik Sass
Outside.in, a Web developer which focuses on aggregating hyper-local content and pairing it with highly targeted advertising, has struck deals to provide these services to a number of national newspaper Web sites, including The Miami Herald, New York Post, St. Louis Post-Dispatch and various properties of Tribune Co., including the Chicago Tribune, several Chicago-based online news sites, and the Baltimore Sun. Outside.in has also partnered with CNN.com and the Dow Jones Local Media Group, which owns community media operations -- principally local newspapers -- in California, Massachusetts, Maine, New Hampshire, New York, Oregon and Pennsylvania.
The main service offered by Outside.in to these companies, Outside.in for Publishers, allows newspaper Web sites to create tightly focused "Neighborhood News Pages." which aggregate a variety of local news (including content from 4,000 local bloggers) in categories selected by the publisher to create custom-tailored local news sites.
The service also allows them to add tagged news maps and social-media functions like reader comments and sharing via email. Overall, the Web service aggregates and organizes over 40,000 unique news feeds, serving almost 58,000 neighborhoods. Web sites in the Outside.in network currently attract over 7 million unique visitors per month.
News publishers on the Web have focused on local news as a way of distinguishing their offerings, as national and international news has become increasingly commoditized (with similar content available from multiple publishers). Ideally, local news reaches a small but interested group of readers, allowing advertisers to deliver precisely targeted advertising to a highly engaged audience at relatively modest prices.
Not all online local news initiatives are necessarily ad supported, however. In 2009, NPR announced the upcoming launch of a nationwide local news operation dubbed "Project Argo" with $3 million in funding from the Knight Foundation. Project Argo will coordinate in-depth journalism intended solely for the Web -- on topics of local as well as national interest -- by 12 participating public radio stations.
Argo builds on NPR's Local News Initiative, which launched in 2007 to improve the quantity and quality of local news reporting by public radio stations. In the last two years, LNI laid out an overall strategy, formulated standards and style guides, conducted audience research and helped the stations produce pilot programming that aims to be more relevant and appealing -- as well as easily re-purposed for digital distribution.
8. MediaCom Names Jarvie COO
by Fern Siegel
Euan Jarvie, formerly chief client officer for MediaCom, has been upped to a new post: chief operating officer, MediaCom U.S. In that capacity, Jarvie will oversee the digital, insights, communications planning, analytics and business development divisions.
Before working for the company in the U.S., Jarvie led MediaCom's operations in Scotland and Ireland. He joined MediaCom in 1997 to found the company's Edinburgh office and continues to serve as a member of the executive committee. He will also chair the U.S. Management Board.
Doug Checkeris, CEO, MediaCom North America, stated that the Jarvie appointment "maintains greater consistency and control over our product from its conception and development, through to its execution and delivery."
Prior to joining MediaCom, Jarvie held media director and media investment positions at several major agencies, including WWAV Rapp Collins, O&M Media, TMD Carat Manchester and Zenith Media.
MediaCom's U.S. billings exceed $7.0B. Its client roster includes Audi, ConAgra Foods, Staples, Diageo, GlaxoSmithKline, Hasbro and JetBlue.
9. truTV Super Bowl Spot Helpful, No Touchdown
by David Goetzl
Did a Super Bowl ad help truTV? Some may label it a first down, not a score. The same might hold for Denny's and its spots.
The truTV spot promoted the new show "NFL Full Contact," and its premiere the night after the game. While the debut produced ratings above the network's season averages, the numbers were well below its Monday lead-in.
"Full Contact" at 10 p.m. drew 713,000 adults 18-49 and 1.26 million total viewers in "live plus same day" figures. By one measure, that topped the network's season average of 570,000 and 1.16 million, respectively.
But the episode of "Operation Repo" that ran right before "Full Contact's" debut at 9:30 p.m. drew 1.2 million in the 18-49 demo -- 66% higher than the NFL show. And "Repo's" total viewers (2.32 million) were about 1 million people higher.
The spot was a Groundhog Day-spoof with Pittsburgh star Troy Polamalu plugging six more weeks of football. The six-episode "Full Contact" promises a behind-the-scenes look at the NFL.
Separately, Denny's ran two spots promoting a free Grand Slam breakfast for all on Tuesday. The chain said approximately 2 million people took advantage. That was about the same as last year, when Denny's tried the same stunt of offering the free breakfast two days after the game. (The fast-food eatery ran one ad in last year's game.)
Denny's was hoping for an increase in customers, but attributed a failure there partly to bad weather in the Midwest and Washington areas, which could have discouraged people from waiting in line. A year ago, Denny's spent $5 million on the promotion, including the ad costs and free meals.
Denny's said it had approximately 24 million hits on its Web site post-game. CEO Nelson Marchioli stated that Tuesday was "a great day for Denny's. We received an outpouring of the most genuine and heartwarming comments from our guests, servers and managers."
The chain ran a third Super Bowl ad promising a free Grand Slam on one's birthday. The signature Grand Slam, with pancakes, eggs and more, costs about $6.
News Briefs
10. O'Hara To CEO, Topps Company
The Topps Company, the creator and marketer of sports cards, named Ryan O'Hara president and CEO. Previously, O'Hara was the president of TV Guide Network and TVGuide.com, will assume the new role on March 1. Michael D. Eisner, chairman of Topps, who purchased the company with Madison Dearborn Partners in 2007, says the appointment "will help Topps capture a greater share of consumers' leisure time." O'Hara had earlier led TV Guide-owned interactive horse-racing network TVG, growing its revenue and distribution by one-third.
Wednesday, Feb 10, 2010
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