What is NBC going to do now that two of its most enduring sitcoms, "Friends" and "Frasier," are history? Will NBC's long-running dominance in adults 18-49 and upscale audiences finally come to an end in 2004-05? Or will Jeff Zucker & Co. come out on top by this time next year? NBC will unveil its strategy in detail--and its spin to media buyers on how it's going to thrive in a post-"Friends" media landscape--when it takes the stage Monday afternoon at its upfront presentation in midtown Manhattan. While executives aren't likely to be as cocky as they've been in the past, they also come into the upfront with a fair amount of momentum. "The Apprentice" unexpectedly became a wild hit for the network; there will be 32 one-hour episodes comprising two runs this season. "ER" isn't going anywhere, and even though "Friends" is history, fans have the chance to get to know even more about one of its characters, Joey, as actor Matt LeBlanc will be the star of a new sitcom expected to take the place of "Friends" at 8 p.m. Thursday. But media buyers are wary about whether NBC can hold onto its position as the home for must-see TV--an honor it has held since the 1980s, first with "The Cosby Show," then "Seinfeld," and later, "Friends." "Friends" was the top-rated comedy on television; more than 45 million tuned in for its final show two weeks ago. While "Frasier" wasn't what it used to be, the 11-year-old comedy did its part to deliver an upscale audience. And NBC has done well in the May sweeps. "'Friends' was an outstanding performer for them. Losing that tent pole on Thursday nights is probably going to hurt them," says Lyle Schwartz, senior vice president and director of research at Mediaedge:cia in New York. "The question is--how good is the replacement show? And I don't think that the replacement show--even though it's supposedly 'Joey'--will perform as well as 'Friends.'" Schwartz isn't alone in his opinion. Many don't give "Joey" the chance to surpass its predecessor. But, as some point out, "Joey" doesn't have to. Even part of the audience would help NBC in its struggle against CBS for dominance on Thursday night, which is the most important night of the week for advertisers wanting to plug movies, automobiles, and other consumer products and services. "They do have high hopes for 'Joey.' I think their success will depend on whether they make him more of a three-dimensional character," says Susan McClellan, national media manager at Empower Media Marketing in Cincinnati. "If they go beyond that, he might have some promise." But that doesn't mean that it's certain. For every "Frasier" that comes out of "Cheers," there are plenty of other flops for shows that come out of programs with an ensemble cast. While they weren't direct spinoffs, shows starring "Seinfeld" alums Julia-Louis Dreyfus and Michael Richards failed on NBC. NBC's schedule this season wasn't immune to failure. The highly touted "Lyon's Den" failed, and "Miss Match," "Whoopi," and "Happy Family" are on the bubble--all shows with established stars. But it was a TV novice--real estate magnate Donald Trump--who delivered the best new story of the year for NBC with "The Apprentice." Trump's reality show became a cultural phenomenon, following the same path as "Survivor" and "American Idol." And a show that had been passed up by other networks quickly became NBC's savior on Thursday nights. Instead of bleak words coming from 30 Rockefeller Center, NBC executives have been whistling happy tunes about "The Apprentice" and its ability to keep NBC on top. Trump has been signed on for next year's shows. While "The Apprentice" was a certifiable hit, the question remains whether it's got staying power. "I think that NBC has quite a challenging year ahead of them. When you think about their lineup right now, the one anchor they do have is 'The Apprentice,' which is absolutely a runaway hit," says Kristi Argyilan, executive vice president and director of media at Hill, Holliday. "But after that is a big gap." Argyilan thinks that the key to success for NBC would be to come up with scripted programming that is compelling and interesting. Susan Hajny, broadcast research manager at GSD&M in Chicago, doesn't think "The Apprentice" is a long-term solution for NBC. "Ratings-wise, NBC probably is still in a dominant position. However, moving forward, they need to convince the buyers that they're not going to become overly dependent on reality," Hajny says. "I don't think that there's a lot of confidence in those numbers ["The Apprentice"] continuing, and NBC needs to be putting a lot of investment into scripted programming." A recent report by Horizon Media's Brad Adgate estimates that NBC will have to replace between three and six hours of programming during the week, depending on the fate of several shows on the bubble. He notes that several programs are sure to return, including "Fear Factor," "Third Watch," "The West Wing," "Las Vegas," and the three "Law & Order" shows. A fourth "Law & Order" will join the stable in the fall. He thinks there's a fair amount of positive momentum for the Peacock. "I think that they're still in the driver's seat, and certainly having the Olympics in August and premiering shows after the Olympics is a very good move instead of waiting three weeks," Adgate says. He says NBC's strength has always been in cleverly written situation comedies. NBC presented 17 at its development meetings earlier this year. The "Law & Order" spinoff is likely to be a winner. And NBC is putting a lot of ink into "The Contender," a boxing-oriented show that may make a reality TV star out of actor/director Sylvester Stallone.
While observers in the general market tussle about network and cable's haul in the looming upfront, there's another part of the TV spectrum that's almost assured to increase when all is said and done: Hispanic TV. Last year's Hispanic upfront took in about $1 billion of the $3 billion overall Spanish-language television marketplace, further evidence of the explosive growth of Hispanics in the United States and the television networks that serve them. Most experts don't think the growth will slow down in 2004-05, as more networks come into the market, both on broadcast and cable. "I think we're all expecting a healthy upfront," said Ingrid Otero-Smart, president of WPP's Mendoza-Dillon & Asociados in Irvine, Calif., and a former president of the Association of Hispanic Advertising Agencies. The marketplace has grown in recent years. While it's still dominated by Univision with its phenomenally popular prime time novellas and other ratings winners, the Spanish-language powerhouse is no longer the only game in town. Telemundo has been taking on Univision with prime time novellas of its own and heavier investments made since NBC purchased the network a few years ago. And a big-time broadcast network in Mexico, Azteca America, has been making inroads in the United States, although observers say it's still got a ways to go. Telefutura (another broadcast network owned by Univision) and Mun2 (owned by Telemundo) are also becoming forces in the marketplace. This year, there's also competition in the sports arena between Fox Sports en Espanol and newcomer ESPN Desportes. And for the first time, there will also be two networks targeting young Hispanic males who prefer at least some of their programming in English: SiTV and Voy Network. Observers say it's likely that the upfront haul will increase 16 percent, with CPMs growing by like amounts. But with Hispanic populations growing all the time, a lot of the concerns that plague the general market--like declining eyeballs and the impact of digital video recorders and video on demand--aren't yet concerns in the Hispanic TV marketplace. The major concern--one taken to heart by the Association of Hispanic Advertising Agencies--has been that general market advertisers aren't spending enough in the marketplace yet. Many advertisers devote only about 5 percent of their total budgets to the Hispanic market even today, but the AHAA notes that the numbers don't come close to what should be spent. "We represent 13 percent of the market," Otero-Smart says. "There's a big potential for increases." Hot categories this year are expected to be packaged goods, telecom, retail, and automotive, among others. But that doesn't mean that everything will be completed in a rush as a lot of the general-market network upfront is done. The upfront season begins this week with presentations in New York City by many of the major players, including Univision, Telemundo, Azteca America, SiTV, and Fox Sports en Espanol. But the negotiations and the sales will continue through the summer and even beyond, as some of the advertisers don't finalize their marketing budgets until the fall. Marla Skiko, group director of Starcom's Tapestry Partners in Chicago, says that this year's upfront sees a stronger challenge by Telemundo as its ratings increase. Skiko says that it's been interesting to watch across a lot of demographics, particularly adults 18-49. But that doesn't mean that Univision is going to roll over. Observers expect Univision to make a big splash--to show not only that they remain on top, but that they intend to stay that way for a long time. Expect telenovellas to play a big role in the prime-time planning. It's also going to the first upfront in which Univision Radio--the former Hispanic Broadcasting Corp.--is going to be a factor, which gives Univision a leg up in cross-platform opportunities. Jose Lopez Varela, vice president and managing director of Hill, Holliday Hispanic in Miami, says that everyone will be watching what Univision does. "I think the next couple of years are going to be critical," he says. "What they do this year and next is going to play a role in who's on top." Lopez Varela says that Univision's telenovellas have been a smart programming strategy for them. Telemundo also programs novellas in the prime time, but Telefutura counterprograms with movies, and that's been working among adults 18-34. Azteca America provides an interesting alternative, particularly with its sports inventory. But Tapestry's Skiko says that Azteca's success depends on getting more distribution, something that has eluded it so far. "We're watching them to see how quickly they grow," she says. "They need to get more distribution." And unlike the general market, there aren't many missing 18- to-34-year-old Hispanic males. Two networks have sprung up to serve them, both in English. The existing network, SiTV, will hold an upfront presentation tonight in New York City. It targets young males with comedy and music programs. VOY, which is scheduled to go on the air later this summer, features more informational programming. Fox Sports en Espanol has been on cable since 1996, but for the first time this year, it will have competition from ESPN Desportes. Spanish-language media buyers say ESPN Desportes isn't much of a threat to Fox thus far, as it's far behind Fox's distribution. But they also say that ESPN's contracts for Spanish-language coverage of major sports like Major League Baseball means that it will grow stronger as time passes. This will be the fourth upfront presentation that Fox Sports en Espanol makes to the New York City ad buying community. "I think that the effect of it has been enormously positive for us. It's helped to put us on the map as far as the Hispanic media-buying community is concerned," says David Sternberg, general manager of Fox Sports en Espanol. "We've been able to tell a great story of distribution growth, ratings growth, and sales growth. This year will be no different." There are 100 consumer advertisers--up from 19 five years ago. Sternberg says he's not worried about ESPN Desportes, which he acknowledges brings some interesting programming. "We're focused in terms of distribution. We position ourselves as the first--and still really the only full-time--sports channel that reaches and serves the needs of a significant Latino audience," he says.
Media agency executives spend a considerable amount of time debating the impact new media technologies are having on the consumer marketplace, but it seems the real impact so far has been on the media executives themselves. Take digital video recorders (DVRs), or personal video recorders. While only 15.4 percent of consumers say they now "own" such a device, 26.7 percent of media agency executives claim to be a DVR household, according to results of a series of surveys on media technologies and consumption habits by consumers and industry executives conducted by MediaPost and InsightExpress. The findings are not surprising given that the professionals are charged with evaluating the impact new and potential media technologies ultimately can have on consumers, but the divide is considerable. For the most cutting edge new technologies, things like Wi-Fi, MP3 players or satellite radio, the differential is three or four times the rate of consumer adoption. Even for something like broadband Internet access, which many in the profession take as a necessity, penetration among media agency pros is considerably higher than among the consumer population. The findings make sense when you consider the psychographic disposition of the industry pros versus consumers. While 27.1 percent of media agency executives consider themselves "early adopters" of new media technologies, only 14.6 percent of consumers typified themselves that way. Among media agency executives "C-level" executives were most likely to be early adopters (35.7 percent), while senior agency executives (media directors/associate media directors) were least likely (19.2 percent). Adoption Rate Of New Media Technologies Media Agency Execs Consumers Early Adopter 27.1% 14.6% Buy It When Needed 45.2% 44.0% Wait And See 24.1% 28.6% Only When I Have To 3.6% 12.8% Source: MediaPost Advisory Panel, InsightExpress consumer panel. Based on a self-administered survey conducted online in April by InsightExpress. Interestingly, the penetration rates are not so spread out among types of media agency executives themselves. C-level executives were most likely to be ahead of the curve on most new media technologies with the exception of satellite radio. Media planners were average by trade standards across all new media technologies, with the exception of MP3 players, where they excel. Also interesting, is the fact that the media adoption patterns of online media agency specialists were not appreciably different than those of the average industry executive. Media Technologies 'Owned' Digital High Video Speed Satellite Recorder Internet Wi-Fi MP3 Radio All Media Agency Execs 26.7% 75.2% 22.8% 37.6% 7.6% C-Level Execs 35.7% 89.3% 42.9% 46.4% 3.6% Senior Management 24.7% 69.9% 12.3% 31.5% 6.8% Middle Management 25.8% 74.2% 29.0% 35.5% 3.2% Planners 26.7% 80.0% 20.0% 60.0% 6.8% Buyers 12.5% 75.0% 0.0% 12.5% 0.0% Online-Only 28.9% 79.6% 27.4% 40.8% 8.5% Consumers 15.4% 49.8% 5.2% 13.6% 3.2% Source: MediaPost Advisory Panel, InsightExpress consumer panel. Based on a self-administered survey conducted online in April by InsightExpress. >
Discovery Communications Inc.'s revenues rose strongly in the first quarter, primarily on double-digit growth in advertising revenue. U.S. revenues rose from $299 million in the first quarter of 2003 to $382 million this year. Ad revenues grew 23 percent in the first quarter; net affiliate revenue rose by a similar percentage increase. Discovery Networks International and the company's other international ventures rose as well; consumer products revenue fell from $25 million in the first quarter of 2003 to $19 million in the first quarter of 2004. The data on Discovery was part of Liberty Media Corp.'s quarterly filing with the U.S. Securities and Exchange Commission. Liberty owns half of Discovery, which makes its revenues public information where it would normally be private. In an SEC filing, Liberty said it expected Discovery's revenues to increase in the high teens. Liberty also owns 98 percent of TV retailer QVC Inc. and all of premium TV service Starz Encore Group LLC. Both reported first quarters better than they posted in 2003. QVC tallied $932 million in domestic revenues in the first quarter of 2004, compared to $848 million a year ago. Liberty said the increase came from more sales to existing customers in apparel, accessories, and cosmetics. There were 23.6 million units shipped in the first quarter--up 13 percent from a year ago. The average sales price dropped from $43.82 to $42.34. Revenues at Starz Encore rose from $229 million in the first quarter of 2003 to $232 million in the first quarter of 2004.
When the horse farted in someone's face, I didn't say a word. I didn't flinch when I saw examples of women shaving product logos into their pubic hair. I didn't really care if bases in MLB were covered with spider webs. Clearly others did, but I wasn't one of them. Having been part of the advertising industry for more than thirty years I try to understand the strategy behind ads that most of the public find offensive. I give benefit of the doubt to marketers who try to stand out from the clutter and grab attention in some offbeat way. But everyone has his limits, and this week, I reached mine. In a two page spread that I saw in Ad Age (it might have run elsewhere, but that's where I saw it) PointRoll, the rich media company in an effort to draw attention to a new offering called TomBoy, showed photos of children who I guess are supposed to have been "beaten up" by the little girl (aka: tom boy) on the opposite page. The "beaten" boys, all about 10 or 11, are unconscious with blood flowing from various injuries. At first glance. And at second. And even on the long shocked, incredulous third, the children appear to be dead. The scene looks like the photos you see of terrorist bombings in the Middle East - and a couple of times - on these shores. The shoe of one victim is missing, resting a few feet away as is often the case with bodies in bombings or airline crashes. The sky overhead is dark and somber looking just too much like smoke. I showed the ad to my wife who has also been in and around advertising for nearly three decades and she withdrew in horror. "What where they thinking?" she asked, but in a far more off-colorful way. The ad business side of me rationalizes the strategy, the lame attempt to tie the new product to the tom boy in the ad, but the human side of me tries to envision a bunch of PointRoll execs sitting around a table reviewing this ad and thinking, "Yeah, that's cool, that will do the trick." It is utterly inconceivable to me that any of them let this atrocity get into the final review stack, much less think it appropriate to run. What happened to all that post 9/11 sensitivity that the ad business pledged to honor? With Americans dying daily in Iraq, with newspapers filled with the grim results of terrorist attacks, how could anyone run pictures that remotely suggested dead children? How could Ad Age accept such an image? I know that times are tough, but there is simply no excuse for accepting this ad. A few pages away in the same issue of Ad Age, a Deutsch executive writing on behalf of the Advertising Education Foundation, laments that college professors who teach prospective adverting executives, have a low opinion of advertising as a career. Said one professor "It seems like a fluffy occupation filled with puffery, in which you have to close your eyes about a lot of things." This is one time NOT to close your eyes. Join me in telling the PointRoll and Ad Age folks that they have stepped so far over the line that they ought to run a two page, 4 color apology in the same space. And then fire whoever presented this abominable idea. I have never been so ashamed to say I work in this industry.