Dethroning Univision is not the primary objective for NBC's Telemundo, the No. 2 Spanish-language broadcaster. Instead, NBC Universal Chairman-CEO Bob Wright said a high tide can lift all boats. "Our issue is not to overtake Univision," he said yesterday at an Advertising Week event in New York. Wright said Telemundo takes in 30 percent of ad dollars spent in the Hispanic broadcast market--and his goal, for now, is a modest increase to 40 percent or 45 percent. The market has such high potential for revenue growth that a slight increase in share can result in a big lift to the bottom line, he said. The Hispanic broadcast market doesn't yet receive the level of advertiser support commensurate with the desirability of the audience, he added. Many general-market advertisers are "hesitant" to jump into the space, although he noted that may be due to the logistics of expanding planning operations. "We still don't have the pricing volume or advertiser support of the general market," Wright said. But the influence of networks like Univision and Telemundo--which NBC acquired in 2001 for about $11 billion less than Univision was recently sold for--will soon be unavoidable from a marketing standpoint. "That's a very good future," said Wright, "and that's what we bought into."
NBC Chairman-CEO Bob Wright said the network took the financially prudent course eight years ago by refusing to pay huge rights fees to carry the NFL. Now, after failed attempts with the XFL and Arena Football, he said the NFL is back on NBC--on considerably more favorable terms for the network. "It took eight years to get the pricing right," he said yesterday at an Advertising Week event in New York. Wright said NBC was given an offer sheet in the late 1990s to retain its Sunday afternoon NFL package for $550 million. At the time, NBC Sports head Dick Ebersol blasted the prospective deal--taken by CBS--saying a network could never make money at that level. "We thought we'd lose too much money," Wright said. But last year, NBC scored the NFL's new Sunday-night broadcast package for $50 million more--$600 million a year--than it walked away from in 1998. Despite losing a ratings battle to ABC's "Desperate Housewives" on Sunday, Wright indicated that the deal is a winner for the network. Not only are the terms better financially, but NBC has a tentpole to help rebuild its recent lackluster prime-time performance, he said. Plus, it has the benefit of flexible scheduling for the first time. Now, the network has a say in which games it carries late in the season in order to avoid unappealing match-ups. On another sports matter, Wright said he still believes the network's commitment to carry the Olympics through 2012 is a smart one, despite the Winter Games losing $70 million this year. His reasoning is echoed by many top media executives: Premiere content cuts through clutter. "In a world that gets more options out there," he said, "the things that are premium break out." Since the 2008 Beijing Summer Games will take place in August, the network will likely benefit from not having to compete with "American Idol" and other first-run programming on other networks.
Jay Leno could remain at NBC beyond 2009 when he cedes his "Tonight Show" desk to Conan O'Brien. NBC Universal Chairman-CEO Bob Wright said the network will try to craft a new role for the man who succeeded Johnny Carson. "We will do our best to entice Jay to do any number of things, and he'll make that call," Wright said yesterday at an Advertising Week event in New York. Leno has said he will leave his "Tonight Show" host duties after 16 years on the job in 2009. O'Brien will succeed him. NBC has a history of rewarding on-air talent that leaves the stage graciously. After Tom Brokaw left "Nightly News" anchor duties to Brian Williams, NBC gave him a new 10-year contract. On other talent matters, Wright said that over the past four years, the network thought Katie Couric would try to launch her own syndicated Oprah-like talk show, rather than take the anchor role at CBS. "Maybe Jane Pauley's experience was something in the back of her mind," he said. "I don't know." Pauley's syndicated talk show had a precipitous demise. Wright said NBC wanted Couric to stay on "Today," but he felt she just wanted a change. With Williams hosting the nightly newscast and Meredith Vieira replacing Couric on "Today," he said he is pleased with the network's position on both shows. Wright also said yesterday that NBC may slash the amount it spends on programming in the coming years as dollars in the syndication market dry up. Unless NBC can recoup costs through emerging markets, such as digital distribution, it may have to look for ways to rein in costs. "You have to be careful about your investment in shows if there is no back end," he said.
Just when it seemed there would be no new shows destined to become prime-time hits, ABC's "Brothers & Sisters" lit up Nielsen People Meter remotes on Sunday night. The Calista Flockhart-starring drama, which followed "Desperate Housewives," pulled in a strong 6.2 Nielsen preliminary rating among 18-49 viewers. Even more impressive, it beat CBS' "Without a Trace" and NBC's "Sunday Night Football" among 18-49 viewers. Not to be outdone, ABC's anchor Sunday-night show, "Desperate Housewives," continued to crush the competition with a brawny 9.5 rating in adults 18-49--easily the highest-rated show of the evening. "Housewives" was up 4 percent over last season's premiere--a season that received critics' lukewarm reviews. For the evening overall, ABC won the night with a 6.4 rating/16 share. NBC was a distant second, with a 4.6 rating. Fox was a close third with 4.4/11. CBS was next at 3.6/9; then the CW at 1.1/3, and Univision at 0.9/2. Program analysts registered surprise, since "Brothers & Sisters" wasn't much of critics' favorite. The show beat out two proven commodities: the NFL and "Without a Trace." "Sunday Night Football" had a 5.3 rating. "Trace" earned a 4.8--down 16 percent versus a year ago. One saving grace: "Trace" beat "Sisters" in overall viewers. How well will "Brothers & Sisters" do long-term? "It's not going to be an "Emily's Reasons Why Not," says Brad Adgate, senior vice president and corporate research director for Horizon Media, referring to a quickly dismissed ABC series of a year ago. "There will be a second week." "This is how "Grey's Anatomy" got started," adds Adgate. "What "American Idol" is to Fox, "Desperate Housewives" is to ABC." Although NBC couldn't keep pace with ABC, it continues to have improvement versus its programming of a year ago. The NFL's third game, featuring Denver Broncos-New England Patriots, posted 91 percent better numbers in 18-49, and had 38 percent more total viewers for NBC than a year ago. NBC also notes that Sunday night football is up 14 percent in household ratings versus the third week of "Monday Night Football" on ABC a year ago. As for CBS, it was the debut of a regular series on Sunday night programming. For years, it ran a TV movie. With "60 Minutes," "Amazing Race," "Cold Case," and "Trace," CBS claimed a victory of sorts--up 29 percent in adults 18-49, its best Sunday numbers since November 2005. Fox had a typical Sunday. First, in the 7 p.m. hour, it pulled down a 4.5 rating for 18-49s for the end of a late afternoon/early evening NFL game and an episode of "The OT." Later in the evening, "The Simpsons" earned a 4.8; "American Dad" drew a 4.3. The CW was next, grabbing a 1.1/3 rating for reruns of "Everybody Hates Chris" and "America's Next Top Model." Univision had a 0.9/2 for the night with "Hora Pico" and "Cantando por un Sueno." If there is a downside to ABC's performance with "Brothers & Sisters," it's this: It lost some viewers from the first half-hour to the second, dropping from a 6.8 to a 5.6. Also, "Brothers & Sisters" only kept 65 percent of "Housewives" viewers. Program schedulers typically look for new shows to keep roughly 70 percent to 80 percent of their lead-in program viewership.
Betting on new ad models for on-demand digital content, research firm ABI predicts that ad-serving and ad-splicing technology companies will boost revenue from $284 million to $1.8 billion by 2011. Although the technical details of ad-serving hardware aren't central to media planning, ABI uses the market as a bellwether for ad-supported media--and is optimistic about its prospects, particularly the demand from large markets. According to ABI analyst Michael Arden, studies have shown that "VOD viewer numbers increased dramatically when the service became advertising-based instead of fee-based." Cable companies are already driving demand for equipment that delivers ads. Arden notes that one cable television operator, Sunflower Broadband, is already delivering ads into on-demand programming for MTV Networks. Arden says likely winners include established ad tech firms like SeaChange, C-COR (nCUBE) and Concurrent Computer Systems, as well as new IPTV tech firms, like Bitband and UTStarcom. The latest generation of ad-serving technology allows delivery of targeted ads, based on demographic information gleaned from subscription data or other sources with permission from users. ABI notes it may even be possible to target individuals within households, holding out the promise of demand for multiple ad-splicers per home.
The more things change, the more they stay the same--at least in terms of ad revenue. A new study from JupiterResearch predicts only modest benefits for cable and broadcast TV from the rollout of new ad platforms. In the report, titled "Evolving Business Models for Television & Filmed Entertainment," David Card, a vice president and senior analyst at Jupiter, forecasts $5 billion of additional revenue from new ad platforms by 2011. But he also warns of a potential $12 billion loss from DVR ad-skipping, as well as competition from other disruptive technologies. Jupiter's forecast is erring on the side of caution, according to Card; it doesn't cut TV much slack. "We advise media planners not to cave in to TV and Nielsen's talk about new live-plus ratings. If stuff is time-shifted, a lot of the ads will definitely be skipped." He was careful to note that the $12 billion loss figure is a worst-case scenario. It was calculated by combining recent data on DVR subscription rates with surveys of American households when asked how often they skipped commercials. Card also said the estimate assumed widespread disillusionment with TV advertising over the next five years due to ad-skipping--an outcome, he notes, that is far from certain. The Jupiter forecast is "somewhat conservative," in Card's words, but no one denies that DVR date impacts TV. Last fall, network executives disseminated research showing that DVR homes watch 12 percent more television--but a more recent study from Mediamark Research (MRI) showed that adults in DVR homes watch less television than those without the devices. Specifically, they are 23 percent less likely to be heavy television viewers than the general population. In July, TiVo added more fuel to the fire, announcing a program to provide advertisers with second-by-second tracking of DVR viewership--providing a gauge to determine whether ads are skipped, in part or in full. In a sign of TV executives' concern about DVR use, Mike Shaw, ABC's president of advertising sales, suggested disabling the fast-forward button on DVRs to prevent people from skipping ads. Of course, $5 billion of revenue from new platforms is "nothing to sneeze at," Card conceded--but "when you look at the overall TV industry, you realize that $5 billion is a small piece of that." Overall, Card said, new digital platforms won't generate big revenue streams for established players. They are likely to be more effective as simple promotional channels: "You should definitely experiment with the new platforms, but also realize that a lot of it is experimental." As for shoring up TV revenue, Card was optimistic about new strategies to counter ad-skipping, including targeted ads delivered via digital cable, sponsored shows and product placement.
Spots, dots and banner ads won't fix what's ailing Detroit, according to Omnicom President-CEO John Wren. "Advertising can be part of the solution," Wren said. "Advertising is certainly not the solution." Wren--head of Omnicom, which represents DaimlerChrysler, among other leading automakers--said yesterday that upgraded design and greater innovation will lead to a turnaround. But it won't happen overnight. Even a promising idea put in place today will take three to five years to come to market, he said. Wren also said Detroit has become too reliant on plugging trucks and SUVs with a "macho" image. The executive spoke yesterday at an event in conjunction with Advertising Week in New York.
For years, Detroit's desire to "show the metal" has been music to the ears of ad salesmen. No matter what the medium--outdoor, print, television or elsewhere--advertising from the Big Three automakers has focused on displaying the sleekness and cruising agility of their cars. And they have spent so handsomely that the amount of dollars a media outlet garners from the GMs and Fords in a particular year can have a monumental effect on their bottom line. Now, as the age of product placement has taken hold, Detroit and its overseas challengers, Toyota, Nissan and Honda, have aggressively driven their "show the metal" mantra to reality and scripted shows. In the scripted arena, the vehicles have been woven into the story lines of dramas, and are a staple at crime scenes in procedurals. But it's on reality shows where carmakers' inventory (usually SUVs) are most visible--particularly as prizes on the ever-growing number of competition-reality shows. And there's no sign of the unimaginative trend coming to a red light. In the recent finale of HGTV's "Design Star" and a final episode of CBS' "Rock Star: Supernova," contestants were lavished with new SUVs. In each award scene, the respective hosts excitedly touted the new vehicles, while the thrilled contestants expressed shock and awe. In the Sept. 10 "Design Star," the two finalists each received a Mercury Mariner. They gleefully hugged each other, ran to the vehicles and jumped in the drivers' seats. Next, they mawkishly waved to the cameras in a move reminiscent of a "Price is Right" winner after Bob Barker's signature "you've won a NEW CAR!" Essentially, a commercial for the Mariner followed, with shots of the SUV in action, coupled with ample glimpses of the interior. On the Sept. 12 "Rock Star," a contestant named as a fan favorite wins a Honda CR-V. Host Brooke Burns touts the vehicle's "awesome sound system," XM Radio, heated seats and other amenities. Almost on cue, the CR-V takes center stage with exterior and interior shots. What's a bit quizzical is the enthusiasm the would-be rock star, Ryan, shows after being told he's won the ride. He whoops it up with the audience, then runs over to the SUV. To be sure, he may be a struggling amateur in need of new wheels--but wouldn't a super-cool rocker act a tad more mellow? Say, a quick fist pump, then back to the music. (Both brand appearances were among the top-ranked product placements of the week, according to measurement firm iTVX.) The continuous run of reality contestants walking away with new vehicles begs the question: Does the marketing tactic work? It's hard to believe it does. By simple default, if it's a staple of the reality-competition genre, that means clutter. And that's the bane of every advertiser. Then it gets down to the issue of whether reality-television finalists have any endorsement power. Can they really help sell cars? After all, they aren't beating the competition in the next Nascar race. Also, automakers are clearly counting on goodwill and perhaps a halo effect on sales from awarding winners. But the new SUV is always a secondary prize, so who will associate Mercury or Honda with the show--or remember the brand--when the big award is getting your own show ("Design Star") or the chance to record an album with a major label ("Rock Star")? Quick quiz: What car did the two finalists on last spring's "American Idol" take home? As far as product placement in competition-reality shows goes, "showing the metal" doesn't have much mettle.
ShowProductQ-Ratio Project Runway Loreal Paris 2.996 Design Star Mercury Mariner 2.701 Queer Eye GMC 2.699 Rock Star: Supernova Honda CR-V 2.466 Cover Shot Manolo Blahnik 1.364 Click here to view these placements. Data and analysis provided by iTVX.