AT&T's telco TV service, which the company says is taking a quality versus quantity approach to rollouts, has entered its fifth DMA in the top 15, adding the Detroit market. As of last week, AT&T U-verse only had 26,000 customers, giving it a penetration rate--before Detroit--of perhaps 5% in homes where it's available, maybe even lower. That pales beside the 348,000 customers the other telco TV entrant, Verizon's FiOS, had at the end of March, earning a penetration rate of 11%. Verizon is also a step ahead in the ad sales business, hiring ViaMedia as a rep firm to sell the local avails it gets, similar to cable and satellite operators. AT&T has formed a unit to implement the process--looking to sell packages across its broadband, TV and wireless offerings--but has yet to launch. AT&T says its rollout has been slow in order to ensure that it offers a top-notch product when it hits a market, including a DVR that records up to four programs at once, picture-in-picture for every subscriber, regardless of set, model and HD capabilities. Verizon has tried to compete on price. While Verizon has run TV spots promoting its service, AT&T has focused on grassroots efforts for U-verse, including having ice cream trucks in serviced neighborhoods hand out treats and offer demonstrations. So far, the two are attempting to mount challenges to cable and satellite providers, but not each other. They are concentrating their efforts on areas where they operate traditional phone service. To date, there are no regulatory barriers to competing. With cable operators making an increasingly aggressive play to attract phone customers--in bundles with TV and broadband--telco providers are fighting back. They offer a package with the same services, but lag considerably in customers. (Telco can also pitch a fourth option: wireless.) Still, the companies predict they will be in millions of homes (though nowhere near the large MSOs or DBS operators) by 2010 or so. Besides Detroit, U-verse is in other top-15 DMAs, including Los Angeles, the Bay Area, Dallas and Houston.
TV networks were busy with Web expansions yesterday. CNN bought an equity stake in Internet Broadcasting, CBS Interactive bought Wallstrip, and NBC Universal adopted a new ad format from Unicast. CNN joined Hearst-Argyle Television, Post-Newsweek Stations, McGraw-Hill Broadcasting and Split Rock Partners as investors in Internet Broadcasting, which runs a network of more than 70 news and information sites for local TV stations nationwide. In addition to stations owned by the parent companies, the company also publishes sites for NBC, Cox, Meredith, Scripps and Morgan stations. CNN and Internet Broadcasting said they will now allow advertisers to combine CNN.com's national reach with the regional reach of the local news sites. Internet Broadcasting will offer select CNN.com ad placements as part of its nationwide, regional or market-by-market ad packages. On the editorial side, the companies will share local, national and international news content. (Two other providers to local TV station Web sites also made announcements yesterday: WorldNow, whose publishing platform is used by 130 TV station sites, partnered with Magid Media Futures for audience surveys, while MediaSpan added 75 TV and newspaper sites to its ad network, for a total of more than 1,300 affiliates.) "Wallstrip," the 6-month-old irreverent online financial video show, used an irreverent news video with its on-air host Lindsay Campbell to confirm that it had been acquired by CBS Interactive. Purchase price was not announced. NBC became the first publisher signed to use Unicast's new InteractiveX ad format--which allows advertisers to showcase multiple videos in a custom ad unit. When a user watching online video selects one of the videos from the ad, it plays over the original video content. The original program resumes once the marketing message ends.
XM Satellite Radio subscribers suffered widespread service outages for the second day on Tuesday, after a software glitch temporarily put one of the company's four satellites out of service. The company eventually fixed the problem, but the technical screw-up is a reminder that XM's satellite broadcasts, while generally reliable, are vulnerable to any problems affecting the space platforms--there is no backup option. The problem is especially pressing for XM, whose first two satellites experienced such severe technical mishaps that the company now (optimistically) terms them "spares." When the software upload problems began Monday, XM was therefore left with one functioning satellite. Because the satellites are in fixed or geostationary orbits, the service outage primarily affected subscribers in the eastern half of the U.S. and Canada. The satellite software problems have great potential impact: They may raise questions about the advisability and timing of the company's proposed merger with Sirius Satellite Radio--an erstwhile competitor and now a potential owner. The merger would mostly affect the two companies' earthbound operations, including marketing, sales and customer service. However, executives from both sides, under pressure from legislators to demonstrate benefit to consumers, have also talked about merging broadcast capabilities to create an "a la carte" menu that draws from both companies' programming. While a potential union would call for the production of "interoperable" radio receivers, it would likely require substantial software modifications to the satellites themselves. More generally, the merging of two separate engineering teams could also result in confusion and error. The service outage comes on top of XM's recent decision to suspend shock jocks Opie and Anthony for 30 days, following obscene comments about Laura Bush, Condoleezza Rice and the Queen of England. Subscribers, who pay $13 a month for the service, criticized the suspension, since XM isn't bound by the same FCC indecency rules as terrestrial radio.
As last week's upfront announcements indicated, the leading Spanish-language networks, Univision and Telemundo, plan to take an active role in covering the 2008 presidential election. On Tuesday, Telemundo said it plans to offer two debates among the Democratic candidates. Translated into Spanish (overlaid, really, as the English will be slightly audible), the debates this fall will be re-broadcast after being produced by NBC, a sibling in the NBC Universal family. Other details will be released later, the network said. The debates will be hosted by Telemundo news anchor Pedro Sevcec and originate from New Hampshire and Pennsylvania. "Telemundo News' decision to bring these debates to the U.S. Hispanic audience supports the network's commitment to educate and encourage the Hispanic community to participate in the 2008 presidential elections," said network executive Jorge Hidalgo. "This effort is part of our recently announced company-wide, news-driven campaign to promote voter registration among U.S. Hispanics." At its upfront presentation, Univision said it's launching a Sunday morning "Meet the Press"-style news/analysis show, "Al Punto", partly because of the increased influence of Hispanic Americans on the political process. Telemundo is launching a similar half-hour show, "Enfoque," that will include interviews with Hispanic community leaders, along with discussion of topics facing Hispanics in the U.S.
Immigration is no longer the main driver of growth in the U.S. Hispanic market. It has been surpassed by natural growth of the in-country population, according to a report from the Mercanti Group, an investment-banking firm that tracks Hispanic marketing issues. In the future, the trend will have big implications for advertisers trying to reach Hispanics with tailored marketing programs, including choice of language and media for delivery of ad messages. From 2000-2005, growth was split between immigration and natural increase of the resident Hispanic population, according to Mercanti's Edgar Mendez, who led the study. But in recent years--despite popular perceptions to the contrary--Hispanic immigration has been declining, according to the Pew Hispanic Center. Now, natural growth has the upper hand, with a substantial base population tending to produce families larger than the national average (3.87 versus 3.19). As the population's characteristics shift, the most important area of difference for advertisers will be language. While 73% of Hispanic immigrants prefer Spanish over English, the number falls to 25% of their children and just 1% of their grandchildren. With a larger proportion of Hispanics being born in the U.S., English will increasingly supplant Spanish as the most effective language for marketing messages. This forecast seems to contradict other recent studies, including a 2006 Unilever survey, "Winning the Hispanic Shopping Trip," which found that Hispanic shoppers respond positively to in-store communications in Spanish. But that survey's middle-aged female subjects are far more likely to belong to the immigrant cohort; the linguistic shift resulting from changing patterns of birth and immigration will take decades to play out. There are some early signs that advertisers are planning ahead. According to a recent article in the Los Angeles Times, Spanish-language TV leaders Univision and Telemundo are having a hard time courting ad dollars from banking and financial-service categories, since media planners are skeptical of the need for Spanish-language media. Although overall Spanish-language ad spending rose 14.4% in 2006, to $5.9 billion, according to research cited from the Association of Hispanic Advertising Agencies, 100 of the top 250 advertisers did not include any Spanish-language component in their advertising. However, the increasing preference for English doesn't mean tailored multicultural messages aren't necessary: Third-generation Hispanics, born in the U.S., retain a sense of Hispanic identity and heritage that translates into English-language media consumption and purchasing decisions. For example, one popular new magazine, Urban Latino, is an English-language publication catering to the "New Generation Latino"--ages 18-34--with music, lifestyle, health and beauty content. The same phenomenon is powering the emergence of a new, mostly English-language radio genre, "hurban" ("Hispanic Urban"). Still, Mercanti's research shows a continued affinity for products from the country of origin, even among non-immigrant descendants born in the U.S.--resulting, for example, in a boom in the Mexican food market, which now tops $52 billion a year. Here, the study found that Hispanic consumers visit grocery stores three times as often as the population at large. For marketers looking for broad reach, one increasingly popular solution (in print, at least) is bilingual publication--producing magazines with duplicate content assuring accessibility to Hispanic readers regardless of age, date of arrival or national origin. Recently, Unilever announced that its ViveMejor Hispanic marketing program, produced by Mass Hispanic Marketing, will include a bilingual Web site and free bilingual magazine. To cater to the older Hispanic market, a mix of relatively recent arrivals and longtime U.S. citizens, AARP produces a bilingual magazine titled Segunda Juventud ("Second Youth"). The U.S. Hispanic population remains an attractive market. According to Mercanti, its buying power will grow from $838 billion in 2006 to $1.3 trillion in 2011.
High-profile NBC "Dateline" anchor Stone Phillips is leaving the prime-time news magazine that he's been with for the past 15 years. Phillips' contract reportedly was not renewed. "It's been a wonderful 15 years," Phillips said in a statement. "I'm profoundly appreciative of the many friends and colleagues, past and present, who have been a part of the "Dateline" family. This is a great news division with a bright future. I wish the people of NBC News all the best." Phillips previously had worked for ABC on news magazine "20/20." He had been with "Dateline" since its debut. "He is a first-rate journalist and a dedicated professional whose legacy here will live on with the program he established and cares so much about," said Steve Capus, NBC News' president, in a statement. "Dateline" is scheduled to air this fall on Saturdays at 8, and against "60 Minutes" Sundays starting next winter, after NBC's coverage of the NFL is complete. But the show, as it has many times before, could pop up in other spots as a utility player when scheduled shows are canceled.
Fox will end up winning the season and May sweeps when the official numbers tally 18-49 viewers. But the performance of one of its main shows, "24," will humble the network going into next season. The two-hour "24" finale came in with a weak 3.8 rating/10 share among 18-49 viewers, down a massive 31% from the 5.5 rating of a year ago. The 3.8 rating only includes one day of DVR playback usage. Most networks say to be fair, you need to look at three days--if not seven--of DVR viewing. Still, the extra DVR viewers probably won't make up half of the 31% decline. Tuesday and Wednesday night's "American Idol" finale offer a better clue as to how Fox will perform on the final two days of the May sweeps period and of the season. NBC and ABC may have had much to do with the "24" drop. NBC's "Heroes" finale grabbed a Monday night-leading 6.2/15. ABC's "Dancing With the Stars" finale also posted a strong 5.3 rating among 18-49 viewers. Fox might have been somewhat relieved that CBS decided not to play in its Monday night prime-time hand. Instead, the net ran four repeats of "Two and a Half Men" and a repeat of "CSI: Miami." ABC won the night. Its finale of "The Bachelor: An Officer and a Gentleman" helped out "Dancing" with a healthy 4.8/12. Overall, ABC earned a 4.9/13 for the night. NBC was right behind ABC with a 4.2/11. Its "Deal or No Deal" earned a 3.1/9, and "Law & Order: Criminal Intent" scored a 3/8. Then came Fox, with a 3.8/10. CBS was in fourth, with a 3.3/9. The CW--like its half-sister network, CBS--was also in rerun mode, grabbing a 0.7/2. This gave MyNetworkTV a shot at coming close to CW's ratings for the night, with a 0.5/1 for its ultimate fighting show, "IFL Battleground."
Looking to ramp up its TV brand image, Joost, the high-quality Internet TV service, is signed with Creative Artists Agency. CAA will look to boost the Joost name and image in linking the new company with other entertainment content. Michael Yanover, head of business development at CAA, said in a statement that CAA will provide Joost "greater access to programming through our relationships with networks, studios, record labels, artists and other independent content." Schedule to officially launch next month, Joost will feature 150 channels for animation, entertainment, film, sports, comedy, lifestyle, documentaries and sci-fi. Joost already has deals with CBS Corp., Viacom and others. Joost is founded by Janus Friis and Niklas Zennstrom, who also started music Internet sharing site, Kazaa, and telecommunications site Skype. They have built Joost in a similar way, using peer-to-peer technology, which they say will help avoid future Internet storage capacity concerns. While Friis and Zennstrom have had copyright issues with music companies over Kazaa, they say there will not be similar concerns with Joost, since all content will have deals with rights holders.
I am digitally disabled. Unable to shift time. Forced, like an old-media sucker, to watch what they want me to watch when they want me to watch it. And why? Because I hate my neighbors. See, I got TiVo from the ex-wife as a birthday present. Freedom! I rip open the box, log onto TiVo.com and get ready to join the small-screen elite. All the wires are plugged in. The online subscription is done. The TiVo logo gleams on the screen -- but the system won't work. (And my laptop mysteriously isn't working all of a sudden, either.) After waiting 15 minutes on the phone for TiVo tech support, I'm told I need new software that my brand new unit doesn't have. The damn thing is less than two weeks old, and already it's outdated. Tech support says you can update over the phone. I try it. Nope. Another 15 minutes with the tech people. Apparently, the problem is my phone provider, Verizon, which has fiber optics. TiVo doesn't work with fiber optics. I'm told to "go to the neighbors, and use their phone. This happens all the time." Except I hate my neighbors. All of them. So I stay shiftless. The TiVo goes back. I cancel my online subscription. (And my laptop mysteriously starts working again.) I get an iHome instead. Which is sitting in its box, unopened, on my living-room floor. To hell with it, too. Those of you who toil for tech companies, or spend your workdays in media-agency offices, or make a nice, upper-middle-class living conning others as a media pundit, you need to remember Marketing 101. You know, that old saw about how good advertising can't make up for a bad product? This stuff is supposed to work, dudes. You can buzz all you like about commercial ratings, whine with abandon about pre-rolls -- "Honey, I shrunk the commercial!" -- but if your digital whatever doesn't work, or is too difficult to figure out, you're toast, folks. (Go ahead and create a Second Life avatar and try to move around without flying into walls. Go ahead. Good luck.) I wonder if my TiVo tale is a common one. And I wonder how many of the 70 million households in this country without cable or satellite television tried to get hooked up and also quit in disgust because that stuff didn't work, either. Alienated isn't a good mood-state for engagement, is it? As for me, I'm not committing another second to tech-enabled consumerism of any kind until all I have to do is place an order or press a button. Or until Google buys my house. Whichever comes first.