In a surprise move coming just weeks before a decision on the $3.4 billion account, Interpublic's Initiative unit has pulled itself out of AT&T's media services review, and the reason may be a new kind of holding company level conflict sensitivity. In a statement, Initiative said, "We are proud of the work that we have done with Bell South and regret that we are unable to go forward in the AT&T consolidated media review. In light of the conflict policy communicated to us during the briefing process, it will not be possible for us to draw all of the resources from across Interpublic that are required to best meet the clients needs. Naturally, we whish AT&T, and their partners a successful review." Initiative, which was one of five AT&T roster agencies invited to pitch the business, was originally a BellSouth shop, which was subsequently acquired by AT&T, as part of a consolidation of the U.S. telecommunications market that realigned the Regional Bell Operating Company structure into two giant and apparently highly competitive companies: AT&T and Verizon. While Initiative executives did not comment on the nature of the conflict, sister Interpublic agency Universal McCann is a Verizon shop, and some of the resources Initiative would have needed to service AT&T were part of the shared services within Interpublic. Interestingly, Publicis' Digitas unit is another one of the finalists in the review, and has become a sister agency of ZenithOptimedia Group, which also works for Verizon. Other finalists in the AT&T review include OMD, and long-time AT&T media roster shop, Mediaedge:cia. A decision on the AT&T review is expected next month.
News Corp. head Rupert Murdoch said Tuesday that increased globalization has ushered in an era of "enormous opportunities" for The Wall Street Journal and the coming Fox Business Network--one of which comes from making the Journal's Web site free. "That looks like the way we're going," he said as News Corp. completes its purchase of WSJ parent Dow Jones. While some $30 million in revenue would be lost from subscription dollars for the site, he said the figure would be made up "just in textual search alone." In general, speaking at an investor conference Tuesday, he said: "The thirst for financial information has never been like this before, but it shows every sign of growing and continuing for the next 30 years, so we see a very big future." Murdoch declined to provide much detail about FBN, launching Oct. 15, but reiterated his pledge to be decidedly different than CNBC, a la Fox News Channel's 1996 launch vis-à-vis CNN. Like Fox News' aim to attract viewers outside big metropolitan hubs on the two coasts, he offered the bromide that "CNBC is a financial channel for Wall Street ... we're for Main Street." And he said that CNBC spends too much time focusing on "failures" and "scandals" and "politics." On the other hand, he indicated that FBN would feature Journal reporters' commentary on politics--as well as national affairs and other topics--suggesting that the network would offer a promotional opportunity for the paper. CNBC has an exclusive deal for the Journal reporters' commentary on business news for several years to come. FBN will initially receive about 11 cents per subscriber for the 33 million homes it launches in, Murdoch said. With the Journal, he added that News Corp. has identified $100 million in cost savings that will come from integration with the company--and he indicated that News Corp. will turn the Journal's Web site into a free offering (The New York Times just abandoned its efforts to charge for part of its site). "I haven't made up my mind yet," he said, although he added that making the site free "looks like the way we're going." He predicted that would lead to a small circulation drop of perhaps 15,000 for the print edition and a loss of perhaps $30 million in subscription revenue, but "if the site is good," greater dollars would come via contextual search--and an audience perhaps 10 times higher of "the most affluent, the most influential people in the world" that advertisers would hunger to reach and pay a premium for. Separately, he said News Corp. receives about $600 million a year in affiliate fees for its cable channels and expects that to reach some $1.2 billion by 2010. And he said the Fox broadcast network is "very very happy with" the new currency in the market--commercial ratings for "live plus three day" viewing--which he said could add slightly to the network's GRPs as people record and watch shows on a delayed basis with DVRs. He added that the network's "American Idol" should recover its ratings momentum after a headwind last year, brought on by partly by what he termed a lack of "charismatic contestants" who have performed in prior years. "I think it's got years and years of life in it," he said.
After several delays, DirecTV's long-awaited VOD offering will be rolled out this fall, according to CEO Chase Carey. Called DirecTV On Demand, the satellite operator is hoping its initial video-on-demand offering, with a library of movies and TV content, will help blunt cable operators' attempts to gain a competitive advantage by plugging their comprehensive VOD offerings. DirecTV's proposed launch date has been delayed several times before. The offering will include movies that will cost customers a fee--but the bulk of the content, including series and programs from cable networks, will be free. Users will go to a dedicated DirecTV On Demand channel and be able to search the options via the electronic program guide, then make selections. Carey said cable operators' VOD platforms have suffered from making it difficult for consumers to find the content they want. But DirecTV's offering will be "a user-friendly experience" with a more intuitive search process "as opposed to just: 'Here are 10,000 things, go find it.'" Programmers such as A&E and NBC Universal are expected to make their content available free via the service. While cable operators have offered VOD for some time--including dedicated channels from cable networks and some broadcast fare--DirecTV had to overcome multiple technological hurdles that Carey said have been resolved. The service will be available to the subset of DirecTV's 16.3 million customers who have an HD DVR. DirecTV doesn't break out the number of customers with the device, which carries an initial cost of about $199 for the hardware. At an investor conference Tuesday, Carey said the VOD platform will be available before Jan. 1, although he didn't specify a date. He added that it has been the subject of a beta testing program, and "there are actually users out there with it--they love it." "We're really trying to create something that is geared towards how the consumers are going to think about how do I find what I'm looking for," he said. He also said that DirecTV has been able to solidify relationships with content providers by giving them a satisfactory level of control over what they offer.
On the heels of MTV Networks' announcement that it has some two dozen new Web sites in development, the CEO of parent Viacom, Philippe Dauman, reaffirmed his pledge Tuesday that the company will bring in more than $500 million in ad revenues from digital offerings this year. Helping propel sales, Dauman said, is Viacom's top-25 advertisers all buying space both on-air and online. However, Viacom does not break out digital revenues--so the $500 million figure will be difficult to verify, and could be partly derived from creative accounting via package deals. Dauman told a group of investors that the company is prepped for "future growth" via the new MTVN targeted Web sites such as TheDailyShow.com and a re-launched SouthParkStudios.com, plus others linked to TV franchises. Overall, MTVN promises 300 sites by Jan. 1. Dauman said MTVN is "looking to create these special-interest sites--that's where we think the online world is going." Investors have questioned whether Viacom can keep pace with the changing digital landscape affecting the younger audiences it targets. Separately, Dauman said he's made an effort in his first year on the job to cut costs to allow further investment in original programming (for the ratings-challenged MTV and other networks), and "that's starting to pay off." An example he cited was an increased focus at MTV on launching shows that are attractive to young males. The network has offered a range of reality series with female appeal, but Dauman said he cautioned his team to "not to get addicted to that." He also said MTVN is moving away from licensed programming and placing an increased focus on owning its offerings, so it can then exploit them on multiple platforms. "If we own the programming we can monetize it online, monetize it on mobile," he said. Earlier, he said that under previous CEO Tom Freston the company took too much of a short-term, quarter-to-quarter approach to ensure it had a good story to tell Wall Street every three months, but he's advocating "thinking long-term about brands (and) making investments for the future."
While their print brethren in the newspaper business are suffering, magazines are enjoying a quiet advertising boom, according to the latest figures from the Magazine Publishers of America and TNS Media Intelligence. The increase in total dollars spent also translates into a larger percentage of total ad dollars--meaning that magazines' ad share has gone up. The move, however, is largely attributable to the fact that TNS calculates magazine advertising revenues based on published rate card data, which may not necessarily reflect actual sales. In the first half of 2007, TNS MI reports that total magazine ad revenue rose by 4.6%, compared to the same period in 2006, from $13.9 billion to $14.5 billion. Although business-to-business titles dropped 7.2% to $1.86 billion, growth in consumer magazines more than offset this loss, as the category rose 6.9% to $11.5 billion. Spanish-language magazines, a hot new category, posted 13.1% growth to just over $100 million. The increase in consumer magazine spending came despite an overall 0.3% drop in ad spend. With numbers like these, it's no surprise that magazines are also capturing a larger proportion of ad dollars than last year. According to Nina Link, president and CEO of the MPA, its analysis of TNS data shows magazines capturing 17.7% of total spending, compared to 16.7% in the first half of 2006. This share increase is second only to the Internet juggernaut, which increased its share by 1.1%. Overall, magazines led all "traditional" media--including television radio, newspapers, and outdoor--in terms of share growth.
A day after The New York Times announced it would no longer require readers to pay for its TimesSelect service, Fitch Ratings praised the general strategy. The company said that online ad revenue will help big brand names weather the worst of the ongoing secular downturn. In the short term, it forecast increases in online readership for The New York Times and seemed to encourage a similar strategy at Dow Jones. At a Goldman Sachs conference on Tuesday, Rupert Murdoch, the new owner of Dow Jones, said he is considering dropping the subscription requirement for access to the Web site of The Wall Street Journal, its flagship publication, saying it "looks like the way we're going." Overall, Fitch said that big companies like the Times, Dow Jones, The Washington Post and Gannett will "be more resilient to secular threats, given that they typically come with very engaged and committed readerships that will more likely transfer to new distribution outlets." Far from undermining newspaper print ad revenues, as many fear, Fitch pointed to a potential bright side of online publication--noting that "online platforms provide the opportunity to increase the shelf life of newspaper content and allow companies to potentially sell more advertising against a given article than is possible in print." The New York Times, for example, is opening its archives to readers for free, massively expanding its reservoir of content for ad serving.
While other cable networks rail against eBay's online TV advertising system, the Oxygen network says it continues to breathe new life into the network. "We are just looking for ways to build our business base," says Mary Jeanne Cavanagh, executive vice president of advertising sales for Oxygen. Oxygen has just completed its second deal with the controversial eBay Media system, with Home Depot, somewhere in the "mid-six-figure range." Cavanagh says an earlier eBay deal with Intel "was a bit less." This was more or less expected. Home Depot, along with Hewlett-Packard and Microsoft, are three of the most ardent supporters of the system, called the eBay Media Marketplace. Cavanagh is happy, because both Home Depot and Intel are two clients that Oxygen, a still-growing young-skewing women's network, hasn't had on its air. Both Home Depot and Intel traditionally place media on mostly male-targeted networks and TV shows. She says a couple of other eBay deals are in the works. One of the prerequisites for any eBay deal, says Cavanagh, is not hurting Oxygen's rate-card pricing or its brand value. "As long as we keep our [price] integrity, we thought--why don't we give it a go," she says. Other more mature cable networks have complained that the new eBay system reduces their inventory to a commodity, since it operates as an auction system. In addition, it doesn't allow for added-value attachments to the media buy. Oxygen disagrees--especially on the second charge. Cavanagh says both Intel and Home Depot deals included special sponsorship extras for weekend Oxygen programming. The Home Depot deal was primarily "heavily in the fourth quarter" and lighter in outlying 2008 periods. Oxygen has some 350 national accounts and is focusing its efforts on traditional male-target advertiser categories: insurance, financial services, wireless, and high-end automobiles. "I'd love to get Mercedes-Benz and BMW," says Cavanagh. The eBay system could help. The upfront marketplace for Oxygen "exceeded" expectations, with the scatter market also doing well, says Cavanagh. The nearly 75 million-subscriber network sells about 30% to 40% of its commercials in the upfront, with the rest coming from the scatter marketplace. Cavanagh says the network skew is 60% to 65% female, similar to E! and VH1. Its median age is 39 years old--lower than other typical women's targeted networks.
Another Nielsen Media Research executive has moved into the C-level suite of parent Nielsen Co. Paul Donato, the long-time Chief Research Officer of Nielsen Media Research, has been named Chief Research Officer of parent Nielsen Co., and on Tuesday, circulated a memo outlining a realignment of media division's research organization. Bruce Hoynoski was named Chief Research Officer for Nielsen Media Research, from head of . the division's statistical and methodological research functions. Doug Darfield was named senior vice president-ethnic measurement, which Donato said would become an "increasingly important" role among all of Nielsen's measurement samples. Darfield was senior vice president of Nielsen's Hispanic services, which originally maintained separate samples, but have been integrated into Nielsen's general market samples. Donato also outlined a series of "measurement science" initiatives across all of Nielsen Co., including a new Measurement Quality Center of Excellence, which will be headed by Danny Monistere, vice president-quality, who will work with Ernesto Santos, global chief of measurement science at the ACNielsen marketing research unit to develop a "simplified local country RMS quality monitoring process."
Metro-Goldwyn-Mayer Studios will bring its international TV film network business to the U.S. MGM will launch its own channel, MGM HD, bringing what the company says is the world's largest film library--some 4,100 titles--to America. Its first distributor is satellite programming retailer DirecTV. MGM HD will be launched in the fall. MGM said the network would be ad-supported--offering advertisers cross-promotional deals as well as "synergies" among all divisions of the company. For DirecTV, the deal fills a clear need. The company's goal is to launch 100 HD channels by the end of this year. But the announcement didn't say whether it would be like other basic cable movie networks, such as AMC, which has limited commercial interruption during movies. Details are yet to be worked out. The studio did say its marketing line to consumers would be: "The way movies were meant to be seen." While the MGM HD channel is the studio's first U.S. effort, versions of the movie channel have been available in nearly 120 countries, including an MGM HD channel launched in Poland last year. MGM says the channel will be a major attraction for movie fans, including behind-the-scenes coverage of red-carpet events, sneak peeks at new films in production and world premieres of newly re-mastered hits from the MGM library.
Fox hit the ground running with its new drama "K-Ville," a cop show based around the aftermath of the Katrina Hurricane disaster in New Orleans. "K-Ville" earned a healthy Nielsen preliminary 3.4 rating among 18-49 viewers--the highest-rated show of the evening. As a mark of its strength, it over-delivered by 6% from the ratings of Fox's returning drama "Prison Break," which earned a 3.2 for its season debut. That said, Fox's results came as virtually all of the other networks are still in repeats or at the end of summer programming runs. The official start to the season is next Monday. Fox led the night among 18-49 viewers with a 3.3 rating/9 share. CBS was next at 2.6/7; NBC was right behind at 2.5/7; ABC was fourth at 2.3/6; Univision came in fifth at 1.7/5, and CW was sixth at 0.7/2.
Smelled like old times this week. Hillary Clinton unveiled a health plan. Sally Field babbled at an awards show. And O.J. Simpson went to the slammer. Hypocrisy fouled the air in the Eighties, when Field first made a fool of herself in an acceptance speech. Life reeked with irony in the Nineties, when Hillary's first foray into health reform crashed and burned, and Simpson was charged with his first felony. But the 21st century just stinks. And I blame the media. Twenty years ago, you heard what the Flying Nun did, but if you really liked her and didn't watch the Oscars live, you had to wait for the networks or cable -- if you had cable -- to rerun the clip. A decade later, if, like me, you only read sports in the newspaper, you didn't even know Hillary had a healthcare plan, let alone care. Of course, nobody could ignore the Simpson trial, but at least that travesty was new enough that it could still titillate. Harvey Levin was still just a grating local news reporter, so mostly you fed your scandal fix with reportage from less-informed sources, like the Los Angeles Times. Or maybe one of the primeval Internet news sites, assuming AOL took less than a day to dial it up. This time, though, I saw the Field Emmy clip online almost before she walked off the stage. I knew a new Clinton plan was coming four days before it arrived, because I heard some old guy named Carl Bernstein talking about it on "Real Time with Bill Maher." I got the 411 on the Simpson burglary bust from TMZ.com, where Harvey Levin is now a grating Internet mogul. I spent a lot of time, maybe 30 seconds, boning up on the case, right after playing "Home Run Hero" on orbitzgames.com and just before lingering forever --had to be a minute at least -- on sciencedaily.com, reading about how Cyprian honeybees kill their enemies by smothering them. See, people complain about inaccuracy in the media, about blog-fed, nut-job opinions replacing informed judgment, about all those three-screen options making us crazy, about easy access to all sorts of useless data. (Why do I know that Nancy Grace is pregnant? More importantly, why does that idea horrify me?) But the real reason the media sucks in the first decade of what appears to be a spectacularly terrible century is speed. It's not how bad all this stuff is, or how much of it there is. It's how fast it flies at us. Too fast to avoid. You get the dirty little picture now, don't you? We don't need fewer choices. We need slower choices. And it couldn't hurt if Sally Field just retired already.