Editor's Note: In memory of "Inside The Actors Studio" founder/host James Lipton, we are republishing this interview Lipton conducted with former Carat chief David Verklin at a MediaPost conference in 2007. In an unusual, probing conversation conducted Tuesday by James Lipton of "Inside The Actors Studio," Carat chief David Verklin revealed surprising bits of his personal side including the fact that he is a chronic insomniac, loves video games, would like to have a Second Life avatar that is a muscle-bound, tattooed "barbarian," but who in real life is a "quiet Christian" with a strong sense of faith who started a congregation with services in his backyard that has grown to 400 and is about to build a sanctuary in his hometown of New Canaan, CT. The interview, which was conducted a la Bravo's popular "Inside The Actors Studio" format, took place during the luncheon session of MediaPost's OMMA New York conference, replete with questions about Verklin's "turn-ons" (competition) and favorite curse word ("son of a bitch"), also revealed that Verklin's favorite film is "The Godfather" (parts one and two), which he uses as an instructional business movie for his troops at Carat. Asked what actor he could see portraying himself in a film, Verklin chose John Cusack. Asked what actress might portray his rival, Starcom MediaVest Group chief Renetta McCann, Verklin picked Halle Berry. The discussion took on some serious overtones when members of the audience asked questions, including IAG Research's David Marans, who asked what Verklin and Lipton saw as the biggest problems in the media business today. "I really worry about the person on the other side of the desk," Verklin said, referring to his clients, and the fact that rapid turnover in marketer ranks is leading to a brain drain in knowledge about the media business. "We're dealing with a less educated client base than I think we need as the business is getting more complicated," Verklin said, adding, "I think we need to do a better job of training clients, and we need to do a better job of getting them to stay a bit longer in their current business." The Emmy-winning program creator Lipton, in turn, used the question as an opportunity to criticize a trend that is blurring the line between program content and advertising messages on the viewer's TV screens. "I know this is an anathema to people in this room, but they speak in our business about the bottom third of the screen," Lipton said, referring to network business executives. "The bottom third belongs to us." Lipton said "incursions" such as advertising and promotions increasingly are popping up during critical moments of programming content, and asked the audience to "please exercise some restraint" in their role in such decisions." He added that executives at Bravo and parent NBC Universal, however, "have been wonderful" in their restraint. On a personal note, Verklin indicated that the pressures of management and excessive business travel have begun to cut into his personal life, and that he gets far too little time to relax with his family. When he does, he says he enjoys playing video games with his sons and taking them to historic American battlefields. Despite these pressures, he said he was able to co-author his new book "Watch This, Listen Up, Click Here," but "stealing time" in the wee hours or during business travel. He described the process as "an enormous challenge," but said he was compelled to write it to help the "everyday person" understand the complexities of the media business, and how business decisions affect the media content they are exposed to. "The book is really not written for this audience. It's written for your mom or your dad or your sister or the person who really doesn't know what we in this business do. It's a book I'm hoping to educate the everyday Joe on the street how this business works," he said. Lipton also has a new book, "Inside, Inside," which is a personal memoir behind the scenes of "Inside The Actors Studio," which publishes on Oct. 28. The interview also included Lipton's trademark rapid-fire question session, and here's how they were answered: Verklin's favorite word? "Fantastic." Least favorite word? "No." Turn on? "Competition." Turn off? "Lack of appreciation and bad manners." Sound he most loves? "Daughter's laughter and sound of a cash register ringing." Sound he most hates? "Sound of alarm clock." Favorite curse word? "Son of a bitch." Profession other than his own he would want? "Archeologist." Profession other than his own he wouldn't want? "Dentistry," "Like my father." If God exists, what would he say when Verklin arrives? "We've been waiting for you to get here," ... "We'll be right back after a moment from our sponsor."
Nielsen proved its heroism to the broadcast network community Tuesday, but has become something of a goat among cable network executives, announcing plans to make NBC's popular "Heroes" series the first regularly scheduled TV show to become rated on the basis of the cumulative, unduplicated audience it generates by running multiple airings of the same episodes. Instead of reporting a rating for the initial telecast of its season premiere Monday night, Nielsen said it would withhold that number and wait until NBC airs that same episode again on Saturday night to generate some incremental reach and a higher audience rating for the show's advertisers. Even though Nielsen unveiled plans for the new unduplicated reach loophole back in August, some cable network executives said they were caught by surprise by the "Heroes" decision, because Nielsen executives had previously told them it was unlikely to happen, because a network would have to air the same episode with the same commercials intact, to qualify for the new cumulative audience ratings. In an indication of how quickly TV programming, scheduling and advertising patterns are beginning to alter, it happened with one of the first episodes of the new prime-time season. That is bound to stir new dust among Nielsen clients, because Nielsen previously announced that the new cumulative ratings would not be available to cable network programming, something some clients believe creates an inequitable playing field, and potential anomalies in competitive ratings claims. Ultimately, Nielsen said it was making these changes effective with the 2007-08 TV season to "streamline" its ratings processes and to "harmonize" the average audience ratings between broadcast network and syndicated shows. But the decision has some obvious implications, including a potential boon for boosting audience delivery to network advertisers, and creating inconsistent competitive comparisons between broadcast and cable network programs. "If ads are the same, it may be a way to boost ratings," said Brad Adgate, senior vice president of corporate research director for Horizon Media, New York. "But at the same time you are losing the sales of that additional inventory [in the second airing of the episode]." Typically, syndicated and cable TV shows will double-run the same episode with the same advertisers. Historically, Nielsen has generated so-called "gross average audience" ratings, or GAAs, that measure the gross -- not the net, unduplicated audience reach -- of syndicated shows with multiple airings. Meanwhile, Tuesday's announcement indicated Nielsen also may be planning further changes in the way it processes audience ratings as program scheduling is altered by new forms of digital distribution. "As the growth of digital platforms and other viewing options emerge, Nielsen is unifying the reporting and processing of all national ratings and developing methods to support the wider array of choices open to all national program providers," read Nielsen's announcement. "One such change is a new option for the way that broadcast program ratings can be calculated."
A multi-platform venture backed by NBC Universal and Microsoft that aims to turn advertising into compelling content is scheduled to launch late next month. Called Firebrand and aimed at Millennials or Generation Y, the programming--er, continuous stream of spots and longer-form promos--will be distributed online, via mobile devices and on a nightly late-night show on the Ion Network. The venture with a "Best in Commercial Culture" tag was announced during an Advertising Week event Tuesday. Firebrand CEO John Lack, an early MTV executive, is betting that high-quality spots form a pop culture touchstone today much like music videos did about the time the Millennials were born in the early Reagan years. Lack's vision calls for consumers to become so enamored with, say, iPod or Bud spots that they will share them with friends and develop their own playlists. Firebrand says more than 33% of Millennials already download ads. In a sense, the company is attempting to do all year what happens in the days after the Super Bowl, when consumers toggle all over the Internet watching their favorite spots over and over and perhaps forwarding links to friends or offering comments on blogs. It also goes against the notion that DVRs have created a generation of rapid ad-skippers. The "commercials as content" TV aspect debuts Oct. 22 on Ion, where it will run weeknights at 11 p.m. When not on the network, it will be available 24/7 at firebrandtv.com; Microsoft's msnvideo.com and MSN Mobile; NBCU's USANetwork.com; and iTunes. The Web presence, which could include a library of some 5,000 spots, will offer multiple interactive opportunities where a marketer can offer a promotion--such as 40% off on a pair of Levi's--which a consumer can click-through to. "QVC for the MySpace generation," Lack called it. A Firebrand promotional DVD offered up a spot with Paris Hilton for Carl's Jr. and one with Jerry Seinfeld and Superman, along with the classic Federal Express spot with the fast talker and the acclaimed BMW Films as well as popular international ads as examples of the type of content it will offer. With at least the Hilton and FedEx spots available on YouTube, Firebrand will have competition--although it will look to create a more enticing environment and offer superior functionality with search and sharing capabilities. A sample episode on Ion might include a Top 10 list of currently airing spots, a segment showcasing ads with celebs and lengthy movie trailers. Lack, who would not detail which marketers have agreed to work with Firebrand, is banking on their eagerness to display their spots in an environment with an engaged viewer. Its promo DVD tells advertisers: "Reach an audience that is choosing to watch your message." Firebrand's revenue opportunities include charging for placement on its Ion show; asking a fee per ad stream on its Web and mobile outlets; and per-click compensation when it sends a visitor to another site for a promotional offer. The company has set aside resources to acquire classic spots such as the FedEx fast talker and pay for other rights. Ad sales, which would appear to double as program procurement, is headed by Doug Rohrer, a former executive vice president and general sales manager at MTV Networks. Lack and other executives are investors along with Microsoft and NBCU--plus Ion, which NBCU holds a stake in, as well as an NBCU-affiliated venture capital arm. Another partner is Nielsen through its business media group, with Firebrand content appearing on adweek.com. The Firebrand presentation as an official Advertising Week event had a curious aspect. While the venture arguably celebrates the best in advertising, the session gave Lack and his team a chance to promote a for-profit venture. A call to an Advertising Week representative late Tuesday was not immediately returned.
Momentum continues to build on Wall Street for Hearst Corp. to increase its offer price to buy out shareholders and take the Hearst-Argyle station group private. Hearst Corp. has offered $23.50 a share, but H-A's stock continues to trade at a level that's more than $2 a share higher. By bidding up the stock--which has hit as high as $26-plus since the offer came through--investors are hoping to persuade Hearst Corp. to boost its offer. Shares closed at $25.65 Tuesday. Privately held Hearst Corp. has said the offer is good until Oct. 12, although it left open the possibility of extending the deadline--a likely signal that it is unwilling to walk away without a deal. The company, which already owns 74% of the station group, needs 16% of shareholders to accept an offer, allowing it to reach the 90% it needs to take H-A private. Persuading Florida-based Private Capital Management, which owns about 11% of the approximately 94 million shares, would help. Regarding another deadline, the Hearst-Argyle board is expected this week to urge shareholders to reject the Hearst Corp. offer. The board has promised to make a recommendation within 10 business days after Hearst Corp.'s Sept. 14 official bid. Multiple class-action suits have been filed looking to block a Hearst Corp. buyout--and one institutional shareholder, with a relatively small 90,000 shares, has urged the H-A board to reject the offer. In a report issued Tuesday, Bear Stearns analyst Victor Miller said H-A's stock could be worth as much as $27 per share, while indicating that he expects Hearst Corp. to up its offer and a deal to close by Thanksgiving. Miller suggested that H-A has significant upside via increased retransmission consent dollars, especially as telco TV providers look to enter new markets and aggressively compete with cable and satellite operators. A previous report by Gabelli & Co. suggested that H-A stock would hit $32 a share in 2008, helped by a flood of political ad dollars from Presidential and other campaigns, and a $110 million reduction in debt. Among the 29 stations H-A operates are the ABC affiliates in Manchester, N.H. and Boston--both of which are expected to be recipients of a boatload of dollars from White House candidates up to the first-in-the-nation New Hampshire primary in January. H-A also operates the CBS affiliate in Des Moines, Iowa--well-positioned to do the same up through the Iowa caucus, which kicks off Presidential voting just before N.H. Looking toward November 2008 and the general election, H-A has a duopoly in the Orlando market, perhaps the single most sought-after DMA for Presidential candidates to win. The market sits in the heart of the delegate-rich battleground state of Florida, and is believed to be loaded with swing voters. Much has been written about a possible downturn in the local station business with the potential for automakers to reduce ad budgets and ratings for local news declining in the face of Internet competition, but the Gabelli & Co. report said "at a minimum Hearst's offer affirms the value inherent in over-the-air television broadcasters." In a letter to the H-A board as Hearst Corp. signaled its intent to make the $23.50-a-share offer, CEO Victor Ganzi wrote: "The competitive demands of the TV broadcasting industry and changes in the broader media industry, when balanced against the pressures on a public company to deliver short-term results, have convinced us that private ownership of Hearst-Argyle is desirable and will assist Hearst-Argyle in attaining its strategic and business objectives."
It's official: everyone wants a piece of online classifieds. The latest competitor to throw a hat in the ring is Citadel Interactive and ABC Radio Networks, both divisions of Citadel Broadcasting. The radio companies join local TV broadcasters that have already set up shop with online classifieds. All this cross-platform action is more bad news for newspapers, which have been counting on classifieds as they struggle to rebuild profit centers online. On Tuesday, Citadel and ABC announced the creation of a new online classifieds site for ethnic recruitment, IHaveADreamJob.com, in partnership with RegionalHelpWanted.com. According to the companies, the soft launch of the site has already attracted 70,000 job listings and 100,000 resumes. The new site mostly targets black and Hispanic job seekers. To reach them, ABC is promoting the site through its urban and Hispanic format stations. Television has already plunged into the online classifieds rumble. Over the last year, CBS, NBC, and Young Broadcasting have all beefed up their online classifieds. There's also competition from third-party companies. In April, Internet Broadcasting Systems, a national network of local NBC affiliates, struck a deal with Monster.com to share online recruitment listings in 108 markets. Under the terms of the deal, Monster.com is powering co-branded career mini-sites for 120 existing station sites. These sites are being heavily promoted with TV ad spots provided by the stations, as well as ads on the Internet. IBS also publishes Web sites for stations owned by Hearst-Argyle, The McGraw-Hill Companies, Post-Newsweek, Cox Television, Meredith Broadcasting, Scripps and Morgan Broadcasting. After earning $158 million in classifieds revenue in 2006, Borrell Associates forecasts TV's share rising to $253 million in 2007.
The new season started with three networks firing off their big guns--all getting decent early results. But that isn't the final story, especially this season. Advertisers will need to wait a few days for DVR playback results. ABC's lineup, powered by "Dancing with the Stars," took top honors for the whole night--nipping NBC, led by its "Heroes" sci-fi drama, by one-tenth of a rating point. CBS was a bit farther back---four-tenths of rating point behind ABC--but got solid results from its comedies, both new and old. Preliminary Nielsen Media Research numbers showed ABC earning a 4.7 rating/12 share among 18-49 viewers to NBC's 4.6/12 and CBS' 4.2/10. Final national program numbers were released late yesterday. But as opposed to ratings results of years past, these numbers are truly preliminary for advertisers. They will need to wait another three weeks, due to new upfront deals made this past summer with networks that were based on commercial ratings plus three days of DVR viewership. Even then, comparisons will be difficult to analyze. Even ABC, in their press release, noted: "Year-to-year rating trends based on the Live + Same Day data stream may be somewhat distorted by the level of DVR penetration in the Nielsen sample, which has more than doubled from 8.54% during premiere week 2006 up to 19.43% currently." At present, program ratings in both the top two shows of Monday night--ABC's "Stars" and NBC's "Heroes"--perked up, with season premieres higher than their respective debuts of a year ago. "Stars" was up to a 5.8/15 from a 5.7/15; "Heroes" did even better, getting to a 6.5/15 from a 5.9/14 the year before. Of the new shows, CBS' "Big Bang Theory" and NBC's "Chuck" had good results--"Theory" with a 3.7/9, and "Chuck" with a 3.6/9. But other rookie shows suffered somewhat--NBC's "Journeyman" with a 3.7/15 was down from the 5.0 rating that "Studio 60 on the Sunset Strip" earned last year in the time period. Fox's "K-ville"--which had a promising start last week, with a mid-3 rating among 18-49 viewers--turned away viewers in its second week, sinking to a 2.3/5. But the net's "Prison Break" maintained its performance level--pulling in a 3.1/8--about the same as a week ago, even against stiffer competition. CBS' returning comedies proved sturdy. "Two and a Half Men" took in a 4.7/11, and "Rules of Engagement" earned 4.4/10 in 18-49 viewers. "Rules" even improved on ratings for "Old Christine" of a year ago. One possible trouble spot could be veteran "CSI: Miami." Although it won its 10 p.m. time period, the show was down 20% to a 4.6/12 against weaker competition from "Journeyman." For the night, 18-49 ratings looked this way--ABC, 4.7/12; NBC, 4.6/11; and CBS, 4.2/10. Farther down the list were Fox, 2.7/7; Univision, 1.7/4; and CW, 0.7/2. CW will debut its new "Aliens in America" next Monday.
After ten months of tortuous negotiations, Clear Channel Communications shareholders voted to approve the $19.5 billion buyout of the media giant by private equity in a special meeting on Tuesday. The deal will yield a controlling stake of at least 70% to the private equity firms, with up to 30% of the company's stock remaining in the hands of private shareholders. Thomas H. Lee Partners and Bain Capital Partners, LLC, the two private-equity firms, purchased the stock at $39.20, representing a roughly 30% premium over the average share price of $30 during the 12-month period before October 2006, when the deal was first proposed. During the last 10 months, Clear Channel faced entrenched opposition from larger shareholders that felt the premium was too small. These earlier rejections forced the private-equity firms to raise the price repeatedly from an initial bid of $37.60. The recent instability in the stock market may also have spurred shareholders to vote in favor of the deal. If it had failed, most analysts predicted the stock, trading at around $37.50, would slide closer to its original price of $30 before the proposed buyout was publicized. Last week, for example, Institutional Shareholders Services, a big investment proxy advisor serving corporate stock owners, finally endorsed the deal after months of opposition. ISS was the last big holdout, joining earlier converts like Highfields Capital Management, Fidelity Investments and Calpers, the California Public Employees' Retirement System. Independently of the buyout deal, Clear Channel Radio is proceeding with its sale of about 450 small and mid-size market stations to a variety of buyers. This strategic move will shed less valuable assets and focus the business on its most profitable stations. The company also sold its 56-station television group to Providence Equity Partners for about $1.1 billion in net proceeds. Finally, some Wall Street analysts speculate that once the buyout is concluded, parent company Clear Channel Communications will spin off its profitable Outdoor division.
Despite potential fits and starts, an e-business platform for spot buying is on schedule to launch in November, officials reaffirmed Tuesday. The "TVB ePort" system will allow buyers to submit orders to stations electronically within the next two months. It will then ramp up early next year to facilitate the paperless buyer-seller exchanges of proposals, invoices, revisions, makegoods and other stewardship operations--as well as purchases of multi-platform inventory such as station Web sites and mobile extensions. TVB--the Television Bureau of Advertising trade group that represents station operators--announced the development of ePort seven months ago, promising the fall launch. Delivering on the timeline is no small feat in the e-business arena, where delays and technological hurdles often are the norm. Some $5 million was raised to develop the system, which covers national and local spot activities--$2 million from the National Association of Broadcasters and the rest from the station operators and rep firms. The "investors" believe that faster, more user-friendly electronic transactions will grease the spot business and please an often-overburdened buy-side (some media buyers can spend two-thirds of their time on stewardship duties). The system is free to agencies and advertisers. Kathleen Keefe--vice president of sales at Hearst-Argyle, who joined TVB representatives (and others) at an Advertising Week event Tuesday to discuss ePort--said the current process is "so cumbersome," and the goal is to "make spot TV an easy medium to purchase." She said executing a single order for a presence on a station Web site takes 22 steps, which ePort could dramatically reduce. TVB has signed some 32-plus station groups encompassing about 400 stations, which are ready to receive electronic orders for Q1 2008 when ePort launches. Major rep firms Katz and Blair, as well as from the Big 4 networks' O&Os--are committed to using the system as well. TVB ePort--which could impact about 75% of the spot-buying business--will offer what's referred to as an "open standard" where e-business can take place throughout the advertiser-agency-station-and-rep firm loop, even if various parties use different systems in their own in-house operations. In addition to Hearst-Argyle, the 32 station groups include Belo, Gannett and Meredith.
Three out of four Americans are aware of HD digital radio, according to a soon-to-be-released study conducted for the HD Digital Radio Alliance by Critical Mass Media, which also found growing interest in purchasing an HD radio set. The 75% figure, based on a September phone survey, seems to contradict the findings of a March survey from Paragon Media, which pegged overall awareness at just 42%. While the Paragon and Alliance results seem impossible to reconcile, it's worth noting that HD radio has benefited from some unpaid publicity in the last six months--ironically from one of its main competitors: satellite radio. The controversy surrounding the proposed merger between XM and Sirius has helped draw attention to HD radio, cited by Sirius CEO Mel Karmazin as one of a crop of new, unexpected competitors. In April testimony describing the competitive landscape to Congress, Karmazin gave HD radio pride of place after standard terrestrial radio. Karmazin predicted that HD radio "surely will intensify the competition between AM/FM radio and satellite radio," noting that "approximately 1,200 HD Radio stations are already on the air, and hundreds more have licensed HD Radio technology." HD radio also benefited from a secondary PR lift, thanks to media coverage of the deal, which usually includes HD radio in the list of satellite competitors. The recognition figures are critical in measuring the success of the HD Digital Radio Alliance, an industry consortium representing most big terrestrial broadcasters. It was formed in December 2005 to raise awareness about the medium. In 2006, the Alliance organized the donation of $200 million worth of free on-air advertising to promote HD radio programming, as well as retail outlets which sell HD radio sets. It plans a $250 million campaign in 2007. Manufacturers like Sony, Philips and Bose have issued rebate incentives, while pushing the price of HD radios down. HD iBiquity, which controls digital radio technology, has also partnered with car manufacturers to get HD radios into new model cars. In 2007, Hyundai, Mini Cooper, and Jaguar all announced they will include HD radio as an option. BMW became the first big manufacturer in 2006 to offer HD sets in all its new models.
It was a lazy day, and I thought of sneaking down to the Polaroid House in Malibu to snicker at skeletal starlets dipping tiny toes in the blue Pacific. But I dozed off on the patio, lost in an advertising reverie. I haven't been to many conferences since I escaped from Stalag Adweek two years ago, and I miss those endearing stupid fests. I pine for the upfront bacchanal, even the headaches caused by after-party debauchery and Jerry Zucker presentations. And I loves my 4As Media Conference, where not much happens of consequence, but there are plenty o' opportunities to get hammered with sources. Like that time in Orlando when Initiative's Mike Tunnicliffe spent three hours describing to me in salacious detail what it was like to pub crawl with Universal McCann's Robin Kent. My reverie wasn't all good, though. Cannes popped into my head, and you know what I think media executives should do with the International Ad Festival--pretend you're taking it to lunch at Eden Roc and halfway across the bay, smash its skull with a Media Lion and throw the body overboard. Then take the next flight to Venice -- and get to work making the Media Festival the glittering symbol of media power it ought to be. Finally, my mind wandered to Advertising Week, which will be here all week, folks. I took out my laptop and started surfing. Ad Age and Adweek had roundups, and I wanted more meat. I surfed a little more and got excited when I found what looked like a gaggle of online reports on this industry, ahem, "showcase." But the stories weren't about advertising at all. They were about a gang of baboons on a crime spree in South Africa. An understandable mistake. Stuart Elliott at The New York Times talked about those damn ad icons--again. If anything in advertising deserves a mercy killing, it's these things. OK, they canceled the parade. But they had a panel where the Maytag repairman spoke about his dedication to his job. I'd have preferred the parade. Still, this fond pageant is growing on me. My buddies who went to the opening night party at Wollman Rink didn't see a lot of mainstream agency types, but plenty of media agency leaders. Plus, notes one, "They didn't run out of alcohol like they did last year." How can you not love a mainstream industry gala that features David Verklin and Carla Hendra going mano-a-mujer over how to run an agency? Or a joint seminar with the Venice Media Festival on creative media thinking? A New York Times "CEO summit" with six top media agency leaders? If that kind of insight was represented in the south of France every year, there'd be no need for either a media agency boycott or high-seas homicide. Well, they're French, so they probably deserve it anyway.