Being fourth place as a TV network doesn't take away from NBC's financial resiliency. For its calendar year in fourth-quarter 2007, its parent General Electric reported NBC Universal's net profit grew 10% to nearly $1 billion--$923 million. A year ago, NBC put up profits of $841 million. Revenue rose 8% at NBCU to $4.55 billion. NBC's stable financial gains over the past few periods come from its assortment of cable networks, which witnessed operating profit climb 23% on a revenue increase of 14% this current period. News channels MSNBC and CNBC saw double-digit ratings increases. At its film division, Universal Studios, revenue rose 16% from theatrical films and DVD releases. GE executives noted that lower programming costs for NBC, given the writers' strike, have helped the TV network's financial situation. Keith Sherin, GE's chief financial officer, said the two-month strike has had "no noticeable impact." NBC Universal's TV network NBC has seen viewership decline by 8% when looking at commercial ratings plus three days of DVR usage--but almost double that when looking at live program ratings. Still, Jeff Immelt, chief executive officer at GE, said two high-viewing and low-cost new reality shows "The Celebrity Apprentice" with Donald Trump and the athletic competition show "American Gladiators" have helped NBC maintain a good financial picture. "We are pleasantly surprised by how well reality programming has done," said Immelt. "It gives us more confidence in the financial strength for NBCU." GE expects first-quarter profit at NBC Universal to grow at about the same level as the fourth quarter, around 5% to 10%.
After the relatively brief tenure of a little more than a year, Los Angeles Times Editor James O'Shea has been shown the door, executives with the paper said Sunday. O'Shea is the fourth high-level employee to leave the company in less than three years. He joins former publisher Jeffrey Johnson, fired in October 2006 for refusing to make staff cuts, and his predecessors in the editor spot, John Carroll, who quit in 2005, and Dean Baquet, fired at the same time as Johnson. O'Shea, previously the managing editor of the Chicago Tribune, was sent by Tribune Co. to fill the empty editor's seat in November 2006, but failed to revive the struggling paper during his 14-month stint -- an especially daunting task as the newspaper business in general suffers an ongoing secular downturn. According to figures from the Audit Bureau of Circulations, the Los Angeles Times saw its average Sunday circulation fall about 5% from 1,172,004 in the six-month period ending September 2006 to 1,112,165 in September 2007, compounding serial losses in previous years. Although separate ad revenue figures aren't available for the paper, its poor performance certainly impacted the Tribune Co.'s bottom line; in the third quarter of 2007, the most recent for which figures are available, in which advertising revenues fell 9%. Tribune executives placed a large part of the blame on declines in retail and classified advertising in California. O'Shea was apparently dismissed by publisher David Hiller at the behest of the parent Tribune Co. It's unclear whether Sam Zell, the company's new owner, had anything to do with the decision. Some observers expressed surprise at the firing, citing comments made by Zell in April 2007 that were widely interpreted as a promise to end newsroom layoffs. However, Zell never made any such promise, or even an implied promise: he simply said he would leave personnel decisions including layoffs and firings to Tribune's CEO and board of directors.
The Ion Television Network has struck a deal with Omnicom's sports and entertainment unit and Star Media to create an African-American programming block. Omnicom's OMG Entertainment & Sports will provide advertising backing in the form of at least three charter sponsors: McDonald's, State Farm and Procter & Gamble. The deal actually started on Monday, Jan. 14 with reruns of "The Wayan Brothers," show, a Warner Bros. Domestic TV show, during the 6 to 7 p.m. time slot. The long-term goal is to develop original programming. In the near term, the deal will use the syndication TV libraries of Warner Bros. and other major television studios. Dennis Ray, the Chairman and CEO of Star Media, said in a release that "the chief limitation to the growth of African-American television and media companies has been the inability to get sustained advertiser support for African-American programming." He said this deal represented a new model to do business. Ion didn't talk time period specifics about the block. Brandon Burgess, Chairman and CEO, ION Media Networks, said in a statement that "we may also consider establishing a dedicated, 24/7 multicultural spin-off network, using our digital broadcast capacity."
Bowing to the inevitable, the Chicago Tribune will soon offer fewer print "help wanted" classifieds, saving on newsprint costs by limiting them to its Sunday edition--a drastic cutback from its previous daily offering. Going forward, the paper will direct readers to CareerBuilder, an online classified site it co-owns with Gannett and McClatchy. A much-reduced version will also appear in the Tuesday edition, again directing readers online. The decision is one of the first major changes at Tribune Co.'s flagship newspaper since the company was taken private by real-estate billionaire Sam Zell. It also reflects the ongoing transition in classifieds. Over the last decade, classified listings--which at one time accounted for one-third to a half of all newspaper revenues--have migrated to Web sites that offer greater volume, interactivity, and search functions. In the first three quarters of 2007, total newspaper classified revenues fell 13.2%, 16.4%, and 17%, according to the Newspaper Association of America. The Tribune Co., publisher of The Chicago Tribune and the Los Angeles Times among others, is certainly feeling the heat. In the third quarter of 2007 (the last for which data is available), classified revenue tumbled 18% compared to the same period in 2006. With demand for print classifieds waning, newspaper companies may now be able to achieve substantial cost savings by scaling back or axing them altogether. That's especially true in light of a recent note Deutsche Bank to investors predicting that newsprint prices will rise 20% in 2008, compared to 2007, negatively affecting the earnings of most major newspaper companies. As their print classifieds business collapses, newspapers are struggling to rebuild this profit center online, contending with sites like Craigslist and other local list services. One strategy is to affiliate with other newspaper owners in networks like CareerBuilder that share classified listings. Many newspapers are also entering into hybrid partnerships with online properties like Monster, Yahoo's HotJobs (part of Yahoo's newspaper consortium) and Zillow for real estate.
Station operator Pappas Telecasting has reached a five-year deal with Spanish-language network Azteca America, allowing it to continue airing on a key Los Angeles station. The deal for use of KAZA-TV goes through 2012, giving Azteca an ongoing presence in the country's second-largest market. The companies said the $129 million that Pappas owes Azteca America has been adjusted as part of the new deal. Last year, Pappas stopped carrying Azteca on five of its stations, including Houston and San Francisco--and instead launched its own would-be competitor to Univision and Telemundo called TuVision. Pappas could have given TuVision a boost by placing it on its Los Angeles station, although the change in the $129 million financial liability could have prompted the deal to keep Azteca on KAZA. Also part of the new deal with Azteca: Pappas can run TuVision on one of KAZA's digital multicast channels--brought on by the government-mandated switch from analog to digital broadcasts. "The agreement ensures a long term presence in the nation's largest and most important U.S. Hispanic market at favorable conditions," said Adrian Steckel, president and CEO of Azteca America. "It consolidates our solid market positioning, and allows (Azteca America) to continue adding increased value for the network, and steadily raise overall profitability." Azteca America--with novelas and soccer as cornerstones of its program lineup--is available in 89% of Hispanic households in the U.S. and is in 61 markets, the company said. Pappas is privately held and runs 27 stations, including Fox, ABC, CBS, CW and MyNetworkTV affiliates in small to-mid-size markets. Plus, TuVision is on the five of its stations. Azteca America is owned by Mexican broadcaster TV Azteca.
Euro RSCG New York has become the latest agency to subscribe to TiVo's second-by-second ratings service. Launched almost a year ago, the service provides the most granular data possible for commercials viewed by TiVo users. Known as TiVo Stop||Watch, the service offers comprehensive data on skipping and fast-forwarding for time-shifted viewing. It offers the same for "live" viewing. For a creative agency, it offers the possibility to evaluate whether some portion of a spot it has created may prompt people to fast-forward. For media agencies, it offers a potentially attractive currency to use for upfront and other deals. A possible downside is that the ratings are only derived from TiVo users, who are considered to be more upscale than the overall population of DVR users. Still, agencies and networks can use the data to gain insight into trends in that larger pool. The ratings are culled from a daily anonymous sample of what happens with 20,000 TiVo units. "DVR penetration is only going to increase in the years ahead," said Richard Notarianni, executive creative director of media for Euro RSCG New York. "It is our job to not only develop the most creative and impactful advertising campaigns for our clients, but to understand the way the messages are viewed and received by the target audience." Notarianni says TiVo's data may offer the best real-world insight into the effectiveness of our campaigns. "DVR viewers have total control of their viewing experience. Understanding what commercials, and which parts of commercials, they choose to watch, as well as under what circumstances, gives us a competitive edge in creating and deploying campaigns that really resonate for our clients." TiVo Stop||Watch data, available by subscription, is accessible in online reports.
The magazine industry showed both vigor and volatility in 2007, as some titles prospered and others struggled or went out of business. 2008 promises more of the same. According to year-end figures from the Publishers Information Bureau, of 238 leading consumer magazines tracked by the organization, 76 titles--or roughly 32%--enjoyed growth in ad pages of 5% or more, compared to 2006. In the same period, 71 titles, or roughly 30%, saw ad pages drop 5% or more. And 91, about 38%, were essentially flat, with revenue increasing or decreasing less than 5% in either direction. Altogether, this equaled a total 0.8% drop in ad pages, keeping the industry as a whole basically flat from 2006 to 2007. Total rate card revenue rose 5.9%, to almost $27.5 billion--although these revenue figures may not be reliable, as many publishers offer discounts behind the scenes. Indeed, it's probably wise not to read too much into these year-to-year changes. Samir Husni (a.k.a. "Mr. Magazine"), the chairman of the journalism department at the University of Mississippi, advised that "we have to look at the big picture over a period of years and see if we are really seeing any real change," adding: "If we look at the entire picture, we will see that all that is happening in the magazine industry is similar to a market correction: some win, some lose and some stay the same." Both success and failure tend to come in a big way for leading titles. Among the most successful in 2007 were men's and women's lifestyle magazines, both new and established. Here, Vanity Fair, Details, Conde Nast Traveler, Life & Style Weekly, More, Outdoor Life and Outside were all up over 10%. Beauty and style magazines also fared well, with Harper's Bazaar, Glamour, and Allure also growing more than 10%. Men's Health, Men's Fitness, and Men's Journal turned in similar results. Some of the biggest success stories in 2007 were relatively new launches, like Everyday with Rachael Ray, which jumped 59%, and Rodale's new Women's Health, up 48.3%. Wondertime--a parenting magazine from Disney--surged 60.3%, as competitor Cookie grew 44.8%. And Best Life, a men's lifestyle magazine, grew 37.3%. Celebrity weeklies, another relatively new category, gave another strong showing in 2007. In Touch Weekly grew 20.2%, OK Weekly jumped 44%, and Star rose 24.8%. However, US Weekly stagnated, and Entertainment Weekly (a more middlebrow publication) is in trouble with a 12.7% drop. Other categories are suffering--most notably newsweeklies and business titles. In the first category, Time, Newsweek, and U.S. News & World Report were all down by mid-single digits. In the second, BusinessWeek, Entrepreneur, and Forbes all fell as Time Inc.'s business division--consisting of Fortune, Fortune Small Business, and Money--also struggled, including the demise of Business 2.0. There were, however, three bright spots: The Economist, up 8.5%; Fast Company, which surged 20.6%; and Inc., up 6.4% (the latter two published by Mansueto Ventures). Magazines targeting younger readers also suffered in 2007, and 2008 may see some go the way of Nickelodeon Jr., closed by MTV at the beginning of last year. Most notably, the ride may soon be over for Disney Adventures--down 31.3%--and things are also looking grim at Nickelodeon (Nick Jr.'s older sibling), which is down 16.1%. In the teenage realm, CosmoGirl, down 10.5%, seems to be suffering from the same depression, as Elle Girl and Teen People both closed in 2006. Furthermore, ad pages aren't the only ominous trend for some magazines. A separate analysis of readership data from MediaMark Research and Intelligence for 112 well-known consumer mags shows that the median age of magazine readers continued to edge up across all categories, at a rate exceeding the general population, in both five-year and one-year comparisons. Since 2002, 64 of the magazines saw the median age of readers increase two years or more, with 41 increasing three years or more. That's more than twice the increase in the population at large, where the median age rose 1.4 years from 2002-2007. Fifty-five also showed substantial increases in the shorter 2006-2007 time frame.
Measurement firm iTVX has tabbed a Jaguar brand integration on a recent episode of VH1's "America's Most Smartest Model" as the top product placement on a reality show in 2007. In second place came Donald Trump--technically "The Apprentice"--who employed his mother to plug Renuzit air freshener. Calling it "a great product" as he introduced the challenge for the contestants--to create a 60-second spot for the brand--Trump said: "It was one of my mother's favorite products." Then, throughout that April 15 episode, Renuzit saw numerous product shots and verbal plugs. On the Dec. 2 episode of "Smartest Model," Jaguar used the show to promote the launch of its new XKR convertible. Contestants had to act as spokesmodels and give a presentation touting the flashy XKR--and they did so enthusiastically. "Yesterday, I got to ride in a new Jaguar XKR ... and my heart kept fluttering," said one. Another said: "The XKR hit the markets December of last year, or should I say intimidated the markets in December of last year?" The iTVX firm has a propriety system where it uses a range of gauges--from the amount of product shots to the level of story-line integrations in scripted shows--to determine performance for a brand integration or product placement. Its rankings of the leading 2007 placements do not take into account whether a placement was paid for by an advertiser, only exposure levels. Overall, four of the top five--and five of the top six--placements last year took place on reality shows, though the overall leader was video game "Guitar Hero" in Comedy Central's "South Park" on Nov. 7. In third place for reality series--behind "Smartest Model" and "The Apprentice"--was an integration for Procter & Gamble's Secret Scent Expressions on the CW network's "Pussycat Dolls Present: The Search for the Next Doll" on April 17. In that episode, contestants participated in a commercial shoot for the brand. In fourth place was a Scrabble integration on the Food Network's "Ace of Cakes" episode on April 19. That was followed by "Etch-a-Sketch" on the "Late Show with David Letterman" on Nov. 2. On that episode, a master portraitist with the device appeared--and while conducting a give-and-take with the host, finished one of his jaw-dropping creations in what appeared to be real time. In rankings for the top-five placements for scripted shows in 2007, the "Guitar Hero" link with Comedy Central's animated "South Park" finished on top. "Guitar Hero" has a role in the storyline throughout the episode, helping to account for the integration coming in as iTVX's top placement for any show--reality or scripted--last year. Next up in the scripted-show category was Home Depot's appearance on the April 16 episode of CBS comedy "The New Adventures of Old Christine," where characters spend time at the store and give it a plug. That was followed by the Life board game on the Oct. 10 episode of Comedy Central's "Sarah Silverman Program," where characters play the game on a double date. Next came handheld vacuum cleaner Dirt Devil's role in the premiere episode of CW's "Reaper" (which aired Sept. 25), with the product playing a role in the story line where it's given magical powers. In fifth place for scripted shows was Cadillac's integration on the Aug. 23 episode of USA drama "Burn Notice," where a supporting character gets a car as a gift from his girlfriend.
Ah, the power of the press. Sometimes a little magazine can stir controversy and publicity with great investigative reporting or an incisive, well-argued opinion column. But you can also do it by just being really, really stupid. The controversy surrounding Golf Channel commentator Kelly Tilghman's on-air remark of Jan. 4--when she jokingly suggested that junior players might have to "lynch" Tiger Woods to have a chance of winning --was fair warning that lynching is not a comedy gold mine in public discourse. It's more like a third rail. Of course, Tilghman apologized profusely, and Woods graciously issued a statement saying her ill-considered remark was a "non-issue"; otherwise she could have lost her job. (She was suspended for two weeks instead.) The apology, and Woods' public response, both seemed sincere--affirming that Tilghman hadn't even thought of the word's historical connotation before she spoke. The second time around, however, it's harder to make that argument. Once the remark becomes a topic for public discussion, everyone knows what the controversy is about, and any later reference--far from being unwitting--plugs directly into the racial subtext. In fact, that's the whole point; that's why it's an issue. Which leads us to the question: what, in God's name, was Golfweek thinking? On the cover of its Jan. 19 issue, the Turnstile Publishing title featured a close-up of a noose set against an evening sky, as if to recreate the historical context of lynchings. which mostly took place at night. The puny headline reads: "Caught in a Noose: Tilghman slips up, and Golf Channel can't wriggle free." The lighthearted text and the creepy image don't quite match up, to put it mildly. The backlash against the magazine, which hit the newsstands Jan. 16, came even faster than the reaction to Tilghman's original comment. Tim Finchem, the PGA tour commissioner, lashed out at the magazine with remarks quoted in USA Today. By the 18th, editor David Seanor was out, replaced by Jeff Babineau. Ironically, the article itself, by Scott Hamilton, takes the standard line, noting the need for more "diversity training" at the Golf Channel and in the insular world of golf generally. An evenhanded and thoughtful piece, it gently opines that the controversy may be overblown--and laments that Tilghman may yet lose her job, while still placing the blame firmly on her doorstep. After all, Hamilton warns, broadcasters are public figures who must consider every word they say. Seanor might have considered this sensible advice before approving the cover. But for now (to mix sports metaphors) he has beaten Tilghman to the Finish line.