With less than nine months before the U.S. television industry converts to digital broadcast spectrum, 22% of households are still either completely or partially unready for the conversion, according to findings of a report scheduled to be released today by Nielsen Co. The report, a version of which was released to clients last month (MediaDailyNews May 1), concludes that 9.4% of U.S. households are completely unready, and that the transition risks a significant number of TV viewing hours being displaced begging on Feb. 17, 2009, when the nation's analog-only sets will go dark. The report estimates that daily tuning among the "completely unready" population represents 6.9 hours on average, and currently accounts for about 7.5% of all daily television viewing, and 8.1% of all prime-time viewing. Looked at on the basis of total television sets - including secondary sets in households where the primary set are currently digital ready - Nielsen estimates that 16.5% are not ready to receive digital broadcast signals. Completely unready households have an average of 2.7 sets per household, while partially unready households have an average of 4.7 sets. The Nielsen report, "The February 2009 Digital Television Transition," does not project how many of the currently unready sets or households will be prepared by the transition date - either by trading up to new, digital-capable TVs, or by acquiring a digital TV converter box - but it paints a potentially disruptive scenario for the TV industry, assuming they are not. In fact, Nielsen already has taken steps to delay the February Sweeps in 2009 to the month of March to provide more time to deal with the dislocation that could occur in hundreds of thousands of diary households that are the basis for local TV ratings, and advertising rates in many local TV markets (MDN May 1). According to the new Nielsen report, some markets are better prepared than others. Among the 56 local metered markets, for example, communities like Milwaukee (18.3% of sets completely unready), Salt Lake City (18.0%) and Portland, Or. (17.3%), the dislocation could be significant. In others - including some of the biggest markets such as Hartford-New Haven (3.1%), New York (3.8%), and Atlanta (4.1%), the effects are likely to be less pronounced. Demographically, the Nielsen report spells another potential problem, noting that the least prepared audience segment are men 18- to 24-years-old, a group that is of especially high demand among some advertisers, and one that has been particularly vexing for Nielsen to measure in the past. According to the new Nielsen report, these young men are 27% more unready for the transition than the rest of the U.S. population.
NBC will make the unusual move in not using its big-rated Summer Olympics as a launch platform for its new season shows. Instead of running in the last week in August, after the Beijing Olympics are completed, the network will premiere shows in a typical mid-September/early October jumping-off point. NBC also made some scheduling changes. The biggest is putting its highly touted "Kath & Kim" in its high-profile Thursday night comedy block, starting at 9:30 p.m., getting a lead-out from "The Office." The show had been scheduled on Tuesday after "The Biggest Loser." NBC's first new show of the season will be a new reality show, "America's Toughest Jobs," which will start with a two-hour premiere on Friday, Sept. 12. "Heroes," which has been off the air for months due to the writers' strike, will renew Monday, Sept. 22--first with a one-hour highlight show at 8 p.m., then with a two-hour premiere at 9 p.m. It will be NBC's first scripted series debut of the season. NBC's other praised new effort, "My Own Worst Enemy," will debut on Monday, Sept. 29th at 10 p.m., benefiting from a lead-out from "Heroes." In the past, NBC has used the Olympics to launch new shows, but media analysts have increasingly questioned whether Olympics viewers match up well with prime-time series entertainment. Those viewers--sometimes referred to as "light TV" viewers--only show up for special TV events. In addition, NBC would not get the benefit of any 2008-2009 seasonal ratings totals by Nielsen Media Research, given that those shows technically run before the season starts. Here is the complete list of NBC fall premiere dates: Friday, Sept. 12 "America's Toughest Jobs" series premiere (8-10 p.m.); returns on Sept. 19 (8-9 p.m.) for five weeks, then resumes from 9-10 p.m. on Oct. 24 Monday, Sept. 22 "Heroes" clip show (8-9 p.m.); season premiere (9-11 p.m.) Tuesday, Sept. 23 "Law & Order: SVU" (10-11 p.m.) Wednesday, Sept. 24 "Knight Rider" (8-9 p.m.) "Lipstick Jungle" (10-11 p.m.) Thursday, Sept. 25 "My Name Is Earl"--one-hour premiere (8-9 p.m.) "The Office"--one-hour premiere (9-10 p.m.) "ER" (10-11 p.m.) Monday, Sept. 29 "Chuck" (8-9 p.m.) "My Own Worst Enemy" (10-11 p.m.) Friday, Oct. 3 "Life" (10-11 p.m.) Thursday, Oct. 9 "Kath & Kim" (9:30-10 p.m.) Friday, Oct. 17 "Crusoe" two-hour premiere (8-10 p.m.) Thursday, Oct. 30 "30 Rock" (8:30-9 p.m.)
U.S. marketers say they will be cutting print and boosting online ad spending over the next three years, according to a survey by Eloqua, a Canadian-based company that helps marketers increase lead generation and customer acquisition with integrated campaigns, including online and offline components. The survey, titled "State of the Marketer" for 2008, asked roughly 200 marketing executives from companies with revenues between $10 million and $500 million about their plans for the future. Overall, 90% of respondents said they plan to increase online ad spending, and 15% said they would boost it "radically." Seventy-eight percent said they will increase spending on social media, 74% on email campaigns, and 65% on mobile texting. In part, respondents said the move to digital media is driven by increased pressure for accountability in marketing by the rest of their organizations, with 86% saying corporate pressure has increased over the last three years. The outlook for offline media isn't as promising, with print media taking the punches. Fifty-five percent of the marketers surveyed said they anticipate spending less on print advertising in three years. The Eloqua study did not specify newspapers, magazines or both.
One of the largest leveraged buyouts in history came a step closer to completion last Friday with the news that the six-bank consortium has fully funded the $17.9 billion acquisition of Clear Channel Communications by Thomas H. Lee Partners and Bain Capital Partners. The cash for the deal has been placed in an escrow account, where it will remain until the deal is complete. The sale price of $36 per share still must be approved by Clear Channel shareholders at a special meeting that has yet to be scheduled. The completion of funding for the deal represents progress from just a few weeks ago, when it looked like it might be delayed or even derailed by a drawn-out legal battle. In March, Clear Channel and its private-equity buyers sued the banks in New York and Texas, accusing them of trying to block the deal with last-minute provisions that violated earlier agreements. The trials were just getting underway in mid-May when news of a last-minute deal saved both sides a courtroom drama. The settlement would substantially lessen the burden of financial risk on the consortium of lenders, which includes Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, Royal Bank of Scotland and Wachovia. When the consortium agreed to lend the private-equity firms almost $20 billion for the buyout in May 2007, the global credit crunch was just beginning to unfold. Since then, the six-member consortium got cold feet about the high price of the Clear Channel buyout. Mark Mays, Clear Channel's CEO, asserted that "cash on the barrel head ... is an enormous win for our shareholders," but it's unclear whether they'll agree to the new price. The private-equity firms originally offered $37.60 per share when the deal was first announced in November 2006--a bid rejected by shareholders as too low. Seven months of negotiation raised the price about 4% to $39.20, by which time economic malaise was beginning to set in. The new, lower offer must be especially galling, considering that some shareholders bought the stock at almost $100 per share in the years before 2001. If they accept the new offer, Clear Channel shareholders also have the option of exchanging their current shares for shares of the new, privately owned company, called CC Media Holdings. Up to 30% of the shares may be exchanged. There are encouraging signs: One major institutional shareholder, Highfields Capital Management, is believed to have agreed to the new price of $36 per share.
Those pesky Time Warner-NBC Universal merge stories won't go away. A May 21 report from CNBC says the possible major media deal is hot on the burner again--for many of the same reasons that have been bandied about for years. Media analysts have long mused that NBC would make a perfect match with Time Warner--given that the largest U.S. media company, Time Warner, still doesn't fully own a viable major TV broadcasting network. (It does hold a half-interest in the mini-broadcast network CW.) For its part, NBC Universal does not own any major magazines and publishing interests. In the past, former NBC Universal CEO Bob Wright has said a merger of this type would be a good deal for both companies. With NBC in the basement in terms of ratings, and with Time Warner flush with billions in cash from its spinoff of its Time Warner Cable division, analysts say such merger talk is natural. Previously, reports circulated that General Electric--the owner of NBC--was looking to put its TV and entertainment division up for sale after this summer's Beijing Olympics, when the network expects to pull in just over a billion dollars in TV advertising sales. GE executives have nixed these rumors. In the meantime, Time Warner and NBC Universal are separately bidding for one of the last big independently owned cable networks, The Weather Channel. The price tag, according to analysts, could hit $3 billion to $4 billion.
To no one's surprise, Fox took another season victory this year. To almost everyone's surprise, other networks drifted farther behind. Fox was the only network to improve on last year's numbers, averaging a 4.1/10 rating among 18-49 viewers. But its strength was deep beyond the usual suspects. As Fox's President of Advertising Sales Jon Nesvig said, if you take out "American Idol" numbers, Fox still wins. If you take out the Super Bowl and "Idol," Fox is still No. 1. Plus, the network did all this while combating a hard-fought writers' strike. Fox averaged 11.1 million viewers in prime time this season through Tuesday, up 7% from last year. CBS was second with 10.5 million viewers, but it had the sharpest drop among the big broadcast networks, falling 16%. ABC was just behind with 10 million viewers, off 7%, while NBC finished fourth with 8.9 million, slipping 9%. The biggest fall was with the CW, down a whopping 19% to 2.6 million viewers. "Idol" was again the best-performing show on the network, averaging an 11.2 rating/28 share for the year among 18-49 viewers for its Tuesday night performing show. Wednesday's result show came in with a 10.7/26. Those two editions of the show offered up the only 10 plus-rated shows on the network's schedule. Fox's "House" was in third place with a 7.1/17, just barely beating out ABC's "Desperate Housewives" with a 7.0/16. The next grouping was with "Grey's Anatomy," which landed in fifth place, taking a 6.4/16. After that was Fox's cheeky and surprising strong game show "Moment of Truth," with a 6.2/16. NBC's "Heroes," with only 11 episodes this season, took a steady 6.2/14. NBC's "Sunday Night Football" (6.1/15), "Lost" (5.6/14), and "Dancing with the Stars" (5.5/13), round out the top 10. The best CBS show came from longtime survivor "Survivor: China," with a 5.1/14 in 13th place. "CSI," CBS' usual big-rated show, dipped to a 4.9/12, in 15th place. CW's best-rated effort was with "America's Next Top Model," which earned a top 2.5/7 for 18-49 viewers, coming in 87th place. CW also occupied the last 11-rated spots on the list, with Sunday's version of "Everybody Hate Chris" and two magazine shows, "Online Nation" and "CW Now," posting 0.3 ratings/1 share among 18-49 viewers. The average rated 18-49 show was a 2.8 rating/8 share for the year. Among total viewers it was much the same story, as "Idol" led the pack with the first two places--averaging 28.7 million viewers for its Tuesday show, and 27.8 million for the Wednesday edition. ABC took the next five spots, with four coming from "Dancing with the Stars" editions and the other from "Desperate Housewives." For "Stars" Monday shows, it earned 21.7 million viewers; "Housewives" had 18.2 million.
It's the pleasure/"Payne" principle. TBS has partnered with Def Jam Records and R&B singer Chrisette Michele to promote Tyler Perry's "House of Payne." The campaign for the sitcom features a new song, "I Gotta Love Jones," by the Grammy-nominated Michele, which will be featured in on-air spots and ancillary promos. "During the NBA All-Star game in February, we had a lot of fun and a lot of success using popular music to tap into viewers' love of both basketball and 'House of Payne'," said Vicky Free, vice president of entertainment marketing for TNT, TBS and TCM's Emerging Marketing and Partnerships business unit. "Now we're taking things a step further." She says the campaign will reach viewers as they are "jonesing" for summer. A key creative element is a 60-second music video that features LaVan Davis, Cassi Davis, Lance Gross, and Larramie Doc Shaw dancing along with Michele on "I Gotta Love Jones." A short piece on the making of the music video will be shown in Regal Cinemas around the country. Additional versions will be heard on TV and radio. Spots began May 22, and additional elements kick off in early June. Michele will join the "Payne" cast at the 2008 Essence Music Festival for a special performance.
MediaDailyNews, in collaboration with the Carat Digital Exchange, and OTX Research, is fielding a survey of the media technology and consumption habits of media industry professionals. The goal is to compare the insights with comparable OTX research on consumers to understand how the habits of industry insiders relate to consumers. The brief online survey only takes a few minutes, so please participate by clicking here. Results will be revealed during an upcoming Carat Digital Exchange meeting and will be published in MediaDailyNews.
2008 will be remembered with 1999 as a pivotal year in the digital music revolution. A wide-ranging movement, which includes artists, major labels and entrepreneurs, is pushing new and creative ways to appeal to fans in an era of unprecedented experimentation, driven by Web-based music services and distribution models--from Radiohead's pay-what-you-want release to ad-supported services like SpiralFrog and imeem. In the midst of all this experimentation, the media have become fixated on finding the "next iTunes killer." That may make for great headlines, but it's a pointless obsession that ignores the diversity of music fans. One service isn't going to satisfy all of the people all of the time. Choice and diversity are essential. A Service for Every Fan iTunes is the undisputed champ of paid-for downloads, but research shows that iTunes users tend to be higher-income, most aged 30 or above, and subscription service users older still. Of the more than 90 million 13-to-34 year-olds in the U.S., about one-quarter own iPods. That means a lot of folks don't have one. The Limewire set (those who like their music "free") is in high school and college. All of these fans will be served in one of two ways, which are already before us. A year after Steve Jobs and many others called for tracks free of Digital Rights Management (DRM) restrictions, all four major labels are delivering them. Offering paid-for, DRM-free downloads gives consumers what they have wanted for so long--the ability to play their music how they want, where they want and as often as they want without restriction. DRM-free tracks are why Amazon has joined eMusic as a major provider, and we haven't seen the last of such services. Without question, paid-for DRM-free tracks are a good thing. But paid-for, DRM-free tracks won't solve an important fact of life in the 21st century: A whole generation is used to getting its music for free. The answer to this problem is a model that has worked for TV and radio for decades--a model where DRM still has an important role to play. Free ad-supported music is what will put a dent in piracy. It's a win-win for younger music listeners, who can get what they want for free, and for labels, because the music will be copy-protected, or DRM'd, providing an ongoing revenue stream through advertising. Besides offering free tunes, ad-supported services can capture younger users by delivering an experience that's better than spyware and adware-ridden P2P services. The combination of paid and non-paid services makes sense. Just as broadcast television delivers free programming, some consumers opt for the content they can only get with cable. Some access pay-per-view services, others choose to own movies or shows on DVD. Satellite radio now plays the same role for commercial radio that cable TV plays for vanilla broadcast TV. The desired experience dictates what consumers do, and it will be that way with digital music, too. Fans can listen to Justin Timberlake on the radio, download his tracks on any number of music services, see his special on premium cable channel HBO, get him via satellite radio, or buy his CD. Lots of options for music lovers -- and plenty of revenue streams for labels. Paid for and unprotected, or free and protected. Between these two music models, there will be enough new services to satisfy the most demanding audiophile. Which one you use will depend on a host of factors. Age. Income. Musical taste. It all amounts to the kind of experience you want. The bottom line is that the new generation of music services will finally harmonize the needs of different constituencies and open up new opportunities. Music fans will get to experience music the way they want--whether they tune it, buy it, stream it or download it. Artists will have multiple distribution and promotional channels and, especially important for up-and-coming bands, the unparalleled power of online word of mouth. From all these activities, record labels and music publishers will get multiple revenue streams. And the file-sharing services? As free ad-supported and paid-for digital music models deliver a better way to discover and acquire music--and in the process steer users clear of legal, privacy and security risks--they will fill a need for those searching for odd bits of content, a song or a video clip, perhaps. But they will no longer be our primary sources of digital music.