Could problems surrounding the Conan O'Brien/Jay Leno debacle spill over to NBC's advertisers? Media agency executives say some marketers, for example, made unique upfront deals in "The Jay Leno Show" -- many of which will have to be renegotiated. Some TV national advertisers made media pacts for "Leno" similar to late-night ad deals when he hosted "The Tonight Show" -- not as prime-time advertising deals. All that will create some extra work. "It's going to be a mess," says Gary Carr, senior vice president and executive director of national broadcast of TargetCast TCM. Another media executive says NBC was firm in making all its deals the same way -- but that Leno's rates were "lower than prime time but higher than late night." Typically, upfront prime-time advertisers get the right of first refusal when a new TV show in midseason replaces one that started in September. The difference here: NBC is essentially replacing a massive amount of gross rating points -- five time periods (or shows) at 10 p.m. --- all at the same time. NBC's announcement last spring of its unusual effort to program a Monday-to-Friday night talk show in prime time left many TV advertisers undecided about how to buy the Leno show during upfront negotiations last summer. Was it a late-night show with lower CPM prices, akin to what Leno got while hosting "The Tonight Show"? Or was it a higher-priced prime-time show? One media buyer said if some marketers bought in at lower, late-night CPM prices, they probably wouldn't get the option to transfer buys into higher-priced regular scripted and reality programming set to air on NBC at 10 p.m. after the Winter Olympic programming is concluded. Those shows include new drama "Parenthood," new reality show "The Marriage Ref," returning shows, "Law & Order" and "Law & Order: SVU," and news show "Dateline." "Obviously, if you're an advertiser in prime-time Leno, you're probably going to want to stay at 10 p.m., and if you're already in a show moving to 10 p.m., you're probably going to want to move with the show," says David Scardino, entertainment specialist for Santa Monica, Calif.-based media agency, RPA Inc. "There's the rub," says Larry Novenstern, executive vice president and director of national electronic media for Optimedia International. "Your 14 units in Leno at a 1.5 rating guarantee may now be 11 units at a 2.1 rating guarantee." Media executives have already pointed to Ford Motor Co. The carmaker has a big deal with Jay Leno for many high-profile branded entertainment placements in the show, as well as a media-buying schedule, and would need to renegotiate when Leno shifts to late night. In-show branded entertainment is not valued the same way in prime time as it is in late night, according to media executives. But advertisers transferring from a late-night show hosted by Conan O'Brien to one hosted by Jay Leno will be somewhat easier to match up. The Leno-hosted "Tonight Show" posted stronger 18-49 ratings than "O'Brien," although "O'Brien" had stronger young viewer rating results. An NBC spokeswoman had no comment about any changing advertising deals on the network. The silver lining for NBC is that the programming changes are expected to lift the network's ratings -- both late night and prime time. That will give the network the ability to better handle its underdelivery of ratings guarantees to advertisers, as well as possibly selling more time in the now strong scatter market. Other media executives wonder what the cutting late-night barbs are doing to the NBC brand -- especially the comedy coming from "The Tonight Show with Conan O'Brien." O'Brien has relentlessly ribbed NBC executives, its programming, and the network's upcoming Winter Olympics games in Vancouver -- at unprecedented levels -- since the start of the controversy. Says John Rash, senior vice president and director of media analysis for Minneapolis, Minn.-based Campbell Mithun: "The concern is for the network brand. It's not becoming of either individual or the network. It doesn't shine a positive light on either. But it doesn't violate any content standards."
For the error of its late-night programming ways, NBC will revamp "The Tonight Show with Conan O'Brien" after only seven months on the job and pay out $40 million in penalties, re-installing Jay Leno as the show's host. Multiple reports suggest a settlement between NBC and Conan O'Brien (and his staff) could be finalized today, after talks over the weekend. Jay Leno will resume as the host of the decades-long late-night institution -- a job he held since 1993 -- after the Vancouver Winter Olympics ends in late February, according to news stories. NBC's previous plan to move "The Tonight Show" to 12:05 am with O'Brien at the helm -- and put Leno in place at 11:35 a.m. in a half-hour talk show similar to the one he had at 10 p.m. -- was rejected by O'Brien. O'Brien would be free to pursue other ventures as early as September. He's likely to land at Fox. However, analysts say Fox may need more time to arrange such a deal, in part, because most of its affiliates have syndicated or other shows committed for 11 p.m. time slots. Since O'Brien's tenure as "The Tonight Show" host, he has given up the dominant lead Leno maintained for over a decade among key 18-49 viewers. "Late Show with David Letterman" has been regularly beating "Tonight" among 18-49 viewers and overall total viewers. To his credit, O'Brien has been grabbing better younger 18-34 viewer numbers than Leno. Since the start of the controversy, however --- now about a week or so old -- O'Brien has rocketed up to the No. 1 position in 18-49 viewership.
A new Arbitron survey shows that satellite radio broadcaster Sirius XM's various ad-supported channels, including news, talk radio and sports programming, are heard by approximately 32 million adults per week. The new figures, based on a survey conducted by Arbitron in October and November 2009, come as Sirius XM continues working to build its existing revenue streams, including greater ad support. The survey included a number of positive findings: Satellite radio subscribers are relatively well-educated and well-heeled, with 56% holding a college degree or higher and 25% reporting a household income of $150,000 or better, compared to 25% and 9% of the population at large. They are also devoted listeners -- going to Sirius XM for 62% of their total audio consumption, versus just 16% for AM-FM, 10% for mobile devices like iPods and MP3 players, and 4% for online (streaming) audio. Out of a typical drive time of 2.75 hours per day, satellite radio subscribers spend just under two hours (71%) listening to satellite radio, on average. The drive-time listening is particularly important to Sirius XM, which in recent years has focused on OEM deals with carmakers to drive subscription growth, as satellite radio appears to be reaching saturation in the consumer marketplace. Sirius XM has deals to offer factory-installed satellite radio sets with virtually every major carmaker in America. Although the satellite radio broadcaster promotes itself as having commercial-free music channels, Sirius XM's talk, sports, entertainment and traffic channels have always accepted advertising, pre- and post-merger.
In five years, network programmers will be subjected to the changing effects of nearly one in two homes with DVRs. The new "On Demand" report from Mediabrands' Magna says that in 2015, 44% of all TV homes will have DVR technology. Magna estimates this will come to 53 million homes, up from 33 million DVR homes or 29% of all U.S. TV households at the end of the third quarter of 2009. Overall, Magna is cautious about what this means for the TV and advertising business as a whole. In a report, Brian Wieser, director of global forecasting for Magna, writes: "We note that the aggregated impact of DVRs will likely continue to be outpaced by a rising population and increases in consumption of conventional TV." Also in five years, Video On Demand programming will reach nearly 66 million households -- about 54% of TV homes. This would add just under 20 million homes, or 14 percentage points, from its 45.7 million and 40% of TV home 2009 levels. Broadband access will grow by about the same number of homes during the period, to 89.6 million from 71.6 million homes (61% of the country's 117 million homes) in 2009. Looking at some of the major providers of DVR machines and technology, Magna says DirecTV now has 7.4 million DVRs and Dish Network, 7.0 million. Comcast is at 5 million DVR subscribers, with nearly 21% of the company's total subscriber base. Time Warner has 4.3 million DVR homes, with 33% of the company's subscribers.
After a fortnight in purgatory, Editor & Publisher has been resurrected and will resume both its print and online editions under new ownership. Following a popular outcry by readers and advertisers, the temporarily defunct trade publication has been bought from Nielsen Co. by Duncan McIntosh Co., a newspaper and magazine publisher based in Irvine, California. The terms of the deal (which also include E&P's trade shows) were not disclosed. Duncan McIntosh, the eponymous owner, stated that he is a long-time reader of the trade title and believes it provides an urgently needed service to the ailing newspaper industry. McIntosh is bringing back publisher Charles McKeown, and Mark Fitzgerald has been promoted to editor from his previous role as editor at large, replacing former editor Greg Mitchell. Neither Mitchell or senior editor Joe Strupp is returning. So far there are no details as to other staffing decisions; with the still-defunct Kirkus Reviews, Editor & Publisher employed about 18 people in various capacities. The 126-year-old trade publication's return was widely applauded by readers who depended on the trade title's comprehensive coverage of the newspaper business, especially as the medium has undergone traumatic changes in the last couple of years. Although many digital prophets have written the epitaph for the print newspaper business, newspapers of all sizes continue to report and advertise activity online. More immediately, the upheaval in the newspaper business makes for interesting (if not always pleasant) reading. Last month, Nielsen's abrupt announcement that it planned to shutter the well-regarded trade came as a surprise to many. Nielsen made the decision after failing to sell Editor & Publisher as part of a larger divestiture of trade titles, which also included the sale of Adweek, Mediaweek, Brandweek and The Hollywood Reporter to a new company, e5 Global Media LLC, formed by Pluribus Capital Management and Guggenheim Partners. (e5 recently recruited Richard Beckman, former boss of Conde Nast's Fairchild trade publisher, as CEO.) Nielsen's closing of E&P generated remarkable controversy and a good deal of criticism from readers and indeed the publication's own editorial staff, focusing on Nielsen's lack of commitment and strategic insight. The newspaper business E&P covers continued to produce unhappy news, with the disclosure that Village Voice Media could be forced to declare bankruptcy after losing a court decision over allegations of price-fixing, according to a Bloomberg News report. One of Village Voice Media's Bay Area affiliates was ordered to pay $15 million to the Bay Guardian Co. but has failed to do so (with interest, the amount owed now stands at $21 million). The Bay Guardian now has a lien on Village Voice Media's newspaper properties, including the New York alt mainstay, The Village Voice.
Scripps Networks has been pouring on the vitriol in its dispute with Cablevision. But while it may be eager to reach a deal, the standoff doesn't seem to be affecting ad revenue. Scripps pulled Food Network and HGTV off 3 million Cablevision homes on Jan. 1. Yet ratings have been on the increase. By one measure, Food's viewership is up 12%, while HGTV has seen a 14% rise. Similar increases have resulted in the target adult 25-to-54 demo. Scripps took both networks off Cablevision in a battle over affiliate fees Jan. 1. Scripps argues the 25 cents Cablevision pays it for the two channels combined is below market value. Cablevision says the rate increase that Scripps is seeking is ludicrous. Both sides have lobbed invective at each other in ads and in the press. It might take more than 3 million homes going dark to markedly affect ratings. The 3 million Cablevision homes represent only about 3% of the customer base for both Food and HGTV. But the significant ratings increase is still noteworthy, if for no other reason than its potential effect on the negotiations to restore carriage. It could embolden Scripps, at least in part, to hold its line for the time being (currently, Cablevision pays it an estimated $750,000 a month in affiliate fees for Food and HGTV). For the Jan. 4-10 stretch -- the first Monday-Sunday period of 2010 --Food Network averaged 1.31 million viewers in "live plus same day" performance. By one measure, that marked an increase over the 1.17 million the network had been averaging for the 2009-10 season until that point. HGTV saw viewership rise to 1.38 million for the Jan. 4-10 period, compared to 1.2 million for the season until then. Among adults 25 to 54, Food Network posted an average of 690,000 viewers Jan. 4-10 -- compared to 615,000 for the season until that point. HGTV drew an average of 579,000 viewers in the key demo for Jan. 4-10, up from a season average of 522,000.
Even though he oversaw a slew of acquisitions while CEO at Meredith Corp., new Arbitron chief Bill Kerr said his "philosophic bias" leans toward building rather than buying. "I'm not a big believer in transformative mergers," he said. "I think a lot of them destroy value rather than create value." Speaking at an investor event last week, Kerr said he has "never been shy" about share repurchases, if there is no better way to deploy resources. But he is not making any predictions as he settles into his new post. Arbitron does have significant free cash flow to use. In 2005, under Kerr, Meredith reached an agreement to acquire several magazines, including Family Circle, from Gruner + Jahr for $350 million. Kerr also oversaw the 2002 purchase of the American Baby group of magazines for $115 million. And the 1999 acquisition of the Atlanta CBS station, which he had already expanded. Kerr was Meredith CEO from 1998 to 2006; he joined Arbitron last week when CEO Michael Skarzynski resigned after making a false statement to Congress. Kerr was a board member of the radio ratings company. Also at the investor gathering, Arbitron CFO Sean Creamer said the company is evolving "from a pure research company to a more technology-focused business services company. By definition, that moves us into an area where acquisition opportunities are probably more significant than they have been in the past." "It is our job to at least evaluate what's out there," he said, although "we don't believe we need to do acquisitions." Separately, Creamer said the overwhelming amount of Arbitron's revenue from radio measurement comes from the broadcasters. About 85% is from the programmers, with advertisers providing 15%. Total company revenues last year were $369 million. "Now ultimately, the advertisers would say they pay for it all at the end of the day," Creamer said. "But in terms of how that revenue works for us, that's the split." Creamer noted that the 85/15 split is largely the same for Nielsen and other measurement services.
ETrade is introducing a new series of "Talking Baby" ads, including a spot that will debut during the Super Bowl, featuring a fresh tot. The two premiere ads break during NFL playoff games on Jan. 16 -- the first during the NFC divisional playoffs on Fox, the second during the AFC divisional playoff game on CBS. A third spot will debut on CBS during Super Bowl XLIV Feb. 7. A total of five new spots will be a central component of a multifaceted marketing communications program that spans traditional and social media throughout 2010, per the company. ETrade will also debut its animated "Product/Laptop" solution series campaign to complement the "Baby" series. The first in this sequence kicks off on Fox during the NFC divisional playoff game on Jan. 16. The combined campaigns are designed to appeal to a widespread audience while targeting new business growth for the core retail franchise. Grey New York -- ETrade's AOR since 2007 -- created the campaign, which will run on TV, print and online. The campaign is an evolution of the company's marketing message that it can "liberate investors from big, expensive brokers." The 2008 launch of the ETrade baby was intended to communicate a "wise beyond his years" perspective on how to be a liberated investor, while the 2009 campaign emphasized being in tune with the changing economy. The 2010 campaign, with a new cast of babies, builds on the "liberation and value" message and focuses on how ETrade can help consumers better manage their investing goals and needs. "Of course, the reality is that babies do grow up, and therefore advertisers run out of footage, opening the door for a fresh personality," stated Nicholas A. Utton, ETrade chief marketing officer. To maximize the Super Bowl investment, ETrade will utilize social media, including Facebook, Twitter and YouTube. On Facebook, the eTrade brand currently has more than 18,000 fans and more than 12,000 fans of the baby. Over 3,000 Twitter users follow the baby's tweets, and there have been 19 million+ total views of the baby and over 10,000 subscribers on YouTube. The new spots already have one critic, Adrants publisher Steve Hall. "Sadly, there's nothing special about these commercials," Hall writes on the Web site. "The shtick is getting old. Even the baby's 'shocked face' is lame. The creators could have at least had a little more fun morphing the little guy's face into something that actually resembled shock. Hopefully, the Super Bowl version of this campaign is an improvement."