The worst-kept secret in TV has been confirmed: NBC officially announced that Jay Leno would be returning to host "The Tonight Show" starting March 1. In that press release, NBC didn't mention Conan O'Brien, who took over the hosting job of the show in June. He lasted seven months, and according to reports, will receive $33 million in severance, with another $12 million going to his staff of 200. Leno hosted the show for 17 years. NBC executives and NBC affiliates witnessed the show's key 18-49 ratings sink almost 50% or more when O'Brien took over, taking the show to second place against rival CBS' resurgent "Late Show with David Letterman." In a separate statement concerning O'Brien, NBC said in an agreement signed Thursday, that it and O'Brien "will settle their contractual obligations and the network will release O'Brien from his contract, freeing him to pursue other opportunities after September 1, 2010." Rival networks, including Fox, have been suggested as possible new homes for him. O'Brien did expand the number of younger viewers. But media advertising executives say there is much more money to be made from targeting 18-49 viewers. Compounding the problem was installing "The Jay Leno Show" at 10 p.m., which also suffered in ratings, but was profitable for the network -- versus other prime-time programming. During this period, NBC affiliates suffered, losing big late-night revenue -- especially from their local newscasts. In early January, Jeff Gaspin, chairman of NBC Universal Television Entertainment, told critics that around one-third of NBC affiliates were considering pre-empting "Leno" at 10 p.m. That prompted Gaspin's plan: wedge a half-hour "Jay Leno show" at 11:35 p.m, with "The Tonight Show" moved to 12:05 p.m., and return NBC at 10 p.m. to scripted and unscripted programming. But O'Brien rejected the revamped "Tonight Show" plan, then went on to rail against NBC executives with comedy for about two weeks, where his ratings shot up 50%. Letterman and Leno also spewed comedy at the expense of NBC -- and each other. In the press announcement, NBC says "Late Show with Jimmy Fallon" would continue running at 12:35 p.m.
More help is coming for TV stations -- now corporations can directly support political candidates with campaign advertising. The Supreme Court overturned a 20-year-old ruling prohibiting corporations from using money from their general treasuries to pay for campaign ads. It will also allow labor unions to participate more freely in campaigns. Supporters say this could pave the way to end similar limits in about two dozen state laws. The justices also struck down part of the landmark McCain-Feingold campaign finance bill that barred union- and corporate-paid issue ads in the closing days of election campaigns. Previously, there was restriction on such ads within 30 days of an election. In a close 5-4 decision, Justice Anthony Kennedy said in his majority opinion: "The censorship we now confront is vast in its reach." On the dissenting side, Justice John Paul Stevens said: "The court's ruling threatens to undermine the integrity of elected institutions around the nation." The decision does not affect political action committees. Corporations, unions and others may create PACs to contribute directly to candidates, but they must be funded with voluntary contributions from employees, members and other individuals, not by corporate or union treasuries.
Meredith Corp. reported an increase in profits in the fourth quarter of 2009 compared to the same period in 2008, with earnings per share rising 50% from $0.28 to $0.42, even as total revenues fell 6.5% from $361 million to $337 million. The rise in earnings was attributed by Meredith President and CEO Stephen M. Lacy to a higher profit in its national magazine publishing business ($32 million, up from $23 million last year) and companywide cost reductions of 8%. Mirroring the company's overall performance, magazine publishing saw profits increase, despite a 5.8% decrease in revenues from $277 million to $261 million. The company also enjoyed double-digit percentage increases in new revenue areas like brand licensing, retransmission fees and video content creation. Despite the decrease in revenues, there was some good news in magazine publishing: Total ad revenues at flagship Better Homes and Gardens increased 7% in the quarter, while More and Fitness were also up. In fact, because of declines in the rest of the magazine industry, Meredith's share of total magazine ad revenues increased from 9.4% to 11.7% in the final quarter, according to official rate card data from the Publishers Information Bureau. Meredith also reported an uptick in readership, per audience measurements from Mediamark Research and Intelligence, while monthly unique visitors to its magazine Web sites increased 35% compared to the previous year, to over 20 million. Separately, Meredith's local media division, encompassing its broadcast properties, also saw total revenues decline, with a 9.5% drop from $84 million to $76 million. This decrease was attributed to a $14 million drop in political ad revenues that was only partially offset by a 4% increase in non-political advertising. As a result, the division's operating profits fell 23%, from $22 million to $17 million. The relatively modest 6.5% decline in Meredith's total revenues suggest that its business may finally be stabilizing after a year of steep losses, which began before most other big publishers. In 2008, Meredith saw revenues decline 1% in the first quarter of 2008, 11% in the second quarter, 8.5% in the third, and 7.5% in the fourth, followed in 2009 by declines of 14% in the first quarter, 8% in the second quarter and 9% in the third quarter.
Fox Business Network and the Tennis Channel have expanded their co-marketing arrangement to span all four tennis grand slam events this year. The arrangement began with the U.S. Open last summer, but will now include the higher-profile FBN morning show hosted by Don Imus. A Tennis Channel "Court Report" about the goings-on at the various slams -- hosted by talent from the tennis network -- will take place each weekday morning on "Imus in the Morning." Having started with the current Australian Open, it will continue during the next three premiere tennis events. In exchange, FBN gets exposure on the Tennis Channel when one of its anchors provides a branded update on that day's market performance at 6 p.m. During the 2009 U.S. Open, the Tennis Channel received exposure during the FBN morning series that preceded the "Imus" show, which began in October. The Tennis Channel is sharing Australian Open coverage with ESPN, as it does with the other three Grand Slams. Broadcast networks also carry action from the French Open, Wimbledon and U.S. Open. Before the U.S. Open last summer, Robyn Miller, senior vice president for marketing at the Tennis Channel, stated that the cross-promotional deal is "mutually beneficial to both of our viewer bases." From a niche perspective, both tennis and business news might be expected to attract an upscale audience.
Air America Media is ending its live programming operations as of today. The company, which blamed a bad economic environment, intends to file a Chapter 7 of the Bankruptcy Code to close the business. In a memo from Charlie Kireker, chair, Air America Media, he said the past year has seen a "perfect storm" in the media industry. Air America Radio, which ultimately ran on 100 radio outlets, launched in April 2004 with both known personalities such as comic turned Sen. Al Franken, and then-unknown future stars like Rachel Maddow. It was credited as a rare progressive voice in mainstream radio broadcasting, a medium dominated by conservative talk-show hosts. Air America is not alone in its financial woes; major radio players like Clear Channel, Citadel and Emmis have reported revenue shortfalls. The industry's veteran trade magazine Radio & Records closed last year. Kireker cited the difficulty in obtaining "operating or investment capital from traditional sources of funding. In this climate, our painstaking search for new investors has come close several times right up into this week, but ultimately fell short of success." He added that radio industry ad revenues are down for 10 consecutive quarters and reportedly off 21% in 2009. Online efforts to monetize face the same "profitability challenges." A severance package will be offered to full-time employees with more than six months' service. "We should all be proud of our passionate determination to assure that our nation's progressive voice would be heard loud and clear," he wrote, adding that "a lasting legacy was forged which will now continue through other voices and venues."
The Food Network is once again ready for consumption by Cablevision customers. After nearly three weeks, Scripps Networks Interactive and the New York-area cable operator have resolved their standoff and both Food and HGTV are back on in some 3 million homes. The two sides had been fighting over how much Cablevision would pay Scripps for rights to offer the popular networks. Scripps said Cablevision was paying a combined 25 cents a month per subscriber for the pair. And it wanted more -- for the Food Network, in particular -- to bump that up. Terms of the new deal were not disclosed. Scripps, which pulled the networks off Cablevision Jan. 1, had tried to put some pressure on Cablevision to settle on its terms with a barrage of ads that were critical of the cable company. A taste of the vitriol came as Scripps lambasted Cablevision for accusing it of engaging in "unusual or unethical" negotiating tactics in a statement it released. Scripps also tried to apply some pressure by airing reruns of some of its programming on local stations in New York and Connecticut. Still, ratings continued to increase for both Food and HGTV nationally during the battle. Cablevision customers make up only about 3% of each channel's reach.
Hachette Mulls Loyalty Clubs Hachette Filipacchi Media is considering importing a European marketing idea, fee-based loyalty clubs for magazine readers as part of a push to increase audience and revenues by transforming itself into a "media and servicing company," according to Folio:, which reported the news earlier this week. The new initiative comes as magazine publishers seek new revenue streams to offset losses suffered in a challenging ad environment. Although nothing is set in stone, Folio: President and COO Philippe Guelton outlined a concept in which magazine subscribers pay a still-undetermined monthly fee to join clubs offering benefits, including retail discounts, special film screenings, wine club memberships and multiplatform digital delivery of premium magazine content. One obvious example offered by Guelton would be fashion and beauty-related shopping discounts and other benefits for Elle subscribers. Also, Hachette is continuing full throttle with its transition to digital distribution of content. Woman's Day is preparing a new mobile, multimedia cookbook app for the iPhone and iPod Touch, combining text recipes with video. The new app, priced at $9.99, is titled "The Woman's Day Cookvook: Healthy Food for Everyday Living" -- and no, that's not a typo: "vook" is one of the newer digital neologisms, combining "video" and "book." It has become increasingly urgent for publishers to find new revenue streams to offset huge declines in ad pages and revenues. According to the Publishers Information Bureau, total consumer magazine ad pages fell 21.6% in the fourth quarter of 2009 compared to the same period in 2008, and 25.6% for the year overall. Entrepreneur Prepares SecondAct.comEntrepreneur is readying a new Web site targeting baby boomers who are retired or nearing retirement, called SecondAct.com. The site will offer visitors content covering traditional areas, like travel, leisure and vacation homes, but also advice and articles about a new phenomenon that might be called "semi-retirement," in which successful boomers "retire" at a relatively young age but start a new business or career. Spin Gets Into LicensingSpin has launched a new Spin Licensing Store, offering the magazine's trove of music-related images up for purchase and use by other publishers in editorial content. The virtual store gives editors access to an archive of about 3,000 images accumulated over the magazine's quarter century of publishing, mostly focused on photos of popular and up-and-coming bands, past and present. Spin will also begin licensing videos of music performances and related content. Old Navy T-Shirts Sport Vintage Popular Mechanics Covers Old Navy and Hearst are teaming up to bring old covers from Popular Mechanics to T-shirts for kids, targeting parents who haven't found the appropriate retro-futuristic aesthetic for their little ones. The new line of T-shirts for infants, toddlers and young children, selling for $10.50-$12.50, offer one of four vintage covers, focusing on mechanics, specifically transportation. The magazine is also hosting a design contest called "Kids Can Do Great Things." The winning submission will appear in the magazine and the artist will receive a $500 shopping spree at Old Navy. Cosmo Editor Invites Senator-Elect Back for Naked Reprise Kate White, the editor in chief of Cosmopolitan, extended a (presumably tongue-in-cheek) invitation to Scott Brown, the victorious GOP candidate in this week's Massachusetts Senate race, to pose nude for a centerfold spread in the magazine. While Brown is likely to demur, the invitation is not totally unprecedented. In June 1982, Brown, then a law student, posed nude for the magazine as part of its "America's Sexiest Men" issue.
Despite some agency claims to the contrary, Nielsen's decision to replace the local Live program data stream with Live + Same Day ratings is a major step forward for local audience measurement and should be welcomed by the advertising community. Assertions that L+SD ratings will overstate program ratings while driving up costs are based on erroneous assumptions that do not hold up under scrutiny. Consider this: according to our calculations, including same-day DVR playback could potentially overstate commercial viewing by about 4%. Meanwhile, the standard error on the same data is 36%. That means that any possible change caused by DVRs is far below the swings that naturally occur in Nielsen's audience projections. Well aware that viewing behavior shifts over time, Magna plans to perform this analysis on an ongoing basis to identify any changes in DVR playback patterns. We have also heard assertions that Live Program ratings should remain the local currency because at the national level, it is the closest available proxy to Average Commercial Minute (C3) ratings. While that may have been true two years ago, increased DVR penetration has changed the landscape. Additionally, Live + Same Day Program ratings were closer to C3 than Live Program Ratings were in more than half of the telecasts we analyzed, proving that the Live stream is no longer the closest substitute for C3. Using a comprehensive data set provided by Nielsen, Magna has gauged the level of potential ratings overstatement caused by the switch. The analysis consists of program and commercial ratings for both data streams in 21 LPM markets, 10 demographics and 138 prime-time programs for a total of 115,920 data points. Our analysis shows that while certain programs may see a bump, the relationship between program and commercial viewing would barely change. The differences would be so small, in fact, that it would be nearly impossible to tell if the cause is the new data stream or simple statistical bounce. Even if we assume there will be across-the-board ratings increases, there are too many variables in the buying process to project a universal price increase. Let's not forget the role of negotiation. Put simply, the way people view television has changed, and a ratings stream with DVR playback included is much more representative of today's audience. Rejecting the Live + Same Day program data stream because it might marginally overstate commercial viewing is a head-in-the-sand approach, especially given the variability that already exists in the numbers.