LIN TV CEO Vincent Sadusky joined the chorus of station-group executives suggesting that prices for syndicated programming may have reached an apex. Instead, replacing it with local programming can pull in higher ratings and boost the bottom line with the lower costs. As for off-network sitcoms, Sadusky indicated that syndicators are seeking inflated prices and longer contracts that could outlive a show's popularity. Example: the "Two and a Half Men" sellers asking for seven-year deals. "We just don't think shows are going to have those kinds of legs," Sadusky said at a recent investor event. "The days of the "Seinfelds" coming off net are really over." He said LIN will continue to pursue quality off-net programming, but may have more leverage than in past years: "We won't chase it down if terms get out of hand." Beyond sitcoms, some station-group executives have suggested recently that even "The Oprah Winfrey Show" ending could lead to more local programming and a net positive. LIN, with 32 stations, has expanded its local offerings, notably with lifestyle-type shows resembling some of the "Today" show's segments. They cost less and offer new ad opportunities. "Because it's not news, we don't have the same standards that we have in terms of objectivity, so we can have a little bit of fun," Sadusky said. "We can have our hosts drink the Dunkin' Donuts' coffee mug ... we can do some product integration. We can have a chef on from a local restaurant and get outside the 30- and 60-second spots. ... Advertisers love new ideas being brought to the table." Fox doesn't offer affiliates a morning show, so stations have space to experiment. On LIN's Fox affiliate in Providence, there is "The Rhode Show" ("Rhode" as in Rhode Island) from 8 a.m. to 9 a.m. on weekdays, and again from 1 p.m. to 1:30 p.m. In the Norfolk, Va. market, there is a "Hamptons Roads Show" in the same morning slot, and a related hour from 10 a.m. to 11 a.m. on LIN's Mobile, Ala. The Fox outlet has "Studio 10" in the 8 a.m. hour. Video from the shows and related content can be placed on station Web sites, providing additional offerings cross-platform. Back on syndication strategy, the stronger local programming gives LIN some heft when negotiating with syndicators, Sadusky said. "It's an opportunity for us to have a bit more leverage and kind of control of our own destiny, a bit more than the historical broadcast model," he said. Still, he expects the traditional station business model, given the need for syndicated content, to succeed for some time.
As it moves toward an IPO, Nielsen has added three years to CEO David Calhoun's contract. In the process, Calhoun gets a hefty signing bonus and jump in his base salary. The new deal runs through 2014. The previous agreement was scheduled to expire at the end of 2011. The new deal comes with a $6 million signing bonus, while Calhoun's base salary goes from $1.5 million to $1.625 million. However, the signing bonus must be repaid by Calhoun if he leaves the company for any reason before Jan. 1, 2013. Nielsen disclosed the new agreement, which went into effect in late October, in an amended pre-IPO government filing last month. Nielsen, controlled by a group of private-equity investors, has indicated that it will look to net $1.66 billion in an IPO. Calhoun joined Nielsen in 2006 after a lengthy tenure at General Electric, where he was CEO of multiple units, including ones involving aircraft engines and insurance. Calhoun's new Nielsen deal also comes with the potential for a better payout, should he be terminated under certain circumstances during the length of the deal. Both the previous and current deals prevent Calhoun from hiring Nielsen employees, or competing with the company, for a period of two years after his departure. There are also non-disparagement clauses. Outside salary and annual bonus, Calhoun's original 2006 deal came with commitments that he would receive payments of $29.5 million by January 2012. An additional payout that could exceed $14.5 million is also coming by that time. The new deal adds $3 million to that amount, which will come after January 2012. In the 2006 deal, Calhoun received millions of stock options in connection with his investing $20 million of his own money in Nielsen when he joined.
Although new data suggests consumers are slowly abandoning pay TV services, one study says the vast majority intend to maintain traditional subscriptions with cable, satellite and telco TV/video companies. While consumers increasingly are using new digital platforms -- the Internet, video-on-demand, new set-top box functions -- an annual study by TV researcher Frank Magid Associates says it is additive. The solid use of traditional TV delivery remains. For example, it says only 10% of consumers express an interest in viewing a TV show and movie viewing from the Internet, viewed on a laptop, computer or tablet screen. Conversely, bigger traditional TV screens -- as well as new Internet connected services, AppleTV, Google TV, Roku, and others -- continue to fuel higher interest in traditional TV screening. Although recent data has shown first-time declines in subscription TV (per a recent report by SNL Kagan), the Magid study notes only a 1% decline. Future indications are that only 3% of consumers may join this group, "suggesting a relatively stable subscriber base for traditional providers." It says only 2.5% of consumers use Internet content exclusively. The real danger of new alternative video platforms is harming the DVD purchase and rentals business -- which continue to see price discounts, new low-priced kiosk DVD dealers and lower overall revenue. Touting more strength for traditional TV with bigger screens and new technology, it says 8% of consumers are likely to purchase a 3D television set in the next 12 months. It estimates that roughly 5% of U.S homes will have a 3D television by the fall of 2011. "As new video viewing platforms, such as instant streaming and mobile apps proliferate, consumers are simply adding them to their portfolio of video viewing options," stated Maryann Baldwin, vice president of Magid Media Futures. "Our research indicates this is definitely not a zero-sum game," she adds. "At least at this point, it appears traditional subscription services and alternative viewing platforms can coexist with services like TV Everywhere locking in revenues for traditional providers."
After several months in the doldrums earlier this year, the recovery in consumer magazines appears to be gathering speed, judging by the latest figures for monthly titles from the Media Industry Newsletter, covering December issues and the year-to-date. Total ad pages increased 4.4% in 2010 compared to 2009 -- a modest improvement over one of the worst years in the medium's history. Overall, 99 out of 149 (or two-thirds) of titles tracked by MIN are up in year-to-date ad pages as the year draws to a close. That's a big improvement compared to the same time last year, when just 10 out of 150 (or just 6.6%) were up in ad pages for the full 12 months. According to MIN, the 10 best performers in 2010 included Vogue, up 16% to 2,308 ad pages; People StyleWatch, up 49.5% to 940 ad pages; Elle Décor, up 34.7% to 1,121 ad pages; Harper's Bazaar, up 17.7% to 1,792 ad pages; Marie Claire , up 19.5% to 1,344 ad pages; Chicago, up 18.9% to 1,346 ad pages; InStyle, up 8.6% to 2,512 ad pages; Real Simple, up 13.8% to 1,642 ad pages; Elle, up 9.1% to 2,286 ad pages, and Parenting Early Years, up 21.5% to 961 ad pages. Full data for all 149 monthly titles tracked by MIN is available from the subscription newsletter. For magazine publishing as a whole (including monthlies, bimonthlies, weeklies, and others), 2010 has provided scant relief following a disastrous 2009. After a bad first quarter, when total ad pages dropped 9.4% according to the Publishers Information Bureau, the industry stabilized with a 1% year-over-year growth rate in the second quarter, followed by 3.6% growth in the third quarter. For the first nine months of 2010, total ad pages are still down 1.6% compared to 2009, per PIB.
Looking for a broader public awareness, Time Warner Cable is starting a program to back and publish reports on a number of entertainment, media and technology issues. Fernando Laguarda, vice president of external affairs and director of the Time Warner Cable research program on digital communications, says this effort will award reports that provide new information, insight and practical advice for the entertainment and media industries. "It's an effort to have our own voice -- now that we are an independent company," he says. "We want to set ourselves apart." In 2009, Time Warner Cable spun off from its Time Warner Inc. parent. Time Warner Cable says research will not necessarily support any of the company's business efforts. "We think it's a matter of adding new voices," Laguarda says. "It's to broaden involvement." The papers will explore a broad range of issues. For example, video convergence, local programming, the future of set-top boxes, gaming and the role of network advertising are among possible topics, says Laguarda. In keeping its promise to stir debate and conversation, Laguarda says, "we are not editing this content." Time Warner Cable is offering a $20,000 stipend for efforts from professors, think tanks and any study from a scholarly background. It wants to complete around six such studies per year, aiming to get these papers published in the Federal Communications Commission's law journal. As part of the overall effort to separately brand itself, Laguarda says the TWC program already commissioned a series of five essays from various academics.