A new report shows that 376 deals in the Internet space helped drive a 3% increase in the number of M&A transactions in the overall U.S. entertainment and media sector last year. The level outpaced overall M&A movement, the PwC US report said. There were 153 deals in the advertising and marketing areas -- slightly up from 2009. The 53 in broadcasting and cable was down significantly. The total value of ad/marketing deals was $4.1 billion -- up significantly -- while broadcasting and cable topped $11 billion, which was down. The Internet software services deal-making total value was $7.1 billion. As the number of overall transactions in the M&E market jumped, the total value fell from $37.2 billion to $33.5 billion year-over-year. (Some values may not have been announced, so the numbers could be altered.) Private-equity companies that had sat on the sidelines during the economic crunch and tougher credit markets upped their pace last year -- and should again in 2011. "Look for M&E deal volume to continue to outperform the broader market in 2011 as media companies complete more middle-market acquisitions," stated Thomas Rooney, who heads the M&A practice in M&E for PwC US. Of course, the near-completion of the Comcast-NBCU deal already gives the market a huge lift. The increase in "new media touchpoints" and a hunger for geographic expansion should be factors, Rooney stated. "Companies must determine how they are going to reach their audiences in an increasingly digital market." PwC stated that E&M transaction multiples for deals, where the values were released, increased for the first time since 2007: "Median enterprise value to EBITDA multiples increased from 8.3x in 2009 to 9.8x in 2010 -- still well below the six-year high of 13.6x in 2007."
Buying radio advertising is about to get easier. Radio ratings firm Arbitron will integrate Proposal XML -- one of the most widely used software platforms for media transactions in TV and Internet -- with its own TAPSCAN system for radio ad sales proposals and evaluation, currently used by more than 17,000 radio sales personnel. The union will enable the distribution of over 400,000 proposals to radio buyers per year. Arbitron plans to complete the software integration, which will allow buyers to buy local radio ad inventory seamlessly with other media, sometime in the second quarter. Arbitron is moving to make TAPSCAN compatible with Proposal XML in response to demands from media buyers -- specifically Carat, which reportedly threatened to freeze its local radio ad spending earlier this month unless the buying process becomes Proposal XML-friendly soon. After catching wind of this ultimatum, Arbitron reps met with Carat execs and struck a deal to preserve radio ad spending while meeting Carat's demands. According to Jerry Wiese, Arbitron's manager of customer software products: "We said we're committed to getting this done by the end of the second quarter, if they can just hold off" on the threatened spending freeze. Wiese said the integration of Proposal XML and TAPSCAN is the highest priority for Arbitron's software division and will be handled in-house by Arbitron programmers. Jennifer Hungerbuhler, Carat's vice president and regional broadcast director said the upgrade should help local radio stations compete with other media, simply by making it easier and less costly to execute radio buys. Plus, it could result in more spending "if we can show those savings to clients," added Hungerbuhler. In addition to helping make the medium more competitive, the display of speed and flexibility suggests Arbitron's new management is trying to put its best foot forward as it begins its first full year on the job. Arbitron's top management underwent a major shakeup over the course of 2010, with multiple departures and new names in top slots -- including CEO and president William T. Kerr and chief research officer Gregg Lindner. These changes followed a high-profile dispute with minority broadcasters over alleged shortcomings of the sampling methodology for Arbitron's Portable People Meter, a passive electronic measurement device. The two sides seem to have buried the hatchet last year after new execs took the reins at Arbitron. Separately, last week Arbitron announced it is integrating TAPSCAN with Marketron's Exchange, which handles media transactions, to create a fully automated, Web-based sales and traffic platform for radio advertising. The service covers all stages of the sales process from initial proposal through fulfillment, ratings information, and invoicing.
Time Warner Cable registered big profit gains for its fourth quarter -- but continued fewer video subscribers. The second-biggest cable TV operator in the country improved its net profit 22.2% to $392 million in the fourth quarter of 2010, with revenues gaining 5.9% to $4.8 billion. But as has been the trend for many cable system operators, Time Warner lost basic video subscribers -- 141,000. Still, Time Warner continued to show strength in its newer products -- Internet and phone business, adding 94,000 data subscribers and 72,000 phone subscribers, respectively. Triple-play business -- packages containing video, data and phone -- improved 72,000. Multiple product sales to consumers totaled 8.5 million, which represents almost 60% of all Time Warner's customer relationships. Riding on the back of a resurgent local TV ad market, Time Warner said local ad sales increased 34% to $269 million -- much of this coming from improved political advertising dollars. This year looks good as well. Time Warner expects double-digit percentage gains in operating income. Concerning the prospect of "cord-cutting" -- continued defection by consumers to other newer digital technologies to get their TV programming -- many companies, including Time Warner, say there is little sign of wholesale, major transitions by consumers. Glenn Britt, chairman/president/CEO of Time Warner Cable, said on Thursday that although online video subscription services may have better user interfaces than traditional pay-TV services, these businesses depend on cable's broadband business to work well. In the future, he said, cable set-top boxes could be replaced by emerging technologies like Web-connected TVs and mobile devices. Britt stated: "We made great strides financially and operationally in 2010. We achieved record free cash flow and continued to deliver on our shareholder-oriented capital allocation strategy. At the same time, we enhanced our products and services, increased the sophistication of our marketing and accelerated the growth of our commercial business."
Healthier messaging from big fast-food and confection companies is getting women to talk to each other. A six-month analysis from the Women at NBCU Brand Power Index shows that brands such as McDonald's, Nestle, and Frito-Lay are generating bigger online and offline buzz. McDonald's moved up 10 places on the NBC index to 15th place, stemming from a partnership with social game "FarmVille," which aligned the brand with fresh farm produce. A focus on four new salad options and "natural-cut" fries seasoned with sea salt moved Wendy's higher into 96th place. Domino's Pizza gained a large number of places -- 140 spots -- to 218th, from its advertising push that touted California farm-grown tomatoes and 100% real cheese. Commercials from Nestlé, which included products designed to prevent disease and improve health, help it gain 120 places to 153rd position. Frito-Lay made its first appearance on the list -- 361st place -- from two efforts, introducing its Artisan Recipes tortilla chips made with all-natural ingredients, then announcing that 50% of its products will be made with all-natural ingredients. The Women at NBC Index, which started up last year, says after six months, the brands women continue to talk about include: 1) Walmart 2) Target 3) Verizon 4) eBay 5) Ford 6) Coca-Cola 7) AT&T 8) iPhone 9) iPod 10) Pepsi 11) Honda 12) Amazon.com 13) Sears 14) McDonald's 15) Samsung 16) Toyota 17) Bank of America 18) Netflix 19) Kohl's 20) Sony 21) Sprint 22) Microsoft 23) Tylenol 24) Xbox and 25) Comcast. The Women at NBCU Brand Power Index is an analysis of 500 brands most talked about by women. It is based on online search data from Compete and social media buzz data from New Media Strategies, as well as person-to-person conversations tracked by Keller Fay Group.
A deal where Time Warner Cable serves as a sales rep for Verizon's FiOS service played at least a minor role in boosting the cable operator's ad sales near the end of 2010. TWC said its sales rose 18% in the fourth quarter, stripping out political revenues. Total dollars with political money included came in at $269 million, the most ever for a fourth quarter. About 35% ($95 million) of that came from just the auto and media categories. Political accounted for about 16%. TWC has been selling regional spots on behalf of Verizon in the New York, Los Angeles and Dallas markets. The cabler receives a percentage of the revenues under the recent deal. TWC could also benefit this year as NCC Media, a cable rep firm that it partly owns, begins selling DirecTV inventory in several markets. "We expect the FiOS deal and others like it will increasingly contribute to ad revenues in 2011," said TWC COO Robert Marcus on an earnings call. Marcus said the company anticipates that despite a lack of heavy political advertising this year, ad dollars will go up. For the full year 2010, the company posted a 26% increase in ad sales to $881 million. Dropping political dollars, the increase was 18%. Ad dollars account for about 5% of TWC total revenues, which were $18.9 billion in 2010. In the fourth quarter, TWC lost 141,000 video subscribers and now has 12.3 million. The bulk of the company's revenues come from its traditional TV supplier business -- which generated $11 billion in 2010, up 2%. Total company revenues increased 6%, helped by a 10% increase in broadband-subscriber dollars.
strong>PixelMags Unveils Digital Publishing PortalMagazine publishers are getting more resources for creating digital editions for Apple's iPad and other digital platforms, with the unveiling of PixelMags' new 2.0 tools portal. The suite of PixelMags tools allows publishers to manage all aspects of their digital content, from interactive features and rich media integration to pricing and delivery of magazine apps through the Apple apps store. Using the PixelMags tools, publishers can drag and drop Web, e-mail, phone and address hotlinks and import videos directly from YouTube with additional options for customization through HTML5. The 2.0 tools portal also offers options for monetizing content through subscriptions, integrating print and digital subs through a single set of APIs. and advertising. That includes membership in PixelMags' advertising network, "Ads by PixelMags," which allows publishers to combine their audiences to extend advertising reach while keeping 100% of ad revenue. The new PixelMags 2.0 tools portal makes it easier for publishers to get their digital editions through Apple's approval system -- sometimes one of the most labor-intensive parts of mobile publishing for Apple devices -- by taking care of key aspects of the approval process. Originally developed for Apple devices, PixelMags is working on a cross-platform version of the 2.0 tools portal that should allow publishers to create digital editions for other smartphones, e-readers and tablet computers at no additional cost. The Week Signs Up for GfK MRI's Starch Ad Research The Week will back its advertising performance guarantees to advertisers this year with metrics from GfK MRI's Starch Advertising Research. The Week's guarantees to advertisers include the promise that consumer recall of ads in the magazine will rank in the top one-third of all magazines on an advertiser's media plan; if the initial ad schedule does not achieve this result, the magazine will run additional ads at no cost until the result is achieved. Publisher Jessica Sibley stated: "We are one of the few consumer magazines to guarantee an advertiser's media investment. It's vital that the research we use to support this guarantee is widely used and understood by the advertising industry." Last year saw a growing number of publishers signing up for GfK MRI Starch's new integrated ad effectiveness metrics, which combine measures of audience accumulation with ad recall and impact, including brand perceptions and actions taken. The Advocate Bows Mobile App Here Media, which publishes The Advocate, said it will be unveiling a free, ad-supported mobile app for the LGBT news publication later this quarter. The new Advocate app, created in partnership with mobile publication production company Thumb Media Group, will include news feeds with content from the magazine's Web site in categories such as news, entertainment, features, travel, and health. Users can also watch "The Advocate On-Air," as well as content from NBC on The Advocate. In addition to building and maintaining the app, Thumb Media's technology will facilitate mobile ad sales by the magazine's sales staff. Rodale Promotes Falkenberry Alison Hobson Falkenberry has been promoted to vice president of brand and digital communications at health and fitness publisher Rodale, effective immediately, the company announced this week. In this role, Falkenberry will be responsible for leading all Rodale's corporate, brand, book, International and digital media relations efforts. Falkenberry previously served as assistant vice president for brand communications, leading consumer and trade media relations efforts for all Rodale's brands.