Crucial auto advertising TV business slowed down a bit in Meredith’s recent reporting business. But overall, its TV businesses continue to shine over its lackluster magazine group. Auto advertising for TV stations grew 4% in the company’s third quarter fiscal 2012 reporting period -- down from a 13% increase for the same period a year ago. Still, revenues from its Local Media group -- TV stations -- grew 10% to $78 million. The group benefited from a 11% gain from advertising of its Professional Services category. Operating profit from the group was $23 million, a 71% rise compared to $13 million in the previous year period. Meredith’s digital advertising revenues for its TV businesses gained 70%, driven by what it calls “enhanced sales initiatives and product offerings." Revenues for Meredith’s National Media Group -- magazines -- grew 2% in advertising sales to $123 million. But it says excluding recent acquisitions, advertising revenues were down 7%. Over-the-counter drugs and media and entertainment were strong categories, compensating for weakening prescription drug and retail advertising. As with its TV stations, magazines' digital advertising revenues grew 70% with the food category doing solid business. Overall, company revenues increased to $346 million from $339 million, with net earnings sinking to $21.2 million from $30.8 million.
TV station group Belo Corp.'s first-quarter results inched up, due in part to higher automotive, retail and political advertising. The company, which has 20 stations, and nine in the top 25 markets, had revenue of $156 million -- 3% higher than the same period in 2011. Total advertising revenue was up 2% and leaving out political ad, it gained 1%. Local spot advertising business picked up 4%,but national spot business declined 5%. Political advertising dramatically improved at $1.6 million, a $1.2 million gain over the first quarter 2011. The big growth revenue areas at Belo: Internet and retransmission fees. Combined, the two were up 7% in revenues versus the year before. Slipping away was the long-time revenue source network compensation, which the TV group is no longer getting. The same trend has occurred at other TV stations. Belo got $1.7 million in the first quarter 2011 from network compensation. With the expense of "The Oprah Winfrey Show" gone in syndication, overall station programming costs were down 10% or $4.9 million, compared with the first quarter 2011. In a release, Dunia Shive, president and CEO of Belo Corp, stated more improvements are anticipated in the second quarter, expected total revenue: "to be up around 3% to 4%, including an estimated $4 to $5 million in political revenue."
Oxygen says it will boost its original programming offerings by 50% and look to establish a new “Girlfriend Confidential” franchise with two shows at once -- New York and Los Angeles versions. The network is bringing back “The Glee Project” starting June 5, while launching another music genre series, “The Next Big Thing: NY,” where a performance coach trains potential stars, on June 12. The network brands its audience as Generation O and focuses programming on themes such as “friendship, dating, fashion and entertainment.” It seeks to appeal to a broad range of adult women -- from those starting out in jobs and relationships in their mid-20s to those who have moved on to careers and marriage in their 40s. “Girlfriend Confidential: NY” and “Girlfriend Confidential: LA” play into that diversity, with women at different life stages, but all maneuvering in the beauty, fashion and entertainment worlds and “making decisions that will affect their friendships and their futures.” New series “All the Right Moves” will follow four professional dancers who are launching their own dance company. “My Shopping Addiction” focuses on young people who face a serious addiction to spending and look for ways to change their behavior.On the parental front, “I’m Having Their Baby,” focuses on 20-something women grappling with whether to keep a child or place him or her up for adoption. In development is a series that blends digital life and music, carrying the working title “#VideoStar,” which hopes to give promising talents who upload online videos of themselves a big break in the music video arena.
Car-service company GroundLink is looking to build national awareness by appealing to the secret agent that lives within every person who might use its service. “We all have a secret agent on the inside,” Seth Lasser, chief marketing officer of GroundLink, tells Marketing Daily. “That’s who we’re trying to appeal to.” Two videos, which are currently online and will begin appearing on media in local markets this summer, introduce Dan, “a financial planner, devoted husband, father and part-time secret agent for the federal government.” The first 90-second video (which has also been cut down into a television -- and Internet -- video-friendly 30-second clip) shows Dan getting dropped off at his office, entering a GroundLink car and jetting off to exotic locales to fight crime (while also consulting with clients about financial issues). The video also shows him using the company’s mobile app to order a car and track its progress, so he can escape a hail of bullets into a GroundLink car. A second video, which will live online only, further explores Dan’s secret agent side. In the piece, three burly men abduct Dan into a windowless van. Saying one of his partners gave him up, the villains reveal their plans to dump him in the desert, surrounded by “a few hundred miles of unforgiving terrain.” During their monologue, Dan surreptitiously uses his phone to summon a car to meet him at the distant locale. When it does, the bad guys are only left to mutter, “Who the f--- is GroundLink?” The approach, which Lasser describes as “bold, savvy and a little witty,” is meant to bring some excitement and a memorable hook to a category that doesn’t have much traction in consumers’ minds, he says. “We’re trying to create a brand in a large industry [where] there haven’t been strong brands,” he says. “When you communicate a car service, it can fall flat.” In addition to running online and in local spot markets, the company plans on running the ads on the Captivate Network in elevators and they will “live in the social sphere,” Lasser says, teasing them on Facebook and Twitter.
Two items reported in the news this month demonstrate how oft-overlooked media consumer preferences are beginning to shift the landscape and business model for ad-supported T/V (television/video). News item #1: an across-the-board decline in traditional, linear TV audiences. Observers suggest the reasons for recent, surprising drops in network and cable prime-time audiences range from poor measurement to DVR playbacks taking time away from live viewing to an early and warm spring. I would add another: that viewers moving to various on-demand platforms account for more viewing in locations where traditional (Nielsen) ratings are not picked up. Advertisers who haven’t yet expanded their media investments into on-demand platforms (Hulu, Xfinity, cable operator on-demand channels, Xbox Live, etc.) will suffer a further loss of “potential exposure” with these drops. This loss will be particularly acute in younger demos, who grew up with the on-demand world of the Internet and are shifting more rapidly to online and mobile T/V viewing platforms. The big challenge and opportunity for ad spenders moving money to on-demand platforms will be that content providers are installing far less ad loads per program than for linear television (see my recent article for a snapshot of this). These advertisers will need to be prepared to 1) use a hybrid audience measurement approach tailored to their specific buys in order to evaluate whether their investment goals have been realized; and 2) be prepared to pay a higher CPM (cost-per-thousand “opportunities for exposure”), though in reality, this will no longer be “opportunities for exposure,” but actually a verified CPE (cost-per-engagement) for ads that are actually seen. In a marketplace where supply is declining, this shift to a different valuation system will be necessary. I offer, though, that this is not a bad thing for advertisers, as the decrease in clutter, reduced ad-avoidance and the assurance of engagement will more than make up for any blind adherence to outdated CPM measurements and criteria. News item #2: Over-the-top (OTT) T/V services are developing original programming, sometimes with traditional television providers. There’s a strong viewer hunger for quality T/V programming, seen in the popularity of shows like “Downton Abbey” (PBS), “Mad Men” (AMC), “The Killing” (AMC), “Game of Thrones” (HBO), “The Borgias” (Showtime), “The Good Wife” (CBS), “Revenge” (ABC), “The Closer “(TNT), “In Plain Sight” (USA) and others. Notice how many of these programs come from cable networks. Back in the early 1980s, when cable was new and had insignificant ratings, it would have been unimaginable that they could fund quality content to compete with the big 3 networks. What cable networks had that the broadcast networks didn’t was strong dual revenue streams -- subscriptions and advertising -- that they could (and still do) reinvest into content, attracting new audiences, increasing both subscription and advertising revenue, and reinvesting again into content. Today we see Netflix and Hulu beginning to produce original content, some of it pretty high quality (Netflix’s “House of Cards” employs top talent and is based on the successful BBC/PBS mini-series). Hulu has the dual revenue stream of subscriptions (Hulu Plus) and advertising, and Netflix would be well-advised to develop the same. Even when players like Fox and most cable networks are limiting/denying programming rights to these over-the-top distributors, they shouldn’t be ignored. The Internet today offers a low cost and broad-based distribution system that has never been seen in the media industry, already dramatically shifting consumer habits, business models and pricing for music and book publishing. With players like Amazon Plus, Xbox Live -- and, rumor has it, Google and Apple -- ready to join the fray, the proprietary cable systems and their content partners will no longer have the kind of control over viewing consumption that have made them so profitable in the past. Perhaps that is why CBS is working with Netflix, seeing it not as a competitor but as a category-expander and even a potential customer. This kind of smart reframe around industry change, embracing rather than trying to control and defend old ways, can and will make for some very positive outcomes for all parties -- financially and in the overall T/V viewing experience
This is a special time in the ad industry. What happens in the second quarter's upfronts will go a long way toward determining industry economics for the rest of the year. Now is when we will see whether the cyclically down first quarter will be a memory or a portent of the future. Now is when we see who who controls pricing in the $70 billion annual U.S. TV ad market, and who will leverage the subsequent spot market. Perhaps a preview can be seen in NBC’s asking almost $1 million for a 30-second spot in its new Thanksgiving-night NFL broadcast featuring the New England Patriots against Tim Tebow (er, I mean the New York Jets). This week was the coming-out party for Google, Microsoft, Yahoo, AOL and Hulu and their Newfront to see if Web video can get a seat at the "adults table" within the context of the upfront market. What will have happened when this week and quarter play out? To answer that, I will borrow a Jack Welchism and try to look "at the market as it is, not just as we would like it to be." To do that, I will call on the analysis of the smartest observer of the ad market I have encountered, Brian Wieser of Pivotal Research. In his recent "Madison and Wall" Report, Brian had a number of observations on the current state of the ad market. Here are those that struck me as both sobering and on-target: TV will have a strong upfront. TV sellers will do well in this upfront, if for no other reason than the structure of the market continues to favor TV broadcast networks that can deliver large packages of audience reach. TV ad buyers and marketers are not yet ready to reduce this scarcity by better assessing the actual business outcomes they drive with these TV ad products. Alternatives to big TV ad buys are some time away. As Wieser sees it, TV ad buyers won't have leverage in the pricing and packaging of the TV ad inventory they buy until they have a "credible ability to walk away." Today, no other medium, not even cable TV, has demonstrated the ability to deliver the same quantity and quality of audience reach as broadcast TV. Web video not big enough -- or growing fast enough -- to matter. While the category of online video is fast-growing, it was only $1.8 billion last year, less than 2% of the TV ad spend. And, as Wieser notes, if you look past the numbers for the two largest players in video advertising sales, Google's YouTube and Hulu, there is very little growth. The rest of the market only grew 10% to 20% in total last year. Online display in trouble. Wieser notes that when you look past search, video and mobile, the best thing you can say about the rest of the online ad market "is that it wasn't negative." The commoditization of display inventory, and the transparency that online ad buyers and marketers have into its actual value to drive business outcomes, has meant very little growth in display. You have to wonder how much that was a factor in super fast-growing Facebook's recent claim that its first quarter ad revenue (below its fourth quarter last year) was due to old-style cyclicality. Many of us would like to believe that the ad market is approaching a digitally driven "tipping point" that will empty buckets of TV ad spend into digital alternatives, and that the upfront market will collapse. Wieser doesn't see these events happening anytime soon. Do you?
CIMM is taking a proactive role in advancing new media nomenclature and processes with both its Lexicon(terms and definitions associated with return-path-data measurement) and Asset Identification Primer (glossary of asset terms). These documents form the basis of this column, which offers a common language for RPD nomenclature that can expedite the rollout of the data for its many industry applications. For cable operators, the return-path transfer of the data is done via the Internet. The speed by which the data transfer occurs depends on the amount of available bandwidth. The greater the bandwidth for this process, the faster the transmission. But bandwidth is used for a variety of deliverable services – content, internet access, VOD – and the use of bandwidth for certain services will use up bandwidth for other services. Solutions to managing bandwidth include Qip Boxes and QAM Tuners. Both are defined below. It should be noted that telecos, which also use data connections, and satcos, whose upstream data can come from either phone lines, the internet or an upstream satellite connection, also must grapple with the issue of bandwidth optimization although not necessarily via Qip or QAM. Qip BoxesSee also: QAM, Internet Protocol CIMM DEFINITION : A hybrid Set-Top Box from Motorola that offers QAM and IP at the same time and connects through the internet. QAM abbr Quadrature Amplitude Modulation CIMM DEFINITION: A method of modulating digital signals onto a radio-frequency carrier signal involving both amplitude and phase coding. A modulation scheme used by telecommunications providers. More advanced modulation offers increased capacity (e.g., 256 QAM offers greater capacity/transmission speeds than 64 QAM). (Source: CableLabs) 2: The format by which digital cable channels are encoded and transmitted via cable television providers. QAM tuners can be likened to the cable equivalent of an ATSC tuner which is required to receive over-the-air (OTA) digital channels broadcast by local television stations; many new cable-ready digital televisions support both of these standards. (Source: Wikipedia) QAM TunerSee also: Bandwidth Optimization, Switched Digital Video CIMM DEFINITION: A device in some digital televisions or other devices that enables direct reception of any unscrambled digital cable channels with the use of a Set-Top Box. QAM stands for quadrature amplitude modulation, the format by which digital cable channels are encoded and transmitted via cable television providers. QAM that uses 6 MHz bandwidth carries 38.47 Mbp/s @256QAM (Source: Wikipedia) Definition currently under review by CableLabs. Please refer to the CIMM Lexicon online at http://www.cimm-us.org/lexicon.htm for additional information on these and other terms.
National advertisers this time of year might be feeling the push and pull of networks promising fresher, original material. This provides the patina of more value for marketers -- though not always. Network upfront presentations talk up lots of stuff. But with almost any cable network, one refrain keeps coming: “We are increasing our original programming development.” You don't hear this cry from broadcast networks. It’s assumed they will offer new programming every year -- either from returning or new series. What you don't hear about during upfront presentations are all the reruns those networks will air during the course of a season. Mind you, cable networks also rerun tons of programming in prime-time slots -- including shows that originally aired on broadcast networks like "NCIS," "Big Bang Theory," "The Office" and "House." Oxygen, Bravo and TNT are just some of the networks saying they’ll increase original programming to as high as 50% for the upcoming season. Digital video platforms that are also TV/video wannabes -- like AOL, Yahoo, YouTube and Netflix -- are talking up their original programming efforts, most of which have been disclosed during their “Newfront” presentations. Nothing is wrong with repeat programming. While original programs grab the headlines, cable network reruns are the financial backbone of their operations. Broadcast networks do their part as well. CBS, for example, gets the best results of all broadcast networks by re-airing programs. This is one reason -- along with good-performing first-run series episodes -- why national advertisers like CBS’ consistency. For all networks, reruns – including time-shifted programming -- will be the bedrock of new digital business. For its part, the co-owners of CW say a deal to re-air programming on Netflix will make the network instantly profitable. And reruns can be of big value digitally. Advertisers wind up paying three to four times the cost per thousand (CPM) for shows that have already aired on traditional TV (but with lower out-of-pocket total cost). And there’s another factor to consider with reruns: Sometimes less original programming on networks makes us want it that much more. How many years was “Mad Men” off the air -- only to come back to record ratings? Viewers and advertisers need to pick their spots.
Relax and recline; what we really need is for a TV company to go into the couch business. I’m thinking Kabletown has it right -- you know, the fictional cable company that owns NBCUniversal on "30 Rock." Sofas are being pushed by NBC senior executiveJack Donaghy -– in part because he’s bored, in part because he secretly still misses the good old days when Don Geiss was his boss. That’s when true vertical integration at major companies was in force, in the tradition of a real-life General Electric who makes jet engines, turbines, washing machines, light bulbs, as well as having a big financial services division and, now, a minority interest the big entertainment company called NBCUniversal. In real life, traditional TV companies and networks have been slow to vertical or horizontally expand behind their TV-centric business. Sure some are in outdoor, some in print, some in digital. The biggest business was in getting on the cable TV network bandwagon – which in retrospect, in this digital age, doesn’t seem all that daring a product extension. The winners in this area so far that would be Walt Disney Co., Comcast Corp, and News Corp. CBS Corp., for all its great efforts in the broadcasting space, missed the cable network boat. Question is, where do all these companies go from here? Big traditional-based media companies –- like Disney, Comcast, and News Corp. – are all in the digital Hulu game. But even then there are many questions about whether to keep Hulu, the big digital video operation, going forward. Should they keep it in-house? Should they sell it off as an independent entity to hopefully grab bigger growth? Other speculation comes from those traditional media companies linking up with bigger digital players: Google, Facebook, AOL, and others. Maybe Netflix. I wonder if even these great digital brand names could just be one phase in the step for other digital companies to take over. After all, we are told content creation is everything -- the rest is just distribution, a so-called pipe. Couches? I’m thinking Kabletown’s next move should go further into tangible stuff: soft drinks, pizza, beer, toilet paper, and perhaps eyeglasses. Hey, when you are Jack Donaghy and have been vice president of East Coast Television and Microwave Oven Programming for General Electric, you are always looking for the next TV-related soft-to–the-touch consumer product -- available in suede or leather.