Take note of how TV network groups are thinking about presenting themselves to advertisers and media agencies — from a marketing point of view.
For the last two years, NBCUniversal has offered its upfront revenue results with a single figure for all their networks.
For the most recent upfront market, it pulled in $6.5 billion for all its networks — some 15 channels in all. This was up from $6 billion a year ago. NBCU has been dogged in recent years to sell all its TV platforms — and related digital areas — in big cross-media packages.
One needs to put this in the context of what Kevin Reilly, president of TBS and TNT and chief creative officer for Turner Entertainment, said this week: Cable network industry consolidation is coming.
Consider: Discovery Communications and Scripps Networks Interactive are seemingly on the verge of a merger. (It follows the still yet-to-be-completed AT&T/Time Warner merger.)
At issue is too many networks. A new Discovery/Scripps group will now have 20 networks overall. Sounds like a lot of clout, huh?
Nope. Think about what this really means for consumers. They generally want fewer cable channels — and have demanded so for decades.
Reilly says Turner is in a good position in this regard — just focusing on smaller core entertainment network brands. Some of Turner's main drivers are TNT, TBS, Cartoon Network, Adult Swim and truTV. “The entities that are floating six, eight, 15 networks — that's not going to be sustained,” he said at the Television Critics Association meeting in Beverly Hills, California.
Now look at the digital media business, which is now bigger than the traditional TV business in the U.S. It has some $83 billion a year to spend on advertising -- and is dominated by essentially two players: Google and Facebook.
eMarketer estimates that Google is likely to make $72.69 billion in ad revenues in 2017, and Facebook $33.76 billion — about half of all digital media ad dollars worldwide. (And roughly about same dominant share in the U.S.)
As for the TV industry? There are many more players, especially in the U.S. — pure cable network groups; TV/cable network hybrids; TV network/pay TV distribution companies; and even some TV/digital media companies.
So Reilly has a major point: There is a gravity to consolidation. All this might be more efficient for media agencies and advertisers when it comes to adopting the so-called “one-phone” approach to traditional TV buying. But that isn’t the whole story.
How does that help marketers be more efficient with their media/marketing costs?
And.. who has the clout, then?