MTV Needs More Aces In The Digital TV Poker Game

MTV's amazing record of hip has had incredible staying power, despite a fickle young target audience. 

Since the 1980s, MTV has figured out how to stay in vogue--remarkable, considering blazingly fast changes in popular culture and styles.

In the '80s and early '90s, advertisers could be found always pooh-poohing MTV. The network's 12- to 24-year-old viewers could never put up the big ratings of other networks. Advertisers had deemed MTV's draggy ratings not deserving of big rate hikes. 

Then came the mid-'90s, when Turner Broadcasting executive John Popkowski started running MTV's ad sales division. MTV was just reaching critical mass with its viewers. Instead of bowing deeply to advertisers, he went "all-in"--in poker terms. He told advertisers and their agencies they would now pay double-digit CPM hikes--or take a hike.


At first blush, media agency executives laughed. 'We're not going to pay that kind of freight--just wait until we tell our clients your plans. Ha!"



But instead of laugher, MTV's core group of advertisers--movie companies, video game companies, soft drink companies, and other young-skewing advertisers--told their media agencies:  "I can't do without MTV. I can't get those viewers anyplace else. Pay the network what it wants."

That attitude really hasn't changed. Even through last year's upfront, MTV always seemingly grabbed high CPM increases versus that of other mainstream, broad-based, cable programming networks.

This upfront TV ad season had a decidedly different feel, though--all due to the prospect of digital platform revenues. Though far fewer dollars actually appeared than predicted, the shadow of it all must have sent a shiver down the backs of MTV executives. That's because MTV's core viewers, the 12-24 young adults, can spend as much as 25 percent more time on the Internet than watching TV.

Not that MTV hasn't bolstered its Internet mix--but perhaps not fast enough. Cooler sites--MySpace and YouTube--get more play in the press. Perhaps, as some reports speculate, MTV will move to buy a big, happening player--say, YouTube.

Decreasing cash flow at MTV is all of a sudden raising eyebrows. MTV had a very healthy 18 percent cash flow in 2003; then a small, but still good, 11 percent in 2004. In 2005, the number dipped to 9 percent. For this year, Kagan Research says look for just 8 percent.

All this has revealed itself in Viacom's stock price--stumbling 20 percent since it began separate public stock trading from its former TV partner-in-arms, CBS Corp. CBS, for its account, has seen a small stock price lift.

Here's the mixed message: It's actually old media that still runs the show.

MTV says what all TV networks say in this digital age, that it is still the hip and happening TV shows, like "The Real World," "Pimp My Ride," "The Osbournes," or "Laguna Beach," that move the whole company's other new digital platforms, the stuff that gives a network its street cred.

In other words, MTV's long-time Texas Hold 'Em poker face needs an ace on its river card.

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