In the latest sign that Discovery Communications' anticipated IPO is imminent, the company said Wednesday that it is replacing its CFO. Brad Singer takes over the post, joining from publicly traded American Tower, a company that runs thousands of towers for broadcast and wireless communications. Singer will serve under Discovery CEO David Zaslav as senior executive vice president and CFO when he joins July 15. It is likely that the IPO would come some time after, since Singer may need time to get up to speed. In May, in another pre-IPO move, Discovery tapped Craig Felenstein to head investor relations. He joined from News Corp. and will report to Singer. Singer takes over for Roger Millay, who is leaving the company after two years. Zaslav cited Singer's "public company experience" as an asset, and implied that his international experience would be a help. Singer had been CFO at American Tower since 2001--a company that has some of its 23,000 towers in Mexico and Brazil. Even in a bumpy economy, the company was trading Wednesday at some $10 above its 52-week-low share price. Earlier this month, readying for the public offering, the Discovery Holding Company and Advance/Newhouse said they have a final agreement to combine their stakes in Discovery.
Cable system operators continue to be hurt at the expense of increasing growth among satellite and telco video distributors, according to the Television Bureau of Advertising (TVB). Now there are 56 markets where alternative delivery system (ADS) distributors make up 40% or more of homes that pay for TV on a monthly basis, according to the TVB. Last month, ADS penetration reached 28.1% of all U.S. television households--up a full percentage point over the same month a year ago. Of those who pay for TV channels--versus those who only get free-over-the-air channels--ADS make up 31.7% of all such TV households. TV satellite distributors make up virtually the entire ADS market--now at 27.7% of TV households, versus 26.5% a year ago. The TVB, the advertising group promoting local TV station ad efforts, says advertisers should take note of cable systems' erosion and what it can do to advertiser TV media buys. That said, the TVB also notes that cable distribution over the year actually was up--albeit just two-tenths of one percent to 61.4%. In the top 50 markets, eight markets--Albuquerque-Santa Fe; Salt Lake City; Dallas-Ft. Worth; Greenville, S.C.; Sacramento-Stockton-Modesto; Birmingham, Ala.; St. Louis; and Los Angeles--are over the 40% mark in terms of those subscription-paying homes using ADS distributors.
Call it a "bad cop, worse cop" strategy. Last week, Tribune Company executives announced they would be "right-sizing" newspapers so that no edition contains more than 50% editorial content, opening the way for substantial cuts in newsroom staff. The announcement elicited widespread dissent and criticism both inside and outside Tribune newsrooms, but the executives were not finished. On Tuesday, the company said it will close the Los Angeles Times' monthly magazine and create a new publication, with a new editorial staff, entirely under the control of the Los Angeles Times Media Group. In short, Tribune executives are transferring control of the magazine from editorial staff to the business side. According to a New York Times Web story, the new magazine--as yet unnamed--will be edited by Annie Gilbar, a former editor of InStyle, who also hosted a show on the Home Shopping Network. Stanton, however, denies that an editor has been hired. According to several reports, plans for the new magazine were developed for months without his knowledge. Stanton, who took up his post in February, has requested that the publisher not call it the Los Angeles Times Magazine when it debuts in August or September, since it will not be under editorial control. Newspaper analysts panned both elements of Tribune's strategy, calling them risky and shortsighted. Chopping editorial content is risky because "basically, it's diminishing the product," according to John Morton, a veteran newspaper analyst who heads his own consultancy. "Newspapers are counting on success on the Internet, but that success still relies heavily on the standing of the print newspaper. Its brand name is highly important, and anything that you do to diminish that--by making the product smaller, thinner, the coverage less deep or sophisticated--could end up undermining the Internet strategy as well," says Morton. Likewise, turning the LAT magazine over to business management could blur the lines between editorial and advertising content. Morton added: "There has to be a very clear demarcation in the newspaper business between what is, and is not, for sale. If they cross that line, they risk damaging the entire newspaper brand--not just the magazine." In an email to the LAT newsroom, Stanton promised that the magazine will include a disclaimer that it is not produced by LAT reporters, as "We want to make sure that the public--our readers and the subjects of the stories included--are not confused about who is producing the content of the magazine." Some confusion, however, seems inevitable. Ken Doctor, a newspaper analyst with Outsell Inc., pointed out that "the idea of doing niche magazines and appealing to a specific set of advertisers is not a revolutionary idea or a controversial idea, as long as they're clearly labeled as advertising--but it has to be done well. Above all, you don't mix the two." Echoing Morton's warning about the risk to the LAT brand, Doctor expressed amazement at management's highly public, but also "tone-deaf" approach. Addressing the "50-50" ratio, Doctor said a strategy of deep newsroom cuts runs counter to the trend at most Web-savvy newspapers: "It's crystal clear what the smarter publishers are doing,Yes, there have been layoffs and buyouts, but they try to minimize them, because the growth strategy requires journalists to create more and more content that is able to be distributed via the Internet and on mobile phones, as well as in general print and niche print." Many newspapers are keeping print journalists but asking them to assume new, additional roles as bloggers or Internet video reporters. Doctor noted that the Washington Post recently trained 185 newsroom staff in video reporting.
NBC Everywhere, the out-of-home video network operated by NBC Universal, is expanding its partnership with the Fuelcast Network, which operates a network of video displays in pumps at gas stations. In addition to bringing NBCU content to another 100 stations around the U.S., the deal makes NBCU the exclusive content provider and ad sales partner for Fuelcast; its official name is now the "Fuelcast Network powered by NBC." Mark French, the senior vice president and general manager of NBC Everywhere, remarked that "with this expansion, we can now offer our national and local advertisers greater reach into the digital out-of-home marketplace and connect them to a hyper-localized and captive audience at the pump." Fuelcast's network covers about 600 gas stations with 6,000 screens, in seven top U.S. markets. Fuelcast says it reaches about 12 million consumers a month, via pump displays at gas stations in Los Angeles, Chicago, San Francisco, San Diego, Washington, D.C., Minneapolis and Miami. In the world of gas pump-based video, Fuelcast is actually something of an underdog. One of its main competitors, Gas Station TV (partnered with CBS News), is roughly comparable in size, but claims to reach about 30 million consumers a month. Meanwhile, PumpTop TV, partnered with ABC News Now, says it will reach 100 million consumers a month by the end of 2009. All three networks have plans to expand rapidly over the next few years.
Nokia has launched an initiative looking to make mobile marketing an easier proposition for advertisers. Called the Nokia Advertising Alliance, the group convenes expertise in potential operations such as couponing, "location-based targeting," "image recognition" and other opportunities. The goal is to facilitate campaigns via one Nokia interface. Alliance members include i-movo, Mobile Acuity, Mobiqa and uLocate. "Now brands can work with Nokia to combine the reach of mobile advertising on the Nokia Media Network with the latest mobile technologies for more effective campaigns," the company said. "Mobile is maturing into an effective advertising medium, however, the fragmentation of certain technologies makes it hard for some programs to scale," said Brian Bos of MindShare in Detroit. "We applaud Nokia's efforts to streamline this evolving market and make it easier to manage our clients' mobile advertising investment." "Succeeding in mobile requires much more than a banner ad alone," added Nokia's Mike Baker. "Brands have the opportunity to deliver immersive, highly engaging experiences to consumers, [with help from the Alliance]."
Noting the success of its drama "Army Wives," Lifetime Television has placed an initial order for 13 episodes of "Rita Rocks," an original half-hour comedy about a married working mom who becomes a musician in a garage band. The series is set to debut this fall as part of an hour-long comedy block with 7-year-old former WB series "Reba." Debuting this fall, it stars Nicole Sullivan ("The King of Queens," "MADtv") and Richard Ruccolo ("Joey," "Two Guys and a Girl"). "Rita Rocks" is being produced by Media Rights Capital, which recently signed a deal to program Sunday nights on the CW. "Army Wives," Lifetime's most-watched series in its history, returns in November with original episodes. That same month, the hit reality show "Project Runway", with Heidi Klum and Tim Gunn, makes Lifetime its new home. Also Wednesday, Lifetime competitor WE said it will debut five new specials this summer along with new seasons of "Bridezillas" (which started June 1) and two other series.
This summer may be a drag on some networks' original-scripted, rerun and reality programming, but sports--at least top-tier games--score. ABC again dunked the competition with the third game of the NBA finals--up 38% to a Nielsen preliminary 4.4 adults 18-49 rating. Last year, the number was a 3.2 rating. Much of the rise is thanks to watching two of the most storied basketball franchises playing each other: the Los Angeles Lakers and the Boston Celtics. Such hoop dreams gave ABC a Tuesday night win, averaging a 4.0/12 among 18-49 viewers. Fox was second at a 3.3/10, in which "Hell's Kitchen"--one of the few steady summer performers--averaged a 4.2 rating, which actually tied ABC for its first hour of the NBA game. Overall, Fox continues to lead all networks in the summer in the 18-49 demo. CBS was next at a 1.9/6--virtually consistent with a 1.9 for a "NCIS" rerun, a 1.9 for a "48 Hours Mystery" and a 1.8 for a "Without a Trace" rerun. NBC was right behind with a 1.8/5--with its best coming from its summer reality show "Most Outrageous Moments," which earned a 1.8/5. Univision was in fifth place at a 1.6/5. Its best of the night was a 1.8 for "Fuego en la Sangre." CW only posted less than half Univision's numbers, at 0.5/2. ABC is not the only network seeing positive results from sports programming. Recently, NBC's NHL Stanley Cup Finals between Detroit and Pittsburgh had a 3.2 household rating/6 share--the highest since Carolina-Detroit in 2002, which averaged a 3.6. The average rating this year doubled last year's record low of 1.6.
5th Finger, the company behind the mobile strategy for the Live Earth Concert Series, has raised $7 million from Starfish Ventures, an Australian venture capital firm. 5th Finger is based in Australia, but has a growing presence in the United States, where it will use the Series A funding to expand its operations substantially. In addition to media, TV and real events, 5th Finger's mobile practice counts clients in beverages, pharmaceuticals and retail. North American clients include MSN Mobile, Nike, New Line Cinema and Amazon. The company is also working on mobile marketing projects with Avenue A|Razorfish, Grey, and Cadient. The new funding comes not long after 5th Finger achieved prominence with its work for Live Earth. The mobile strategy for the Live Earth concerts, created and managed by 5th Finger, used SMS, Web and "Green Button" iTV features to recruit over 1 million "commitment" pledges for Live Earth, a charitable cause combating climate change. The strategy was enabled by 5th Finger's "Air-Cast" platform, which offers marketers real-time reporting and analysis of mobile campaigns.
Ripple, a place-based video network that operates displays in local and specialty retail locations, is joining the Out-of-Home Video Advertising Bureau. Ripple's network of screens offers local and national news, weather, entertainment and local-event listings. It was originally created to offer an ad platform to local advertisers that wanted to reach prospective shoppers in nearby retail locations; however, it has since grown to include a substantial amount of national advertising as well, aided by its partnership with the CBS Outernet, which was announced in January. Ripple also has a deal with another OVAB member, SeeSaw, which aggregates place-based networks. Suzanne Alecia, OVAB's president, remarked: "Ripple's contributions to the growth of our industry make them a welcome addition to OVAB. Calling it a "powerful media platform," Alecia says the collaboration between members and guidance from industry leaders ensure that OVAB continues to support both the advertising community and the operators of out-of-home video networks to measure and maximize value."
The mixed martial arts league that the fledgling MyNetworkTV hoped would serve as anchor programming may be close to folding. The publicly traded International Fight League, which saw a 65% revenue drop in the first quarter, said it has canceled its next live event, in light of its "current financial condition." The event was scheduled for Aug. 15 at the New Jersey Meadowlands. The IFL, whose stock was trading at 2 cents a share Wednesday (down from a 52-week high of $1.14), said it is exploring its options, although bankruptcy protection is a possibility. In 2007, as MyNetworkTV struggled during its debut season, the network launched "IFL Battleground," hoping to build ratings and increase ad dollars from marketers looking to reach young men. The IFL series marked the first time that the booming mixed martial arts--toplined by the UFC--was on network TV. Last season, however, MyNetworkTV discontinued IFL programming. That served to drop IFL's television rights fees in the first quarter of 2008 to $39,000, down from $210,000 in the same period in 2007. Overall, first-quarter revenues dropped 65% to $282,000. Still, ad dollars were up 133% due to a bump in sponsorships, and its net loss decreased substantially from $7 million a year ago to $2.3 million this year. In January 2008, the IFL reached a deal in which HDNet would televise three of its events live--and another agreement two months later called for Fox Sports Net to air them in repurposed fashion over nine one-hour episodes. The company was founded in 2005.