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Media Decoder: Sooner Than Expected, CBS Largely Finishes Upfront Sales

June 7, 2013 by Leave a Comment

Word that CBS, part of the CBS Corporation, was finishing up came on Friday afternoon, a week after a network spokesman described the network as “in active negotiations” with advertisers and agencies.

Late on Wednesday, CW, which is owned by the CBS Corporation and Time Warner, became the first major English-language broadcaster to cross the upfront finish line.

The upfront market is called that because the sales take place before the start of the coming season. Industry analysts are predicting that the five big broadcasters — ABC, CBS, CW, Fox Broadcasting and NBC — will struggle to match the estimated $9.2 billion worth of commercial time they sold last spring in the 2012-13 upfront market.

The analysts cite factors like ratings erosion, the bumpy economy and intensifying competition from rivals like cable television and online video.

That CBS is concluding its upfront sales is a bit unexpected because some Web sites of trade publications reported on Thursday and Friday that the 2013-14 upfront market had turned sluggish, slowed or was even approaching an impasse. (Indeed, if this article were to have run decades ago in, say, Variety, it might have carried a headline like “Eye Surprise,” after the CBS logo.)

The rates CBS is charging advertisers for the 2013-14 season — known as c.p.m.’s, for the cost to reach each 1,000 viewers, a standard measurement in the television business — are estimated to be increasing by an average of 7.5 percent. By contrast, in the upfront market last year, estimates were that CBS was able to raise c.p.m.’s an average of 8 to 9 percent.

Analysts also predicted that c.p.m. increases would probably be lower during the 2013-14 upfront market than they were in the 2012-13 upfront market.

Before the current upfront market began, Leslie Moonves, president and chief executive of the CBS Corporation, said he was anticipating that CBS would obtain c.p.m. percentage increases in the high-single-digit to low-double-digit range when compared with last year. Seven and a half percent does qualify as a high-single-digit gain.

Turning to the volume of commercial time sold, estimates are that the CBS total will be about $2.5 billion to $2.6 billion — and perhaps closer to $2.5 billion than $2.6 billion — compared with estimates last year that the network took in $2.5 billion to $2.75. (The numbers are not more definite because during the season,advertisers can usually cancel their upfront market commitments without penalty.)

CBS is selling about 80 percent of its commercial inventory in this upfront market, holding the rest back to sell during the course of the 2013-14 season in what is referred to as the scatter market. That is slightly higher than what CBS did in last year’s upfront market, when it sold 77 to 78 percent of its inventory.

CBS plans to add six series to its prime-time schedule for 2013-14, five in the fall and one in midseason.

With CW and CBS wrapping up their upfront sales, that leaves ABC, Fox Broadcasting and NBC to continue making deals with advertisers and agencies.

Article source: http://www.nytimes.com/2013/06/08/business/media/sooner-than-expected-cbs-largely-finishes-upfront-sales.html?partner=rss&emc=rss

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Advertising: A Channel Reflects the Reshaping of TV Demographics

February 27, 2013 by Leave a Comment

The network, Bounce TV, part of Bounce Media, has hired Dennis Ray for the new post of executive vice president for advertising sales. Mr. Ray, whose résumé includes stints at Fox Broadcasting and NBC, is based in a new New York sales office for Bounce TV, which has headquarters in Atlanta. He is overseeing a staff of three sales executives, with plans to add additional employees in the office.

Bounce TV, which began its digital over-the-air broadcasts in September 2011, is indicative of the multiplying media choices for multicultural consumers like African-Americans and Hispanics, whose increasing numbers and buying power make them attractive audiences for marketers.

“You can look at the last election,” Mr. Ray said in a telephone interview. “Diversity is imperative for the survival of these companies and their brands.”

In broadcasting to African-Americans, and selling commercial time to marketers seeking to reach them, Bounce TV competes with channels and networks that include Aspire, BET, Black Heritage Network, Centric, GMC and TV One.

The hiring of Mr. Ray and the opening of the New York office come after Bounce TV has sold commercials to marketers that include the Chrysler Group, General Motors, Johnson Johnson, McDonald’s, Nissan Motor, Sprint, Toyota Motor and Wal-Mart Stores. The expansionary moves also come after Nielsen began to measure viewership for Bounce TV and issue ratings data.

Bounce TV now reaches 77 million American television homes and 86 percent of African-American television homes, said Jonathan Katz, chief operating officer at Bounce TV, who joined Mr. Ray for the interview.

“We are poised to capitalize on that growth on Madison Avenue,” Mr. Katz said, “and that was part of the decision to bring Dennis in.”

Mr. Ray said that when he started talking to Mr. Katz about Bounce TV, “I told Jonathan this is eerily familiar to me” because it reminded him of “when I was leaving NBC to go to Fox” in 1989, “working to build something from the ground up.”

“We’ve had over 50 meetings with agencies” recently, Mr. Ray said, and “we are in talks” with marketers of packaged-goods products to join the lineup of Bounce TV advertisers.

Executives at agencies already working with Bounce TV praise it.

“There are a few other solid African-American networks,” said Detavio Samuels, executive vice president at GlobalHue in Southfield, Mich., which works for the Chrysler Group. “But I love that Bounce TV is not on cable, because the opportunity to get more eyeballs to the network is great.”

“And Bounce TV has been doing the right thing in getting distribution,” he added.

Although African-Americans as a demographic group “may not have the same growth trajectory of Hispanics,” Mr. Samuels said, they remain important to marketers for several reasons that, in addition to buying power, include their status as “true influencers of pop culture in America.”

“The goal is to engage with African-American audiences in a way that enables them to become influencers,” he said. “It’s definitely about the amplification.”

Deborah Gray-Young, vice president and media director at Burrell Communications in Chicago, which works for clients like McDonald’s and Toyota, said: “We really liked Bounce TV’s philosophy on programming being family-friendly and respectful. Not all programming in the marketplace adheres to those values.”

“I take offense to a lot of the stuff out there” that is “denigrating, meanspirited and salacious,” she added. “You want to be in an environment where consumers appreciate what’s coming into their homes. The idea you could be anywhere on that network and not be concerned what the content is makes our job easier.”

Ad sales for Bounce TV had previously been handled by two representation firms, the Ace Media Corporation and Marathon Ventures. Mr. Ray, who worked with Ace Media on the initial sales efforts for Bounce TV, now takes over that function as Bounce TV brings it in-house. Marathon will continue working for Bounce TV, Mr. Katz said, handling sales of direct response advertising.

The Bounce TV moves come as the television industry readies for the upfronts, the annual series of sales presentations ahead of the coming season. Some upfront presentations for 2013-14 have already been made; dozens more are planned through mid-May.

Bounce TV plans to hold meetings with agencies individually during the upfront season.

Underlining the reshaping of television’s demographic landscape is a deal that Bounce TV made in December with Univision Communications, which specializes in programming aimed at Hispanic viewers. The agreement calls for the Univision Television Group to carry Bounce TV through what is known as multicasting — a digital television technology that gives viewers access to local broadcast TV channels — in seven major markets like Boston, Miami and San Francisco.

“It seemed like a great partnership to serve the largest two minorities in the United States,” said Kevin Cuddihy, president at the Univision Television Group. The agreement, with undisclosed financial terms, is “a multiple-year deal,” he added, “with options for extending it.”

Helping Bounce TV reach more viewers of broadcast television is important, Mr. Cuddihy said, because “African-Americans and Latinos have a higher percentage of over-the-air viewing” compared with cable viewing.

“To use our bandwidth to broadcast Bounce TV makes a sweet combo,” he added.

Article source: http://www.nytimes.com/2013/02/27/business/media/a-channel-reflects-the-reshaping-of-tv-demographics.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Media Decoder Blog: News Corp. Posts Gain on Strength of Cable Channels

February 7, 2013 by Leave a Comment

8:54 p.m. | Updated Strong growth at News Corporation’s cable channels FX, Fox News and regional sports networks helped the company more than double its net income in the three-month period that ended Dec. 31, offsetting lingering costs related to a phone-hacking scandal and the cost of a planned split of the media conglomerate into two publicly traded companies.

On Wednesday, News Corporation reported net income of $2.38 billion, or $1.01 a share, compared to $1.06 billion, or $0.42 a share in the same three-month period a year earlier. The gains rested largely on an 18 percent increase in revenue at the company’s cable network segment. Over all, revenue rose 5 percent to $9.43 billion.

In a conference call with analysts, Chase Carey, News Corporation’s president and chief operating officer, said the company would complete its separation into two companies by the end of fiscal 2013. Fox Group will include the company’s cable channels, 20th Century Fox studio and Fox Broadcasting. The company’s newspapers, including The Wall Street Journal and The New York Post, its Harper Collins book publishing unit and a suite of Australian pay-TV assets will make up a new, slimmed-down company called News Corporation.

The company’s second-quarter results highlighted how disparate Rupert Murdoch’s media empire has become — with its cable channels making up more than 60 percent of the company’s overall profit. Its publishing business, while stronger than last year, continues to face industrywide headwinds.

News Corporation has faced struggles at its British tabloids, which have been the subject of a continuing investigation into phone-hacking and bribing of public officials. The costs associated with the scandal appeared to have temporarily waned. The company’s gains on Wednesday were partly offset by the $56 million spent on investigations related to the closure of News of the World, compared to $87 million spent in the same period of 2011.

Over all, the publishing division reported modest improvements from the same period last year, which Mr. Carey attributed in part to the transformation to digital storytelling The introduction of the Sunday edition of The Sun in Britain contributed to a $16 million increase in operating income to $234 million. Advertising revenue at the company’s Australian newspapers continued to drag on the division.

But the real driver of News Corporation’s growth came from its cable channels, which reported operating income of $945 million, a 7 percent increase from the previous year. The company continues to invest in sports rights, including a deal with the Ultimate Fighting Championship.

Mr. Carey called speculation about News Corporation introducing a cable sports channel that could compete nationwide with ESPN “the world’s worst-kept secret,” but declined to comment on when that channel might make its debut. “Almost everywhere we’ve invested in sports around the world it has been not just important, but a cornerstone,” he said.

Mr. Carey also emphasized the importance of investment in original programming like the anthology series “American Horror Story” and “The Americans,” a spy drama on FX that last week became the channel’s highest-rated drama premiere.

Affiliate revenue at the cable channels spiked 13 percent at domestic channels and 42 percent at the company’s international channels. Advertising revenue at the domestic cable channels grew 8 percent compared to a year earlier. “Our domestic cable business continued to hit every target we set and execute superbly,” Mr. Carey said.

Broadcast television didn’t fare as well. Sluggish ratings in the fall season at Fox Broadcasting contributed to lower national advertising revenue.

Fox reported a 19 percent increase in operating income, because of retransmission consent agreements with cable and satellite operators and an increase in local political advertising. Mr. Carey said he was “disappointed” in ratings for the singing competition series “The X Factor” and hoped the show would gain momentum. “At the Fox Network it has been no secret that we had a tough fall,” he said, emphasizing that he would stick with the network’s current management team.

The company’s movie division racked up critical and box office successes in “Lincoln” and “Life of Pi,” which has grossed over $500 million worldwide. “Taken 2″ also helped the division in the second quarter, bringing in $375 million in worldwide box office revenue. Still, the film division’s operating income fell slightly to $383 million, compared with $393 million in the same period a year ago.

In a statement, Mr. Murdoch, chief executive and chairman of News Corporation, said the company “seized opportunities to invest in our core businesses for long-term and sustainable growth.” He added: “As we make progress toward the proposed separation of our entertainment and publishing businesses later this year, I am confident in the future prospects for both businesses.”

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/06/news-corp-posts-gain-on-strength-of-cable-channels/?partner=rss&emc=rss

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TV Networks Say DVRs and Weak Shows Explain Low Ratings

December 3, 2012 by Leave a Comment

The numbers tell the tale. With seven days of delayed viewing factored in, ABC is down 7 percent in the audience preferred by most advertisers, viewers between the ages of 18 and 49; CBS is down 18 percent; and Fox Broadcasting is down an eye-popping 26 percent. NBC is the only network bucking the trend, with its audience up 23 percent in that category.

“We are definitely in a transition period,” said Paul Lee, president of ABC’s entertainment group, citing the heavy shift toward reliance on DVRs and video on demand to create personalized viewing schedules.

Another factor also seems to have been at work this fall: disappointing new shows.

“The point the networks make is that the DVR is revolutionizing viewing,” said Brad Adgate, director of research for Horizon Media, a media buying company. “But that is masking the fact that the new shows they put on this fall just aren’t that good. There are better shows on cable.”

The lack of excitement this fall came in stark contrast to a year ago, when a host of new series broke through as hits: “Two Broke Girls” on CBS, “New Girl” on Fox, “Once Upon a Time” on ABC and many others. ABC had an especially fruitful year, bringing back six new series for second seasons.

This season, only one new series, the NBC drama “Revolution,” has cracked the top 30 programs among those 18-to-49 viewers.

Mr. Lee noted that “there is always an ebb and flow” to seasons, with one marked by strong newcomers followed by another filled with misses, and midyear shows that often reverse the fall trend.

Kevin Reilly, chairman of entertainment for Fox, also stressed that the history of television has been marked by what he called “flat years” when the new selections largely didn’t pan out. “I think this is a flat year,” he said.

Another top network executive, Kelly Kahl, the chief scheduler for CBS, suggested that the season may be showing signs of settling down after the disruptions of the fall, citing stabilized performances for CBS’s shows in recent weeks. But he, too, stressed that networks have to recalculate the meaning of success with “people adjusting to new ways of watching television.”

He pointed to CBS’s growing success in adding viewers from DVR recording, with no fewer than eight CBS shows adding more than three million viewers after a week of delayed viewing is counted. (Only one of those, the drama “Elementary,” is a new show.)

A few new shows gained favorable reviews but failed to attract adoring audiences. ABC’s “Nashville,” despite strong critical backing, has struggled to build wide audiences, winning support among young women but not with older viewers — perhaps, Mr. Lee said, because older viewers “have not gotten past the barrier of country music.”

A Fox comedy, “The Mindy Project,” won critical praise, but has ratings that, in most recent years, would have doomed it in two weeks. But it at least has a core audience of young women watching, and as with “Nashville,” in this season’s environment, that has been enough for survival.

“Usually you are able to say the show was sampled and rejected,” Mr. Reilly said. “Almost none of these new shows were even sampled.”

The need to find some way to carve out space on viewers’ recording machines has been an added factor preoccupying the programmers’ minds. “There is a real pressure to make sure this is appointment television,” Mr. Lee said, “television that has a hook.”

Robert Greenblatt, the top entertainment executive at NBC, reinforced that point. “The bigger the hook the better,” he said.

But Mr. Lee said this approach could be contradictory. “On the one hand,” he said, “you need it to have the fierce urgency of now, so you want to watch it live. But on the other hand, you want it to be attractive enough for people to want to put it on their DVRs.”

Article source: http://www.nytimes.com/2012/12/03/business/media/dvrs-and-weak-shows-explain-low-ratings-for-tv-networks.html?partner=rss&emc=rss

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Media Decoder Blog: News Corporation Announces Split

June 28, 2012 by Leave a Comment

11:39 a.m. | Updated Rupert Murdoch confirmed Thursday morning that News Corporation, his $54 billion media conglomerate, will proceed with a plan to divide the company in two — separating newspapers like The Wall Street Journal, The New York Post and The Times of London from the fast-growing entertainment unit.

In a news release, the company said the split would be completed within the next 12 months, with Mr. Murdoch serving as chairman of both companies and chief executive of the entertainment business. Chase Carey would remain chief operating officer of the entertainment group, which would include cable channels like FX and Fox News, the 20th Century Fox studio and Fox Broadcasting. In the coming months, the board of directors would decide the leader of the publishing business.

“News Corporation’s 60-year heritage of developing world-class brands has resulted in a large and unparalleled portfolio of diversified assets,” Mr. Murdoch said in a statement. “We recognize that over the years, News Corporation’s broad collection of assets have become increasingly complex.”

He added: “We determined that creating this new structure would simplify operations and greater align strategic priorities.”

News Corporation shareholders would receive one share of common stock in the new company for each same-class share they hold in the current company, the news release said. Both companies would maintain their controversial dual-class share stock structure, which enables the Murdoch family to control nearly 40 percent of the voting power.

The publishing company’s stock would be worth between 50 cents and $1.40 a share, according to Richard Greenfield, an analyst with BTIG Research.

In a memo to staff, Mr. Murdoch cited the company’s “spirit of innovation” in the decision, which he viewed as an opportunity to free his beloved newspapers from their ugly stepchild status within the giant corporation.

“Our publishing businesses are greatly undervalued by the skeptics,” he wrote. “Through this transformation we will unleash their real potential, and be able to better articulate the true value they hold for shareholders.”

In a phone interview Thursday morning, Mr. Murdoch said newsroom [Read more…]

Article source: http://mediadecoder.blogs.nytimes.com/2012/06/28/news-corporation-makes-it-official-two-companies/?partner=rss&emc=rss

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