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Fox Viewers May Be Graying, but Their Passion Still Pays

July 22, 2013 by Leave a Comment

For most of the television business — the segment that relies on advertising — that would be serious cause for concern because ad sales are almost always based on a target age of 25 to 54, and Fox News, for the last two years, has had a median age of 65-plus in its ratings both for the full day and for prime time.

But up until now at least, Fox News has been more able than any other television entity to defy the tyranny of the demos, as they are known in the business. And the network, which has upturned traditions and expectations throughout its history, has earned consistently enormous profits, relying on the commitment and loyalty of its audience.

“I don’t think you can fully capture the value Fox News brings by looking at the Nielsen ratings alone,” said Craig Moffett, the longtime financial analyst who specializes in cable. Mr. Moffett, who heads his own firm, said that the key to Fox News’s continued financial strength has been “the level of passion and engagement” it inspires in its viewers.

That translates into big money because cable systems now pay Fox News one of the highest per-subscriber fees in television, 94 cents a month, topped in cable television only by a few networks, most of which have expensive sports rights to pay. (By comparison, CNN gets 57 cents a subscriber, according to SNL Kagan Research.) As Mr. Moffett put it, “There are a handful of networks consumers are deeply passionate about out of all proportion to Nielsen ratings, and distributors know if you don’t have those networks, then woe be to you.”

With close to 100 million subscribers in total, Fox News will take in $1.11 billion this year from subscription fees before it ever sells a single commercial, Kagan estimated. Still, the network faces some significant questions as it goes forward: How old is too old? And when does the issue have to be addressed?

Fox News declined to make executives available for comment, but several recent signs — including changing personalities for some of its weekday programs — suggest the network may have decided the time has come to confront the issue of age.

Just how old is its audience? It is impossible to be precise because Nielsen stops giving an exact figure for median age once it passes 65. But for six of the last eight years, Fox News has had a median age of 65-plus and the number of viewers in the 25-54 year old group has been falling consistently, down five years in a row in prime time, from an average of 557,000 viewers five years ago to 379,000 this year. That has occurred even though Fox’s overall audience in prime time is up this year, to 2.02 million from 1.89 million three years ago.

The network also has been faced with a recent string of nightly wins in that 25-54 audience by CNN, which had been hopelessly behind in recent years.

“The numbers indicate they haven’t been replacing the younger viewers,” Mr. Moffett said of Fox News. Many of the loyal viewers the network has always had are simply aging up beyond the 54-year cutoff for many ad buyers. The result is an audience edging consistently above that 65-plus number.

News audiences always trend old, and the viewers of Fox’s competitors are hardly in the full flower of youth. MSNBC’s median age for its prime-time shows this year is 60.6; CNN’s is 59.8.

In terms of the rest of television, Fox News also is quite a bit older than networks considered to have a base of older viewers. CBS has frequently been needled for having older viewers, but at 56.8, its median viewer is far younger than Fox News’s. (Viewers at Fox News’s sister network, Fox Broadcasting, have a median age of 50.2; at ABC, the median is 54.4; at NBC, it’s 47.7.)

Article source: http://www.nytimes.com/2013/07/23/business/its-viewers-are-graying-but-their-passion-pays-for-fox-news.html?partner=rss&emc=rss

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ABC to Live-Stream Its Shows via App

May 13, 2013 by Leave a Comment

The functionality will be featured at ABC’s upfront presentation for advertisers on Tuesday. It is, among other things, an attempt to keep up with the rapidly changing expectations of television viewers.

It also reflects the increasing role that subscriber fees play in the broadcasting business: the live stream will be available only to paying subscribers of cable and satellite providers, even though the stations’ signals are available free over the public airwaves.

ABC, a unit of the Walt Disney Company, said the live stream would be available in the other six cities where it owns stations sometime this summer. It is also in talks with the companies that own ABC’s more than 200 affiliates to make the “live” button work in their markets.

ABC finished the first of its affiliate deals, with Hearst Television, on Sunday afternoon; it said the live streams would work in Hearst’s 13 markets, including Boston and Pittsburgh, in the coming months.

The mobile app may prod the other broadcasters to follow ABC, much as they did seven years ago after the network started to stream full episodes of shows the morning after their TV premieres. ABC had originally planned to introduce a live-streaming feature for its apps in 2014, but decided to speed up that process this year.

“We keep a very close eye on consumer demand,” said Anne Sweeney, the president of the Disney-ABC Television Group, which includes the broadcast network. “We watch how people are behaving with their devices, and we really felt that we needed to move faster.”

Internally the project was code-named Project Acela, a reference to the high-speed train between Boston and Washington. A team led by Albert Cheng, Ms. Sweeney’s executive vice president for digital media, was given a deadline of May 14, the date of the ABC upfront. While Apple devices came first, other phones and tablets will be supported in the coming months, Mr. Cheng said. Securing the necessary rights from programming providers was laborious, but ABC will be able to stream all of its stations’ local newscasts, syndicated talk shows like “Katie,” and national series like “Grey’s Anatomy.”

The live-stream functionality comes at a time when ABC and its broadcast rivals are trying to keep the attention of audiences that are increasingly turning to cable channels and Internet streaming services like Netflix.

It gives ABC another talking point about how it is adapting to audience preferences; in this case, viewers will be able to carry “Good Morning America” with them as they move around the house in the morning, or tune into a weekend basketball game while out with friends. The live stream will work anywhere in a local market, the same way an old-fashioned TV antenna would.

During a demonstration of the app in her New York office on Friday, Ms. Sweeney said she was struck by how personalized television becomes when it is live-streamed to a person’s phone.

The app is also an implicit rebuttal to Aereo, the start-up backed by Barry Diller that is being sued by major station owners for streaming their signals to paying subscribers in New York. Ms. Sweeney reiterated her view that Aereo is illegal but said the plans for the app’s live-stream feature predated the service.

The app, to be named Watch ABC, in line with Disney’s existing Watch Disney and Watch ESPN apps, will allow users to watch ABC shows on demand, like the network’s previous app had. In the future, ABC will withhold its most recent TV episodes from the free versions of Hulu and ABC.com, further limiting access to paying subscribers of cable and satellite providers only.

The mobile live stream will not carry the same ads as the television broadcast; instead, it will include the same sorts of digital ads as on ABC.com. This is in part because the Nielsen Company is not able to measure mobile viewing of live television yet.

“What you see here is the same live programming,” Mr. Cheng said as he used the app, “but what we are doing during the commercial break is actually inserting new ads into the stream.”

Over time, live-streaming of ABC stations could cannibalize big-screen viewing of those stations, but ABC could make up the difference through streaming ads. Disney’s chief executive, Robert A. Iger, pointed out this month that an increase in online advertising partly compensated for declines in TV ad revenue in the first quarter of the year.

Transmitting television via live stream requires new deals with traditional distributors, like Comcast, DirecTV and Verizon FiOS, and with the owners of ABC’s affiliates. Gaining Hearst’s backing ahead of Tuesday’s upfront was important to ABC because it lent some local support to the app effort.

David Barrett, the chief executive of Hearst Television, said in a statement on Sunday that his company, recognizing “that consumers want the ability to view our stations’ programming on any device that has a screen,” was eager to work with ABC on the app.

Some station owners may bristle at ABC’s arrangement, however, given the other mobile television efforts that are under way. In some cases, these efforts require a miniature antenna, or a dongle, to be plugged into the phone.

A technology company called Syncbak has a live-streaming app for phones that does not require a dongle, but currently, it can carry only local programming, not syndicated or national programming.

CBS took a minority stake in Syncbak last month, stoking talk that it might use the technology to live-stream the stations it owns.

The Fox network, a unit of the News Corporation, is also known to be working on live-streaming functionality for its stations, though it is not expected to be available soon.

Article source: http://www.nytimes.com/2013/05/13/business/media/abc-to-let-app-users-live-stream-local-programming.html?partner=rss&emc=rss

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Media Decoder Blog: Sirius Reports Revenue and Subscriber Growth in 2012

February 5, 2013 by Leave a Comment

Sirius XM Radio reported strong subscriber and revenue growth for 2012 on Tuesday and described new features that the company hopes will put competitive pressure on Internet radio services like Pandora and Clear Channel’s iHeartRadio.

Sirius had $3.4 billion in revenue in 2012, up 13 percent from the year before, and it ended 2012 with 23.9 million subscribers, up two million, the company’s biggest annual subscriber gain since 2007.

For the year, it had $3.5 billion in net income, largely because of a $3 billion income tax benefit, and $920 million in adjusted earnings. For the fourth quarter, Sirius had $892 million in revenue, a 14 percent gain from the same period the year before but lower than the $899 million that analysts had expected.

It matched earnings estimates of 2 cents a share for the fourth quarter. In midday trading, Sirius’s stock was down slightly on the news.

Last month, Liberty Media, the company controlled by the billionaire investor John C. Malone, took control of Sirius after nearly a year of buying shares on the open market. The earnings announcement on Tuesday was the first with Sirius’s new interim chief executive, James E. Meyer, who in December succeeded Sirius’s longtime chief, Mel Karmazin.

At the beginning of 2012, Sirius raised its subscriber fees by $1 to $1.50 per month. It was the first time that Sirius has raised prices, and only the second time XM had done so, Mr. Meyer said in a conference call with investors. (The two satellite radio services merged in 2008.)

But that price hike appears to have had little effect on Sirius’s subscriber growth, which has been helped by an improved market for new cars as well as the gradual spread of Sirius’s availability in used cars. The company says that 50 million cars now on the road are able to receive Sirius.

On the call Tuesday, Sirius executives discussed new features like MySXM, which is now in public beta testing. Like Pandora or iHeartRadio, it is a custom radio feature that will let listeners tailor Sirius broadcasts to their tastes, and it will compete against those companies as more services push to introduce advanced listening features in new cars.

“MySXM users will now hear more of the music they love tailored to how they want to hear it,” Mr. Meyer said on the conference call. “If they happen to hear a song they don’t like, MySXM will let them skip it.”

Ben Sisario writes about the music industry. Follow @sisario on Twitter.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/05/sirius-reports-revenue-and-subscriber-growth-in-2012/?partner=rss&emc=rss

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Mets Have $160 Million to Spend on Talent, if They Want

January 5, 2013 by Leave a Comment

The cash infusion, as refreshing to the co-owners Fred Wilpon and Saul Katz as a World Series-ending home run, comes thanks to their majority ownership of the SNY regional sports network. One benefit of owning a network like SNY is the ability to borrow money against it. SNY’s annual revenue is in the hundreds of millions of dollars because of monthly subscriber fees that keep increasing regardless of team performance.

The resulting stability and financial muscularity of SNY and similar networks make them low risks to banks. Late last month, SNY refinanced $450 million in existing bank loans at lower interest rates and borrowed at least $250 million more. With their 65 percent ownership of SNY, Wilpon and Katz should have walked away with about $162.5 million. The refinancing was first reported Friday by Bloomberg.

So what will the Mets, so restrained about spending on talent the last few years, do with this extra money?

They could repay the still-substantial bank debt on the team, sock away money in anticipation of future financial losses or use it for working capital.

Or, perhaps, they could even dabble in a free-agent market they have studiously avoided this off-season, emerging as the only team not to acquire a single major league free agent since the World Series ended.

In particular, the Mets need legitimate outfielders — even part-time ones — who could bolster what now stands as an unimpressive starting threesome of Lucas Duda, Mike Baxter and Kirk Nieuwenhuis, all left-handed hitters. Two recent pickups — Collin Cowgill and Andrew Brown — hit right-handed and can add some balance to the current outfield options, but both are fringe major leaguers who might not help much at all.

The best free-agent outfielder still available, by far, is Michael Bourn, the 30-year-old, left-handed-hitting center fielder who hit .274 for the Atlanta Braves last season with 42 stolen bases. But Bourn is looking for big money, perhaps as much as $100 million in a multiyear deal, and is represented by the uncompromising Scott Boras, so rule the Mets out.

Then again, Vince Gennaro, a consultant to several major league teams, suggested the Mets should at least think about Bourn, particularly if he remains unsigned as spring training draws closer and his price drops.

“They should give serious consideration to investing in the near-term competitiveness of the team,” Gennaro said of the Mets’ owners.

He added: “The Mets have two issues. One, the prospects for the team, and two, perceptions about the owners’ commitment to winning. They could make a dent in both of those issues by parting with some of this money.”

A more realistic option for the Mets would be to re-sign Scott Hairston, the right-handed-hitting outfielder who slugged 20 home runs for them last season in a platoon role. Hairston was a bargain for the Mets in 2012, making just $1.1 million, and it is believed he is now seeking a two-year deal worth upward of $8 million. That’s not a huge amount of money by major league standards, but it certainly seems to be for the Mets.

Because R. A. Dickey, the 2012 National League Cy Young Award winner, has departed for Toronto, the Mets also need to add some depth to a starting rotation that has talent in Johan Santana, Jon Niese and the rookie Matt Harvey.

The most inexpensive move might be to re-sign Chris Young, the 33-year-old, 6-foot-10-inch right-hander who went 4-9 for the Mets last season with a 4.15 earned run average in his latest comeback from an arm injury.

More enticing options would be two remaining free agents — Kyle Lohse and Joe Saunders — but they, of course, would cost more money.

For now, the Mets have made one significant off-season financial move   — signing David Wright to an eight-year, $138-million extension. The refinancing is perhaps equally important, bringing new money to a club that lost $70 million in 2011 and $51 million in 2010. The Mets have not said how much they lost in 2012.

Article source: http://www.nytimes.com/2013/01/05/sports/baseball/mets-have-160-million-to-spend-on-talent-if-they-want.html?partner=rss&emc=rss

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Networks Want Slices of a New Pie

July 4, 2011 by Leave a Comment

Those shows, and the rest of Fox’s prime time, will be carried instead by a competing station in southern Missouri, because KSFX’s parent company, the Nexstar Broadcasting Group, refused to pay a new fee imposed by Fox, a unit of the News Corporation.

The fees, sometimes called reverse compensation, are changing the relationship between the broadcast networks and the local stations that carry their programs in big cities and small towns across the country.

In recent years, the stations — including some that are owned by the networks — have wangled lucrative new fees from cable and satellite operators for the right to retransmit the local stations’ signals. Now the stations are finding that the networks want a big piece of the bounty.

It is the second front of the TV retransmission war.

The networks say they need the new fees from stations to keep supplying prime-time programs and sustain profitability for their parent companies, imitating the cable channel model of a dual revenue stream of advertising and subscriber fees.

“We think that being a Fox affiliate is worth something,” said Michael C. Hopkins, the president of affiliate sales for Fox, which has taken the most aggressive stance of all the networks and has severed its ties with three Nexstar-owned stations this year.

Most stations have agreed to the new terms, but others have objected. Perry A. Sook, the chairman and chief executive of Nexstar Broadcasting, said Fox’s proposal was unprecedented in its size and scope.

“Given the limited amount of regularly scheduled programming Fox provides to local stations compared to ABC, CBS and NBC, we just cannot make their numbers work,” he said in an e-mail message, declining to comment further. (Fox supplies two hours of prime-time programming each night, while others supply three.)

The money at stake is significant. SNL Kagan, a research company, estimates that retransmission fees to local stations from cable and satellite operators accounted for $1.14 billion in revenue last year, and that the revenue will grow to $3.6 billion annually by 2017. The fees are passed on to consumers in the form of higher bills for cable and satellite services.

The government is contemplating changes in the retransmission negotiation process, since some cable companies say it currently favors the stations and causes occasional blackouts for customers. One such blackout of the New York-area ABC stations for Cablevision customers last year made national news because it cut off the beginning of the Academy Awards telecast.

Once stations have the fees, the networks believe they should have a “fair share,” as Leslie Moonves, the CBS Corporation chief executive, said at a media conference in New York last month.

“If a station is looking at what’s really bringing in the money, it’s the N.F.L., it’s ‘American Idol,’ it’s ‘CSI,’ it’s the prime-time strength,” Mr. Moonves said. “It’s not the local news or, you know, ‘Regis and Kelly’ at 9 a.m., you know, that’s bringing in the big bucks.”

In the past, local stations handed over advertising time to the networks in exchange for prime-time programming and other benefits, like the prestige of a network affiliation. (David C. Joyce, an analyst for Miller Tabak Company, projects that a station that loses a network affiliation could lose 50 to 75 percent of its value.) But as viewership — and top-tier programming — gradually moves to cable, the networks say they need a cut of the retransmission fees.

The payment plans differ depending on the network. NBC, for instance, is in talks with its affiliate board about negotiating retransmission deals on behalf of the affiliates, then splitting the fees down the middle, but that plan hinges on its acceptance by a sufficient number of affiliates.

Brian Lawlor, the chairman of the affiliate board, said he was hopeful that “we will finalize the details in the coming weeks that will allow NBC to introduce a structure to the affiliate base that will be positively accepted.” NBC is controlled by Comcast, the largest cable company in the country.

NBC said in a statement that the arrangement would be a win for both the network and the stations because both “need to develop additional revenue streams to offset the high cost of producing local and national programming and news.”

Fox is going a different route, insisting on a flat fee that is not directly tied to stations’ retransmission fees. Fox’s terms are not public, but the network is said to expect roughly 25 cents a month per viewer who receives the station via a cable or satellite company, escalating after the first year. In a letter to stations last winter, Mr. Hopkins wrote that if Fox’s proposal did not work for some stations, the network would “pursue different distribution channels.”

He added, “We don’t want that to sound like a threat, but it is a fact.”

Though the Nexstar disputes with Fox have been striking, most of the negotiations between stations and networks have happened without incident — a point of pride for Fox’s competitors.

The payment plan set up in the past two years by ABC, a unit of the Walt Disney Company, is a combination of Fox’s plan and NBC’s proposed plan: a flat fee or a share of a station’s retransmission fees, whichever is greater.

On top of several retransmission deals for its owned stations, “ABC has successfully completed negotiations with more than 60 percent of our affiliate coverage for the network,” a spokesman said.

Article source: http://feeds.nytimes.com/click.phdo?i=0e397e83a5a5aeeb9f170fb17d349a63

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