Microsoft execs made a lot of promises, but had little to show, in their Newfront presentation to attract advertising for their Xbox Originals shows. “I know from experience that building something substantial won’t be easy and will take time,” Xbox Entertainment Studios President Nancy Tellem told th NYC gathering. But with 85M Xbox owners, the Internet delivered programming for the game console “is in a unique position to reach audiences everywhere…This is where TV wants to be.”
Based on clips from Possibilia — a short film that gives viewers the ability to choose the direction of the story — TV wants to be schizophrenic. The film shows two characters in a troubled relationship whose feelings change with the click of a button as they constantly ask questions such as ”Are you going to stay or are you going to go?”…”You don’t think I can handle unfamiliar territory?” …”Why is it so hard to be a human being?”
The company is “laser focused” on appealing to Millennials, EVP Jordan Levin says adding that “Microsoft understands what it takes to achieve these goals.” As you might imagine, the original shows are heavy on fantasy (as in the drama Humans planned for 2015) and goofy gags (as in Extraordinary Believers). A series of six interactive documentaries from Jonathan Chinn, called Signal To Noise, will focus on technology-related matters including a dig this past weekend … Read More »
With sales cooling in television’s scatter advertising market, negotiations underway now for the huge upfront market will generate less than networks would like Nomura Equity Research’s Michael Nathanson predicts this morning in his thorough quarterly review of ad trends. He forecasts that overall U.S. sales will grow 5.6% in 2012, making him more optimistic than ZenithOptimedia (which projects U.S. sales +3.6%) and MAGNA Global (anticipating +4.0%). Television will be +6.6% this year with help from the additional spending for the 2012 election campaigns and the Summer Olympics — but will decelerate to +0.9% next year. Demand in the broader marketplace “seems to be stable,” he says, after rising 5.3% to $19.2B in the first three months of this year vs the same period last year. The 11.8% boost in Q1 online sales to nearly $5B accounted for much of the growth. But television was up 6.0% to $10.2B. The return of NBA games, following the basketball league’s lockout, helped cable networks to lead the way, +7.9% to $4.8B. But the major broadcast networks enjoyed a 5.0% bump to nearly $3B. Nathanson says that Fox’s ratings struggles with American Idol (and not including the network’s boost from the Super Bowl) offset the mid-to-high single digit growth at CBS and ABC. Read More »
AOL, Hulu, Yahoo, and Google’s YouTube are among the companies that provided so-called “newfront” presentations to advertisers this year — sales pitches urging them to divert to Web video platforms some of the billions that they plan to spend on conventional TV. Some major advertisers including GM and Samsung Mobile have said that they expect to do just that this year. But while that’s made this upfront season interesting, “we think it is still too early for online video to be meaningfully disruptive to TV,” Barclays Equity Research analyst Anthony DiClemente says in a report this morning. He notes that most viewers still flock to TV much more than the Web: The average person spent 153:19 hours a month watching the tube in Q4 — with another 11:44 hours going to time-shifted TV — according to Nielsen data. But they devoted just 4:34 hours watching Web video, and 4:20 watching videos on mobile phones. Things are changing slowly. Monthly television watching was down 46 minutes from the average at the end of 2010, more than made up by the 1:17 hours added to timeshifted TV. But Web videos were only up 11 minutes, and there was no change in video viewing on mobile phones. What accounts Read More »
It’s in almost everybody’s interest to try and gin up excitement for next week’s major TV network upfront presentations: The celebrities are lined up, and the shrimp and booze ordered, in an effort to entice ad buyers to conditionally bet billions of dollars on shows that haven’t been written yet, and ratings points that can’t be accurately measured. Wall Street analysts say that CBS will be the big winner in light of its strong ratings. For example, Credit Suisse’ Spencer Wang predicts this morning that CBS will record commitments of $2.8B (+4%), followed by ABC at $2.4B (+2%), Fox at $2.0B (+2%), NBC at $1.7B (no change), and CW at $477M (-1%). But for the most part, analysts are preparing to yawn. ”As it currently stands,” RBC Capital Markets’ David Bank writes this morning, “broadcast year 2012/13 is setting up to be a ‘boring’ year for network TV advertising, with few surprises.” He reflects the consensus view that advertisers are less likely to be stampeded into making deals than they were last year. The economy looks wobbly — nobody knows how the European debt crisis will play out — and overall TV ratings continue to slide. Demand from auto companies is robust “but likely will decelerate,” Bank says. Meanwhile pharmaceutical companies have been standoffish “and likely will continue to remain so for the foreseeable future” with fewer new products teed up and some major patents due Read More »
Actually the debt ratings service projects an “advertising windfall” for virtually all traditional media in a report this morning that says auto makers will sell 14M vehicles this year, up 9.3% vs 2011. That should especially delight TV execs, according to the Moody’s Investors Service report: Last year auto companies spent $13.9B on ads, and accounted for as much as 25% of sales on cable systems, 23% for TV stations, and 12.5% for broadcast TV networks. With auto sales following improvements in the overall economy, broadcasters should enjoy ”strong – perhaps even record-high – upfront sales this year,” says the report’s lead author, Neil Begley. “We expect the scatter market to be even stronger in the latter half of 2012, as new-car launches coincide with peaking political ad spending ahead of the November US elections.” As a result, he says, TV networks likely will “hold above-average levels of inventory after the upfront to take advantage of even better and potentially record price levels in the second half of the year.” The biggest beneficiaries in Big Media will be CBS, which derives about 63% of its revenues from ad sales, followed by NBCUniversal (36%), Viacom (34%), and Time Warner (21%). Disney and News Corp “are the most diversified of the media conglomerates and will therefore be the least affected by growth in auto ad spending,” Begley says.
Fox executives told advertisers today during its upfront presentation that it will embrace digital platforms by offering opportunities to buy spots that will run on a TV show anywhere it airs — including digital sites such as Hulu. Fox Broadcasting President of Sales Toby Byrne promised to deliver ”a unified audience experience.” He added that “the Internet and mobile are television’s friends, not enemies.” The company says it has 150 million followers on Facebook and Twitter, which is 29 million more than the next-highest network. Execs crowed that Fox has been No. 1 for seven consecutive seasons — although they didn’t say that they owe their success largely to the popularity of American Idol. Fox also says that it has four of the five most-followed shows: Family Guy, The Simpsons, House and Glee.
Just about everyone says that the 2011 upfront ad sales season that kicks off this week will be a record-setter. Barclays Capital analyst Anthony DiClemente expects advertisers to commit about $9.2 billion for prime time spots at ABC, CBS, Fox, and NBC in the season that begins this fall. That’s up 7.5% vs. last year and will beat 2008’s record $8.8 billion. He also says this will be the first year buyers will spend an equal amount on all of cable, up 15.3%. But don’t fool youself into thinking that this has much to do with the quality of the sitcoms, dramas, and reality shows that execs will unveil to ad buyers this week at the networks’ unconscionably extravagant presentations.
Once buyers recover from the networks’ childish efforts to dazzle them with celebrities, shrimp, and booze, they’ll begin their mundane deal-making for clients who need to be sure that they’ll have airtime to help them move product. But companies don’t want to make the same mistake that a lot of them made last year by postponing ad buys in the hope of landing a better deal in the scatter market. Many who waited had to pay as much as 40% more for spots in the first quarter of 2011. Auto makers, TV’s biggest advertisers, can’t afford to sit on the sidelines. They hope to sell about 13 million cars this year. That would be up 13% from last year, but still short of the 16 … Read More »
The money is flowing again into Big Media. Just about every media CEO who recently spoke to Wall Street analysts about this year’s 1st Quarter earnings said that ad sales are up and consumers are spending. “Viacom has never been stronger financially,” CEO Philippe Dauman crowed. At Disney, where net profits fell slightly, CEO Bob Iger expressed he was “confident in the trends we’re seeing across our segments”. So will these companies do more hiring and give out raises? Don’t be naive. Dauman, for one, told investors that he’s “watching for head count creep” while the company returns $1.9 billion to shareholders over the first 9 months of its fiscal year. Most Big Media companies are buying back their stock, making publicly held shares more valuable. CBS doubled its quarterly dividend to shareholders and Viacom plans to follow suit.
Here are some of the other major themes from this earnings season:
TV Advertising: Network executives were predictably upbeat about what will happen in their upfront ad sales negotiations in coming weeks. Disney CEO Bob Iger predicted the market will be “strong”. NBCUniversal chief Steve Burke upped that to “very strong”. And News Corp COO Chase Carey claimed it’ll be “truly strong”. Their pronouncements made CBS chief Les Moonves sound refreshingly bold when he projected “solid double-digit increases” in ad sales for his broadcast network. Executives cited the price increases they’ve seen in scatter sales as the economy has improved and auto, technology, telecom, … Read More »
Cable channels are already making upfront presentations to advertisers, and those sales efforts will accelerate on Thursday when Discovery Communications introduces its fall shows. According to new forecasts out this week which do not take into account the deepening NFL labor strife, cable channel sales could hit $9 billion during the coming 2011 upfronts, up 11.5% over last year. As for broadcast, Miller Tabak analyst David Joyce projects a 14.9% increase to nearly $9.9 billion for the Big Four networks’ primetime schedule unveiling next month. Media services firm Zenith Optimedia also said this week that it expects double-digit gains in cable and broadcast sales. Car, cell phone, and banking service companies – eager to take advantage of the thawing economy – could make this upfront ad-sales season one of the strongest since 2003. Auto companies normally account for about a quarter of TV ad sales but were in a deep slump during the economic crisis giving the TV honchos fits. Now they’ll likely drive the market once more. They’re introducing 65 new models this year vs. 60 in 2010, and only 40 in 2009. Read More »