By John Eggerton
For more than 60 years, TV stations have broadcast news, sports and entertainment for free and made their money by showing commercials. That might not work much longer.
The business model is unraveling at ABC, CBS, NBC and Fox and the local stations that carry the networks’ programming. Cable TV and the Web have fractured the audience for free TV and siphoned its ad dollars. The recession has squeezed advertising further, forcing broadcasters to accelerate their push for new revenue to pay for programming.
That will play out in living rooms across the country. The changes could mean higher cable or satellite TV bills, as the networks and local stations squeeze more fees from pay-TV providers such as Comcast and DirecTV for the right to show broadcast TV channels in their lineups.
The networks might even ditch free broadcast signals in the next few years. Instead, they could operate as cable channels — a move that could spell the end of free TV as Americans have known it since the 1940s.
“Good programming is expensive,” Rupert Murdoch, whose News Corp. owns Fox, told a shareholder meeting this fall. “It can no longer be supported solely by advertising revenues.”
More of ‘Business Model Unraveling for TV Networks’ here.
The Pew Research Center’s Hispanic Project and Internet Project combined forces to write an in-depth look at Internet penetration across racial and ethnic categories in the U.S.
A summary of the major findings:
From 2006 to 2008, Internet use among Latino adults rose by 10 percentage points, from 54% to 64%. In comparison, the rates for whites rose four percentage points, and the rates for blacks rose only two percentage points during that time period. Though Latinos continue to lag behind whites, the gap in Internet use has shrunk considerably.
For Latinos, the increase in Internet use has been fueled in large part by increases in Internet use among groups that have typically had very low rates of Internet use.
· While U.S.-born Latinos experienced a two percentage point increase in Internet use from 75% in 2006 to 77% in 2008, foreign-born Latinos experienced a 12 percentage point increase during the same period, from 40% to 52%.
· In 2006, 31% of Latinos lacking a high school degree reported ever going online; in 2008, this number was 41%. In comparison, Latinos with higher levels of education experienced three to four percentage point increases in Internet use.
· Internet use among Latinos residing in households with annual incomes less than $30,000 increased 17 percentage points from 2006 to 2008. For Latinos in households earning $30,000 to $49,999 annually, Internet use increased two percentage points, and for Latinos in households earning $50,000 or more annually, there was no change in Internet use.
Read the entire survey, Internet Use Grows Fast Among Latinos, here.
Looks like buying Walt Disney Co.’s ABC Radio stations in 2006 was an unfortunate business decision for Citadel.
By Mike Spector and Sarah McBride
Citadel Broadcasting Corp., the third-largest radio broadcaster in the U.S., filed for bankruptcy over the weekend, the latest victim of the travails facing media companies.
Citadel, which owns and operates 224 stations across the country, listed assets of about $1.4 billion and more than $2.4 billion in debt.
The company, like many print and broadcast media outfits, faces stiff competition, shifts in consumer habits and a harsh advertising climate.
More on Citadel Files for Bankruptcy here.
This article brings up a good point that the increased usage of DVRs creates a huge problem for any advertiser whose television spot is time constrained .
By Brian Steinberg, AdAge
The ability to delay viewing of TV shows by using a digital video recorder is giving rise to noticeably different habits, according to new research from Horizon Media.
Through November 2009, 11 fall season programs were regularly “time-shifted,” or watched as many as seven days after the date of original air, by more than 3 million viewers, said Brad Adgate, the independent media-buying firm’s senior VP-research. Last year at this time, only three programs — ABC’s “Grey’s Anatomy,” Fox’s “House” and CBS’s “CSI” — fit that bill.
The trend is cause for scrutiny among TV outlets and advertisers, because the more people who watch TV programs longer after they air, the more difficult it is to reach them with a timely ad pitch.
While futurists project one day advertisers may well be able to insert more relevant advertising into recorded programming, these days marketers remain concerned that ads for particular events — Friday-night movie openings and weekend sales at retail outlets — amount to naught when consumers watch them five or six days after they were intended to run.
Entire article, “The Most Time-Shifted Shows of the Fall Season” here.
By David Lieberman, Associated Press
The Internet and tech toys get the headlines. But the vast majority of Americans still turn to their familiar televisions, radios, and CDs when they want to be informed and entertained, according a consumer tracking survey released Tuesday by the NPD Group.
“There’s a perception that families spending time in front of a glowing TV hearth has been replaced by glowing laptop or iPod displays,” NPD analyst Russ Cupnick says in a release. While true for some, “TV remains the top entertainment choice by far in the United States.”
More than 80% of the country watches an average of 10 hours a week of non-movie TV programming, according to the online survey of 10,281 people in August, weighted to reflect the general population.
* 78% said that they listened to music on a traditional AM/FM radio sometime during the prior week.
* 70% sent an instant message or e-mail.
* 60% listened to music on a CD.
* And 58% watched a movie on TV, not including pay-per-view or video-on-demand.
But the survey found that online is becoming an increasingly important part of the mix. Some 47% of the respondants visited a social networking site the prior week.
Read the entire survey, entitled “TV More Popular Than Internet for Entertainment” here.
By Emily Bryson York, AdAge
Not everyone wants a value meal. And not everyone is unemployed. These insights informed an impressive year at Panera Bread Co., in which the chain outperformed much of the fast-casual category. To do so, the chain focused on quality, innovation and marketing.
“A bunch of folks have been cutting quality to cut price to go after the marginal customer,” said Exec VP-Chief Operating Officer Rick Vanzura, who added that Panera donates about $100 million in bread each year. “We said a better strategy that addresses a bigger group of people is providing better value.”
More about Panera: an America’s Hottest Brands Case Study here.
If this software works well, it could really improve the creative process for digital media.
Burt, a software development company that sprang from Crispin Porter + Bogusky Europe, has released its digital media analytics product, Rich.
Rich is aimed squarely at agency creatives and is designed as a streamlined, accessible – and free- tool for measuring the success of online campaigns.
Burt was co-founded by Gustav von Sydow and Gustav Martner of Daddy, which was acquired by CP+B this year. von Sydow was a planner at Daddy and is now working at Burt full-time; Martner is still ECD of CP+B Europe. As agency types, they say they have a greater understanding of the specific needs of creatives when it comes to these sort of tools.
Burt is making Rich available to agencies for free and, starting in January, will offer premium services like media quality audits and pre-testing for a fee.
Read more about Burt Unit Launches Analytics Tool for Creatives here.
Gotta love Seth. We’ve been using the concept of LTPV (Lifetime Present Value) for years to help our clients determine just how much a new customer is worth. Not to mention how much you can lose when one goes out the back door.
By Seth Godin.
If you walk into a company-owned cell phone store to sign up for a contract, what are you worth?
Given the huge gross margins at AT&T and Verizon and the standard two-year contract, I think it’s easy to figure on more than $2000 in lifetime value.
If you ran a business where a customer represented an additional $2,000 in profit, how would you staff? How long would you make someone wait? If staff costs $25 an hour, how long would that extra person take to pay off?
Few businesses understand (really understand) just how much a customer is worth. Add to this the additional profit you get from a delighted customer spreading the word–it can easily double or triple the lifetime value.
So, a chiropractor might see a new patient being worth $2,500, easily. And yet… how much is she spending on courting, catering to and seducing that new customer? My guess is that $50 feels like a lot to the doc. Instead of comparing what you invest to the benefit you receive from the first bill, the first visit, the first transaction, it’s important to not only recognize but embrace the true lifetime value of one more customer.
Write it down. Post it on the wall. What would happen if you spent 100% of that amount on each of your next ten new customers? That’s more money than you have to spend right now, I know that, but what would happen? Imagine how fast you would grow, how quickly the word would spread.
Here’s how you’ll know when you’ve really embraced this–a good customer at your podiatry practice (or supermarket or tax firm) walks out the door in a huff and you turn to your partner and say, “There goes $74,000.”
Real moms still have unmet needs—as women and mothers. Boston Consulting Group estimates that women control $4.3 trillion of the $5.9 trillion in U.S. consumer spending, or 73% of household spending.
To reach this demographic, marketers need not just to communicate that the goods and services they offer are practical and convenient; they also need to make real moms feel confident and in charge.
Marketers should empower these female consumers to delegate to others (spouses, children,brands) so they can have more time to be who they want to be—at home, at work and on their own.
And marketers have to use new ways to reach a population that rarely has time to sit down to read or watch or enjoy something without simultaneously doing something else.
Read the entire report about marketing to moms here.
Not my cup of tea, but a whole bunch of people tuned in to see the final episode of USA’s “Monk.”
By Nellie Andreeva
“Monk” ended its eight-season run with a bang, becoming the most-watched hour-long series on basic cable.
The Friday series finale of the USA Network dramedy drew about 9.4 million viewers.
It is the largest audience and demo turnout to date, not only for the show and for a USA scripted series but also for a drama series on basic cable, eclipsing the 9.2 million mark for TNT’s “The Closer.” (“Monk’s” final tally is expected to grow further once Live+7 numbers are factored in).
It is a fitting farewell for a series that defined USA’s brand of quirky dramedies and kicked off the network’s ascension to cable-ratings supremacy.
The second part of “Monk’s” two-part closer, which saw Tony Shalhoub’s OCD-plagued detective solve the biggest case of his career — his wife’s murder — beat the series’ previous high in total viewers by 37%.
It also towered over all programs on the broadcast networks Friday night.
Boosted by “Monk,” the fall finale of USA’s freshman series “White Collar” also hit series highs, averaging 5.55 million viewers, the cable network’s best performance at 10 p.m. Friday in more than three years, since the series premiere of “Psych.”
“Collar” also posted its best numbers in adults 18-49: 2.1 million.
“What a perfect way for ‘Monk’, our first tentpole success, to finish its run — going out even stronger than it came in, and helping to launch another great show, ‘White Collar’,” said USA’s president of original programming Jeff Wachtel.
Read all about the final episode of Monk here.
SABMiller Plc. have re-launched Pilsner Urquell, the original pilsner from Plzen, with new secondary packaging and can graphics by Lewis Moberly.
LM were appointed in 2008 as part of a global re-positioning of the brand. The new design reflects the high quality of the product and reasserts the rich and authentic heritage of the brand with a contemporary edge.
The new split color secondary packaging and can graphics are now a harmonious balance of a premium gold and dark green. The gold is a reminder of the wonderful golden color of the beer while green reflects the familiar green glass bottle. Secondary packaging features a water-marked, cropped graphic version of the Plzen town coat of arms highlighting the unique relationship between the brand and the city. The brewery gates feature as a graphic device on the base of the can.
Other Pilsner Urquell designs here.
We’ve recommended Cinema advertising to our clients for years now. Executed well, it’s an effective tactic.
By Breeanna Hare, CNN
There’s an old Hollywood tale, and it goes like this: Open a female-led movie around Valentine’s Day. Watch women go in droves and drive up box office numbers.
Then let Hollywood executives call it a fluke, since everyone knows that women don’t go to movies.
Over the past few weeks, that tale has been told with a twist.
Two female-led movies have earned astronomically high box office numbers — like “third best opening weekend” high — on fall weekends typically dominated by blockbuster movies aimed at men. “New Moon,” the second film in the “Twilight” vampire series, has grossed more than $230 million since its opening, while “The Blind Side,” about a white family that takes in a homeless African-American boy, is already past the $100 million mark.
For both “Blind Side” and “New Moon,” women have made up more than half the audience. And by the time these films complete their runs, they could gross nearly $500 million each, said Gitesh Pandya, the editor of BoxOfficeGuru.com, because of a largely female audience packing theaters.
Read more about women going to the movies here.
“Keep on Truckin’” was a one-page comic by Robert Crumb, published in the first issue of Zap Comix in 1968. We thought we’d have a little fun with it.
Be Deborah Yao.
Comcast Corp. announced Thursday it plans to buy a majority stake in NBC Universal for $13.75 billion, giving the nation’s largest cable TV operator control of the Peacock network, an array of cable channels and a major movie studio. Although the deal could mean that movies could reach cable more quickly after showing in theaters, and that TV shows could appear faster on cell phones and other devices, it was already raising concerns that Comcast would wield too much power over entertainment.
Indeed, if the deal clears regulatory and other hurdles, Comcast would rival the heft of The Walt Disney Co. – which Comcast CEO Brian Roberts already tried to buy.
Comcast, which serves a quarter of all U.S. households that pay for TV, would gain control of the NBC broadcast network, the Spanish-language Telemundo and about two dozen cable channels, including USA, Bravo, Syfy and The Weather Channel. It also would have regional sports networks, Universal Pictures and theme parks.
Heinz is going to spend more money on its marketing campaigns over the next few months to attract new shoppers and please consumers loyal to its products. The giant food company’s profits rose to $2.67 billion (2.5%) in the last quarter, and the giant believes it’s high time to adopt new approaches for gaining more popularity among customers, looking for discounts and bargains.
The company is going to spend 25-30% more in the second half of the fiscal year, and in four years the expenditures set for these purposes will comprise $130 million. Over this period the marketing investments will be greatly increased particularly in North America and Europe.
“Even though the global recession appears to be abating, there’s no question that consumer and customers remain intensely focused on value which they are more often defining as price,” comments Bill Johnson, chairman/CEO of Heinz. The new approach is going to be based around the company’s Consumer Value Program scheme involving “selective price point adjustments that are more attractive to cost conscious consumers, targeted media, increased point of purchase, in store marketing and increased new product activity,” noted Johnson.
By the end of 2020 Coca-Cola is planning to double its “Asian” revenues to $200bn in course of the next 10 years, with the developing markets of India and China being set as the major fields. The giant soft drinks maker is hoping to have at least $1 billion of annual sales from marketing its six major brands in the Celestial Empire.
The giant’s broad portfolio, which now includes a wide range of soft drinks, diary and water, helped increase Coke’s profits by annual 19% over the past five years, and the company is plotting to earn three times more by 2020. At the current moment, Coke’s sales double those of its main competitor PepsiCo. As FT reports, each average resident of China annually consumes 28 Coca-Cola items.
Coke and Sprite soft drinks already make $1bn in China on an annual basis, and Yuan Ye, the maker’s tea product, and Ice Dew, are supposed to deliver this amount of money by 2020. To win more consumers, the giant has already launched Glaceau water and Minute Maid Super Pulpy Milky in China market and is planning to introduce new products to the fast-growing market. The company has 10 years in stock, and with its high brand level and a variety of new offerings to arrive a decade will be more than enough to reach the lofty aims.
The Nike (RED) campaign was launched yesterday, December 1, in 13 countries around the world. Like Starbucks, another global brand, the sportswear maker joined the movements dedicated to fighting AIDS in Africa. All the revenues gathered from selling red football laces, with each pair costing $4.00, will be donated to the Global Fund.