Forecast: Discovery-WarnerMedia Among Top 4 Streamers, 200M Global Subs By 2026

• by Wayne Friedman , Yesterday

Discovery's acquisition of WarnerMedia could rapidly boost the combined company to 200 million streaming subscribers in four years, according to one media analyst -- placing it among a handful of direct-to-consumer premium players.

“The transformative WarnerMedia merger, once closed, will create value as a fourth major direct-to-consumer provider, with one of the most broad-based content offerings alongside Disney’s bundles,” writes Tim Nollen, media analyst for Macquarie Research.

He adds: “This could lead to nearly 100 million combined Discovery+/HBO subs in 2021 and 200 million by 2026.”

Discovery is working to align its technology platform with HBO Max -- which will include an ad-supported offering, co-marketing with HBO Max and distribution arrangements with local pay TV and telco operators.

Nollen says by the end of this year, discovery+ will be at 23 million subscribers, with HBO Max/HBO at 74 million. A total of around 100 million, including Discovery's other D2C businesses, such as Motor Trend (1.3 million) and Food Network Kitchen (800,000), would rank just below the 131 million for Disney+ and 222 million for Netflix.

He adds that about half of Discovery+'s 20 million subscribers are U.S.-based. In turn, half of those are subscribing to an ad-free option and the other half subscribe to an "ad-supported" option.

Discovery’s "ad lite" product results in $5 to $6 of advertising average monthly rate per user (ARPU) in the U.S. Adding in $5 per month for the base subscription cost results in a total of $10 to $11 in ARPU.

For investors, he says, this is a deal they should not miss. “Current [Discovery] valuation looks too cheap to pass up here: the current ... stock price implies the combined company is worth $115 billion and is thus trading at 10x ’21 EV/EBITDA.”

A 10x "enterprise value-to-earnings before interest, taxes depreciation and amortization ratio," has historically been a cheap multiple for media companies to operate under.

Midday Monday trading of Discovery Inc. was virtually unchanged at $26.49. The Discovery/WarnerMedia deal is expected to close in the first half of 2022. The company will be named Warner Bros. Discovery.

 

Nielsen Begins Testing 'One' Methodology Internally, Sees Gracenote In The Metaverse

• by Joe Mandese  @mp_joemandese, 11 hours ago

Nielsen has begun internal tests of its new multimedia audience measurement methodology, Nielsen One, and will begin testing it with clients next year, the company’s top management executives said during a briefing with a Wall Street securities firm.

“Most of the methodology is built from Big Data sources like [connected TV] makers and Roku, but Nielsen’s panel remains vital to calibrating the data for fraudulent accounts, non-viewed content (e.g., streaming or set-top box showing video, but TV is off) and better accounting for underrepresented audiences,” BMO Capital Markets analyst Daniel Salmon disclosed in a report sent to investors late Monday.

The report describes Nielsen executives as characterizing Nielsen One as a “streaming-first orientation from the outset," and the core of David Kenny’s vision since becoming Nielsen’s CEO three years ago.

The report notes that the vision coincides with rapidly expanding demand from advertisers for ad-supported streaming inventory, which generally yields higher prices relative to other advertising buys. The Nielsen executives also characterized the increasing focus on privacy as a “tailwind for its overall business owing to the legacy in trusted panel use.”

Nielsen utilizes its own proprietary identity tracker for measuring audiences, though not for actually targeting them, but the report notes it can be used to “reconcile” other targeting tools like Universal ID 2.0 and/or Google’s FLoCs (federated learning of cohorts).

Nielsen disclosed is streaming meters are now being used by 18,000 of its targeted 42,000 panel base, with the majority expected to adopt them by next year.

In terms of Nielsen’s grander designs, management said the company’s Gracenote division, which watermarks digital content so it can be tracked and measured, is poised for growth across streaming services, online gaming, and even various “metaverse opportunities.”

 

Comscore Pushing 'Currency' Status For 2021-22 Upfront

• by Karlene Lukovitz  @KLmarketdaily, 9 hours ago

Comscore reported improved results for this year’s third quarter, and also took the opportunity to announce that it's in talks to get its measurement solutions used as currency during the next television upfront.

The company is “in the middle of discussions with national TV networks to use Comscore's measurement, as currency especially, as we move into next year's upfront market,” CEO Bill Livek told investors during the earnings call. “That follows our expanded relationship with Fox Networks and Viacom CBS for traditional linear currency that we announced previously.”  

The announcement is the latest move by Comscore to capitalize on marketers’ push to find alternatives to Nielsen.

Comscore, which uses set-top box data for audience measurement, has been picking up more media clients as the long-dominant Nielsen service has come under fire for undercounting viewers during the pandemic, which led to suspension of its national and local accreditation by the Media Ratings Council.

In April and August of this year, respectively, ViacomCBS and Fox announced as part of agreement renewals that they would use Comscore TV measurement as well as Nielsen measurement.

In September, ViacomCBS also struck a deal with advertising software/data company VideoAmp to provide an “alternative currency” measurement.

Last week, Univision selected Comscore as its exclusive linear local audience measurement provider for Hispanic TV stations it is acquiring in Washington, D.C. and Tampa and Orlando, Florida.

Over the past year, Comscore has used funds from a refinancing to acquire expanded data rights to improve its measurement stability.

Nielsen is pushing forward with Nielsen One, meant to combine data from digital and traditional linear broadcast, and is now testing the new solution’s methodology internally in preparation for an expected 2022 launch.

Comscore’s third quarter results included a 5% year-over-year increase in revenue, to $92.5 million — its first revenue increase since Q4 2019.

The company also narrowed its net loss to $1.9 million (2 cents per share) in the quarter, down from $11.1 million (16 cents per share) in Q3 2020.

COMMENTARY TV Oddities Of COVID Era Are Fading As Normalcy Returns

 

COMMENTARY

TV Oddities Of COVID Era Are Fading As Normalcy Returns

• by Adam Buckman , Featured Columnist, 11 hours ago

It does not seem all that long ago that TV content and commercials flipped a switch and went into COVID-19 overdrive seemingly overnight.

But today, all of those commercials made up of home video clips made by ordinary folks quarantining at home, and the TV shows that took up similar pandemic-related themes are either completely gone or exceedingly rare.

One of the latter was the sitcom called “connecting …” (spelled with a lower-case “c”) which came and went last fall on NBC.

The show (pictured above) centered completely on a Zoom-like get-together of friends who felt isolated and sought to reconnect on a virtual videoconference (the brand-name Zoom was never used).

Give the makers of this show some credit for coming up with it in the first place. But not surprisingly, it was all talk and no action, just like real Zoom meetings.

The first TV Blog referring to the onset of the crisis that contained either the word “COVID” or “pandemic” appeared here on March 6, 2020, in a column about some of the news stories that week.

They included Chris Matthews’ abrupt resignation from MSNBC following allegations that he made lecherous comments to female co-workers and that week’s Super Tuesday Democratic presidential primary.

A distant third on the list: A pandemic that “appeared to be accelerating.” 

Searching through the “pandemic” columns, I came across one published three months before the pandemic upended our lives. 

This column from January 2020 reported on a new drama series premiering then on Fox called “The Passage” that turned out to be prescient (and also short-lived).

One of the show’s storylines had to do with “the spread of a lethal disease that so far has broken out only in China.” Coincidence? Probably.

But after mid-March, the TV Blog began its deep dive into all things COVID and their impact on television. As of this past September, 86 TV Blogs published since then contained either the word “COVID” or “pandemic” or both.

Among the recurring topics was TV’s reliance on video that in almost any another era would have been deemed unfit for broadcast.

This category comprised several forms of this kind of video that became commonplace during the pandemic.

These included the aforementioned home-made video clips shared on social media by ordinary people who were cavorting in their homes and backyards in an effort to fend off quarantine boredom; the shows that began to originate from the homes of their hosts, most notably the late-night shows; and the reliance on Skype, Zoom and other forms of virtual one-on-one communications for TV news interviews and cable news talk show appearances.

Concerning the latter category, this means of conducting interviews for TV news stories with commentators and experts appears to be here to stay even if the video quality of this kind of imagery is so substandard that it can actually repel viewership.

But for TV news, remote interviews like these mean that news crews need not be dispatched to interview these people with broadcast-quality cameras and other equipment, thus giving TV news departments another way to cut corners and save money. Always the dollars, right?

Columns on the shift of the late-night shows to the homes of Stephen Colbert, Jimmy Fallon and Jimmy Kimmel pointed out that the shows, at least at first, came across as slapdash and below par.

One TV Blog had a photo of Colbert doing a show from a bubble bath. On NBC, Fallon hosted “The Tonight Show” from a “desk” that had been built by his young daughters -- like Lucy’s “Psychiatric Help” stand in an old “Peanuts” cartoon.

The eventual return of the late-night shows to the well-equipped studios and theaters where they belonged was a welcome occurrence.

As for the motherlode of commercials that relied on all of that home-video footage in 2020, those are practically all gone now. In fact, when I happened to actually see one on TV recently, I asked myself: Are we really still doing this?

Hopefully the answer will soon be no.

Back with all the good news for you!

 Hi all: Sorry I dropped out late October for a bit as I was getting my heart fixed. Now I have 4 wonderful stents to keep me going into my 90s!!!!

 Not every new platform works for local-direct clients! Philip Jay LeNoble, Ph.D.

Advertisers Value Addressable TV... But Lack Consensus On Defining It

• by Karlene Lukovitz  @KLmarketdaily, Yesterday

Although nearly a third of advertisers consider addressable TV to be a “must-buy,” there’s no real consensus about how to define it. 

So finds a survey of 200 U.S. video advertisers conducted in June for WarnerMedia Ad Sales and DirecTV by Advertiser Perceptions. The survey built on research on addressable and connected TV (CTV) conducted last year. 

Clear majorities agreed that addressable is a reliable way to reach their audiences, and that they are satisfied with the results of their addressable campaigns (85% and 79%, respectively). 

This year, 32% described addressable as a must-buy — up 7 points from 25% in last year’s survey — and 44% as a complementary buy (up from 41%). 

The number considering it a discretionary buy declined to 18%, from 24%, and just 6% consider it an experimental buy (down from 10%). 

Further, 47% said they expect their company or main client to increase spending on addressable TV over the next 12 months (compared with 55% saying the same about CTV). And one in four said they would increase investments in addressable TV if they were provided with addressable/digital cross-screen solutions.

 
While the researchers had their own clear definition of addressable TV (shown above), advertisers tended to define addressable TV holistically, with “targeting” and “targeted ads” being the terms most commonly used, according to the study report.

Asked in a separate question to choose which of several definitions best describes addressable, just over third (37%) picked “Targeted ads dynamically inserted into a content stream, allowing for different ads to be served to relevant households within the same ad break.”

But much smaller percentages chose a variety of other definitions (top of page).

One marketing manager admitted: “Confusion. I can’t quite seem to remember the precise difference between OTT, CTV, addressable, and data-driven, to be honest.” 

Perhaps that’s not so odd: In general, the participating advertisers tended to perceive CTV and addressable TV similarly, suggesting that they view them as complementary rather than as an either/or investment. 

Both are perceived as offering increased ad relevance, incremental reach, and reliable audience targeting. 

However, those who said CTV is most important to achieving their goals tended to agree that addressable TV’s ability to test and learn is its top benefit, implying a desire to experiment with both CTV and addressable, while those who said linear is most important to achieving their goals tended to view addressable’s ability to deliver more relevant ads as its top benefit.Lack of scale is the most-cited obstacle to buying both addressable and CTV (38% and 30%, respectively). 

Inadequate audience and campaign measurement was cited by 32% and 37%, respectively.

 Something to share with a potential or current local-direct Travel Agency: Philip Jay LeNoble, Ph.D.

COMMENTARY

Report: Big Changes Looming For Travel, Tourism Category

• by Richard Whitman , Columnist, Yesterday

TBWA’s cultural intelligence unit Backslash is out with a new report that details looming changes in the travel and tourism category and how brands may need to pivot to exploit new opportunities that the shifts are fostering.

As you would imagine, COVID has been one factor driving change. Also, more people are becoming woke to the harmful effects that previously unlimited travel has had on the environment and on many popular destinations.

“Incessant travel has taken a catastrophic toll on our planet, and a tendency to prioritize tourism dollars over residents’ well-being has destroyed the cultural fabric of our most cherished destinations,” the report states.

The report touches on “anchorless living” and the mainstreaming of the digital nomad lifestyle thanks to work-from-home models set during the pandemic. That, in turn, has triggered more travel from remote work locales. A study earlier this year found that more than half of Americans had already taken a trip, or were planning to, as a result of working remotely.

The hotel business is being transformed as many have begun to focus on subscriptions versus nightly rates.

The insurance business also stands to gain from the shifts. A recent survey found 70% of Europeans and 64% of Americans indicated they would be more likely to purchase travel insurance as a result of the pandemic.

According to the report, wellness-related travel “has officially taken over” the category. The global wellness tourism market reached $735.8 billion in 2020 and is expected to grow at an annual clip of 6.6% to reach $1.2 trillion by 2027. And nearly half (47%) of those polled in a survey indicate wellness and mental health as a top motivator for traveling in 2021.

The report predicts an increase in “responsible restrictions” that will help preserve more popular destinations. “Trips personally planned by locals will distribute visitors more evenly. And a nomadic new business class will stay longer, marking the end of disposable turnaround trips.”

Also, off-grid destinations are gaining in popularity, especially among those who have already done grand tours of Europe and Asia multiple times. The report points to Antarctica’s tourism boom. Over 56,000 tourists visited Antarctica during the 2018-2019 season, and the figure for the 2020-2021 season is expected to surpass 78,500 — more than double the total from a decade ago.

“So if even Antarctic travel is edging toward the mainstream, what’s next?” the report asks. It partially answers the question, noting the fledgling space ventures being developed by Elon Musk and Jeff Bezos, and others.