Upbeat Upfront Predicted For Broadcast

 


TVNewsCheck, April 6, 2016 8:23 AM EDT
By Wayne Friedman

CPMs are expected to rise 7% to 9%, and for the first time in three years, projections are that the broadcast upfront market will see a rise in total dollar volume — climbing 3% to 4% overall to $8.7 billion. Media agency executives are warning their advertising clients to expect sizable rate hikes.

  

The broadcast TV networks are poised to dramatically reverse three years of declining upfront volume with rising revenue and higher pricing -- a strong signal coming from an active scatter market with big spending increases in key advertising categories.

“It’s a strong marketplace; there looks to be more money in the overall TV economy,” says Geri Wang, president of advertising sales and marketing at the ABC Television Network. “Advertisers still seek high quality.  People still care about premium TV and premium video.”

 

Media agency executives are warning advertising clients of sizable rate hikes. “The upfront market may be challenging,” says Jason Kanefsky EVP of strategic investments at Havas Media.
One key measure of TV advertising health — cost per thousand viewer prices — is expected to rise 7% to 9%, according to media estimates. All this comes in contrast to small CPM gains of a year ago when national TV advertisers had to pony up 3% to 5% price additions from the year before.
Additionally, for the first time in three years, projections are broadcast upfront markets will see a rise in total dollar volume — up 3% to 4% overall to $8.7 billion.
 “National TV could see low single-digit volume growth, and high-single digit pricing," says Brian Wieser, senior research analyst of Pivotal Research Group.

 

Last year’s upfront TV ad marketplace for the 2015-2016 TV season, witnessed broadcast TV networks' primetime spending sinking 3.7% to $8.36 billion, according to Media Dynamics.
This is down 11% overall in volume since the 2012-13 season.  Also, a year ago broadcast TV networks gained just 4% on average in primetime CPMs to $24.40 for viewers 18 and older.
Much of the positive talk around this year's upfront is based on the current scatter market, where advertisers buy commercials on a near-term quarter-by-quarter basis — this versus the summer’s upfront market when marketers purchase around 70% of  commercials for the entire TV season, which starts in September.

Paul Rittenberg, EVP of advertising sales for Fox News Channel, says: “Scatter prices have been up for three consecutive quarters over upfront — probably due to scarcity and money that has been over-committed to digital.”

How much higher? Like a eye-popping 15% to 20%, according to media buying and selling executives.

Sharply higher scatter revenue has come from a number of marketers including pharmaceutical, food and the biggest TV ad category, automotive, which represents around 25% of all TV advertising.
According to iSpot.tv, since the beginning of the TV season, automotive spending is up 28% to $3.37 billion — upfront and scatter deals from mid-September through March 20 — this versus $2.63 billion for the same period a year before.

Pharmaceutical advertising — over-the-counter and prescription products — are 40% higher to $2.15 billion from $1.54 billion. Fast food restaurant spending has improved 30% to $1.4 billion versus $1.08 billion for the same period a year ago.

Still, Catherine Warburton, chief investment officer of media agency Assembly, wonders whether all this is new national TV money: “Is the money we are seeing in scatter money that would have been in the upfront? Possibly. But [overall] I don’t see the scatter situation as being a good barometer for the TV marketplace.”

Even if media buying executives believe the current scatter market signals big upfront gains, Fox News’ Rittenberg says don’t expect a return to the old days.

“In the past, you’d have scatter rising by double-digit percentage price increases, followed by the upfront rising by double-digit percent price increases. I don’t think that is the reality anymore.”
Not only that but there isn’t sharp growth across all major TV categories. For instance, banks and credit cards — also big national TV spenders — have seen mostly flat spending since the start of the season; $698.2 million has been spent versus $707.3 million in the same period a year ago, according to iSpot.tv.

Helping the broadcast networks — as well cable networks, which are also positioned to benefit from a rising upfront — are questions concerning digital media.

Media executives have complained about consumers’ ad-blocking, poor viewability of digital video ads and outright fraud by some digital video advertising sellers.

Beyond all of this, one senior broadcast TV network advertising executive takes solace in what media agency executives haven’t said so far this pre-upfront period:  "The most important marker is that we are not seeing the normal dance from media agency executives, saying that the market is going to be down.”
A strong upfront can have an umbrella effect for other TV platforms — like local TV.
“A strong upfront market bodes well for everybody — linear, local TV and digital,” says Steve Lanzano, president-CEO of TVB. “But can you quantify it? No. But intuitively, it makes sense. There’s a residual emphasis in terms of more demand for inventory.”

Study: The Masses Will Not Pay For Streaming Music

April 6, 2016

That’s according to a study of 500 people between the ages of 17 and 59 done by Kelly Music Research. The company says fewer than 8% of the respondents they surveyed were using the paid versions of Pandora, Spotify, or SoundCloud, and advertiser-supported free is still preferred among those who have embraced streaming. And, according to the Kelly Research study, if free were no longer an option, few said they would ante up.

The Kelly Music Research showed that, not surprisingly, Pandora leads the pack among streamers with 64% saying they’ve used some form of the service. The number jumps to 75% of the younger 17-34 demographic. Spotify was the service more likely to earn paid users with 4.6%, followed by Pandora’s paid version with 2.4%.

And, according to the Kelly Research study, if free were no longer an option, few said they would ante up. “Assuming the are other services out there that remain free, the vast majority would rather switch than pay. Only 12% say they would pay for their favorite stream if it were no longer free. Men are more likely to pay (14.2%) than women (10.5%). Younger streamers are the most willing to pay — 22% of 17-24, 16% of 25-34, 11% of 35-44, and 8% of 45-59. The remainder would refuse to pay and just find a free service.”

What would listeners do if they had to pay for their favorite radio station? “Only 9.7% said they would pay to listen to their favorite AM/FM station. Compare this to 12% who say they’d pay for their favorite stream choice.”

Can Project Indigo Save iHeartMedia?

A hearing over iHeartMedia’s debt began in State District Judge Catherine Striker’s court in San Antonio Monday. iHeart is suing 15 bondholders who, the company says, are trying to force it into bankruptcy by triggering bond defaults that would require $15 billion of its $20 billion debt to be repaid quickly. The bondholders do not like that iHeart set up a subsidiary called Broader Media and transferred 100 million privately traded shares of Clear Channel Outdoor. They say its a shell company and they want the shares returned to the Outdoor division. At the hearing, iHeartMedia Senior VP and Treasurer Brian Coleman said the transfer is part of a strategy called “Project Indigo.”

The San Antonio Express-News reports that Project Indigo is the code-name for iHeart’s long-term strategy to study alternatives to decrease debt. And Coleman says Project Indigo continues despite the company not being able to pursue debt activities under the temporary restraining order.

Bruce Bennett, One of the lawyers representing the bondholders told the court that Broader media is a shell company with no operations. “When money goes into a cookie jar with an intent to make a possible investment later, is it an investment? No. Bloomberg reports Bennett said the bondholders are not trying to push iHeartMedia into bankruptcy. “Nothing could be further from the truth. We want the shares to be returned to Clear Channel Outdoor. It’s where they belong. We then want the company to abide by its indentures and pay their debts.”

iHeart attorney Kevin Huff told the court disallowing the transfer “guts the flexibility of the company and that the company had done this before and nobody objected.” The News-Express quotes Huff and Coleman telling the judge that the share transfer was an allowable investment because it would have made a profit for the company by reducing its outstanding debt. And they say the company needs this flexibility to mange its debts.

What is The AM Radio Alliance?

 

 

 

We could be in the early stages of big Clear Channel AM stations battling with smaller mom and pop AM stations who are looking to serve their local communities when the sun goes down. It’s an issue the NAB does not take a position on because there are many stations on both sides of this issue.  Many Class A AM stations have been asking listeners to sign a petition to stop the FCC’s plan to allow other AM stations to maintain power at night.

A new organization called The AM Radio Alliance is made up of Alpha, Bonneville, CBS, Cox, Cumulus, Entercom, Family Stations, The Grand Ole Opry, Greater Media, Hearst, Hubbard, iHeart, NRG, Scripps, Townsquare, Tyler Media, and Tribune. The group of radio companies was organized to pressure the FCC to back away from its plan to allow small AM stations to maintain power at night as the Commission tries to revitalize the AM band.

The Alliance has submitted comments to the FCC asking the government agency to take the steps necessary to “truly” revitalize AM radio and avoid putting a plan in place that would damage Class A signals. The Commission has proposed allowing some AM stations to retain power at night, which Class A owners say will interfere with their signals, which have long been able to send their booming signals across many states.

The Alliance says the FCC made this decision without sufficient study and has filed these comments. The group says Class A AM stations have played invaluable roles providing the public with critical and often life-saving information in times of severe weather, natural and man-made disasters and other emergency and public safety events. The group says the FCC’s plan would make tens of millions of listeners subject to new reception-destroying interference on the AM band if the Class A stations were not protected.

Total TV, Video Consumption Grows Slightly In Q4 2015

by Wayne Friedman, March 25, 2016,                                             

Total TV-video consumption grew in the fourth quarter of 2015 by just under 1%. These results -- from Nielsen data and estimates from Brian Wieser, senior research analyst at Pivotal Research Group -- include live TV, time-shifted TV, desktop online video, DVD/Blu-Ray viewing, tablets, smartphones and multimedia/OTT devices.

Wieser says total video consumption was essentially flat year-over-year, slipping 0.2% for all of 2015. He also notes declines in total traditional TV viewing -- live TV plus time shifted viewing -- slowed in the period, dropping by just 1% across the whole U.S. TV population.
In addition, he says, time-shifted viewing is increasingly stable with regard to time-shifted time per person and the number of people who time-shift viewing. Looking at total traditional live plus time-shifted TV viewing this activity declined just 1.0% for the year.

Wieser says 33% of TV’s heaviest users represent 52% of consumption. Similarly 33% of the same group account for 53% of internet consumption activity. “This reflects the notion that heavy consumers of TV can be better characterized as heavy consumers of media,” Wieser says,

Looking specifically at streaming video, 14% of the population accounts for 94% of total streaming video consumption from PCs. Top 7% of video streaming users watch nearly 13 times as much traditional TV as they do streaming video -- which would be lower if mobile devices were included. 

Local Stations All Smiles For Political Advertisers - Fewer Grins For Other Marketers

A media critique by Wayne Friedman, Staff Writer Thursday, March 24, 2016 Automotive TV advertising has long been a bellwether TV advertising category. But when we get into the big political TV advertising seasons, automotive advertisers -- as well as others marketers -- can get pushed out of key commercial periods.   A Wall Street Journalreport says this year -- in key political markets -- only about half of automotive advertiser commercials are running, according to a Kantar Media analysis. Kantar points out this is a less-critical problem for retail, telecommunications and other major TV categories, where around 30% to 40% of inventory can be preempted. Not only can political advertisers bump out other advertisers’ media schedules, but they also can buy up that local TV inventory at the lowest possible rate. Still, despite the unavoidable inventory issues, the extra TV ad revenue makes a big, positive difference for TV stations. According to some surveys, anywhere from 20% to 30% of all available local TV station commercial inventory goes unsold. One advertising category TV stations won’t be cutting back on, according to Kanta data: their own on-air promotional time for local TV news programming and other shows. In future years, TV station make be able to smooth out these commercial inventory swings, as many look to the prospects of programmatic-like buying systems -- which would seem to encourage more ad sales directly from marketers. And the benefit for local TV stations: There is no difference between local and national ad inventory. All this could put TV stations into a different league in years to come. In any political season, they’d vote for that.

Forget MTV; Millennials Want Their YouTube (And Netflix And Social Media)

By Kipp Jarecke-Cheng, Op-Ed Contributor Friday, March 25, 2016

There’s an iconic scene in the 1997 cinematic masterpiece, “Romy and Michelle’s High School Reunion,” where one of the titular characters had, like, a dating emergency, so she attempted to audition for “Singled Out,” MTV’s raucously puerile dating show—only to be flatly rejected. At age 28, Romy White was deemed too old and too uncool to be considered MTV material. “Try VH1,” she was told. That fictional film moment neatly encapsulated the hubris that MTV—the arbiter and purveyor of pop culture cool at the time—must have felt without realizing that a seismic shift was underway. In the penultimate years before the turn of the millennium, MTV may have still held cachet for young audiences, but its youthful exuberance was quickly starting to lose some of its luster, thanks to the incursion of the Interwebz. Fast-forward nearly 20 years into the new century, and MTV barely registers on the radar of most Millennials these days. While “I want my MTV!” was a pop culture battle cry for many Gen Xers, Generation Y has largely dismissed the original music television network as a source for music discovery or pop culture relevance. Founded in 1981, on the cusp of when the oldest Millennials were born, MTV is now starting to show its near-middle age and the cable network’s viewership (and cultural influence) has waned dramatically. To be fair, broadcast and cable networks, in general, have experienced viewership declines in recent years due to myriad factors but especially among younger audiences, many of whom have cut the cord and moved on to social channels and web-based entertainment options like YouTube, Spotify, and Netflix to get their music and video fixes. As points of comparison, adults ages 50 to 64 typically watch 39 hours and 21 minutes of traditional television per week, while Millennials between the ages of 25 and 34 watch 21 hours and 10 minutes of traditional television per week, according to Nielsen data. Moreover, teens between the ages of 12 and 17 watch a mere 17 hours of traditional television per week, a 30% contraction over a five-year period. It’s no wonder that networks like MTV, which once had a stranglehold on the pop culture zeitgeist, are now desperately trying to reinvent themselves for the digital age. A survey conducted by Defy Media on the video consumption habits of young people paints a grim picture for traditional television: according to the report, Gen Y’s top sources for video content are YouTube (85%), Netflix (66%) and Facebook (53%). While 67% of Millennials said they couldn’t live without YouTube, only 36% of them said they couldn’t live without TV. What appears to be driving the exodus of young viewers from standard television programming seems to be a combination of social media, content themes, and the relatability of YouTube personalities, among other factors. For many Millennials, web-based channels provide content that they want and that they can relate to, things that Millennials believe traditional television has been less successful at accomplishing. According to Defy Media, digital content reigns supreme for Millennials mostly because online personalities are more relatable and influential. A large driver for Gen Y’s online content consumption is the fact that 62% of Millennials reported that digital content “just makes them feel good about themselves,” compared to 40% of Millennials who reported that television made them feel the same way. It’s a curious conundrum for formerly hot networks like MTV, which for years held the pulse of what the young’uns cared about. For once influential networks that have since grown long in the tooth, the loss of a coveted viewer segment (and the marketing dollars that go with it) is one thing, but losing cultural relevance is something else altogether. Many Gen Xers may recall the conversations that we had with our parents back in ye olden days begging for cable television at home so that we could tune in to “120 Minutes” to catch a glimpse of the music and pop culture that would shape our young identities. Meanwhile, Millennials today don’t need (or want) a corporate pop culture machine to tell them what they want. Instead, Millennials are looking to each other and to YouTube personalities to set the tone of pop culture influence without the corporate spiel. If Romy White was looking to remedy her dating emergency today, chances are pretty good that she would bypass MTV altogether, set up her own YouTube channel, and find a date on her own terms without being judged as being too old or too uncool. That would shut up the A Group right away, amirite?

Content Marketing For TV? You Need To Work Harder

A media critique by Wayne Friedman, Staff Writer Monday, March 28, 2016 True “content marketing” may never come to the TV screen. But can you blame marketers for trying? In a fractionalized media environment, and with so much advertising avoidance, TV advertisers may be tempted to look for alternatives. But I contend: Content marketing for TV ain’t it. Not that I’ve seen many examples yet; there is just a lot of talk that it’s coming. Some of this is born out of initiatives like branded entertainment, which has been around in its current form for around 16 years or so, probably when CBS’ “Survivor” first launched in 2000. Branded entertainment is better than “content marketing” because it is more of a quick hit. Do your business and be done with it -- even when viewers' eyes roll, watching that extra-long shot of a Toyota Camry in a scripted TV drama and/or comedy. TV shows with heavy branded entertainment seem to have deepened their relationship with viewers. Still, do consumers appreciate this kind of sponsored content? That might be a leap. For sure, this kind of marketing-related TV content -- sponsored segments on NBC’s “The Voice” for example, or any number of reality TV shows on cable these days -- is here to stay. You can see a segment where a group of finalists for a singing reality show are driving around in a Ford Focus in preparation for a season-ending show. This is just part of a TV advertiser's overall tool box now. Content marketing for digital media -- stuff that looks like a print article but really isn’t? That’s the main form. Not all that crazy about this -- not from a consumer perspective or as a business marketing opportunity. What might be needed is a new type of content marketing. Sure, an in-depth article about alternatives remedies for headaches, aches and pains seems like a good story. But when learning it is sponsored by Aleve, Advil, or Tylenol? Nope, that doesn’t really cut it. Do better. While you need to be upfront with media consumers -- telling them what stuff is sponsored, and perhaps why -- you'd better figure out better ways to attach your precious brand name. Take your cue in part from WPP Group’s Sir Martin Sorrell, who said recently: “We are not in the advertising business anymore.”