Saturday, February 17, 2007

Financial Details on Sinclair Re-Transmission Deal

UPDATE: Discussed in depth in a previous post, Broadcast / Cable Re-Transmission Agreements: Why Should We Care?, the details of the re-transmission agreement between Sinclair Broadcasting Group and Time Warner Cable were not originally available.

As a publicly traded company, Sinclair Broadcasting Group has reported some of the details of their agreement with Time Warner in their earnings statement for 4th Quarter 2006.

Sinclair owns and/or operates 58 stations and has signed re-transmission agreement with 75% of the cable systems in their local markets. According to the
Baltimore Sun, Sinclair reported today that this will generate an additional $48 million in 2007 compared to the $25 million they earned in 2006.

Sinclair anticipates that this revenue stream could double again by 2010 to almost $100 million.

The compensation will be distributed among stations based on market size and other factors, but just an average shows this to be an additional $827,000 per Sinclair station for 2007.

--Carter Cathey
(c) 2007

Thursday, February 15, 2007

Networking in Texas Media: 2007 Event Calendar

The following is a rough 2007 calendar of Media Industry Events in Texas.

Here are some websites to use in order to stay up to date on scheduled events around the state:

Monthly events (DALLAS)

  • Dallas Ad League monthly luncheon
  • AWRT-DFW monthly luncheon

Texas Media Events:

February 8: DALLAS – Dallas Ad League 2007 Addy Awards

  • This annual event presents awards to great creative produced in Dallas. I went to this event several years ago and it was primarily creative services people that attend. Some good work is show-cased, but it wasn't well-attended by media professionals on the buying or selling side of the business. None of my media clients were involved nor were clients.
  • Recommendation: As a media networking opportunity, skip it.

February 17: HOUSTON – Houston Ad Federation 2007 Addy Awards

  • This annual event presents awards to great creative produced in Houston. It is less exciting than the Dallas version and less attended.
  • Recommendation: For media, definitely skip it.

February 23: AUSTIN – Austin Ad Federation 2007 Addy Awards

  • Haven’t been to this one, but I have heard it is not well attended.
  • Recommendation: Again, marginal media value - Skip It.

March 7: SAN ANTONIO – Ad League 2007 ILA Honors Luncheon

  • Honoring AT&T for their innovation and leadership in advertising, this event sounds interesting. I haven't been to an ILA Luncheon before, but on the basis of who potentially might attend, it might be interesting as a networking opportunity and as a way to learn more about AT&T as a potential client.
  • Recommendation: Deserves more investigation.

March 22: DALLAS - AWRT Awards Gala

  • A well-attended, annual event, there are actually two simultaneous events. One is inside the ballroom during the long presentation of media-industry awards and the other is at the bar outside the ballroom.
  • Recommendation: Should Attend (and work both parties).

March 29: DALLAS – Ad League All Fools Golf Tournament

  • I have never participated. I am curious about other events surrounding the golf like awards ceremony, lunch, dinner, etc. There might be some good networking opportunities, but I am not familiar enough with the event to say.
  • Recommendation: Deserves more investigation.

April 10: DALLAS – Ad League Ad Roast (2007 Roastees Barbara and Stan Levinson)

  • A well-attended, annual event, but it is truly painful to endure it. Advertising and Media professionals attempt, usually badly, to roast like the Friar’s Club. It goes from extreme boredom to amazingly insulting. However, it is a big event and everybody goes.
  • Recommendation: Should Attend (even though you probably won’t enjoy it)

April 19: AUSTIN – Austin AWRT Trailblazer Awards

  • 2nd Annual and I have not been previously. The Trailblazer awards are where the media community honors people in the community who have been visionaries when it comes to media. The worth of the event as a networking opportunity depends a great deal on whom is being honored. A good honoree means A-list attendees on both the agency and client side of the business plus all the sellers.
  • Recommendation: More Investigation Needed

April 26: DALLAS – Texas Showdown 2007

  • A well-attended, annual event, which is attended by television stations, radio stations, media mavens, buyers, planners, and assistants. It is an experience. It starts at the hotel with a suite-crawl from one sponsor party to another. After jello shots and fourteen flavors of beer, you take the shuttle out to the ranch. Frozen margaritas and beer are the constant background to events like riding the mechanical bull, getting your butt sketched, line dancing, calf roping, and carnival games.
  • Recommendation: Should Definitely Attend. This is a great networking event and a unique media experience in Texas.

April 27: DALLAS – AWRT Mournin’ After Golf Tournament (Showdown)

  • I have worked this event as a sponsor for several years. You can sponsor a team or sponsor a hole. As a team sponsor, you play in the tournament. As a hole sponsor, you set up an table at the tee-box with Bloody Mary’s, Mimosas, snacks, cokes, freebies, etc. There is usually alcohol and free stuff on every other hole.
  • Recommendation: Maybe Attend. (Please note that this is the morning AFTER Showdown. Pace yourself if you intend to tee off at 8am.)

August 9: AUSTIN – Texas Association of Broadcasters 2007 Annual Convention

  • This is a great event with good sessions. It is mainly attended by Texas broadcast television stations and the numerous companies that call upon them. The sessions are great even though more of them focus on the technical side of broadcasting. The legislative affairs session is always good and the broadcaster panel discussions.
  • Recommendation: Should attend if you are a Texas Broadcaster or sell to them.

October TBD: DALLAS – Dream Fund Night in Monte Carlo

  • A well-attended, annual event with casino table games played for chips. This is a great networking event attended by media industry buyers and sellers. There is a silent auction and at the end of the night, there is a live auction where you use your poker winnings to bid on prizes. People cheat at the live auction so don’t get your hopes up, but it is a good event.
  • Recommendation: Should Attend this great event for a great cause.

October TBD: HOUSTON – Houston Media Classic Golf Tournament

  • A well-attended, annual golf tournament. I have never been, but I am told it is one of the better events in Houston. As with all golf events, I would like to know more about networking opportunities like lunch or awards presentations.
  • Recommendation: Maybe Attend

October-November TBD: DALLAS – AWRT Battle of the Media Stars

  • This is a strange event, but typically well-attended by the station and agency people in Dallas. The idea is that there are teams and they compete in odd events like Battle of the Network Stars. If you are interested in competing, then you have to go to the Battle Team Lottery Happy Hour to try and get on a team. More people watch than compete so it is worth attending either way. Over the last few years, I have started to feel that the attendees have become more and more junior people rather than senior people.
  • Recommendation: Maybe Attend.

November TBD: Dallas – Dream Fund Chili Cook-off

  • I have never been to this event, but everybody that goes says it is great. I don’t know how well-attended it is personally, but it sounds like a relatively large event and the nature of the event lends itself to easy networking.
  • Recommendation: Should Attend

November TBD: HOUSTON – Trailblazer Gala

  • This is the Houston Ad Federation’s annual gala where they recognize and award Trailblazer in Houston media. The quality of the event really depends on who the award recipient is scheduled to be. This is a well-attended event with relatively inexpensive sponsorship opportunities and it is attended by agencies and clients.
  • Recommendation: Maybe Attend

December TBD: DALLAS – SBR / AWRT Christmas Party

  • This is a well-attended event by all Dallas media. Party dresses and dancing, this event is every sales assistant's first opportunity to make bad professional decisions. This event brings out almost everybody and is an excellent networking opportunity.
  • Recommendation: Should Attend

TBD Events:

  • AUSTIN AWRT Battle of the Media Stars
  • AUSTIN AWRT Bachelor Auction
  • SAN ANTONIO AWRT (Media Alliance) SAMA Awards Gala

--Carter Cathey

(c) 2007

Wednesday, February 14, 2007

Broadcast / Cable Re-Transmission Agreements: Why Should We Care?

On the surface, there is little that appears as boring as the recent announcement that Time Warner Cable and Sinclair Broadcast Group have reached a cable re-transmission agreement. The net result of this news: nothing changes for viewers.

But, in the broadcasting world, this shows a fundamental shift in business practice and a new step in the evolution of how content is delivered to viewers. Let me back up a bit…

Broadcast television stations create local content and can have exclusive local licenses to network and syndicated content. This means that WFAA-TV, Dallas ABC, produces local news at 6pm and 10pm, they carry ABC network programming exclusively in Dallas, and they have Oprah, for instance, through exclusive syndication.

Local television stations, therefore, own or have an exclusive local license to everything that they broadcast. From their towers, broadcast stations typically send out their content over an analog and a digital signal. As a viewer, you can pick this up through an antenna for free. Sometimes. Some rural viewers do not get a quality over-the-air signal, for instance.

In the Dallas area as an example, 77.7% of the homes have either cable or satellite. So, 22.3% (529,890 households) are using this over-the-air signal while 77.7% (1,848,770 households) are tuning into the local channels through a cable or satellite system that is re-transmitting these local stations on their system. In a small number of cases, people get up and flip the A-B switch on their cable box to view via antenna, but most of the time, people use the online guide to switch to ABC.

This is cable re-transmission.

(While there are different rules for satellite companies and cable companies, for the rest of this article I am going to use the catch-all term 'cable systems' in discussion of re-transmission.)

Cable systems must get permission to re-transmit local broadcast station content. For cable systems and local broadcast stations, this negotiation is critical. Most cable system subscribers expect to be able to get their local channels through their set-top box with no additional effort on their part.

For local broadcast stations, there is a definite benefit as well. Broadcast stations have a coverage area that is strictly defined by the amount of power they put through their tower, the height of their tower, and the geography of the region. Cable re-transmission allows local stations to reach much farther away from their tower, increase their viewing area, and to reach new viewers with no additional cost. They do not have to build additional towers or increase the power of their signals. Larger coverage areas and larger potential audiences lead to higher viewership, higher Nielsen ratings, and more advertising revenue. And, at least in the beginning, local cable systems were not a serious competitor for local television advertising dollars.

The federal government, through the FCC, has been involved in this process for quite some time. Most recently with the Satellite Home Viewers Improvement Act (SHVIA), the federal government set forth some rules for the relationship between local broadcast stations and the cable and satellite systems in their local markets. Three key provisions of SHVIA and other like-minded legislation:
  • Value of True Local Content - The FCC recognized the value of local content and the role local broadcast stations have in their communities by providing local content like weather, news, emergency warnings, and local sports. Therefore, cable and satellite systems can not bring in out-of-market stations and call them ‘local’ to specific markets. For example, KNBC-TV (Los Angeles NBC) could not be brought into Odessa Texas by the local cable system and called the ‘local’ affiliate for Odessa.
  • Must-Carry Provisions – This means that any broadcast station in a market has the right to be carried on all cable and satellite systems in their market as the ‘local’ affiliate. For example, WFAA-TV (Dallas ABC) can assert must-carry and Time Warner is obligated to put the station on their cable systems in Dallas. Must-carry involves no financial obligations from either party.
  • Re-Transmission – This means that a broadcast station, as the content owner in a local market, is not obligated to make their content available to cable systems for free. They are able to withhold their content and negotiate terms for re-transmission.

A local broadcast station could either assert their must-carry rights OR negotiate a re-transmission agreement that might include some sort of compensation or other provisions. In the past, local stations exercised their must-carry rights to force cable systems to carry their content, but provided their content for free. However, in recent years, local stations have begun to reconsider this practice.

Considering the benefits to local broadcast stations, why does providing content to cable systems pose a problem for local television stations?

  • While not historically a threat, local cable systems are now one of the biggest competitors of local television stations when it comes to local commercial advertising sales.
  • In addition, local cable systems now routinely charge their subscribers an additional $4.00 - $10.00 per month to access the local broadcast channels. They are charging customers for content that they are getting from local broadcast stations for free.
  • Local Broadcast stations know how important and profitable it is to cable systems to provide access to the local broadcast station content to their subscribers.

The result has been the beginning of a change in practice. Local stations and, more importantly, large station groups like Nexstar Broadcasting and Sinclair Broadcasting Group, are beginning to re-negotiate their deals with cable and satellite systems demanding compensation for the right to re-transmit their content. They are asking the question 'Why should local broadcasters provide content to cable and satellite systems for free?'

What would happen if local broadcasters decided not to license their content to cable and satellite systems? This is an interesting question which nobody can fully answer. Cable system owners worry about three things:

  1. Would subscribers pay for cable that did not include local channels?
  2. If Satellite reaches an agreement with local stations, would cable subscribers convert to satellite rather than cable?
  3. And, perhaps the biggest question, if cable systems pay one station in one market for local content, does this mean that every station in every market is going to want to be paid?

But, it isn't as lopsided in favor of the local broadcast television stations as it might seem. They are hesitant to pull their content from cable systems even though they feel strongly that they should be getting compensated. It looks good on paper, but it is a risk. In the short-term, viewership and ratings would go down. This would be true for no other reason than it takes people a while to figure out how to find programming in a new place. This would level off some over a period of months, but it would be a noticeable hit. This dip in ratings would negatively affect the station for a long time as it creates a history that will be used to negotiate future media schedules. But, the risk goes deeper than that...

Back to WFAA-TV, what if they withheld their content from cable only to find that viewers started going to to watch Lost and Desperate Housewives each week or watched them through sling-casting from another ABC station in another market? Nobody has an idea what the full consequences would be. And, nobody wants to be the one left holding the bag.

For local broadcast systems, there has been a lack of solidarity on this issue. They have been competitors first and broadcasters second. I think this is changing due in large part to broadcasters like Perry Sook (photograph), Nexstar Broadcasting, that challenged the way it had always been done and led the charge even when he had to do it alone. Pulling his stations off the cable systems in several markets when his request for compensation was denied, he jump-started the conversation of how to correctly value and compensate local stations for local content. Under Sook's direction, Nexstar Broadcasting was the first broadcast group to reach a re-transmission agreement that included some form of compensation. Now, Sinclair Broadcasting has reached an agreement, also undisclosed, that includes compensation.

The battle over re-transmission is an important one for local broadcasters and content creators especially as we enter a new technical age where content can be consumed in so many new and fast-changing ways. With the introduction of video streaming, pod casting, video phones, sling-casting, and other new technologies, the battle over re-transmission will set an important precedent on the relationship between local content producers and those that amalgamate local content regardless of the technological form the distribution might take in the years to come.

--Carter Cathey
(c) 2007

Tuesday, February 6, 2007

Superbowl XLI Media Overview

During Superbowl XLI, the biggest category with the most product mentions was CBS promoting their own programming with 45 commercials and/or promotional mentions.

CBS most heavily promoted:

The biggest paying category was, not surprisingly, Automotive with 25 commercials and/or product mentions by nine brands.

Top Five in Automotive:

  • Cadillac (4)
  • Chevrolet (4)
  • Honda (4)
  • Toyota (3)
  • Ford Trucks (3)

The third category was beer and this was the largest exclusive category with all 13 commercials and/or product mentions being for Budweiser products. Non-alcoholic beverages (10), Internet (6), Snacks (6), Insurance (5), DVD Rental (4), and Employment (4), rounded out the top ten categories. For a full category listing, see Superbowl Commercial Categories.

There were 83 advertisers in Superbowl XLI many of which were advertising multiple brands. Looking just at commercials and not including sponsorships, Budweiser, was the biggest commercial advertiser with nine entries for at least four different beers. For a complete list of advertisers, see Superbowl XLI Commercial Advertiser Rankings. For a complete list of sponsors, see Superbowl XLI Sponsorships.

Top Six Commercial Advertisers:

  • Budweiser All Products (9)
  • Grammy Awards (6)
  • Survivor Fiji (5)
  • Cadillac (4)
  • Coke (4) NFL (4)

With a total of 144 commercial spots at an average in-game / post-game selling price somewhere between $2M and $2.6M, this game generated between $280M and $375M in commercial revenue alone.

For a complete log of all commercials and their pod positions, please see Superbowl XLI Commercial and Promotion Log.

Superbowl XLI Commercial and Promotion Log

The following is a list of all the commercials, promotions, and/or sponsorships that were broadcast during the commercial breaks of Superbowl XLI. I did not collect mentions and logos that appeared during actual game play. Everything I collected occurred in the commercial breaks. Beginning with pod 01-00, Ford Trucks broadcast the last commercial before the hard open. I did not record the length of each spot nor did I differentiate between :60, :30, :15, :10, or :05 spots.

Position ---- Advertiser ---- Commercial
01-00 ---- Ford Trucks ---- Assembly (lead-in spot)
01-01 ---- Budweiser ---- Low Five (Rock, Paper, Scissors)
01-02 ---- Doritos ---- Smooth
01-03 ---- Blockbuster Online ---- Carl & Ray Mouse Click
01-04 ---- CBS Promos ---- CBS Evening News with Katie Couric
01-05 ---- Superbowl ---- Prince Halftime Show
02-01 ---- Sierra Mist ---- Beard Combover
02-02 ---- ---- Sales Leads
02-03 ---- Sierra Mist ---- Karate
02-04 ---- Superbowl Sponsors ---- Budweiser
02-05 ---- Superbowl Sponsors ---- Pepsi
02-06 ---- Superbowl Sponsors ---- Federal Express
03-01 ---- Toyota ---- Tundra off a cliff
03-02 ---- Federal Express ---- Moon Office
03-03 ---- Bud Light ---- Wedding Auctioneer
03-04 ---- CBS Promos ---- Amazing Race
03-05 ---- Superbowl ---- Prince Halftime Show
04-01 ---- Snickers ---- Lady & The Tramp Kiss
04-02 ---- Schick ---- Titanium Shaver
04-03 ---- Movie Release ---- Pride
04-04 ---- CBS Promos ---- Survivor Fiji
04-05 ---- Superbowl Sponsors ---- Toyota
04-06 ---- Superbowl Sponsors ---- Career Builder
05-01 ---- Chevrolet ---- Songs
05-02 ---- Bud Light ---- Foreign Students
05-03 ---- CBS Promos ---- Grammy Awards
05-04 ---- CBS Promos ---- Letterman & Oprah Promo
06-01 ---- ---- Marketing Department
06-02 ---- Coke ---- Grand Theft Auto Redux
06-03 ---- CBS Promos ---- CBS is #1
07-01 ---- Bud ---- Muddy Dog / Fire truck
07-02 ---- Garmin ---- Maposaurus
07-03 ---- CBS Promos ---- CBS Cares / NFL Mentor
07-04 ---- CBS Promos ---- Pro Bowl Promo
07-05 ---- CBS Promos ---- Grammy Awards
08-01 ---- Career Builder ---- Outdoor Office
08-02 ---- Doritos ---- Cleanup on Register 6
08-03 ---- Chevrolet ---- University of Washington Contest Spot
08-04 ---- Superbowl Sponsors ---- Chevrolet
08-05 ---- Superbowl Sponsors ---- Doritos
09-01 ---- Bud Light ---- Slap is in
09-02 ---- Beat Your Risk? ---- Heart Character beat up by illness characters
09-03 ---- United Way ---- Go United Way
09-04 ---- Superbowl ---- Prince Halftime Show
10-01 ---- General Motors ---- GM Robot Suicide
10-02 ---- Coke ---- Black History
10-03 ---- CBS Promos ---- Letterman & Dr. Phil Promo
10-04 ---- Superbowl Sponsors ---- General Motors
10-05 ---- Superbowl Sponsors ---- Budweiser
11-01 ---- Movie Release ---- Wild Hogs
11-02 ---- Sprint ---- Connectile Dysfunction
11-03 ---- Motorola ---- Football Video on Phone
11-04 ---- CBS Promos ---- How I Met Your Mother
11-05 ---- CBS Promos ---- Amazing Race
12-01 ---- Doritos ---- Black History
13-01 ---- Coke ---- What Else Haven't I Done?
14-01 ---- CBS Promos ---- Rules of Engagement
14-02 ---- CBS Promos ---- CSI (Vegas)
15-01 ---- CBS Promos ---- Two & 1/2 Men
15-02 ---- CBS Promos ---- CSI (Vegas)
15-03 ---- CBS Promos ---- Shark
15-04 ---- CBS Promos ---- March Madness (bubbles?)
15-05 ---- CBS Promos ---- Grammy Awards
15-06 ---- Ford Trucks ---- We're #1
15-07 ---- Chase Bank ---- Stoplight ATM Visit
15-08 ---- Acura ---- Aren't We Advanced?
15-09 ---- CBS Promos ---- CBS Evening News with Katie Couric
15-10 ---- Blockbuster Online ---- Blockbuster Halftime Show Sponsorship
16-01 ---- CBS Promos ---- NCIS / The Unit Combo
16-02 ---- CBS Promos ---- Survivor Fiji
16-03 ---- NFL Promo ---- Difference Makers
16-04 ---- Pepsi ---- Superbowl 41 Halftime Show Sponsorship
17-01 ---- CBS Promos ---- Criminal Minds
17-02 ---- CBS Promos ---- CSI Miami
17-03 ---- CBS Promos ---- Jericho
18-01 ---- CBS Promos ---- CBS Evening News with Katie Couric
18-02 ---- CBS Promos ---- CSI NY
18-03 ---- CBS Promos ---- Grammy Awards
18-04 ---- CBS Promos ---- Survivor Fiji
18-05 ---- Chevrolet ---- Chevy Trucks Best Coverage
18-06 ---- Cargill ---- Cute Animal Stuff
18-07 ---- MetroPCS ---- Call Network or Out of Network
18-08 ---- Honda Civic ---- Tron Homage
18-09 ---- CBS Promos ---- Local Affiliate
19-01 ---- Movie Release ---- Disney's Meet the Robinsons
19-02 ---- E-Trade ---- Robbed by Your Bank
19-03 ---- Coke ---- Extraordinary Production inside Coke Machine (long-form)
19-04 ---- CBS Promos ---- Craig Ferguson
19-05 ---- NFL Promo ---- Football
20-01 ---- Bud Light ---- Monkeys Planning a Break
20-02 ---- Revlon ---- Cheryl Crow Colors Her Hair
20-03 ---- Superbowl Sponsors ----
20-04 ---- Superbowl Sponsors ---- ??? (Can't Read my Notes)
20-05 ---- Superbowl Sponsors ---- Wild Hogs
21-01 ---- Career Builder ---- Office Survivor
21-02 ---- Taco Bell ---- Lions Ricardo Montalban
21-03 ---- Van Heusen ---- Just Lucky or Knows How to Dress?
21-04 ---- Cadillac ---- Vote for SVP online
21-05 ---- CBS Promos ---- Two & 1/2 Men
22-01 ---- Toyota ---- Tundra up a ramp
22-02 ---- Emerald Nuts ---- Robert Goulet during nap time
22-03 ---- T-Mobile ---- Is this your Dad? Dwayne Wayne / Charles Barkley
22-04 ---- CBS Promos ---- Grammy Awards
22-05 ---- Superbowl Sponsors ---- Coke
22-06 ---- Superbowl Sponsors ---- Revlon
23-01 ---- Federal Express ---- Ground Service: Judging by a name
23-02 ---- Nationwide ---- Kevin Federline: Life Comes at You Fast
23-03 ---- Bud Light ---- Hitcher with an axe
23-04 ---- CBS Promos ---- CSI (Vegas)
24-01 ---- CBS Promos ---- CBS Sports
24-02 ---- Mitsubishi ---- Outlander - Out Everything
24-03 ---- Jack in the Box ---- I want to be a Vegetarian
24-04 ---- Dodge Trucks ---- Truck Stop Country
24-05 ---- CBS Promos ---- Local Affiliate CBS 11 Official Home of Cowboys
25-01 ---- Budweiser ---- Crabs Cooler Grab
25-02 ---- Prudential ---- What a rock can do
25-03 ---- Honda CRV ---- Hunk of Burning Love
25-04 ---- CBS Promos ---- Survivor Fiji
26-01 ---- Hewlett-Packard ---- Making the Computer Personal Again
26-02 ---- Izod ---- Melting Pot Sports
26-03 ---- Budweiser ---- Future Tabletop Football
26-04 ---- Superbowl Sponsors ---- Honda
26-05 ---- Superbowl Sponsors ---- Hewlett-Packard
26-06 ---- Superbowl Sponsors ---- E-Trade
27-01 ---- Flomax ---- Men who want to pee less
27-02 ---- E-Trade ---- Things to do with one finger
27-03 ---- CBS Promos ---- Rules of Engagement
28-01 ---- Movie Release ---- Hannibal Rising
28-02 ---- Career Builder ---- Outdoor Survivor - Torture
28-03 ---- CBS Promos ---- Criminal Minds
28-04 ---- Superbowl Sponsors ----
28-05 ---- Superbowl Sponsors ----
29-01 ---- Honda ---- Gas Pumps Unneeded
29-02 ---- ---- Marketing Department
29-03 ---- Snapple ---- Green Tea Yogi
29-04 ---- NFL Promo ---- Its Hard to Say Goodbye
29-05 ---- CBS Promos ---- CSI Miami
30-01 ---- Michelin ---- A Better Way Forward
30-02 ---- Blockbuster Online ---- Total Access - Alec Baldwin
30-03 ---- Start Farm ---- Agents make the difference
30-04 ---- California Cheese ---- Happy Cows
30-05 ---- CBS Promos ---- Grammy Awards
30-06 ---- Lexus IL ---- So Much for Gravity
30-07 ---- Geico Insurance ---- Gecko in therapy
31-01 ---- Cadillac ---- Car Evolution
31-02 ---- Beat Your Risk? ---- Heart Character beat up by illness characters
31-03 ---- ---- Marketing Department
31-04 ---- Comcast ---- DSL Sucks but fast isn't for everyone
31-05 ---- ---- Sales Leads
32-01 ---- Cadillac ---- Tiki Barber and Opportunity
32-02 ---- Lunestra ---- Can't Sleep?
32-03 ---- Progressive Insurance ---- Insurance is cool
32-04 ---- CBS Promos ---- Rules of Engagement
32-05 ---- CBS Promos ---- Amazing Race
32-06 ---- NFL ---- Get your Superbowl hats & shirts at …
33-01 ---- Cadillac ---- Andy Garcia
33-02 ---- Netflix ---- 1 Billion Movies
33-03 ---- CBS Promos ---- Survivor Fiji
33-04 ---- Ford Trucks ---- Expedition Extended Length
33-05 ---- TXU ---- Pick Your Plan
33-06 ---- Mercedes ---- Every Owner Has a Story
33-07 ---- CBS Promos ---- Local Affiliate CBS 11
33-08 ---- Into Criminal Minds through Nance and Simms calling Superbowl…

Superbowl XLI Sponsorships

This lists major and minor sponsorships during Superbowl XLI.

Major Sponsorships: These were sponsorships that had substantial screen time and talking points on-air.
  • Pepsi - Halftime Show (Prince)
  • Blockbuster Online - Halftime Sponsor
  • Cadillac-Game MVP Free Car

Minor Sponsorships: These were mentioned coming out of commercial breaks as Superbowl XLI sponsors with logo identification.

  • Budweiser (Four Different Products)
  • Career Builder
  • Chevrolet
  • Coke
  • Doritos
  • E-Trade
  • Federal Express
  • General Motors
  • Hewlett-Packard
  • Honda
  • Pepsi
  • Revlon
  • Toyota
  • Wild Hogs
  • One more ??? (Can't Read my Notes)

Superbowl XLI Commercial Advertiser Rankings

The following is a list of advertisers that were involved in Superbowl XLI and to what degree they were involved. I did not record the length of each spot, but this list is for commercials rather than mere sponsorship mentions. I did not differentiate between :60, :30, :15, or :10 spots.

Budweiser (All Products) - 9
Grammy Awards - 6
Survivor Fiji - 5
Cadillac - 4
Coke - 4
NFL - 4
Amazing Race - 3
Career Builder - 3
CBS Evening News with Katie Couric - 3
Chevrolet - 3
CSI (Vegas) - 3
Doritos - 3
Ford Trucks - 3 - 3
Honda (All Cars) - 3
Local Affiliate CBS 11 - 3
Prince Halftime Show Promos - 3
Rules of Engagement - 3
Beat Your Risk? - 2
Blockbuster Online - 2
Criminal Minds - 2
CSI Miami - 2
E-Trade - 2
Federal Express - 2
Letterman - 2 - 2
Sierra Mist - 2
Toyota - 2
Two & 1/2 Men - 2
Acura - 1
California Cheese - 1
Cargill - 1
CBS Cares - NFL Mentor - 1
CBS is #1 - 1
CBS Sports - 1
Chase Bank - 1
Comcast - 1
Craig Ferguson - 1
CSI NY - 1
Dodge Trucks - 1
Dr. Phil - 1
Emerald Nuts - 1
Flomax - 1
Garmin - 1
Geico Insurance - 1
General Motors - 1
Hannibal Rising - 1
Hewlett-Packard - 1
How I Met Your Mother - 1
Izod - 1
Jack in the Box - 1
Jericho - 1
Lexus IL - 1
Lunestra - 1
March Madness (bubbles?) - 1
Meet the Robinsons - 1
Mercedes - 1
MetroPCS - 1
Michelin - 1
Mitsubishi - 1
Motorola - 1
Nationwide - 1
NCIS - 1
Netflix - 1
Oprah Promo - 1
Pride - 1
Pro Bowl Promo - 1
Progressive Insurance - 1
Prudential - 1
Revlon - 1
Schick - 1
Shark - 1
Snapple - 1
Snickers - 1
Sprint - 1
State Farm - 1
Taco Bell - 1
The Unit - 1
T-Mobile - 1
TXU - 1
United Way - 1
Van Heusen - 1
Wild Hogs - 1

Superbowl Commercials Categories

The following are a list of categories (my own) that show which categories were involved in the Superbowl to a greater or lesser degree. I did not record then length of each spot or sponsorship mention. If a commercial ran or the product received a verbal sponsorship credit, then I included it for my purposes. I did not include every time a logo appeared on-screen during the game. Further, during commercial breaks, I did not differentiate between :60, :30, :15, :10, or :05 spots.

CBS Promos - 45
Automotive - 25
Beer - 13
Beverage - 10
Internet - 6
Snack - 6
Insurance - 5
Movie Release - 5
DVD Rental - 4
Employment - 4
Financial - 4
NFL - 4
Technology - 4
Cellular - 3
Personal Care - 3
Shipping - 3
Agricultural - 2
Apparel - 2
Fast Food - 2
Health Care - 2
Medicine - 2
Auto Parts/Service - 1
Cable Provider - 1
Charity - 1
Energy - 1

Thursday, January 18, 2007

Reduction in Force

Ann S. Moore, Chairman and CEO of Time Inc., announced today that Time Inc. will be cutting more than the 250 expected jobs. The total was 289 mostly editorial jobs.

Why should those of us outside of print media care? I addressed this question in a related entries Decline of Print Media Sales and What Walks Out the Door (when great senior people are let go).

Time Inc. has 150 titles (as of September 2006) with a several up for sale at the moment. They are owned fully by Time Warner, Inc. Four of their magazines were on Adweek's "Hot List" in 2006: People (#1), Real Simple (#3), In Style (#7), and Cooking Light (#8).

Culled from the Time Warner website about Time Inc.:

  • Time Inc. magazines are read 340 million times each month worldwide by 173 million adults over 18 years of age.
  • Two out of every three U.S. adults read a Time Inc. publication every month.
  • As of June 2006, Time Inc. earned 22.8% of all domestic magazine advertising spending.
  • Time Inc. ended 2005 with three out of the top four magazines in both advertising revenues and pages.
  • People remained the #1 magazine in advertising revenue for the 15th consecutive year.
  • Seven of the top 25 magazines in advertising revenues in 2005 were Time Inc. titles.

The problems facing Time Inc. are the same problems facing the entire magazine industry and the broader media industry. All of these media outlets that were swallowed up by huge corporations are now expected to maintain a level of growth that is often beyond what is sustainable. Mere profitability is no longer enough. For a media conglomerate, a modest success is today's definition of failure.

So, here is how the lay offs broke down at Time Inc. today:

  • 117 jobs from the business side
  • 172 jobs from the editorial side (50% have been offered packages, 50% are just losing their jobs)

Other casualties:

  • Time Magazine closing bureaus in Los Angeles, Atlanta, and Chicago
  • People Magazine closing bureaus in Washington, Miami, Austin, and Chicago

Recent History:

  • 105 people laid off in December 2005
  • 100 people laid off in February 2006
  • 250 more in April 2006
  • Closing Teen People in July 2006
  • Pending sale of Time4 Media and Parenting Group assets up for sale in September 2006 (560 jobs)
  • 27 people laid off in December 2006
  • Sale of Progressive Farmer Magazine

A large part of this reorganization was designed to curry favor with Wall Street. At the time I am writing this (3:16pm on 1/18/07), Time Warner's stock, (TWX), is trading at $22.98 which is:

  • Today's Open: $22.89 -- up $0.09 (~0.4%)
  • Seven Days Ago: $22.50 -- up $0.48 (~2.0%)
  • One Month Ago: $21.50 -- up $1.48 (~6.4%)
  • One Year Ago: $17.00 -- up $5.98 (~26%)
  • Today's High: $23.03
  • Highest Point in Four Years: Today $23.03

--Carter Cathey
© 2007

Tuesday, January 16, 2007

What Walks Out the Door (when great senior people are let go)

Is the gold watch for thirty years of service something that is gone now forever? Are jobs now like winter hats that you wear for a few years and then trade in on a new one? Is every employee an interchangeable cog to be pulled and replaced without consequence?

As discussed in Decline of Print Media Sales late last week, 250 time staffers continue to wait for the announcement of their layoff. It was announced today that five senior staffers are already gone through early retirement, layoff, or leaving to pursue other interests.

As, Lucia Moses reports in Mediaweek:

--Fred Nelson, VP of digital media for Entertainment Weekly, whose job was eliminated when EW adopted a new management structure. He had been at Time Inc. about 10 years in various positions. His last day was Jan. 8.

--Art Berke, in mid-February after 18-plus years as head of communications for Sports Illustrated. A search for a successor is underway.

--Time magazine's Michele Stephenson, who took early retirement Jan. 5 after 19 years as director of photography and before that, serving as deputy picture editor. Picture Editor MaryAnne Golon was named to succeed her.

--Carrie Welch, vp of communications for the Time Inc. Business and Finance Network, who is leaving Jan. 19 after 25 years at Time Inc. for Lowe Worldwide as executive vp in a communications role. No word yet on a successor.

--And Fortune's executive editor Bob Safian, who left for Mansueto Venture's Fast Company, where he'll be editor and managing director.

I am reminded of an old adage that an agency president once said, “100% of my inventory goes home at 5pm.” The people were his product. He had no widget to sell. The product of his agency was the quality and experience and ability of its people.

Time Inc. may well have been overstaffed and the trimming of these jobs and the hundreds more to follow may well be prudent. It might also have made excellent sense for the board in their duty to the stockholders to maximize profitability and curry wall-street favor. It might even eventually lead to better magazines.

But, I can’t help but wonder what walked out the door with Carrie Welch, VP Communications, after 25 years of service. What knowledge is she taking with her that they will not even miss until silence follows a question she would once have answered? What insights left the building with Michele Stephenson after 19 years as Director of Photography for Time Magazine? What did she know after two decades of selecting photographs for the pages of Time Magazine that wasn’t written in the job description?

Perhaps the more profound question is whether or not anybody cares? Is a 25-year veteran easily and instantly replaceable by a 25-year-old college graduate? Can we just move everybody up a chair and a title without impact? And, with the revolving door of celebrity CEOs and the average tenure of a CMO at 22 months, is there anybody that really knows the impact to the magazines?

I am reminded of a story about a woman that was laid off by a Fortune 100 company after a decade of service. Her specialty was that she knew more about the physical configuration of their stores than anybody else. She knew the depth of the shelves, the height of the racks, the clearance of the ceilings, etc. And, since there were dozens of store designs, across dozens of states, this was quite a challenge.

She was well-compensated and managed the group that produced in-store signage and coordinated and negotiated with external print vendors. She was laid off along with dozens of other employees in a cost-reducing move. Some time later, there was a print job that was produced to incorrect specs. Nobody caught the fact that it wouldn’t fit inside the stores because everybody relied on her for such details and she was no longer there. That one mistake with reprinting, reshipping, reinstalling, etc. cost more than ten times her annual salary.

It would be an excellent moral of the story to say that the company discovered their mistake in letting this valuable resource go and hired her back. Perhaps even saying that they hired her back to HELP in their efforts to reduce costs. It would be nice to envision Richard Gere climbing her balcony, a la Pretty Woman, and begging her to return.

As you might have guessed, this was not the case. In fact, the company had already recognized the benefit on wall-street for the layoffs and they just couldn’t seem to find anyone to blame for the mistake. After all, it wasn’t anybody’s fault. Nobody could be expected to know the dimensions of all the different store designs, could they?

In this movie, the Pretty Woman took her severance package, spent some time emotionally recovering from getting canned in her forties for the first time, then got her next job making more money and moved on with her career.

As our peers at Time Inc. might tell us, perhaps in today’s corporate environment, if you want a gold watch, you should go ahead and buy it for yourself.

--Carter Cathey
© 2007

Saturday, January 13, 2007

Decline of Print Media Sales

Mediaweek Online just reported that Time Inc. is about to lay off as many as 250 people. The formal announcement is expected one day next week.

This continues a trend of compression in the world of print that has no end in sight. With the explosion of "new media" and the expectations of today's media consumer for instant information, magazine circulations and their advertising revenues have been declining. (There is an excellent report on The State of The News Media that is full of excellent detail on the trends in print media.) The magazines that are surviving are niche magazines, category-leader magazines, and magazines that have fully embraced and been fully embraced online.

Even news magazines now routinely break their stories on their website first rather than waiting for the distribution of their print editions. The staff at most magazines know that the core product moving forward is going to be the distribution of content online branded under the print edition's masthead.

As all media continues to converge, we shall see some media outlets flourish and others flounder. As a media seller, I think it would be a difficult time to be selling print. Selling Newsweek or People Magazine in New York is probably still quite lucrative. However, most magazines are facing more of a challenge.

For example, type Kitchen Remodel Magazine into Google and you get scores of options. The top several spots are for the major print magazines for the Kitchen Remodel industry:
--Remodelling Magazine
--Kitchen and Bath Design News Magazine
--Kitchen and Bath Business Magazine

Further down the list are a few other print magazines in this category:
--Home Remodeling Cape Cod and The Islands
--This Old House

All of these magazines are going after the same potential advertisers: manufacturers of flooring, faucets, counter tops, sinks, showers, tile, hardware, lighting, etc. These same potential advertisers are being courted by a dozen broadcast and cable outlets like HGTV Network and DIY Network. These are also the same potential sponsors for several major trade shows.

Budgets are stretching thinner and thinner and the second- or third-tier print remodelling magazine is not as easy to sell as it was ten years ago. These magazines get even harder to sell when the magazines are reduced in size and quality, key strategic leadership leaves, sales teams are smaller with larger territories, budgets are slashed, and the editorial offices have more empty desks than occupied ones.

Good luck to those managers that are leaving Time's magazines and the 250 other employees walking around with targets on their backs for the next week. I hope your severance packages allow you enough time to find work somewhere outside of print.

--Carter Cathey
(c) 2007

Friday, January 12, 2007

Media Convergence: Fusion of Electronic Media

Quite a bit of research has been done to determine the relationship between television viewing and time spent online. When, for example, an advertiser puts their web address on their television commercial, there is a noticeable spike in site traffic within minutes with the majority occurring within the first twenty-four hours.

The bigger question is what percentage of this traffic occurs within those first few minutes after the commercial has broadcast? Did the television viewer have time to get off the couch, walk to the computer, log in to their ISP (remember dial-up?), and key in the address? Or, were they already online and sitting in front of a computer when the commercial aired? Were they already dividing their attention between television and online?

This is the idea of convergence.

Advertising Age published an article called "Using Double Screen to Drive TV Viewership" that suggested that it there is a big increase in people watching television while online in Japan. Are we becoming a culture of media consumers with one screen watching television and another browsing online? Does television now compete with the Internet on a minute-by-minute basis? If the content does not compel my attention, then the online world is only a click away. Or, as Advertising Age suggests, can you use RSS prompts to drive television viewership?

In years past, media was easier to categorize. Radio was listened to in the car during morning and afternoon drive times. Television was viewed primarily in the home with a noticeable spike in the evening hours as people came home from work.

So, a savvy advertiser could buy commercial time in the television morning shows at 7am, the popular radio morning drive show in each local market, and television news and prime from 6p-11p. This would allow predictable and duplicated access to target consumers. You knew where they were and what media they were consuming at any given time. You could plan for your optimal target audience and strive to attain the right mix between media reach and frequency.

Now, media planning is considerably more complicated. The first challenge was media fragmentation as television followed the trail blazed by radio by expanding from three television channels to 300 in the blink of a decade. But, you still had the foundational rock of Thursday night prime, right? Time-shifting is making the concept of appointment television obsolete. You watch television whenever you want selecting whatever content appeals at that moment. In radio, iPods, Zunes, and satellite radio are further competing for radio audiences across all formats.

Even the terms are losing their concrete definitions. Watching television used to conjure up images of Mom, Dad, and the two kids sitting in front of the big family console television. However, this Father Knows Best image is all but shattered. Now, there are more televisions in the average home than their are people and most viewing is done alone. With podcasting, mobile content, sling-casting, and other new technologies, viewing television content can be accomplished in an ever-expanding number of ways.

So, what is an advertiser to do? How does an advertiser ever know what sold his products? How can you evaluate the efficiency of different media in such a fast-changing media marketplace? How does radio, print, television, cable, outdoor, online, paid searchwords, and the rest of the vast media mix work together to sell the product and build the brand?

The reality is that we will never know and we never have known. But, more than ever, media professionals have to be smarter, more intellectually nimble, savvier, more creative, and they have to work a lot harder as advocates for their clients.

--Carter Cathey
(c) 2007

Thursday, January 11, 2007

Deal or No Deal: The Evolution of the Evening Game Show

Deal or No Deal marks two big changes in the 'game show' genre. First is the return of a game show to prime time. Second is that the show is chance-based rather than skill-based.

When "Who Wants to Be a Millionaire" became wildly successful in prime time, there was a rush by all the major networks to come up with other game shows to broadcast in prime time. Almost all of these shows were a disappointment if not an outright failure when it came to attracting an audience and advertisers. Analysts of television concluded that "Millionaire" was a fluke and that no other game show could be successful in prime time. Then, of course, "Deal or No Deal" exploded in the ratings demonstrating that the prime time game show was not dead after all.

But, perhaps more interesting, "Deal" is a very different game show than "Millionaire". Even though both have excellent production values, lavish sets, and exciting theme-music, "Deal" is a game of chance. Perhaps with our cultures renewed interest in card games, games of chance are enjoying a resurgence. Who would have guessed that the World Series of Poker would become a spectator sport? However, prior to "Deal" most of the most successful game shows in the last decade have been skill-based or knowledge-based.

With the amazing string of victories of Ken Jennings it became clear that Jeopardy was not the game for everyman. This game was dominated by intelligent, educated people that studied the game-guides extensively prior to their appearance. Even the venerable "Wheel of Fortune", with the luck of the wheel, required creativity and mental agility.

"Deal or No Deal" is completely random. The game for everyman. No education, no preparation, no intellectual problem. There is no skill component. It is solely decided on chance and willingness to risk. Were it not for Howie Mandel's odd watchability and the antics of the contestants, the show would be unwatchable. It certainly doesn't lend itself to playing along at home.

And yet, the show is performing very well in the ratings for the very reason that we all feel as though we could do just as well, if not better, than the contestants. It is not possible to watch without answering for themselves "Deal or No Deal".

If you want the experience of playing the game, attached is a link to try your luck. The great thing about this online game is that without Howie Mandel and commercial breaks, you can play ten times in five minutes.

(c) 2007

Business of Media 1: Four Types of Television Commercials

In television, there are four basic types of commercials that run everywhere: Network Commercials, Local Spot Commercials, National Spot Commercials, and Direct Response.

* Network Commercials - These commercials are sold by the broadcast or cable network and are part of the feed that goes to local stations. These are spots that run simultaneously across the country. If you buy a network commercial during Desperate Housewives, that commercial is going to be seen by every viewer of that program in every household in the country. It doesn't matter if they are in Denver or Dallas or Durham.

* Local Spot Commercials - These commercials are sold by the local television stations or cable providers in each individual market. These spots run only in the market in which they are purchased. If you buy a local spot commercial during Desperate Housewives in Dallas, you would purchase it directly from the Dallas ABC affiliate (WFAA-TV) and it would run only in Dallas. If you wanted it to run in Denver or Durham, you would have to contact those local stations and purchase from them directly. Local Spot Commercials tend to have lower production values. Imagine the local car dealer standing in front of the car lot swinging his arms and talking about the great deals at Westway Ford.

* National Spot Commercials - These commercials are sold in a couple of different ways. Primarily, each local station has a National Sales Manager that works with a National Television Rep Firm who in turn works with media agencies to complete this buy. National is used when an advertiser wants to cover several markets with their advertising message, but doesn't want to buy network. There could be many reasons not to buy network. The company might be regional so a national buy would deliver their message to people that can't shop in their stores. They might be testing a new product or a new advertising message in a few local markets. They might have different advertising messages for different parts of the country.

* Direct Response Advertising - Direct Response is an entirely different process. These are predominantly the commercials that have a phone number at the end so that you can call and purchase the new Vidalia Chop Wizard or whatever new widget they are selling. By definition, there is a way for you to "respond directly" during the commercial. These commercials are often used to fill unsold inventory. Sometimes, they are purchased and sometimes there is a revenue-sharing agreement in place between the DR advertiser and the local station. Each situation is unique.

--Carter Cathey
(c) 2007