Just short of its 30th birthday, Boston’s independent rock station WFNX (described as "iconic," "legendary" and "progressive" across the press) has been sold to radio giant/clearinghouse Clear Channel Communications. As the New York Times describes it, The deal for WFNX, which broadcasts at 101.7 FM, is pending approval from the Federal Communications Commission.
It is unlikely that new management will keep the old format, as 17 of 21 employees were immediately let go, as RadioInk reports. Three full-timers and one part-timer will keep WFNX on air until the sale completes. As WFNX Program Director Paul Driscoll told New England Cable News, "I think of it as a two month Irish wake, so we're going to send this legendary station off the right way."
Stephen M. Mindich, the chairman and chief executive of the station’s owner, the Phoenix Media/Communications Group, announced the sale Wednesday morning in a memo to employees, which was posted by the Boston Phoenix newspaper (another Phoenix Media property).
“We introduced Nirvana and Pearl Jam to wider audiences in 1991,” claimed Mindich. “Together with the Boston Phoenix we staged the notorious Green Day concert at the Hatch Shell in 1994…for years we broadcast One In Ten, the only program on a commercial radio station in the nation dedicated to the issues and lifestyles of the GLBT community…Here comes the catch....Despite its celebrated history, its cutting edge programming , its tradition of breaking new music, its ardent fans among listeners and advertisers, for some time it has been difficult to sustain the station -- especially since the start of the Great Recession.”
In other words: “Thanks for the memories and you’re fired,” as RadioINK described the notice.
Clear Channel owns 840 stations across the United States, including four in the Boston area: The Top 40 WXKS-FM; WJMN-FM, which plays hip-hop; and two AM stations, the talk WXKS and the “Spanish hits” WKOX.
As the Times observes, rock stations have been on the decline for much of the last decade, leaving independent stations particularly vulnerable. Last year, Emmis Communications sold WRXP in New York to Merlin Media to a former top Clear Channel executive who converted it to a talk format.
“We are not immune to the challenges” that the magazine industry has faced, wrote Los Angeles Times President Kathy K. Thomson in yesterday’s paper. So the paper has “made the decision that LA, Los Angeles Times Magazine [LATM] will publish its final issue on June 3rd.
FishbowlLA spoke with the mag’s editor, Nancie Clare, who said “It’s fair to say there were revenue issues…I don’t think they got rid of us because they don’t like us.” The mangazine’s lean staff of seven will be let go, with little likelihood they will be absorbed by the newspaper proper. Clare observed “They’re contracting in the newsroom too. There’s nowhere to absorb us.”
The magazine has struggled for years, for both readership and identity. As Folio described its transition, LATM was once a weekly produced by and distributed with the paper, then transitioned to a monthly in June 2008, then switched shifted to an editorial model separate from the paper and with its own editorial staff. Thus far in 2012, LATM has suffered a 21.3% drop in ad pages compared to 2011, and 2011 saw a 6% decline from 2010.
Thomson called the LATM the “definitive handbook for life in Southern California,” sort of a “New Yorker” for SoCal. But in its place, the Times is developing a quarterly product focused on luxury, design, fashion and style. The Times promises “digital and mobile iterations intended to further enhance our feature coverage and deepen our connection with our members and advertising partners.”
It is an ironic move that a cash-strapped newspaper will launch a luxury title, but likely a wise one. Luxury titles like Boating and Architectural Digest are weathering the economic storm far better than their consumer counterparts, and Forbes and Time Magazine have both launched luxury titles this year.
Market researchers The NPD Group caused a stir yesterday when it forecast an upward spiral in pay TV subscriptions—from an average $86 in 2011, to $123 by 2015 and $200 by 2020.
The cause: The “perennial tug-of-war between cable operators and creators of programming over who gets the bigger share of ever-rising cable payments,” as the New York Post summarized it. TV program licensing fees, which drive up pay TV monthly rates by an average of 6% per year. Interestingly, that is just one to two points behind the average upfront price hikes.
The challenge: Consumer household income has remained essentially flat. That is partly why 16% of U.S. households do not currently subscribe to pay TV services. Another factor is a sharp rise in housing vacancies due to the mortgage crisis, which has taken five million fewer U.S. households off the pay TV grid. Still, total pay TV subscriptions in the U.S. have not declined much, due to bulk-service contracts with apartment complexes and home owners associations that enable operators to retain subscriptions in vacant homes.
The result: “As pay TV costs rise and consumers’ spending power stays flat, the traditional affiliate-fee business model for pay TV companies appears to be unsustainable in the long term,” said Keith Nissen, research director for The NPD Group. “Much needed structural changes to the pay TV industry will not happen quickly or easily; however, the emerging competition between S-VOD and premium-TV suppliers might be the spark that ignites the necessary business-model transformation of the pay TV industry.”
Where Cord Cutters Get TV
Advertisers will follow the viewers, wherever they are, be it watching broadcast tube or online. Based on the latest information from NPD’s “Entertainment Trends in America” report, pay TV cord cutters reported cancelling their subscriptions primarily because of economic considerations; however, they are still accessing TV programming from—
- free-to-air broadcast
- free Internet TV (e.g. from network websites and ad-friendly Hulu)
- lower-priced subscription video-on-demand (S-VOD) services, like Netflix (which is increasingly making noise about advertiser support)
But they do so grudgingly. “Despite the plethora of OTT options for movies and TV, most consumers want their pay TV providers to be central and relevant to the acquisition and viewing experience,” said Russ Crupnick, senior vice president of industry analysis for The NPD Group. In fact 59% of pay TV subscribers preferred having one single provider for their pay TV services, compared to 21% who desired multiple providers, and 21% who expressed no preference. Sixty-two% of subscribers wanted premium TV either delivered by their pay TV provider directly, or from a service affiliated with their pay TV provider. Only 20% of pay TV subscribers were likely to cancel their pay TV service, if they could get their favorite shows online.
“Pay TV providers offer a convenient, one-stop shop for subscribers, and the majority of customers like it that way,” said Crupnick. “There is an open window for the industry to meet consumer needs and become to television what iTunes is to music; however, there is also a definite risk if pay TV providers don’t capitalize on the opportunity—and soon.”
Advertising platform providers like Facebook and Google are “usually on the front line of the digital privacy debate,” observes paidContent. But the Federal Trade Commission (FTC) in its long-awaited privacy report and recommendations called instead for tougher supervision on the data brokers who compile consumer data around shopping purchases, property records, court documents and so forth, then sell that data to third parties.
The FTC did not recommend legislation that forbids advertisers from gathering personal information, but praised the ad industry for its self policing (chiefly through new guidelines released by the Digital Advertising Alliance or DAA). FTC called as well for a “Privacy by Design” system making it easier for consumers to control their data; and praised Apple, Google and Microsoft for their various do-not-track and private browsing options..
As paidContent observes, the brokers like Lexis Nexis and Choicepoint fly under the consumer radar, but in many cases control far more data than do the Apples, Googles, Facebooks and Microsofts. But in many cases, the data companies control a far deeper pool of information.
FTC advocates a sort of online “do-not call list” among data brokers. To quote FTC’s recommendations: “To address the invisibility of, and consumers’ lack of control over, data brokers’ collection and use of consumer information, the Commission supports targeted legislation…that would provide consumers with access to information about them held by a data broker. To further increase transparency, the Commission calls on data brokers that compile data for marketing purposes to explore creating a centralized website where data brokers could (1) identify themselves to consumers and describe how they collect and use consumer data and (2) detail the access rights and other choices they provide with respect to the consumer data they maintain.”
So Google, Microsoft and Facebook (which the FTC refers to as “advertisers,” as opposed to platform providers), are now out of the limelight. But behavioral targeting is hardly safe. The Digital Advertising Alliance (DAA) Self Regulatory Program, which the Alliance and member organizations announced in February, gives consumers the option to identify which companies track them, and opt out of that tracking; but critics charge that it is complicated, realistic for only the most tech-savvy consumers; and that behavioral tracking should be opt-in.
Short term, though, “the report does not appear to poise any immediate threat to the way that companies like Facebook, which rely on providing rich online platforms in exchange for personal information, do business,” paidContent observes.
CBS became the first broadcaster to announce renewals for the 2012-13 season, saying Wednesday that it will bring back 18 series,
The renewals include four comedies, nine dramas, three reality series and two newsmagazines. “The returning shows encompass every night of the week and every hour, many of which are #1 in their time period and some #1 on the entire night,” said the network in a release.
The renewed comedies include the previously announced multi-year pickups of “How I Met Your Mother” and “The Big Bang Theory,” which was the first scripted program to top “American Idol” in viewers and adults 18-49. Also returning, “2 Broke Girls” and sophomore hit “Mike and Molly.”
No surprise that the Navy crime drama “NCIS” will be back; it is TV’s top-rated scripted drama for the third year running. Also returning is “NCIS: Los Angeles,” “Hawaii Five-0,” “Criminal Minds” and “Person of Interest,” among others.
“CSI: Crime Scene Investigation” is a bit of a surprise. After the defection of its two leads, William Peterson and Marg Helgenberger, and a false start with Peterson’s replacement Laurence Fishburne, it appeared time to stick a fork in “CSI.” But new lead Ted Danson appears to have kept the series afloat, if not swimming against the current. But neither of the other two CSI franchises, “CSI: NY” or “CSI: Miami,” was named. Bill Gorman of TVByTheNumbers predicted that at least one of the two would be canned to make room on the fall schedule. “Sadly, syndication economics (and show costs) will tip that decision,” said Gorman. Season eight of “CSI: New York” drew an average 1.5 on Friday night, and the 10th season of “Miami” a 2.0. CBS has already given the “Miami” slot to “NYC 22,” a police procedural produced by Robert De Niro. Gorman had also predicted the demise of "The Good Wife," but it will return.
Among reality shows, “Amazing Race,” “Undercover Boss” and “Survivor will be back; and among news magazines, “60 Minutes” and “48 Hours Mystery.”
Still a mystery: “Two and a Half Men,” which has yet to sign Ashton Kutcher for a second season. Kutcher famously replaced the exiting Charlie Sheen. CBS and Warner Brothers are still trying to hammer out a deal for a 10th season, and “it’s hard to imagine that either side wants to torpedo the comedy,” says Adweek. “When first-run episodes and encores are factored in, 'Men' is averaging 13.9 million viewers and a 4.7 in the [18-49] demo."
Season-to-date, CBS claims to be first among adults 25-54 (4.1/10) and a strong second in adults 18-49 (3.1/08). The Network is posting across-the-board year-to-year growth, up +1% in viewers, +2% in adults 25-54 and +3% in adults 18-49.
Nickelodeon at its upfront presentation held yesterday at Lincoln Center unveiled plans for an unprecedented 650 new episodes—the most in the network’s history—of both brand-new content and returning hits (like “SpongeBob Squarepants” and “iCarly”).
As Adweek describes, “Nick pulled out all the stops at a svelte hour-long show,” but said as well that the network needed to demonstrate innovation. Nickelodeon “made headlines with a 19% year-over-year slip in November,” which parent company Viacom tried to blame on poor math by the Nielsen Company.
Nonsense, countered Nielsen, and the broadcast industry at large. The slip came down to 1) aging inventory and too many reruns; 2) stronger and more new offerings by rivals Disney and the Cartoon Network; 3) possibly losing young viewers to gaming and over-the-top (OTT) content; and 4) upset parents. (One parent we reached for this article, who is also in charge of programming for a midwestern cable provider, described Nickelodon content as “nasty” compared to its early days.)
Nickelodeon may be onto something, when it blames OTT content. It looms particularly large in on-demand viewing. When Comcast’s Xfinity On Demand service tallied its most-watched series for 2011, Nickelodeon took two of the three top-requested kids series, with “SpongeBob SquarePants” and “Dora the Explorer,” and all three of the most-requested non-animated series by kids aged 7 and up, with “iCarly,” “Big Time Rush” and “Victorious.” But neither Disney nor Cartoon Network suffered the same plummet, and their offerings too are available on demand. Right alongside them in the Xfinity tallies are Disney Channel with “Mickey Mouse Clubhouse,” PBS’s Sprout with “Barney” and “Sesame St.,” and the Cartoon Network winning the top three spots in animated series among kids 7+. Every one of those three series debuted in 2010, where Nickelodeon’s “SpongeBob” debuted in 1999, and “Dora” in 2000.
Nickelodeon seems to have moved beyond trying to blame multiscreen viewing and bad math by Nielsen. "Nickelodeon has no intention of letting the recent ratings slip slow down our creative momentum," said Viacom’s Nickelodeon Group President Cyma Zarghami at the upfront. “Kids have a ferocious appetite for new content and it is our intention to serve them more, innovative work than ever before.” Among other new offerings:
- “The Legend of Korra,” based on a character from the film “Avatar”
- A stop-motion SpongeBob SquarePants Christmas special
- Several original primetime TV movies
- “Hollywood Heights,” based on a teenager’s life as she achieves singing fame
- An animated series based on the Raving Rabbids video games It has not tossed out “SpongeBob” or “Fairly OddParents,” but, will roll them into a portfolio of more than 300 new animated episodes in 2012
A new study from the Pew Research Center’s Project for Excellence in Journalism (PEJ) finds some bright spots in the newspaper industry. A few—but just a few—are achieving success with their cross-media revenue models.
“In general, the shift to replace losses in print ad revenue with new digital revenue is taking longer and proving more difficult than executives want,” wrote Pew authors Tom Rosenstiel and Mark Jurkowitz. They described the rate of contraction among newspapers as “alarming,” but chalk it up in part to “cultural inertia.” Most newspapers have put no significant effort into monetizing digital revenue categories.
PEJ surveyed 38 newspapers from six publishers, charting digital revenue and sales efforts. PEJ ensured that it covered papers of various sizes; because the majority of papers in the U.S. are small, PEJ included 22 papers with circulations under 25,000; seven with circulations between 25,000 and 50,000; and nine of over 50,000.
Of those 38 papers, seven reported declines in digital revenue. Among the laggards, one paper saw digital ad revenue decline by 37%, and another by 25%.
But one saw digital ad revenue gains of 63%, and print revenues by 8% over one year, while a second paper gained 50% in digital advertising. One of the top gainers chalked its success up to “smart ads” that targeted customers by online behavior—a practice that was rare among the remaining 37 papers. A second paper build a multi-million dollar advertising and marketing consulting practice. It sold not just advertisements, but ad expertise.
PEJ reported that the newspaper industry as “mature and monopolistic,” adjusting poorly to digital models. Digital is newspapers’ highest area of growth, but still provides nominal revenues. That is due in part to a lack of bandwidth in creating digital strategies. “We have all these [new] products we are working on that we believe are going to deliver results that are part of our sustainability," one executive told PEJ, "But we need to eat today."
So, companies that are struggling find themselves risk averse. "There might be a 90% chance you'll accelerate the decline if you gamble and a 10% chance you might find the new model," one respondent said. "No one is willing to take that chance."
Among other key findings:
- The papers providing detailed data took in roughly $11 in print revenue for every $1 they attracted online in the last full year for which they had data. That nowhere near made up for the 9% decline in print ads revenue.
- Only 40% of the papers say targeted advertising is a major part of their sales effort, despite the fact that targeted digital advertising is expected to dominate local digital revenue by 2014.
- The majority of papers focus their digital sales efforts on conventional display and digital classified, which are the largest categories but low-growth categories.
- Daily Deals accounted for 5% of digital ad revenue in 2011.
- Advertising on mobile devices accounted for only 1% of the digital revenue in 2011. Executives have faith in this meteorically-growing medium, but have yet to take advantage.
- Almost half (44%) are trying to develop nontraditional revenue from, for example, events; consulting; and selling new business products, but revenues are typically under $10,000 per quarter.
- Among the papers that provided data, the number of print-focused sales representatives outnumber digital-focused reps by about 3-1. This reflects the fact that print ad revenue, which is shrinking, still makes up the bulk of the overall revenue (on average 92% in our study's sample).
So as PEJ describes, newspaper execs are “still caught between the gravitational pull of the legacy tradition and the need to chart a faster digital course.”
One consideration: if digital advertising is so nominal a revenue source, advertisers may find they can negotiate for large contracts at medium-sized campaign prices. Newspapers are likely to respond positively to “walk-in business,” and willing to negotiate for the immediate cash influx.
DISH Network defied analysts yesterday by reporting a profit for Q4 2011. In an investor call, the company reported total revenue of $3.63 billion for Q4, a 13% increase over the same period in 2010.
President and CEO Joe Clayton claimed that "By introducing new Blockbuster-branded services, we've begun to turn the tide in subscriber losses while continuing to face increased competitive pressures.” He also heralded introducing DISH’s Hopper product this quarter, “The most technically advanced whole-home HD DVR in the world.”
The Blockbuster statement is a bit of a puzzlement. As Deadline New York reports, DISH Network plans to close 500 of its 1,500 Blockbuster stores in this quarter. DISH acquired Blockbuster last April, for a consistent operating loss, owed to “increasing competition from video rental kiosk [like RedBox], streaming and mail order businesses [like Netflix].” But DISH will jettison only the underperforming stores--about 1,000 of them still turn a profit.
DISH Network gained approximately 22,000 net subscribers in Q4, for a total of just under 14 million subscribers at year-end. Still, that represents a loss for the year: net subscribers decreased by approximately 166,000 for the full year ended Dec. 31, 2011.
Meanwhile, DISH Network is “amassing airwave spectrum to offer wireless broadband services,” says Deadline, and is perceived as a candidate for merger or acquisition. Dish Chairman DISH is awaiting FCC approval for the network to buy wireless spectrum from TerreStar for $1.4 billion, which the network will use to offer new broadband services. “I think we’d be disruptive in the wireless business,” Ergen says. “It would transform not only our company but the way people use wireless in the United States,” said Ergen He acknowledged that the company must hedge its bets with wireless broadband (a field in which the Obama wants more competition), and less focus on satellite delivered video. Ergen acknowledged that cable, AT&T and Verizon are best poised to take advantage of wireless broadband, but DISH Network will compete strongly for a share.
Media Life, conducted a poll last week of its industry-insider readership, and 42.3% predicted that Fox would take top honors; NBC was second at 26.9%, CBS third at 19.2%, and ABC fourth at 11.5%.
Glory is short lived: “It seems readers may have forgotten that NBC carried the Super Bowl,” wrote Media Life. Still, readers may have been put off NBC by the struggling "Smash," which debuted with a 3.8 among adults 18-49 just two weeks ago, to a 2.3 this week. The majority of those polled at 76.9% rated “Smash”’s performance as “so-so,” and over 19% rate its performance “disappointing.”
Fox on the other hand has “American Idol,” its ratings champion, which despite losing a few tenths from 2011, has the highest average for a non-sports/non-special show. When asked to predict which show will finish No. 1 this season, 48% chose “Idol,” while 20% chose the CBS comedy “The Big Bang Theory.”
Among those shows media buyers and planners expect to be canceled:
- “Remodeled” (CW)
- “Are You There, Chelsea?” (NBC)
- “The River” (ABC)
- “Alcatraz” (Fox)
The U.S.’s largest cable TV providers have shuttered a venture that would let viewers interact with TV ads, and have laid off 120 employees, reports the Associated Press. Four-year-old Canoe Ventures enabled viewers of eight cable networks (including Bravo, Discovery and AMC) to request information by mail from advertisers by pressing a button on the remote control.
Canoe had a powerhouse roster of backers, which were Comcast, Cox Communications, Time Warner Cable, Charter Communications, Cablevision Systems Corp. and Bright House Networks; but neither viewers nor advertisers were interested.
That does not mean that advanced advertising is dead, reports Broadcasting & Cable. Rather, the effort may have been simply premature, and perhaps too broad in scope. Canoe aimed at becoming “a national standard bearer for interactivity, addressability and data gathering…a one-stop shop that would nationalize advanced TV.”
Of those three functions (interactivity, addressability and data gathering), one agency told Broadcasting & Cable that addressability is the first step. Tracey Scheppach, executive VP and innovations director at media agency VivaKi and its SMGx unit, felt that “being able to measure [advertising] and address it is so much more important than being able to interact with it.” Scheppach believes that the satellite operators and telcos that were excluded from Canoe are further along in deploying addressability to individual households. They have viewer households than cable providers, but a better grip on technology.
Mike Bologna, director of emerging communications at media agency GroupM, believes that Dish Network, DirecTV, Cablevision and Verizon “all have an addressable product in market today,” if not highly advanced ones, “and I think advertisers are going to focus on that for this current year…once we get the right message to the right households, the interactive overlays and the interactive components will become that much more valuable."
Canoe will close its New York office and retain 30 to 35 employees in Denver to better monetize on-demand programming (encompassing TV, tablet, computer and smart phone viewing). The individual operators will pursue interactive TV on their own.