A La Carte Content Costs Add Up

Spots N Dots The Daily News Of TV Sales December 14, 2016 SURPRISE! CORD-CUTTING ON THE DECLINE

A LA CARTE CONTENT COSTS ADD UP You’ve probably been hearing for several years now that cord-cutting is going to upend the television business as consumers drop pay-TV because over-the-top (OTT) digital video services will fill their needs and not deliver a bunch of channels that they don’t watch anyway. What people are finding, though, is that once they’ve assembled their own package of an OTT skinny bundle, some add-ons and one or more subscription video-on-demand services, they can end up paying more for fewer channels. An annual survey by PricewaterhouseCoopers (PwC) produced a finding that surprised the authors: “Cord-cutting is happening at a slower rate than predicted, and fewer pay-TV subscribers see themselves cutting the cord in the future than they did last year. In fact, many cord-trimmers, who desire to reduce their bills by slimming their TV bundles, say they now pay more for video content than they did last year.” Based on a survey of 1,200 U.S. consumers, PwC found that 84% of pay-TV subscribers say they expect to subscribe to an MVPD one year from now, compared to 70% in 2015 and 91% in 2014. Younger viewers are more likely to scale back traditional TV usage—most of the cord-nevers (who’ve never had an MVPD subscription of their own) are young (68% under 35) and have the lowest household income of the viewer groups identified by PwC. Cord-cutters also tend to be younger and have incomes below the average. The highest income group is the one with people mostly over 35 who subscribe to traditional pay-TV services. In between are the cord-trimmers, also under 35, who are trying the skinny bundle approach to control costs. That isn’t always successful, as the survey found that 51% of cord trimmers who reduced their TV bundles, say they now pay more for video content than one year ago. The bottom line is obviously a big factor dividing the high and low income groups. 43% of cord-nevers say they pay less than $20 per month for video content. Meanwhile, 35% of traditional pay-TV subscribers are paying over $400 each month. Across-the-board, though, the survey respondents said they expect to pay more for video content in the future than they do today. Also across-the-board was a feeling of content fatigue. Respondents were asked: “Do you agree that the amount of TV content available today is overwhelming?” The percentage saying yes in each group was up from a year ago, with cord-trimmers the most fatigued (73%), followed by cord-nevers (72%) and cord-cutters (70%). Even 67% of traditional pay-TV subscribers agreed that the choices are overwhelming.

ADVERTISER NEWS A projection just issued by Fitch Ratings says that overall restaurant sales should grow by 4% in 2017, with half the growth coming from unit expansion and the other half from price increases Traffic is expected to be flat and the senior director of the study for Fitch commented “There will be winners and losers. It’s a market-share game.” It’s also expected that quick- service concepts in general will take share from casual-dining restaurants, but newer fast-casual and specialty burger chains could take share from more mature concepts……Captain D’s is re- introducing its Captain’s D-Lites menu with all entrees under 500 calories as a limited time offer through mid-February. With 516 locations in 21 states, the chain says it’s the number one seafood franchise based on average unit volume……Automotive News reports Fiat Chrysler has put development of two big-ticket vehicles on hold, a redesign of Ram’s heavy-duty pickups and a Jeep Grand Wagoneer luxury SUV—it suggests the delay might be related to the company trying to cut down on its current $7 billion of debt……But Ford has resumed deliveries of 2017 F-150 pickups after holding some trucks for extra quality tests. Ford expects to have inventories up to plan by the end of the month……Pabst Brewing will be the U.S. importer for Cerveza Minerva, a Mexican craft beer. Plans are to launch the brand in selected markets next spring and slowly increase to national distribution……Furniture Today reports bedding and stationary upholstery (chairs, sofas) gained share of furniture stores’ sales this year, with mattress’ share growing from 14% of stores’ business last year to 16% this year, while stationary upholstery grew from 24% to 25%. It also found an increase in the number of bedding lines offered in the average store, up to a median of four brands now……Fitbit is the hottest high-tech holiday item this year according to a report from Connexity, trailing just this year’s most sought-after toy, Hatchimals……October data is now available from the National Automobile Dealers Association, and through the first ten months of the year, the average dealership in the country has sold 2.7% more than last year, but with expenses up 4.4%, the average net profit before tax is down 6.2%. (Advertising is up an average of 4.5%). Sales are better at domestic brand dealerships, up 4.4% while sales growth for import brand dealerships is up just 1.1%, and luxury brand (both foreign and domestic) dealers are actually down in sales by 0.7%. For all dealerships, used-department sales are up an average of 3.0% while service, parts and body shop revenues are up an average of 5%.

NETWORK NEWS Country music superstar Reba McEntire is returning to network TV in a new series being developed by Desperate Housewives creator Marc Cherry. ABC won the bidding war for the potential series’ pilot script. The untitled series is described as southern gothic soap opera set in the small southern town of Oxblood, Kentucky. The Fourth of July celebration is disrupted by an act of terrorism and the FBI is sent in to investigate with the local sheriff, only to discover secrets darker that either could have imagined. McEntire comes back to TV after starring in Reba on the WB and CW networks and Malibu Country on ABC……The NAACP Image Award nominees were announced this week and ABC’s black-ish and NBC’s The Carmichael Show picked up nominations for Outstanding Comedy Series. NBC got another nod for its freshman series This Is Us in the Outstanding Drama Series category along with FOX’s Empire. ABC was recognized in the Outstanding Television Movie, Limited-Series or Dramatic Special category for American Crime. The Talk on CBS and The View on ABC each picking up nominations for Outstanding Talk Series. TV One will air the awards show on February 11th, with Anthony Anderson of black-ish hosting……Fox News Sunday with Chris Wallace scored its second highest viewership in an episode which featured a sit-down interview with president-elect Donald Trump. The news program delivered 2.3 million viewers, second only to the 2003 episode that covered the capture of Saddam Hussein. NBC’s Meet the Press was still number one in the demo with over 1 million viewers 25-54……The list of performers continues to grow for ABC’s Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest 2017. The network announced that Alessia Cara, G-Eazy, Martin Garrix, John Legend, Mike Posner, Bebe Rexha, Hailee Steinfeld and Flo Rida with Macy Kate are the latest additions. The annual New Year’s celebration will begin on ABC Saturday, December 31st at 8 PM (ET) ……Spanish-language broadcast network Azteca America is picking up affiliates in the wake of competitor MundoMax’s apparent demise. Azteca America added WHEH in Charlotte which began airing the network on December 1st. On January 1st, KSAO in Sacramento will begin airing programming from AA joining KSTV in the same market. WXFV in Boston shifted its affiliation to Azteca America at the end of October……The next chapter for the Emmy Award- winning action series 24, 24: Legacy will air in 160 countries after its U.S. premiere on February 5th. The move is part of the studio’s international marketing strategy for viral, high-profile series, such as The Walking Dead, Outcast and Wayward Pines.

WEEKLY RATINGS The week of December 5th was a good week for NBC. The Peacock took four of the top five spots in the 18-49 Nielsen ratings. It should come as no surprise that Sunday’s New York Giants’ win over the Dallas Cowboys was the number one program of the week clocking in with an 8.7 demo rating, followed by Thursday’s NFL matchup between the Raiders and Chiefs. That game delivered a 5.6 demo rating. Football Night in America on Sunday locked down third place for NBC with a 4.0 rating. The OT on FOX placed fourth with a 3.9, with This Is Us, the highest rated scripted show for the week, getting a 2.8 demo rating for fifth place. Empire was close behind with a 2.5, followed by The Simpsons on FOX tying for seventh place with Hairspray Live on NBC, with both shows posting a 2.3 demo rating. The NBC Thursday Night Football pre-game (2.2) and Victoria’s Secret Fashion Show (2.1) on CBS finished out the top ten. The highest rated new shows were all on CBS with The Great Indoors, Bull and Kevin Can Wait all getting a 1.5 rating in the demo.

CONSUMERS LIKE PAID & FREE VIDEO Two monetization models continue to compete in the digital video space—advertising supported and subscription services. Which do consumers prefer? As it turns out, BOTH, according to a new trends report from eMarketer. YouTube and Facebook have continued to be leaders in video advertising in recent months, while some services, notably Vimeo, Hulu and Amazon, have doubled down on subscription-based approaches. According to an August 2016 study from Hub Research, over half of consumers—53%— said they liked free, ad-supported video. The rest preferred paid platforms, with 40% favoring subscription-based ones and the remaining 7% transactional ones. On the ad-supported side, eMarketer estimates that U.S. marketers spent $6.18 billion for digital video ads purchased programmatically this year, up from $3.00 billion in 2015. On a percentage basis, this year’s total amounts to 60.0% of all digital video ad spending, compared with 39.0% last year. By 2018, programmatic digital video advertising is projected to reach $10.65 billion, or 74.0% of total video ad expenditures. These figures do not include video advertising on social platforms such as Facebook. “The high and growing percentage of programmatic video ad spending stems largely from YouTube’s dominance of video,” the report states. Not only did the company capture 20.9% of all U.S. video ads in 2016—the largest share by far of any single company—but over the past year it has aggressively expanded the use of its demand-side programmatic platform, DoubleClick Bid Manager. When it comes to subscriptions, in November Vimeo became the latest streaming operator to announce a video subscription plan. In a letter to shareholders, Joey Levin, interim CEO of Vimeo and CEO of parent company IAC/InterActiveCorp, said Vimeo would begin delivering “subscription viewing experiences” at an unspecified time. The letter was light on details, but it cited the success of HBO and Netflix in building subscription video markets on cable and digital, respectively. In August Hulu announced it would discontinue free access in favor of tiered subscription plans that give viewers a choice of an ad-free experience for a monthly fee of $11.99, or a "limited commercial" option for $7.99. Combined with other recent activity such as Amazon’s decision to offer its premium video service as a standalone offering separate from its Prime membership program, the subscription option is expanding—but “free” is still a strong selling point for many viewers.

ACCOUNT ACTIONS Ad Age reports that biotech company Amgen is preparing to review its media account in 2017. WPP’s MEC Global has worked with Amgen since 2003. The company reportedly reviews its media business every three years……Crossmedia, Philadelphia, is the first U.S. media agency and Our Man in Havana, New York, creative agency for Nando’s. The international restaurant chain is currently in the U.S. around Washington, DC and Chicago.

GAMBLING BIZ IS ON THE RISE Consumer spending on gambling is forecast to grow 3.5% annually through 2020, according to The Freedonia Group. An increasingly permissive regulatory landscape and gains in disposable personal income will support consumer participation in this activity. Once largely relegated to a few travel destinations such as Las Vegas, the report notes that the opportunity for gambling is available in more locations throughout the country. Revenues for U.S. gambling establishments are projected to rise 2.9% annually through 2020. Casino hotels are expected to see above average growth.

THIS AND THAT Videa announced that it has placed its first full-market order for full schedule, forward reserve inventory for programmatic TV advertising with Carat. The full-market order covered five stations in Jacksonville, FL……Gray Television has signed with the Haystack TV OTT platform to distribute its local news video content. The service is aimed at Millennial viewers.

AVAILS

KFVS-TV in Cape Girardeau, MO has an immediate opening for a Local Sales Manager. College degree and experience in coaching and training AEs preferred. We want a manager who is team oriented and can work toward budget achievement for multiple platforms. Must be organized, have exceptional time management skills, a minimum of five years of television advertising sales, and be proficient in selling and managing digital platforms. Experience with Matrix, One Domain, and Wide Orbit is a plus. CLICK HERE and attach your resume when applying. EOE M/F/D/V.

Buckeye Broadband, Toledo Ohio is looking for a qualified candidate to fill a Manager, Local Sales position. We're searching for an energetic and creative individual to manage our advertising sales team as we imagine and craft the future of TV advertising. 5 years Media Sales Management experience in the same or similar medium, a high level of computer skills and a history of developing non-traditional revenue are required. CLICK HERE for more details or to apply now. EOE.

WFTX FOX 4, A Scripps owned station in beautiful Southwest Florida is seeking a high-energy Account Executive. The ideal candidate will have broadcast experience as well as an intense desire to prospect, develop and grow new direct business within the market. Strong time management and organizational skills are required. Please send cover letter and resume to LSM at [email protected]. EOE

Winter is just around the corner! If you would prefer to be selling where summer never ends, WPBF 25, the Hearst owned ABC Affiliate in sunny West Palm Beach has an opportunity for you! WPBF 25 seeks a sales superstar to join our team. The ideal candidate must have broadcast TV sales experience and possess the drive and ability to thrive on multiple platforms in a fast paced, highly competitive market. Your passion for developing new business will be encouraged and rewarded! CLICK HERE to apply. EOE

Raleigh, NC: Account Executive needed for sales of WRAL-TV, WRAL.COM, and digital channels. An in-depth knowledge of basic marketing concepts as well as familiarity with advertising on electronic media including the internet is necessary. Must have the ability to sell specials, promotions, and generate non-traditional revenue. 3-5 years of television and on-line sales experience required. CLICK HERE for more details or to apply now. EOE M/F. All Capitol Broadcasting Company properties are tobacco free. Capitol Broadcasting Company participates in E-Verify.

According to the 25th Amendment, if the President is incapacitated, the Vice President becomes the executive producer of ‘The Apprentice.’

--Conan O’Brien

A woman in North Carolina opened what she thought was a Christmas gift, but was surprised to find four pounds of marijuana that was accidentally sent to her house. While somewhere, Snoop Dogg spent the day trying to smoke a fruitcake.

--Jimmy Fallon

------SPOTS N DOTS The Daily News Of TV Sales December 14, 2016

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