2017: Tvb Looks at Tv S Second Half

Spots N Dots The Daily News Of TV Sales August 4, 2017 2017: TVB LOOKS AT TV’S SECOND HALF 1 IN 4 LOCAL DOLLARS ARE STILL FROM AUTO Just past television’s mid-year point, it’s an improving view for the industry in the second half of 2017. The TVB doesn’t issue any specific forecast but president Steve Lanzano thinks there’s reason to be upbeat. “Pacings are better and people are a little bit more optimistic about the second of the year,” he says. “Expectations are that we’ll see better core growth—and everyone is looking toward next year when we have both the Olympics and mid-term elections.” With one of every four local TV ad dollars tied to the automotive category the biggest reason to celebrate may be predictions of a big downturn in car sales this year haven’t come true. Pacing suggests 16.9 to 17.1 million vehicles could be sold this year. That’s down a bit from last year’s 17.6 million total but Lanzano says it’s still a “pretty robust” car market even after six consecutive years of growth. He points out stations are in the driver’s seat if the tide turns toward more promotions to spur sales. “If it goes from the pie increasing to everyone fighting for individual unit sales that helps us because advertising has to be out there promoting the incentives in the marketplace,” Lanzno says. While not one to make predictions, he says experience has shown that pressure will only build as the weeks go by. “As you go towards the end of the year and people have to start making their unit sales numbers, it’s about taking another sale from your competitor—and that bodes well for us,” Lanzano says. Among the other categories holding strong are home improvement DIY-related spenders, home furnishings, and law firms. In fact lawyer ads are now a top 10 category according to the TVB. Health care spending has been “flattish to down” according to Lanzano with a big question mark over America’s health care policy. Spending in the cable and internet service provider categories have also been challenging with small declines also recorded in the retail, fast food, and education categories. Uncertainty emanating from Washington is why Lanzano thinks ad spending during the first half was a bit softer than had been expected among core TV advertisers. “It was slower than what I think many of us anticipated,” he says. “Things are starting to pick up a little bit, but the incremental growth is not as robust as we would like.” Post-political year comparisons are always hard to swallow but Lanzano expects they’ll be less bitter beginning next month when the industry cycles past last year’s Olympic advertising. Lanzano is also hopeful the big spending on special congressional elections this year is an indicator of how next year’s mid-term will be. Political fundraising is already picking up although for now he’ll only say local TV should get as much in 2018 as it did in 2014. “Things are percolating in a very positive manner but the lack of predictability on a day to day basis in Washington makes it hard to predict,” he says.

ADVERTISER NEWS Yum Brands continued its refranchising efforts in the second quarter, selling off 244 restaurants (mostly Pizza Huts) to reach a global franchise ownership of 94%. The company usually reports worldwide comps, with KFC up 3% in the second quarter, Taco Bell up 4%, but Pizza Hut down 1%...... Denny’s same-store sales were up 2.6% systemwide in the second quarter, with company- owned units up 2.7%. The company gives its newly launched delivery program some of the credit for the gain. Eight new locations came on line during the quarter……Weis Markets had a good quarter with total sales up 20% (after making several acquisitions in the past year) and comp-store sales up 2.7% after adjusting for the Easter holiday. It was the 13th consecutive quarter of comp store gains for the Pennsylvania-based chain…… Cato same-store sales for July were down 9%, but that was actually an improvement over the prior two months. The full fiscal second quarter (May-July) was down 14%. Total sales for the first half are about $80 million behind last year……L Brands same- store sales were down 7%, claiming the exit of the swimwear and apparel categories hurt Victoria’s Secret results by about 5%...... We’re still in Back-To-School season, but here’s one of the first notes about the holiday season and the question of who will be open on Thanksgiving: GameStop has told its employees it will be open on Turkey Day—the chain had stayed shuttered on the holiday for the previous three years…… The weak July sales didn’t help General Motors cut down its oversupply problem very much—on average the company had 104 days’ supply at the end of the month compared to 105 days at the end of June……Edmunds. com says leasing accounted for just 29% of deals in July, the lowest percentage so far this year. For all of 2016, leasing made up 32% of “sales”……The NADA’s Market Beat analysis says crossover-utility vehicles’ market share has gained three percent since the beginning of the year with much of the gain coming from the decline in the midsized car segment. It adds “lofty incentives may need to rise even further to bring in new customers”…… Updated and consistent marketing strategies are the key to developing customer satisfaction in the realty business, according to the new study in that industry released by J.D. Power. Century 21 was the leader in two of the four primary groups studied, scoring first among First-time Home Buyers and First-Time Home Sellers (winning both categories for the fourth straight year). Keller Williams was ranked best among Repeat Home-Buyers with Berkshire Hathaway HomeServices named tops among Repeat Home-Sellers. Generally, first time buyers are more satisfied than among repeat buyers or sellers.

NETWORK NEWS The new ABC version of American Idol is starting its highly anticipated auditions at Disney Springs at Walt Disney World Resort in Florida. Plans are for the iconic American Idol bus to roll into the location for auditions on Thursday, August 17th. Past winners Jordin Sparks, Kris Allen, and Ruben Studdard will make be on hand to greet audition participants during the kickoff celebration for the search for America’s next superstar. Central Florida hopefuls will still have the chance to be part of the competition using the American Idol pop-up audition kiosk, which will be at Disney Springs starting Friday, August 18th, through Friday, September 15th. Auditions will simultaneously kick off on the West Coast in Portland, Oregon…… NBC is stepping up its efforts to employ more female episodic directors with a new annual initiative called Female Forward. The initiative comes after only one drama pilot was directed by a female in the recent pilot season. Female Forward is spearheaded by NBC Entertainment President Jennifer Salke, who made the announcement during the network’s portion of the Television Critics Association summer press tour. The network will work in partnership with top TV director Lesli Linka Glatter (Mad Men, Homeland) with the goal of providing ten female directors with an opportunity to shadow up to three episodes of an NBC series. That will be followed by an in-season commitment to direct at least one episode of the series she shadows. The Female Forward initiative will begin with the 2018-19 season on 10 NBC series with the goal of expanding the number of directors and shows in the subsequent years……Meanwhile, NBC rival CBS is taking some heat from actress Jessica Chastain. Chastain took to Twitter yesterday to call out CBS for the network’s lack of female leads in its fall lineup. Chastain posted “I’ll just Netflix and chill. Or some HBO greatness. Or anything by Ryan Murphy. There’s so many incredible options that don’t include CBS.” Her tweet was in response to news that came out this week during the CBS panel at the Television Critics Association summer tour. CBS senior executive vice president Thom Sherman was asked about the network’s continued lack of diversity in its programming. Sherman responded, “We had six pilots with female leads and the way things turned out those pilots were not deemed to be as good as the pilots that were picked up.” Sherman and CBS Entertainment president Kelly Kahl were also grilled about CBS’ casting department, which is made up entirely of white males. Kahl noted regarding the casting department, “They’re fantastic at what they do,” adding that the department has “cast many diverse roles in the past.” ECONOMIC NEWS We’ll have the monthly jobs report and updated unemployment figures in Monday’s issue, and all indications are it will show even more growth ahead for the economy. Initial claims for unemployment fell by 5,000 to 240,000 last week, making it 126 straight weeks that figure is below 300,000, which is considered to be the threshold of a healthy labor market. That’s the longest stretch since 1970, when the labor market was much smaller.

AUTO DEALER ASSN SPENDING HOLDS STEADY Regional dealer associations are projected to spend $1.35 billion on advertising this year. Borrell Associates’ just-released report on the auto segment shows that’s nearly identical—up a statistically insignificant 0.1%— to what the so-called Tier 2 advertising levels were in 2016. “As more activity shifts to digital, spending by dealer associations is flattening,” the report says. “Associations greatly favor TV and radio over digital, spending nearly half their budget on those types of media and only 14% on digital.” Once again broadcast TV is set to capture the largest share—with spot TV snagging one of every five dollars spent by the associations. That translates into a projected $278 million allocation for spot TV according to Borrell estimates. But that level of spending is down 1.2% compared to a year ago. “The biggest downward shift foreseen is in ‘other print’—the magazines and other publications that have historically been prominent in manufacturer branding efforts,” the report says. The dollars are being shifted to further boost digital advertising budgets, which are expected to grow 6.8 % to $195 million this year. And with a projected 14.4% share digital has now displaced radio as regional association’s second-largest media choice even as radio still captures 13.8% of the total dollars spent. The good news for TV is that despite more dollars allocated to online media it doesn’t necessarily mean local TV stations are left out in the cold. Borrell says one out of every five dollars (20.6%) spent on digital went to online video ads. Cable TV continues to gain favor with associations. Borrell estimates dealer associations will increase cable TV budgets by 3.6% this year to an estimated $170 million. It’s the third consecutive year that cable TV is set to capture more of the regional associations’ ad budget and the segment’s share now totals 12.6%. Many of those TV ads are also being translated to the big screen. Cinema ads saw the only double-digit growth rate in the report as car sellers look to get in front of increasingly hard-to-find young drivers. Borrell says cinema ad budgets are set to increase 10.6% this year to $115 million. “Manufacturers like cinema ads because movies tend to offer targetable audiences (like TV programs) and can’t be turned off or easily ignored (unlike TV ads).”

COMPETITIVE INFO It was about four months ago that over 250 brands pulled ads from YouTube because they had been running adjacent to unacceptable content, but Adweek is now reporting most of the boycotts are over. MediaRadar had reported that many advertisers had dropped off Google Preferred channels at the height of the problem last spring, but by June 508 brands advertised on Google Preferred, a 134% increase over January, before the concerns became news. “There was a real contraction and reaction (among) brand-name advertisers, but our feeling was that YouTube responded very foreseeably to remedy the situation,” the CEO of MediaRadar said. “Even in the NewFronts…they even had some of those same advertisers who said they were going to pull out… back on the stage again.”

BUSINESS BYTES Here’s an interesting take on why automotive sales are slipping from Bloomberg: not enough cars are being scrapped! Over the past twenty years, the number of licensed drivers has gone up about two million per year, while the number of registered vehicles has gone up by about three million a year. Also each year, about 13 million vehicles drop out of the fleet, millions less than new vehicles sold. Americans still tend to own slightly more than one vehicle each, but they’re keeping those vehicles longer than before, partly because the quality of the vehicles made has improved and older vehicles are still reliable. The average age of all vehicles on the road is now more than 11 years old; two decades ago the average age was below nine years. Convenience Store News says its industry’s pump-to-store conversion rate, which had been rising for the last few years, may have plateaued at about 33%, and has dropped to about 31.4% this year. On the positive side, at the beginning of the decade only about 15% of gas buyers also went into the store. The Realities of the Aisle Consumer Study done by CSN also found that about 40% of gas shoppers who did go into the store did so because of some promotional element such as a frequent buyer or loyalty program. Credit-card losses are growing, which could be an early warning sign that consumer spending may be too high and a slowdown could be coming. Fitch Ratings reports the average net charge-off for large card issuers rose to 3.29% in the second quarter, the highest level in four years and the fifth straight quarter showing year-to-year increases. All eight of the largest card issuers saw increases in their write-offs, while total card balances rose by 6% in the last year according to Federal Reserve data.

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A new study finds that George Clooney has the most handsome face because of his eyes, nose, chin, and mouth. In other words, he has the most handsome face because of his face. – Jimmy Fallon

According to Vanity Fair, the Queen of England has four alcoholic beverages a day, including a glass of champagne before bed. Champagne before bed?! Who does she think she is, the Queen? – Seth Meyers

------SPOTS N DOTS The Daily News Of TV Sales August 4, 2017 Phone: 888-884-2630