Total Upfront Revenue Gain Nearly 6%

Spots N Dots The Daily News Of TV Sales July 27, 2017 TOTAL UPFRONT REVENUE GAIN NEARLY 6% CABLE GAINS OUTPACED BROADCAST With the 2017-18 TV season Upfronts all but wrapped up, Media Dynamics, Inc. (MDI) estimates that total ad revenue for the broadcast TV networks and cable channels amounted to $19.73 billion, an increase of 5.9% over the previous year. MDI says the broadcast TV networks sold approximately $9.1 billion of time—up 4.1% over last year. But cable scored bigger gains, with $10.6 billion in ad revenue—a gain of 7.6%. “ Our primary take on the 2017-18 upfront is that national TV is far from dead,” said MDI president Ed Papazian, “In fact, it is evident that a number of major branding advertisers have decided that they (will) continue to use TV as their primary communications platform—despite rating fragmentation and increased CPMs—due to its huge reach advantage over digital media, as well as the fact that every TV commercial is fully visible.” That doesn’t preclude them from using digital media, especially videos, Papazian adds, “but in a supportive role to TV ad campaigns, not a substitute.” MDI’s analysts say this year’s upfront was particularly noteworthy because it included a growing number of cross-platform buys, some bundling of late-night with prime, and increased digital activity. MDI says the networks will probably sell $2.6-2.7 billion in digital time next season. Also included in the Upfront totals are a relatively small but growing number of so-called “advanced targeting” buys, mostly on cable channels. These utilize “big data” set usage profiling as an add-on metric to Nielsen ratings, but mainly in single seller negotiations. As they bragged about their successes in the Upfronts, NBCUniversal had claimed its biggest haul ever, with deals of nearly $6.5 billion across its large portfolio. Disney-ABC, which pitched its broadcast and cable nets together for the first time, said CPMs were up high single-digits for ABC. FOX had flat volume, but CPM increases of 6-8%. CBS had some double-digit increases for morning, daytime and late-night. And The CW posted CPM increases in the high single- to low double-digits. Looking back ten years to compare the current Upfronts to the 2008-09 season, MDI finds that overall primetime ad dollars rose 18%. The lion’s share of this gain went to cable, which saw a 40% increase in ad revenue, while broadcast remained relatively flat. In terms of adult (18+) CPMs for : 30s, however, both broadcast and cable saw increases of 73-74% during this period. The broadcast network 18+ CPM for the 2017-18 Upfront is estimated by MDI at $29.01, an 8.0% increase over last year. The CPM for cable is lower—estimated at $15.94—an increase of 9.1% from a year ago.

ADVERTISER NEWS Asbury Automotive is closing down its used-only car stores, saying “We made an investment in an initiative to see if we could attract additional income and it was unsuccessful.” Automotive News notes three of Asbury’s competitors, Penske, AutoNation, and Sonic are still involved with trying to establish used-only chains. Asbury’s Q used-only stores had been started just three years ago…… Chipotle’s second quarter, all of which came before the most recent food safety problems, produced an 8.1% same-store sales increase, but of course that was in comparison to a very poor second quarter last year when sales had plummeted after the original safety scare. The chain also was running its largest ad campaign ever during the quarter, and the company admits that while the campaign resonated with existing customers, it wasn’t as effective bringing in new diners as had been hoped……Bloomin’ Brands had small comp restaurant gains at two of its chains (Outback Steakhouse up 0.3% and Carrabba’s Italian Grill up 0.4%), but larger declines at two other chains (Bonefish Grill down 2.6% and Fleming’s Prime Steakhouse down 1.3%) pulled down the overall comps to minus 0.3%. No new restaurants were opened in the U.S. during the quarter…… Smart & Final posted a 1.3% comp store increase, a strong turnaround after the first quarter had been negative by 2.5%. The chain’s CEO noted the lessening of pressure from deflation and growth- related cannibalization and sees additional growth coming from marketing and promotional initiatives……Supervalu’s retail operations, however, weren’t as good, with a 4.9% decrease in identical stores. Supervalu’s retail banners include Cub Foods, Farm Fresh, Hornbacher’s, Shop ‘N Save, and Shoppers…… Six Flags’ second quarter revenue was up 3.7% but profit slipped by 14.6% as attendance rose but spending per capita was off by 2%. The company says rainy weather in the East and Texas cut down on customers with single-day tickets and with a higher percentage of attendance being season-pass holders, that factor pulled down spending per capita……AT&T profit was up in the second quarter despite losing phone and TV subscribers, as greater selling of bundled deals made up for customer losses. The wireless business lost a net of 89,000 postpaid customers (the most-profitable customers in that business), leaving AT&T with 136.5 million active accounts. It also lost 199,000 video customers, but DirecTV Now added 152,000 subs to reach a total of 491,000. CEO Randall Stephenson remains optimistic the proposed buyout of Time Warner will win regulatory approval, saying “We continue to expect the Time Warner deal to close by year-end and further transform the company.” The potential deal is valued at $85 billion.

NETWORK NEWS The 38th Annual News and Documentary Emmy Award nominees were announced on Tuesday by the National Association of Television Arts & Sciences. CBS and PBS both picked up more than 40 nominations in various categories. NBC News and ABC News were nominated for the Outstanding Breaking News Coverage category, while ABC’s This Week with George Stephanopoulos picked up a nomination in the Outstanding News Discussion and Analysis category. NBC News’ Lester Holt was nominated in the Outstanding Live Interview category for his interview with Syria’s President Assad. Multiple Emmy and Peabody Award winner Charles Osgood will receive this year’s Lifetime Achievement Award....Page Six has exclusively learned Megyn Kelly’s upcoming morning program will be called Megyn Kelly Today. The title is to be unveiled at NBC internal meetings this morning. The news breaks at the same time Kelly’s Sunday night show will end its initial run this week after eight episodes. Her upcoming one-hour weekday show, airing at 9 a.m. will premiere Sept 25.…… Matt Groening, the creator of Fox’s The Simpsons and Futurama had been given a 20-episode order for a new series for Netflix. Disenchantment is described as an adult fantasy about a crumbling medieval kingdom known as Dreamland..…Stephen Colbert’s Russia Week on CBS’s Late Show averaged 2.87 million viewers according to Nielsen’s Live +Same Day survey for the week ending on July 21st. The performance gave The Late Show its largest margin of victory in late-night since Colbert’s first week as host. The show beat its closest rival, NBC’s The Tonight Show Starring Jimmy Fallon by 19%. Fallon’s average for the same week was 2.42 million total viewers. That margin of 450,000 viewers made it the easiest win for Colbert in 22 months……ABC will air The Bachelorette: The Men Tell All that will feature the most memorable bachelors from this season confronting each other and Bachelorette Rachel one last time. The bachelors will take the opportunity to dish the dirt and tell their side of the story. The Bachelorette: The Men Tell All will air on ABC Monday, July 31st at 8 PM (ET)……NBC’s new supernatural drama Midnight, Texas got off to a solid start in the Monday 10 PM (ET) series premiere. The show posted a 0.9 adult 18-49 rating and drew 3.6 million total viewers. ABC’s competing series Somewhere Between only managed a 0.6 demo rating and 3.07 million total viewers. The rating was a tenth higher in 18-49 than the premiere of Still Star-Crossed, which has been canceled by the network.

NFL STILL SCORES FOR TV Despite concerns about declining ratings for NFL games, Ad Age reports that the NFL has had 17 of the 30 most-watched broadcast telecasts in the first six months of this year, including four regular season telecasts in January and 10 playoff games. And for live sports viewing overall, all but one of the Top 30 most-watched TV programs were sports. In addition to the NFL, viewer numbers were big for The NBA Finals on ABC and college football post-season telecasts.

VIACOM/SCRIPPS? We reported last week on a possible deal for Discovery Networks to buy Scripps Networks, but don’t count out Viacom as a possible buyer. The Wall Street Journal says while Discovery is still a possibility, Viacom has also been in talks with Scripps and members of the Scripps family are said to be close to making a decision about a sale. A combination of Viacom and Scripps’ networks including HGTV and the Food Network would account for about 18% of cable viewership, putting a pairing of the two about on a par with groups such as Disney and NBCUniversal. The Journal adds Scripps’ ad revenue was up about 4% in the second quarter while Viacom was down about 2%, and while Viacom subscriber fees were up 1.9%, Scripps’ fees grew by 6%.

BUSINESS BYTES We’ve been reporting on the tightness of the housing market with skyrocketing prices for existing homes and a historically-low amount of inventory on the market. One of the effects of that situation is that millions of homeowners are now deciding to stay in their current homes and putting big money into renovations, a boom for home-improvement stores such as Home Depot and Lowe’s, as well as greatly expanded business for contractors. Americans are expected to spend $316 billion on home remodeling this year, up about $20 billion over last year according to Harvard University’s Joint Center for Housing Studies. Baby Boomers are staying in their homes later in life than many generations that came before them, largely because they’re generally in better health than previous generations and also because with so few smaller homes for sale, it makes sense to stay in their current home. Millennials have shown interest in investing in older properties that need renovation. “There are two 900-pound gorillas,” Brad Hunter, Chief Economist at HomeAdvisor said. “Baby boomer and the millennials are both having really dramatic impacts at the same time.” One vendor says Amazon jacked up suggested retail prices for Prime Day, leading buyers to believe they were getting a better deal than they really were. Fox Business reports the founder of Remodeez (foot odor stoppers), says his product has had a $9.99 suggested retail price on Amazon for two year, but on Prime Day Amazon showed the product at $15.42 marked down to $9.99. Amazon does retain the right to fluctuate prices with demand-based pricing and third-party vendors cannot mandate a price, but those tactics could lead to trouble. As we reported last week, the Federal Trade Commission is now looking into Amazon’s actions for possible violations. Another major advertiser has expressed disappointment with the results of its digital and social ad campaigns and is reinvesting in traditional media. Motorola agency Ogilvy and Motomentum is moving its Moto Z campaign strategy away from social and digital and toward TV and other channels. Jan Huckfeldt, Motorola’s VP, global marketing & communications, tells AdAge the handset manufacturer spent “quite a lot” on Facebook in 2016. But the digital and social ad strategy “didn’t move the needle overall,” he said, adding, “We were disappointed it did not grow enough.”

ECONOMIC NEWS The Conference Board’s Consumer Confidence Index rose 3.8 index points to a 16-year high this month, reaching 121.1. The Present Situation aspect of the index soared to 147.8 while the forward-looking Expectations aspect rose to 103.3. Lynn Franco, Director of Economic Indicators for the Conference Board commented, “Consumer confidence increased in July following a marginal decline in June. Consumers’ assessment of current conditions remained at a 16-year high and their expectations for the short-term outlook improved somewhat…Overall, consumers foresee the current economic expansion continuing well into the second half of the year.” RICE NAMED PRESIDENT OF TV ONE Michelle Rice will be the Interim General Manager of TV One, the entertainment and lifestyle network targeting Black adults. She succeeds Brad Siegel, who announced today that he will be leaving the network. Rice was most recently Executive Vice President, Content Distribution and Marketing for the network.

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------SPOTS N DOTS The Daily News Of TV Sales July 27, 2017 Phone: 888-884-2630