Every Medium Has Got Its Game Face on for 2006

EVERY MEDIUM HAS GOT ITS GAME FACE ON FOR 2006. Even the traditional media that find themselves facing competition on multiple fronts are upbeat about the new year. Whether it’s net- w o r k television—still the big daddy of delivering marke t e r s’ messages to the masses—bullishly forecasting a solid year of growth or the bat- tered radio industry pulling itself up by the bootstraps as it prepares to t a ke on a hot competitor, all major media foresee a year of gains. It’s clear that not everyone will grow, though, thanks to the return of the Internet as a viable media option and the explosion in customized, personalized, portable new-media alternatives (some of which are even being embraced by old media). Individually, these new interactive devices and concepts won’t siphon away a ton of ad dollars (OK, Google and Yahoo! might), but together they could drain significant enough ad dollars from traditional media that some of the old-school- ers (read: print) will find themselves thirsty for more revenue at the end of the year. We’ve entered the era of “me” media, where consumers exert far more control over their content diet than ever before. And all media are trying to embrace that reality in their own ways. Some, particularly the interactive segment, enjoy a clear advantage. But even magazines, by creating digital versions of themselves, and radio, with HD radio, are opening new avenues of media consumption that beckon to the growing millions of control freaks out there. But let’s not get ahead of ourselves. The lion’s share of ad dollars will still be spent in traditional time and space. And the lion’s share of readers, viewers and listeners will consume what’s given them rather than make their own media meal. And for 2006, at least, that means all media can continue to make a buck out of serving it up the traditional way. —Michael Bürgi

4 MEDIAWEEK January 2, 2006 mediaweek.com R O Y A L T Y - F R E E / C O R B I S JOHN CONSOLI

COMING OFF A SURPRISINGLY s t rong fourth quar- in ad revenue for the Big Four broadcast networks in 2006; t e r, broadcast network sales executives are predicting that 5 percent for CBS, ABC and Fox, factoring out NBC 2006 will be a solid, if not spectacular, year for growing ad because of the Winter Olympics. Poltrack noted that each of revenue. Advertisers and media agencies are rumbling that the broadcast networks sold less inventory in the upfro n t , they will begin to demand more tangible proof that their ad leaving more inventory to sell in the scatter market. The spending is resulting in a solid re t u rn on investment. If not, f o u rt h - q u a rter scatter market was much stronger than the they threaten, they may begin to move dollars elsewhere . networks expected, and Poltrack says that demand will con- But broadcast executives believe the average $24 cost-per- tinue: “This season’s scatter market will be stronger than last thousand for a 30-second prime-time spot is still an eco- s e a s o n ’s and will build strength as the season pro g re s s e s . ” nomical way for most advertisers to get the immediate mass Bob Coen, senior vp and director of forecasting for Univer- reach, or even targeted reach, they need to re m a i n competitive. And they wonder how many advert i s- ers can aff o rd to risk cutting back too much on TV, unless all their competitors do the same. For example, can Ta rget risk trimming its TV ad budget significantly when Wal-Mart is advertising like gangbusters? Ditto for other categories like telecommunications, automotive, fast food and soft drinks. In the auto category, despite the financial problems of the domestic automakers, M e r rill Lynch says there will be a heavy new model launch schedule in 2006 in the category overall. And that, said Lee We s t e r field, senior media analyst at Harris Nesbit, will result in continued strong ad dollars for the broadcast networks. “Those companies that have expanding brand portfolios, particularly the auto companies, will need the promotional level that network television offers,” he said. MINDING BUSINESS New sal McCann, is projecting a 6.5 percent ad M e r rill Lynch is also predicting that procedural drama Criminal revenue hike for the Big Four broadcast net- heavy TV advertisers like computer soft- Minds has become a hit for works in 2006 to $17.9 billion. w a re companies Microsoft and Oracle and CBS, the network with the most Westerfield believes all the Big Four telecom companies including AT&T (fol- stable prime-time schedule. b roadcast nets will have solid first quart e r s lowing its merger with SBC) will spend in 2006, with Fox re t u rning American Idol m o r e on advertising in 2006. And even packaged-goods and 2 4, NBC airing the Olympics, CBS the NCAA M e n ’s companies, which have softened TV ad spending in re c e n t Basketball Championship and ABC featuring Super Bowl years—yet bought heavily in fourth-quarter scatter—will XL. But he said second quarter—minus the big TV i n c r ease spending in the category by as much as 5 perc e n t events—will be a better barometer of how the year will go. in 2006, according to Merrill forecasts. ABC and Fox will be the networks with the most “buzz” That said, network sales execs do realize that they cannot shows in 2006. ABC has L o s t, Desperate Housewives, G re y ’s remain complacent and continue to count solely on 30-sec- A n a t o m y and freshman hit Commander in Chief, and Fox has ond spots to bring in all of their revenue. They also re a l i z e House, Idol and 24, along with freshman hit Prison Break. that product placement may be reaching a saturation point. CBS will continue to be the network with the most stable The networks are facing some push back from scripted show schedule, including its solid C S I trio and new hit pro c e d u r a l writers, who complain that forced product integration is drama Criminal Minds. NBC will need to have viewers hindering their ability to produce quality scripts, while re a l- embrace its revamped Thursday night, where it moved sit- ity show writers are organizing and trying to get union com hit My Name Is Earl and The Office in order to stop wages. If they are successful, it will drive up the cost of pro d- viewer erosion. And the WB must have at least two of its uct integration on those shows. midseason scripted shows—Pepper Dennis, Modern Men, A few of the networks already have cut deals to make M i s c o n c e p t i o n s and The Bedford Diaries among them—suc- their prime-time shows available on demand, for a fee, ceed, not only to salvage this season, but also to give it a base t h rou gh cable systems beginning in 2006. While this cre- for the 2006-07 season. UPN’s African American sitcom ates an additional revenue stream for the networks, they will block has rebounded in the ratings this season, but the net- eventually have to determine whether to offer these VOD work still needs to come up with scripted shows that reach a shows with or without commercials, or offer both options. b roader audience in order to expand its advertising base. ■ As far as on-air ad revenue goes, Dave Poltrack, executive vp, re s e a rch and planning for CBS, predicts a 7 percent gain Senior editor John Consoli covers the broadcast networks.

mediaweek.com January 2, 2006 MEDIAWEEK 5 ANTHONY CRUPI

W H I L E I T M AY B E H Y P E R B O L I C to label 2005 an p l a t f o rms don’t necessarily work for every brand,” Maltby annus horribilis as far as the cable advertising marketplace said. “You have to wait until the audience that you’re look- is concerned, it’s not a stretch to suggest that most cable ad ing for catches up with the technology.” sales executives are n ’t going to look back on last year with If a Goldilocks economy (not too hard, not too soft) anything resembling fondness. If the upfront is the baro m- t h reatens to weigh heavily on cable’s ad sales business, 2006 eter by which cable measures its fiscal well-being, then ’05 may be the year the industry begins to distance itself fro m saw the needle drop precipitously, as anticipated sales its alternative distribution rivals. Yankee Group senior ana- i n c reases in the low double digits failed to materialize. lyst Adi Kishore notes that “the last two quarters haven’t In August, the Cabletelevision Advertising Bureau pre- been very good for DirecTV and DISH Network,” adding sented its final tally of the year’s upfront totals, placing the that cable’s triple-play bundle of digital video, phone and market at a smidgen over $6.5 billion, an increase of $300 high-speed Internet service has “begun having an impact.” million, or 5 percent, over what the cable nets took in dur- Nor is Ve r i z o n ’s FiOS TV service expected to cre a t e ing the 2004 upfront. Other than the solid gains posted by many ripples in ’06. “We’ve read and re read ‘the telco video major players like Tu rner and USA Nets and a few isolated s t o ry’ numerous times over the past decade,” said Bru c e successes engineered by some smaller pro p e rties (includ- Leichtman, president and principal analyst of the Leichtman Research Group. “Unfort u n a t e l y, each reading seems to end with the last several chapters of the book ripped out.” P e rhaps the biggest issue facing cable in ’06 is the à la carte issue, which was brought back wrig- gling into the light in November when Federal Communications Commission Chairman Kevin M a rtin said that he considered backing such a pricing plan. While Time Wa rner Cable and Comcast countered with mollifying family tier options, almost no one expects the FCC to pre s s à la carte into service any time soon. “Mandating à la carte would be a tremendously complex, con- t roversial and likely litigious process with unclear consumer benefits,” Banc of America Securities analyst Doug Shapiro said. I ro n i c a l l y, an à la carte model could actually s e rve to make so-called indecent mate- ing, but not limited to, the Scripps PA RTS & ENTERTAINMENT It’s rial even more readily available. “Yo u ’ re Networks), most ad sales execs were only a safe bet A&E’s Rollergirls will going to wind up [driving] the content able to wring out meager cost-per- t h o u s a n d be on the radar of those eager that you’re trying to keep out of the i n c reases between 1 percent and 3 percent. to regulate cable content. home into another channel that can’t be While those stats cast a pall over cable, legislated,” said Paphion principal ana- the latter part of ’05 saw an uptick in the scatter market that lyst Lydia Loizides, suggesting that content roped off is expected to carry over into 2006. “The good news is that f rom the living room could roam unfettered in a dire c t the quarter looks to be ending on a fairly strong note,” said I n t e rnet Protocol environment. (Of course, the idea of one ad sales vet. “If anything’s going to drop, it’ll be in the consumers voluntarily surrendering their viewing choices next two quarters, and if there is a drop, it’ll be moderate.” to the feds probably has given the framers of the Although Wall Street expects some sluggishness fro m Constitution a case of the grave spins, although whether the auto and entertainment categories, analysts pre d i c t J e fferson et al were able to envision, say, women on ro l l e r some year- o v e r-year growth. Bob Coen, senior vp and skates beating the tar out of each other on A&E’s f o rec asting director at Universal McCann, projected total R o l l e rg i r l s is a puzzle for the ages.) U.S. ad spending growth to reach 5.8 percent this year, Politics aside, the byword for 2006 is moderation. with cable up 7 percent. Merrill Ly n c h ’s total ad fore c a s t K i s h o re warned that this year would see “no radical was lower, at 4.5 percent growth, with cable up 7.7 perc e n t . shifts” in VOD availability and usage, and while DVRs Media agencies will begin nudging clients toward non- may break the fabled 20 million mark by year end, adver- traditional marketing, although the dollars taken off the tisers needn’t despair just yet. “We’ll continue to hear a lot cable pile shouldn’t add up to a huge loss in 2006. of hype next year about DVR and VOD and port a b l e M i n d S h a re president, co-executive director Jason Maltby media,” Kishore said. “But there won’t be a lot of sub- said his agency isn’t going to pre m a t u rely push any clients stance behind it. It’s not going to be a watershed year. ” ■ into alternative platforms. “There ’s a natural tendency for marketers to want to get in on the hot new thing, but some Senior reporter Anthony Crupi covers the cable industry.

6 MEDIAWEEK January 2, 2006 mediaweek.com MARC BERMAN SWEET STRIP King World is generating major buzz for talker Rachael Ray, which is THE CURRENT SEASON kicked off a firm go for fall ’06. with few fir s t - run strips, but there is fre s h p rogramming blood, and plenty of it, on the horizon. At present, King World’s The Rachael Ray Show, NBC Universal’s The Megan Mullally Show, Sony Pictures Te l e v i- s i o n ’s Judge Maria Lopez and C r i s t i n a ’s Court from Twentieth Television have all been announced as a firm go for fall 2006. There a re also at least two other new talkers—D r. Keith Albow from Warner Bros. and The Greg Behrendt Show from Sony Pictures Television—vying for clearances. And there is a brand new genre—first-run drama strips—courtesy of a pending franchise called D e s i re f rom Twentieth Television. All told, the industry may roll out as many as seven new fir s t - run strips in 2006-07, more than ue to form the financial backbone of syndication. And that double the three introduced (M a rt h a, The Tyra Banks Show remains imperative for off-network comedies, given the and Judge Alex) this season. Only two major syndicators— c u rrent lack of A-list network pro d u c t . Buena Vista Television (which remains intent on making “No other medium has as many established hit fran- low-rated sophomore The Tony Danza Show a hit) and chises to work with, and that’s a huge benefit,” said Moira Paramount—have not announced any new fir s t - run pro d- C o ff e y, senior vp, re s e a rch at King World, which is home ucts. Last year, four key syndicators (King World and SPT to the top five rated strips in households. “And when included) had nothing new in fir s t - run to off e r. something works in syndication, the life span can be con- “Although new shows of a talk or court nature are noth- siderably longer than a typical hit network series.” ing unusual, what stands out, at least from the concept Although modest early results for NBC Universal’s itself, is the serialized drama idea from Tw e n t i e t h M a rt h a at a 1.7 rating in households proves that even a bar- Television,” said Peter Wi n k l e r, global marketing dire c t o r, rage of publicity (much of it stemming from Stewart ’s E n t e rtainment & Media Practice, Pricewaterh o u s e - imprisonment and ultimate release) is no guarantee of suc- Coopers. “As new as it sounds, it could have long-term legs cess, ad revenue in syndication remains on the upswing. to stand on because the scripted daytime drama has been an That, of course, is a re flection of the strength of the estab- ongoing staple on the networks for decades.” lished product, both fir s t - run and off-network. Under the D e s i re u m b rella, Twentieth will introduce a A c c o rding to online fig u res published by the Te l e v i s i o n minimum of three Latin American telenovelas per year (65 B u reau of Advertising, syndication in the first half of 2005 episodes each) re p roduced in English for U.S. distribution. netted $1.99 billion, a year-to-year increase of 3.6 perc e n t . “ You definitely have to give Twentieth credit for try i n g G rowth in second quarter 2005 alone was 3.1 perc e n t something new, but what is generating the most word of ($977 million to $1.01 billion). Estimates over the next few mouth pre - N ATPE is King Wo r l d ’s Rachael Ray,” noted years point to similar percentage gains. Brad Adgate, senior vp of corporate re s e a rch at Horizon “One facet of syndication, as in other broadcasting Media. “And the exposure on O p r a h, like D r. Phil t h re e mediums, that has become very beneficial is the value of years earlier, is certainly benefic i a l . ” U.S. programs in the European marketplace,” noted Mitch Burg, president of the Syndicated Network Winkler. “There is a growing interest overseas for strong Television Association, added, “A wider array of new and and established U.S. programming, which adds to its c reative upcoming product means the syndication land- value financially.” scape is poised for momentum. We’ve got new talk, new As the industry pre p a res for the upcoming NAT P E c o u rt, new off-net comedies and a new genre. There is an c o n f e rence in Las Vegas on Jan. 24-26, it does so with a excitement building that we have not seen in years.” renewed sense of intere s t. “While we may never again see Most of that buzz revolves around the veterans, as genre a success in the magnitude of O p r a h, there is a gre a t e r leaders like King Wo r l d ’s O p r a h, Wheel of Fort u n e, sense of optimism with what lies ahead,” said Adgate. E v e ryb ody Loves Raymond and C S I, along with Paramount’s “Even if nothing new makes an impact, there is more than E n t e rtainment To n i g h t and Judge Judy, continue to rule their enough veteran product to carry the medium and build categories with an iron ratings fist. While a modest 2.1 for the future.” ■ household rating to date, according to Nielsen Media R e s e a rch data, makes Twentieth Te l e v i s i o n ’s Judge Alex t h e Senior editor Marc Berman covers TV syndication and highest rated of the current fir s t - run freshman trio (and an writes both the weekly Mr. Television column and the daily incentive to launch more court), the tried and true contin- online Programming Insider.

8 MEDIAWEEK January 2, 2006 mediaweek.com A.J. FRUTKIN

WITH NO BLOCKBUSTER hits having come out of the fall season so far, TV programmers are hoping the New Year brings with it new trends and formats. Of all those trends, comedy’s long-awaited resurgence may well be the most anticipated. Not surprisingly, the success that NBC’s My Name Is Earl continues to enjoy is fueling that anticipation. What’s more, following several seasons of ratings disap- pointments for single-camera comedies—most notably Fox’s Emmy Award-winning Arrested Development—Earl’s success has already “encouraged networks to take more shots” with the format, said Quan Phung, senior vp of SCENE STEALER NBC has greenlighted Heist, about a group creative affairs and comedy at 20th Century Fox TV, of thieves plotting to rob jewelry stores during Oscar week. which produces Earl. But Phung added that programmers are taking next nonscripted programming. season’s comedy cues less from Earl than they are from Of course, audiences are likely to flock back to Fox’s ABC’s Lost. “In this selling season, there was a lot more American Idol when it returns for a fifth cycle on Jan. 17. emphasis on big, event-like ideas, ideas that have a mar- But what happens then remains uncertain. keting hook,” he said. “Those were the shows that sold Some broadcasters have been banking on a game and that got big commitments.” show revival. NBC was first up last month with its high- Among 20th’s entries in the field is an untitled NBC rated weeklong run of Euro-import Deal or No Deal. CBS sitcom from writer/producer Victor Fresco (Andy Richter has its own game show plans, having given a seven- Controls the Universe) about a graphic novelist whose episode order to the British hit format Game Show characters come to life. Phung described the project as Marathon. Tapping into Mark Goodson’s library of clas- “very high-concept.” sic game shows—including Match Game, What’s My Line Even as Lost’s own high concept continues to captivate and Card Sharks—the show could air during May sweeps, viewers, CSI has remained the drama king, proving it is featuring celebrity contestants competing in one format unlikely that procedurals will begin to fade anytime soon. per week, until a champion is crowned. But the networks aren’t giving up on serialized hours After overexposing Who Wants to Be a Millionaire, yet—especially those that feature single story lines in the ABC may not be ready to look at another game show vein of Fox’s 24. yet. But with its upcoming revival of This Is Your Life, In fact, the News Corp.-owned network has several the network is drawing from TV’s golden era, which more single story line series on tap for fall ’06, including gave birth both to game shows and so-called studio- the real-time thriller Crisis, about a terrorist takeover of based shows like T I Y L . And ABC is still searching for a Miami hotel, and Hard Boiled, a steamy detective series less-costly series for a Saturday-night lineup of non- about a kidnapping, from 24 creators Bob Cochran and scripted programs. Joel Surnow. Whether or not viewers take to a game show revival, Surnow told Mediaweek that the success of 24’s DVD most nonscripted execs agreed it is in their best interests sales had paved the way for the single story line format. to investigate any and every format imaginable. “There “Five years ago, the networks wouldn’t have touched are a lot of different ways to reinvent alternative pro- shows like these,” Surnow said. “Syndication was so gramming, whether through game shows or studio-based problematic.” But with the first three seasons of 24 hav- shows or documentary series,” said Andrea Wong, ABC’s ing sold more than 4 million copies, Surnow added, executive vp of alternative programming. “But it’s up to “Now it’s become financially viable.” us to continue to innovate the format and look down Like Fox, NBC is developing the single story every avenue possible.” Kidnapped, which investigates the abduction of a child Even as broadcasters look for that next reality smash, from a wealthy family. In October, the General Electric- advertisers have noticed that the networks are relying less owned network greenlighted production on Heist, about on the nonscripted format for ratings than in previous a group of thieves scheming to rob three Beverly Hills seasons. “Over the past few years, everything was about jewelry stores during Oscar week. The series could reality,” said Sam Armando, vp, director of national TV launch as early as spring ’06. research for Starcom Worldwide. “Now we’re seeing Meanwhile, it may be anyone’s guess as to where real- more of a mix of programming formats. And I think that’s ity is going. Although stalwarts like CBS’ Survivor and a positive sign for the industry because it gives advertis- UPN’s America’s Next Top Model performed admirably ers more choices. And choices are good.” ■ this fall, NBC’s disappointing launches of copycats The Apprentice: Martha Stewart and Three Wishes suggested Senior editor A.J. Frutkin covers the TV studios from viewers want more innovation than sameness from their Mediaweek’s Los Angeles bureau.

mediaweek.com January 2, 2006 MEDIAWEEK 9 MIKE SHIELDS

THE ONE GUARANTEE WE can make for interactive giants such as Yahoo! (Kevin Sites in the Hot Zone) and media in 2006 is this—by this time next year, you’ll be AOL (The Biz) launched original video franchises. able to comfortably toss this article in the trash. Maybe N o w, advertisers are rushing to throw 30-second spots even in six months. Because in this hyper-growing, con- in front of such content. eMarketer projects online video ad s t a n t l y - b e i n g - reinvented space, nothing is permanent and spending will reach $640 million by 2007, up from $225 change is guaranteed. million last year. “We can pretty much sell as much as we “ I t ’s a medium that changes rapidly,” said Alan Schanzer, can serve,” said Moore. The audience for online video is still managing partner of WPP’s MEC Interaction. “It’s hard to developing. But alre a d y, MTV says it has delivered more d e fine. So much of what we are doing doesn’t fit in to a his- than 125 million streams of unique content on Overdrive. torical model.” While Yahoo!’s Moore believes Think back to this time last year. that pure Web players are better situ- Those with iPods were still using ated to score in the emerging medi- them to listen to songs. Few had con- um, expect more ad-supported bro a d- sumed a vlog, a podcast or even band platforms from TV—Cart o o n watched much online video. Most Network is a good bet—and more people had never heard of MySpace experimentation with the direct sales and probably thought AOL wasn’t of TV shows, online or via set-top w o rth much. boxes. Fox should be particularly H o w e v e r, a few things are clear as i n t e r esting to watch in 2006. While we head into 2006. For one, most other networks have been aggre s s i v e o b s e rvers expect the medium to have in the pay-per-view arena, Rupert another terr i fic year, following a 2005 Murdoch’s company is sitting on that took in an estimated $12 billion i P o d - p e rfect fare such as Family Guy in ad revenue. As marketers continue and 24. Also worth monitoring is to shift spending from traditional to A O L’s soon-to-launch IN2TV, which digital media, experts expect spend- begs the question: Will Web users ing to surge between 20 percent and really watch old episodes of Wonder 30 percent this year. And while Wo m a n o n l i n e ? e m e rging segments like videogames, I n d u s t r y insiders say 2006 is the mobile and blogs will all receive their year of behavioral targ e t i n g — t h e s h a re of attention, three areas in par- p r omising tactic of targeting We b ticular should enjoy hefty spikes in users based on their surfing habits. spending: search, video and behav- Last year, eMarketer predicted that ioral targ e t i n g . IPOD, YOU POD Only a year ago, Apple’s spending in behavioral targ e t i n g The rapid rise of paid searc h iPod just played music. Now all sorts of would approach $1 billion in 2005. a d v e rtising—the backbone of those T V shows and podcasts can be played. “Historically the Web has been recent billion-dollar revenue quar- bought according to content,” said ters enjoyed by Google and Yahoo!—has been well chro n- David Moore, chairman and CEO at 24/7 Real Media, icled. The segment, which accounts for 40 percent of the which sells behavior-based ads. “With the advent of current Internet ad market, should see growth slow a bit behavioral, you can now start targeting car buyers in this year. Yet everybody will be watching to see how the places other than car content.” new, deeper relationship between AOL and Google plays MEC Interaction’s Schanzer estimates that 15 percent of out and what exactly Microsoft’s next move will be. online media buys feature some sort of behavioral targ e t i n g , As for video, the content distribution revolution begun and that fig u re may exceed 25 percent this year. B e h a v i o r a l in 2005 shows no signs of stopping, as every p roducer of t a rgeting also fits in with the industry ’s overarching empha- content experiments with new models, including ad-sup- sis on accountability. “[ROI] is just tougher to calculate in p o rted video online and selling individual shows via iTu n e s . other media,” said 24/7’s Moore. “The whole industry is “Almost everything is going to change in TV and fil m , ” becoming audience-centric.” said Scott Moore, Yahoo! vp of content operations. “Yo u ’ re “The in-market user is very elusive,” added Nick John- going to see more and more original online video content.” son, senior vp and general manager of account strategy at Last year, users saw mainly repurposed content fro m the behavioral targeting firm Revenue Science. “There is the major broadcast and cable networks. Bro a d b a n d a lot of pre s s u r e to market to these people…Advert i s e r s launches included MTV’s Overdrive and Comedy Cen- are getting more strategic.” ■ t r a l ’s Motherload. Free video popped up on sites like CNN.com, CBSNews.com and CBSSportsline.com. We b Senior reporter Mike Shields covers interactive media.

12 MEDIAWEEK January 2, 2006 mediaweek.com STEPHANIE D. SMITH

PUBLISHERS IN 2005 scrambled out of holes they had ing through November rebounded 9.3 percent over 2004 dug during the recession and spent much of the year to $1.8 billion, according to the Publishers Inform a t i o n revamping mature magazines, launching new ones and mak- B u rea u, thanks to ads for prescription drugs like Singulair ing sweeping corporate changes—all with an eye toward lay- and Zoloft. Beauty products will get a boost from the flo o d ing the groundwork to better compete in a fast-changing of anti-aging products that pre s e rve consumers’ youthful media enviro n m e n t . g l o w. That’s good news for books such as Hearst Despite a number of high-pro file makeovers, including Magazines’ Marie Claire. Automotive—magazines’ top ad the redesign of Hearst Magazines’ R e d b o o k and American c a t e g o ry — remains dismal in 2006 as Detro i t ’s business Media Inc.’s S h a p e, and launches such as Reader’s Digest woes continue. Through November, auto revenue fell 3.1 Associations’ E v e ry Day With Rachael p e rcent, to $2.1 billion, compared to R a y and Fairchild Publications’ the same period in 2004. C o o k i e, 2005 continued to be the One trend that will spill into this year of celebrity magazines. AMI’s year is the last-minute buys into Celebrity Living, Gemstar-TV Guide magazines, which continue to drive I n t e rn a t i o n a l ’s Inside TV and a U.S. publishers crazy. version of British tabloid O K ! a l l “ We ’ re in an environment of just- launched in a crowded category in-time buying, planning and deci- dominated by Time Inc.’s P e o p l e a n d sion making,” added Jack Griffin , Wenner Media’s Us We e k l y. But in M e redith Corp. publishing gro u p 2006, industry observers are placing p resident. For a clearer picture , bets on a shakeout. It began in G r i ffin said, Meredith is using more essence this past November when s o f t w a re and analytical models that Inside TV folded, a mere six months c h ronicle past advertiser buying pat- after launch. Media buyers believe at t e rns to chart future ones. least one other celebrity title could The last year also brought several fold as it becomes increasingly diffi- corporate overhauls. Meredith Corp. cult for all eight magazines to attract bought four magazines from G+J ads and retain re a d e r s . USA Publishing, and Advance N e v e rtheless, publishers expect a Magazine Group consolidated all of steady stream of launches next year its magazine divisions, including p a rticularly in the lifestyle category. LET’S LAUNCH Joining Vogue spinoff F a i rchild Publications and Golf One of the higher- p ro file titles Teen Vogue will be a magazine aimed Digest Cos., under the Condé Nast being introduced is Condé Nast’s at fashionable men. u m b rella. In December, Time Inc. M e n ’s Vo g u e. Also in the works: cut 105 top managers in a bold eff o rt M a rtha Stewart Living Omnimedia’s tentatively titled shel- to streamline its operations and cut costs; more layoffs are ter magazine B l u e p r i n t (which could launch in May); a high- expected this year as well. end food magazine from RDA; and yet another women’s “ T h e re will be a ripple effect,” predicted Steve Lerc h , lifestyle title in development at Meredith. vp, manager of print media for Campbell Mithun. “There On the advertising front, publishers will struggle for w e re top, talented people at Time Inc. that were let go. market share as Madison Avenue continues to be seduced You’ll see them gobbled up by other publishing houses that by television and the Internet. “As Google grows by $3 bil- will result in pushing other people out.” lion a year in advertising revenue and online in general is F i n a l l y, circulation will remain a challenge. Newsstand going to double in the next couple years, some of those dol- sales have stalled—save for the $1.99 weeklies such as Bauer lars are going to come from print,” predicted Andy P u b l i s h i n g ’s In To u c h—and subscriptions are incre a s i n g l y Buchholtz, managing director for Ve ronis Suhler m o re expensive to obtain (due to the high costs and low Stevenson. “The challenge is finding that equilibrium over re t u rns of direct marketing) and to fulfill. Postal rates will the next couple of years where everyone recognizes the rise 5.4 percent as of Jan. 8. To overcome these obstacles, value of each medium, and there ’s not a flood going one publishers are using their Web sites to acquire subs, while way or another.” others are launching digital editions that are delivered to This year, publishers are expected to be even more readers’ desktops. Among the publishers taking advantage a g g res sive in offering integrated packages that incorporate of this emerging technology are Hachette Filipacchi Media print buys with online or television offerings. and Hearst Magazines. ■ A d v e rtising growth in 2006 is expected to come in part f rom pharmaceutical and beauty categories. Although the Stephanie D. Smith is a senior reporter covering the d rug category stagnated in the early half of ’05, ad spend- magazine industry.

mediaweek.com January 2, 2006 MEDIAWEEK 13 K ATY BACHMAN

IF LOCAL TV STATIONS PLAY their cards right, they market added up to about $4 billion in 2005. Newspaper can have the best of both new and old worlds in 2006. In sites account for about half of that, while TV stations have stark contrast to 2005, stations should be able to maximize a dispro p o r tionately smaller share—about $283 million. their core business with Olympics and political dollars tight- “After seeing video ads on newspaper sites, TV sud- ening inventory, resulting in ad revenue gains between 6 denly realized this is about their advertising stre a m , p e rcent and 8 percent over 2005. At the same time, stations which is video,” said Gordon Borrell, president of have the opportunity to remake local TV by leveraging their B o r rell Associates. video content onto all screens large and small, from iPods “The local online ad market is two to three years and handheld wireless devices to computer scre e n s . behind the network online ad market,” said Reid “It’s clear the day of TV as a mass medium is quickly Johnson, founder, CEO and president for Intern e t changing,” said Kathy Crawford, president of local Broadcasting, a national platform of more than 70 Web broadcast at MindShare. “Broadcasters need to start sites owned by some of the nation’s largest TV groups thinking about how the model is going to change. Online such as NBC, Cox Broadcasting, Hearst-Arg y l e is an important piece of it, but it’s all of the things that Television and Post-Newsweek. “All of our sites are prof- digital is bringing to us.” itable and have been for the past three years. But a couple of years from now, a station’s Web site revenue base should represent about 5 percent of billings and pulling in a seven-figure revenue,” Johnson added. Also lagging their network counterparts, stations have yet to take full advantage of digital broadcasting opportunities to freshen up their over-the-air product. Only a handful of stations, such as KUSA, Gannett’s NBC affiliate in D e n v e r, and WUSA in Washington, D.C., broadcast local news in high definition. One year after NBC Universal launched NBC Weather Plus, the industry ’s first digital b r oadcast network, most of the TV industry remains undecided about how to leverage the digital spectrum beyond the core station brand. Some TV groups are mulling pooling their CLEAR VISION A year after NBCU launched its digital broadcast net, TV s p e c t r um with USDTV to offer a cheaper alter- execs are focused on finding ways to take advantage of the spectrum. native to cable; ABC and American Public Television are in the early stages of rolling out “You started seeing this coming early in 2005 and now network multicast options similar to NBC’s. it’s a tsunami. From an advertiser and consumer point of Meanwhile, Weather Plus is preparing to roll out a view, multiplatform and multiscreen is a total fixation,” Web component. “Overall, people are struggling with the added Chris Rohrs, president of the Television Bureau of space because there are a lot of diff e ren t opport u n i t i e s Advertising. So important is the trend that Rohrs and the wrapped around the digital spectrum,” said Jay Ire l a n d , TVB have focused the organization’s annual marketing p resident of NBC Universal Television Stations. “We have conference in March on deciphering the implications of got to take advantage of every platform that is out there multiplatform on the business of broadcasting. and provide locally oriented content that resonates with Web sites are nothing new to TV stations, but the our viewers.” business model has changed. TV groups, such as CBS While the new media presents an attractive gro w t h Television Stations, were motivated last year to rebuild p roposition, stations also can’t take their eye off the core local station online strategies to include more content business. The automotive category, responsible for a quar- and live streaming video. Other stations, such as WUSA, ter of a station’s revenue, remains a big question mark. Gannett’s CBS affiliate in Washington, D.C., and WPIX, Other revenue sources have dwindled too. “A lot of the Tribune’s owned-and-operated WB outlet in New York, foundation points are gone,” said Rohrs. “Network com- are now offering viewers customized traffic and weather pensation is gone. You used to be able to count on network data “pushed” to their computers or handheld devices. dollars spilling to spot. There are fewer local re t a i l e r s . “ We originally thought these were just pro m o t i o n a l Many have given way to national retailers; kids money has extensions of TV stations, and we were wrong,” said Rohrs. gone to cable. These are structural changes.” ■ “ N o w, most stations realize it’s a second medium. It’s a big robust, growing pie, and we’ve been underperf o rm i n g . ” Senior editor Katy Bachman covers TV stations, radio, A c c o rdi ng to Borrell Associates, the local online ad outdoor and research.

14 MEDIAWEEK January 2, 2006 mediaweek.com K ATY BACHMAN

EASY LISTENING Traditional radio is trying to meet the challenges posed by satellite radio by touting the fact that it’s free.

RADIO’S BIGGEST CHALLENGE in 2006 could be Consortium to accelerate a rollout of the digital radio coping with the expanding definition of radio. As far as technology that failed to take off in 2005 and to cooper- media buyers and advertisers are concerned, and for that ate in the rollout of multicast side channels called HD2. matter the consumer, radio is no longer just AM and FM. For at least the first 18 months, HD2 channels will be I t ’s also Internet radio and satellite radio. And while satel- offered commercial-free, a direct shot across the bow of lite radio’s 9 million subscribers and Internet radio’s 20 satellite radio. Few doubt the potential impact of HD million weekly listeners are dwarfed by traditional radio’s radio, which offers improved sound fidelity as it brings 230 million weekly listeners, the impact of these new radio into the digital age. “We are on the threshold of a media on the consumer cannot be ignored. revolution in radio,” said Dennis McGuire, vp and According to a focus group study conducted last fall regional broadcast director for Carat. “It will generate by Jacobs Media, consumers aged 18-34 consider radio as more interest in the medium. It’s certainly going to take “anything with a DJ.” Young listeners say they find tradi- the wind out of the sails of satellite radio.” tional radio stale. On the flip side, they don’t think they But when that will happen is another matter. Despite ought to pay for radio. kudos from the agency community for radio’s move, most “Radio isn’t a growth medium. It’s misunderstood don’t think HD can turn radio around in 2006. And it’s right now, even among its owners,” said Maribeth unlikely to raise enough excitement to offset advertiser Papuga, senior vp and director of local broadcast for indifference in traditional radio. “HD isn’t ready. It’s like MediaVest, at the recent UBS media conference. signing a major league guy when he’s 16 and hoping he In many ways, traditional radio is coping with the fun- doesn’t break his arm before he turns 22,” said Rich damental shift in consumer choices by embracing a mul- Russo, director of broadcast services for JL Media. t i p l a t f o rm ra dio model, a trend that is likely to accelerate “Radio will be lucky if it’s flat this year. They aren’t going this year. The nation’s largest radio companies, Clear to fix it with something that’s five years away.” Channel and CBS Radio (formerly Infinity Bro a d c a s t i n g ) , Despite satellite radio’s big momentum, it too is facing took critical steps in 2005 to leverage their content onto some growing pains in the form of escalating costs for pro- the Internet, whether through streaming or offering con- gramming and music rights. Howard Stern, Mart h a tent for downloading. The hope is that in 2006, those S t e w a rt, Bob Dylan and Snoop Dogg didn’t come cheap. baby steps will lead to a solid foundation for a new, gro w - Music labels are also looking to reap a larger fee, especially ing and lucrative business. for new satellite receivers that re c o rd and store songs. “While the brick-and-mortar radio business is our main One certainty is a given in 2006—more fragmentation business, you’ll see us invest in new formats and technolo- of an already fragmented medium. But that cries out for g y,” said Joel Hollander, chairman and CEO for CBS i m p roved measurement and better re s e a rch, issues that Radio, which has adopted a new slogan: “Bro a d c a s t … b roadcasters appear to be sidestepping. Under pre s s u re H D … S t rea ming…On Demand.” “Streaming is starting to f rom broadcasters, Arbitron was forced to delay until sum- become a bigger strategy. It’s not a material revenue stre a m , mer 2006 re p o rting satellite radio and Internet radio in its but it’s significant,” he added. s u rveys, leaving the advertising industry with a lot of ques- When it comes to the red-hot satellite radio industry, tions about consumers’ shifting listening habits. Arbitro n b roadcasters continue to fight back. At the end of ’05, tra- is ready to go with portable people meters, but bro a d c a s t- ditional broadcasters launched a narrowly focused attack ers, wary of lower ratings, balk at the cost. against satellite radio in the form of ads, driving home the “ M e a s u rement is going to be essential,” said Kim Va s e y, point that “you shouldn’t have to pay for” radio. senior partner and director of radio for Mediaedge:cia. In a more strategic and unprecedented move, eight of “ [ B roadcasters] have to be realistic that radio is no longer the nation’s largest radio groups at the end of 2005 set just the terrestrial dial. You need the portable people meter, aside their competitive differences to form the HD Radio especially for the rollout of HD2.” ■

mediaweek.com January 2, 2006 MEDIAWEEK 15 K ATY BACHMAN

SOMETHING DIFFERENT Innovations in technology have helped propel out-of- home to the second-fastest growing medium.

WHILE NEW TECHNOLOGIES have made it i n c reasing number of calls from advertisers asking us how tougher for traditional media to hold onto their audiences, they can do something diff e rent.” just the opposite is true for out-of-home. Thanks to new “The general perception of advertisers is that the out- digital media, the oldest medium is undergoing a radical door medium is able to deliver to consumers in a less clut- t r a n s f o rma tion, catching the eye of consumers and adver- tered environment. Consumers see the ad and they aren’t tisers alike. In terms of growth, outdoor is the second- being hit by other media options at the same time,” said fastest growing medium next to the Internet, according to Peter Wi n k l e r, director of Pricewaterh o u s e C o o p e r s ’ most measures of media ad gro w t h . e n t e rta inment and media practice. “It’s not intrusive when A sure sign of outdoor’s coming of age is the form a t i o n the advertising is in an environment not hit with other of specialty agencies devoted exclusively to out-of-home. marketing messages.” While many buying shops have launched new divisions, Traditional outdoor companies such as Clear Channel, WPP-owned Mediaedge:cia and MindShare last year Lamar Advertising and Viacom Outdoor continue to p a rt n e r ed with Poster Publicity to form Kinetic, the experiment with electronic boards that promise to turn l a rgest out-of-home agency in North America. By special- outdoor into a more flexible medium for advertisers wish- izing in outdoor instead of relegating it to a division, ing to segment messages by daypart. In addition to LED Kinetic believes it can capitalize on what it characterizes as (light emitting diode) boards, there are other technolo- an underdeveloped outdoor business. gies—known as magic paper or ink—being developed that For the medium, that’s a huge vote of confidence in a will do the same job as LED, but at a lower cost. business that was relegated to the back rooms for years. “This is a medium where you have to find an advert i s e r “ We’ve been talking about an alignment of stars in the out- that can utilize a board 24 hours a day, seven days a week door constellation,” said Stephen Freitas, chief marketing and have maximum utility out of it. Digital allows us to seg- o fficer at the Outdoor Advertising Association of America, ment the audience in a way that we have never been able who anticipates double-digit growth in ’06. “If it continues to,” said Randall Mays, CFO and executive vp for Clear to grow at its current clip, it’s quite plausible that within the Channel, which spun off 10 percent of its outdoor division next five years outdoor could be a $10 billion business.” to create a separate outdoor company at the end of 2005. The beginnings of the trend took root in 2005, with At the same time, the outdoor industry is getting clos- new out-of-home companies building networks to reach er to the development of a measurement system that will consumers wherever they work or play: Captivate Net- allow advertisers to address their re t u rn on investment works’ elevator advertising reaching professionals where using similar measures to radio and television. Both the they work; Zoom Media’s place-based lifestyle networks Tr a ffic Audit Bureau and Nielsen Media Research have in sports facilities, cinemas and social centers; and Sub- been developing services. At present, the outdoor compa- M e d i a ’s and SideTr a c k ’s ability to turn static billboard s nies favor the TAB’s approach, which would combine the into motion billboards for subways and street displays. daily effective circulation fig u res with a likely-to-see index “ A l t e rnat ive media is growing faster than any other plus a travel survey component to provide demographic piece of the outdoor business,” said Freitas, who estimated data. An acceptable measurement system would give yet that revenue at about 6 percent of the total. “We get an another boost to this fast-growing medium. ■

16 MEDIAWEEK January 2, 2006 mediaweek.com STEVE MCCLELLAN

FOR MEDIA AGENCIES, the big challenges in 2006 Alec Gerster, CEO, Interpublic Group’s Initiative will include showing clients how to capture the attention of Worldwide, said the video iPod phenomenon is a part of consumers while navigating a media landscape that tech- a “sea change” in distribution patterns—CBS and NBC nology continues to make more complex; most import a n t- also agreed for the first time late last year to sell viewers l y, media companies will need to provide consumers with a shows via on-demand venues—that will continue to gath- plethora of new digital gadgets and platforms to access er momentum in 2006. “You’re beginning to see content, content when and where they want it. And while agencies particularly some of the off-network stuff, find its way t ry to keep up with the upheaval in the way media is consumed, clients are also demand- ing better measurements that demonstrate “We have this pressure to that their advertising dollars are being spent deliver better value overall, in the most effective ways possible. and on the other side there Changing media consumption habits and client ROI demands are issues of gro w i n g is strategic change going i m p o rta nce for all media agencies. But those on, which requires taking two trends will often be at odds with each o t h e r, said Charles Court i e r, executive chair- some risk.” C O U R T I E R man, WPP’s Mediaedge:cia. “On the one hand we have this pre s s u re to deliver better value overall, and on the other side there is strategic change onto some of these new digital platforms that were going on in the marketplace, which re q u i res getting into thought to be years away up until very recently,” he said. new areas at the taking of some risk. Client companies “The consumer interaction with these new technologies a re n ’t wrong to re q u i re both, but sometimes you have to is forcing decisions regarding content. And the content accept that the two things pull in diff e rent directions.” owners aren’t doing it because they think it’s the greatest The digital video recorder is very much on the minds idea in the world. They know there is risk in doing it, and of many media executives as the industry braces for a they’re just hoping that the upside—which may not be tripling in DVR penetration over the next two years to at totally apparent now—will be there as well.” least 25 percent (per Forrester Research). The rapidly Laura Desmond, CEO, Publicis’ MediaVest USA, escalating cost for network TV was already a hot button said that the recent content deals, and consumer recep- issue for the media world and one that will be exacerbat- tion to them, are an indication that “we’re close to a tip- ed in the coming year as Nielsen Media Research starts ping point now with broadband” that augers a “funda- to measure DVR playback and to identify more precisely mental shift in how the industry works.” The digital the extent to which viewers skip through ads as they world, she said, “is no longer the domain of just the spe- watch recorded programs. “It may change the pricing cialists.” In a few years it will permeate most if not all and supply-and-demand dynamics” for TV advertising, media, including print, radio and TV, which is why “we said Joe Uva, CEO of Omnicom’s OMD Worldwide. really want to start to adopt a digital mind-set” through- “Time-shifted viewing clearly needs to be factored into out the agency. the price an advertiser pays.” All the change, added Desmond, raises issues about The new DVR data along with the availability of how to allocate spending, how to measure the effective- minute-by-minute commercial ratings will change the ness of media and to address “what forms of contact and way agencies plan media campaigns for their clients, messaging go well together. I think we have to think a r gued Tim Jones, CEO, Publicis Gro u p e ’s more broadly about how we use these new forms of com- ZenithOptimedia USA. “We will start to see a shift in munication, and it’s not going to be as standard or scal- how we build our plans and take into account time-shift- able a decision as buying a 30-second spot.” ed ratings and which shows have greater stickability,” he And media executives say no platform today does a said. And it’s not just time shifting that the industry has better job of matching consumers and messages than to deal with—it’s “place shifting” as well, as consumers search engine Google. Initiative’s Gerster noted that the show a growing appetite for downloading content via industry needs to figure out how best to apply search devices such as cell phones and iPods. technology to other platforms. “Search is what people For example, Apple Computer confirmed that in the want and what they’re interested in,” he said. Jones first 20 days that programming was available late last year agreed: “The broader picture for me is where the next for its new video iPod, the company sold more than 1 great communications model is going to come from. I’ll million downloads (at a price of up to $1.99 each), and be looking out for the Google effect.” ■ that among the top sellers of its video offerings were ABC’s Lost and Desperate Housewives. A d we e k media editor Steve McClellan cov e rs media agencies.

mediaweek.com January 2, 2006 MEDIAWEEK 17 TODD SHIELDS

man Kevin Martin marks one year on the job in M a rch, and most of that year has been spent with a vacant seat at the agency and a resulting two-to- two partisan split. Once the White House names a t h i r d Republican for the five-member agency, M a rtin for the first time will enjoy a working majority. That could free him to redraft rules that ease limits on media ownership but were rejected as flawed by a federal court. Martin backs loosened rules, but his first attempt to meet the court ’s objections foundered amid opposition from agency Democrats. They show signs of continuing their l o n g - r unning campaign to keep big media fro m getting bigger. “I think the rules on ownership have to be tightened,” Commissioner Michael Copps, a Democrat, told senators AFTER SINGER JANET JACKSON’S b re a s t MAKING THE RULES on Dec. 13. “A huge priority of the was exposed during the halftime show at Super FCC Chairman Martin expects commission in 2006 is to get this Bowl XXXVIII, Washington officials vowed a another busy year, battling proceeding right.” quick response. But final congressional action is Democrats on media-ownership Martin could play a pivotal role far from assured as the two-year anniversary of the rules and broadcast indecency. in the headline-grabbing debate famous 9/16-of-a-second exposure draws near. over racy fare on TV and radio. In The lagging response to the CBS telecast of Feb. 1, November he said a fresh look had persuaded him that 2004, is among the top telecommunications issues as earlier findings were wrong and that a cable subscriber Congress heads into 2006. Lawmakers will try to fashion might enjoy lower monthly bills if allowed to choose indi- a legislative response to broadcast indecency and will join vidual channels rather than broad tiers. Such a finding, federal regulators in scrutinizing the cable industry’s roll- once formalized, could embolden congressional pro p o- out of family tiers aimed at mollifying critics of racy fare. nents of à la carte pricing, even though cable executives B r oadcasters will press Congress to reverse federal contend it will force them to charge customers more for regulators on a key pocketbook issue: multicast must- less channel choice. c a rry, or whether the cable providers that serve most U.S. To avoid mandatory à la carte, leading cable compa- TV households must carry all the digital TV channels nies are beginning to offer so-called family tiers that omit that broadcasters off e r. Cable will fight the bid to forc e p r ogramming inappropriate for children. But the tiers operators to carry up to six programs at a time from a sin- themselves are drawing a mixed reception. Rep. Joe Bar- gle bro a d c a s t e r. ton (R-Texas), chair of the Commerce Committee, said At least one major issue has the potential to be solved the tiers will provide “some shelter from the deluge of early in the year. The U.S. House is being asked to give questionable content” but stopped short of a wholeheart- final congressional approval to a large budget package that ed endorsement of the approach. L. Brent Bozell, pre s i- includes language setting Feb. 17, 2009, as the shutoff dent of the Parents Television Council, last week c a l l e d date for the analog signals used since TV’s infancy. The C o m c a s t ’s family tier “more foolishness from the cable following day, all broadcasts would be sent in digital for- i n d u s t ry,” basing his criticism in part on the absence of mat. A vote could come soon after the House re t u rns fro m s p o rts and movie channels that would undermine con- its holiday recess on Jan. 31. Critics of budget cuts hope sumer acceptance. Sen. Ron Wyden (D-Ore.) p ro m i s e d they can persuade enough Republicans to defect to defeat vigilance. He called the family tiers “baby steps” and said the measure, which already has passed once on a 212-to- he would try to impose child-friendly programming “if we 206 vote. The measure is returning to the House because don’t see…a tier of kid-friendly programming done right the Senate in approving it made changes in language that across this country.” does not affect broadcasting. Even as the family tiers are debated, the Senate will try Other issues will be seeking space on a crowded elec- to approve a version of a House-passed measure to tion-year calendar. Verizon and AT&T (the former SBC) increase fines for broadcast indecency. Previous attempts want Congress and federal regulators to ease local re g u l a- failed amid struggles over media ownership limits. Sen. tions that the phone giants say will slow their intro d u c- Ted Stevens (R-Alaska), the Commerce Committee chair, tion of video programming to compete with cable. Cities makes no secret that consensus is hard to find. He has set and counties will fight back, saying they want to preserve a hearing on indecency for Jan. 19. “We’re going to con- their powers in part to ensure all parts of their communi- tinue the pressure,” he told reporters. ■ ties are served and public rights-of-way are not abused. At the Federal Communications Commission, Chair- Todd Shields is the Washington editor for Mediaweek.

18 MEDIAWEEK January 2, 2006 mediaweek.com K ATY BACHMAN

AS FRUSTRATION OVER the lack of measurement of tough road ahead as it tries to incorporate time-shifted c o n s u m e r- c o n t rolled media mounts, media companies and viewing into its ratings, with some initial challenges (last their advertisers last year began to tussle in earnest with week the company had to delay its overnight ratings due to research companies for more input over the direction of complications from having various feeds of data). Also, re s e a rch that determines the course of their business. agencies and media companies will need to decide how That tussle took a few forms in 2005 that are likely to much to use the ratings streams that will become part of the continue into 2006. First was the Advertising Researc h ratings lexicon: live, live plus same-day, live plus seven-day. F o u n d a t i o n ’s industry forum on accountability of audience S e p a r a t e l y, Nielsen’s Active/Passive meter is fin a l l y re s e a rch, which led to the formation of the Audience being deployed, but it will take all of 2006 to get the meters M e a s u rement Initiative to set the direction for impro v i n g fully installed. So far, only 60 are out there. And there ’s still audience measurement. The impact AMI might have no real headway being made on measuring out-of-home should become clearer in 2006. It gives media companies T V viewing, which to some media companies accounts for and advertisers a voice in independently conducted a decent chunk of audience. Whether that gets resolved in re s e a rch that may or may not be adopted by ratings firm s . 2006 is unclear at this point. Second were contentious hearings on Capitol Hill over Then there ’s Project Apollo, which attempts to match Nielsen Media Researc h ’s rollout of local people meters consumers’ media habits from Arbitro n ’s portable people without Media Rating Council accreditation. The MRC meter technology with ACNielsen’s product purchase data, has proposed that the re s e a rch companies establish a volun- o ffering a kind of ROI Holy Grail. A planning tool, the t a ry code of conduct, and Nielsen just last week said it will pilot will go live in the next few weeks. Two major advert i s- finish penning the code “short l y.” ers have signed: Procter & Gamble and SC Johnson, along Nielsen, owned by M e d i a w e e k p a ren t VNU, faces a with four other still-unnamed advert i s e r s . ■

JOE STRUPP

THE FALLING CIRCULAT I O N and advertising re v- Morton, however, showed little enthusiasm for circu- enue that struck newspapers in 2005 is likely to continue lation, which he said would “hopefully” remain flat, with in 2006, analysts predict. The severe job cuts that sliced advertising revenue up in the single digits—3 percent to some 2,000 newsroom jobs at major papers, including T h e 4 percent. He also predicted the minimal online advertis- New York Ti m e s, The Los Angeles Ti m e s and the San Francis- ing newspapers see—about 4.5 percent of total ad rev- co Chro n i c l e, is expected to plateau, although pre s s u re to enue—will continue to climb some 30 percent or more, see profits will not abate. but papers still need to fight growing online competition. “I suspect that [the job cuts are] pretty much over For newspapers to achieve any semblance of success with, and the companies will start to reap the benefits of on the Web, they need to better compete with online it,” said analyst John Morton of Morton Research in outlets and cable and broadcast news sources. Doing so Silver Springs, Md. But that said, newspapers are not out will help retain and grow their readership. In 2006, news- of the woods. The cost of “newsprint probably will go up papers are expected to expand their Web presence via again this year, somewhere at about 10 percent, and soft more reporter and editor chats, online video and using advertising growth will put more pressure on,” he added. audio components to complement print stories. The few papers that saw circulation gains in 2005 had Newspapers must embrace the digital age and make specific outreach programs and strategies for gaining new some fundamental strategic changes, or else the lost cir- readers and keeping old ones. Successful managers point- culation, advertising and extensive job cuts are likely to ed to long-range billing, automatic payment plans and remain on the same steady pace. ■ discounts as the best approaches for driving up subscriptions and circulation. If readership is to rise, such efforts Editor & Publisher senior editor Joe Strupp covers the need to continue in this new year. newspaper industry’s newsrooms.

20 MEDIAWEEK January 2, 2006 mediaweek.com