Every Medium Has Got Its Game Face on for 2006
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EVERY MEDIUM HAS GOT ITS GAME FACE ON FOR 2006. Even the traditional media that find themselves facing competi- tion 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 tradi- tional 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 adver- tising 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 con- tinued strong ad dollars for the broadcast net- works. “Those companies that have expanding brand portfolios, particularly the auto companies, will need the promotional level that net- work 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.