Aha! A Good Move by the New York Times

AdAge.com reports that the New York Times has acquired Baseline StudioSystems for $50M.

It's a smart and very interesting move for 2 reasons:

1. They can use web-based content to populate the newspaper. This will lower costs .. and they have to lower costs because, like TV will see, they are losing ad revenues and need to!
2. They take cash from the struggling cash cow, and invest it in growth. Great financial move.

I like this! Good strategic fit, lowers costs, takes cash from a declining asset and invests in new growth!

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YouTube Revenues Beat Many Local TV Stations

YouTube revenue estimates (from Markus Frind's blog) make YouTube bigger than many .. check that .. most local TV stations in the USA. In a city like Baltimore, for example, total TV revenues are about $170M / year, distributed among 5-6 local stations and the local cable guys .... so they average $30M or so. Their costs are significant, and they would create about $12-$14 M in free cash flow.

Hello YouTube. All volunteer content .. just collect $1.8 M per month. Nice, eh?

The End of the Made for TV Movie

The Orlando Sentinel has a great story that discusses the end of movies made for TV.

I remember as a kid waiting to see those well promoted special event programming. But they will be like the dinosaur, something we look at in museums.

The article says the demise is all about costs and competition .. but I think they really miss the point.

When there were 3 networks viewing for your ad dollars, you got 1/3 of the audience if you were OK. But with 100's of channels to choose from, the networks celebrate with 10% of the audience watching TV.

But the end of made-for-TV movies (cutting big risks and costs) is a definite impact of the changing trends.
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Denial Phase Slowly Slipping Away

Ad Age yesterday published a very interesting article about the (finally) completed up-front.

As I have mentioned, ad execs will spin their results, and the fact that sales and CPMs are up is true if you

"aren't counting marketers who sat out the upfront, such as Coca-Cola or AOL, in their base comparisons to last year. "I just didn't see the money there," said a buyer. "If it was, CPMs wouldn't have been flat." "

At least the word is out. TV advertising is on the decline.

RADICAL SHIFT IN MEDIA CONSUMPTION

Ofcom Communications published a report that says, in a nutshell, the most desirable audience (16-24 years olds) is going away from TV.

"Television is of declining interest to many 16-24 year olds; on average they watch television for one hour less per day than the average television viewer. Of the television they do watch, an even smaller proportion of their time is spent viewing public service broadcasting channels, down from 74% of total viewing among this age group in 2001 to 58% today.
Instead, the internet plays a central role in daily life; more than 70% of 16-24 year old internet users use social networking websites (compared to 41% of all UK internet users) and 37% of 18-24 year olds have contributed to a blog or website message board (compared to 14% of all UK internet users).
The same group also uses mobile phones extensively, on average making seven more calls and sending 42 more texts per week than the wider UK population.
Extensive use of the internet has also influenced 15-24 year olds' consumption of other media. Their radio listening is lower, by an average of 15 minutes a day compared to the wider population; additionally, 27% of those surveyed said they read newspapers less as a consequence of their online usage."

This week, I will look at the recent financials from public TV groups. What can they do? What can they do?

Hello! McKinsey Study Predicts Continuing Decline in TV Selling Power

Advertising Age reports a study that suggests that TV advertising was 1/3 as effective as it was in 1990.

The report goes on to state that prices for prime-time broadcast TV are up 40% while viewers are down 50%! I have commented on this wild trend before and all I can say is: "Good work, ad sales guys!!"

How can this keep happening?
Lack of vigilance, too cozy a relationship between buyers and sellers?

And no willingness of TV ad execs to move out of the comfortable box and try auctions, automation, etc. to bring more transparency and liquidity to TV ad sales.

I've been on a 2 week vacation, and have some catch-up to do!

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