Currency

In a C7 World, Only CBS a Winner, Analyst Says

12/12/2012 09:11:21 AM

Media company CEOs have been arguing that they want to base future ad sales on a C7 metric that captures commercial viewing on DVRs for seven days, as opposed to the current three, as a way to better monetize the way TV is viewed today.

But one analyst has crunched the numbers and found that the broadcast networks would have an advantage in a C7 world, but that corporately, only CBS would actually make more money right now.

Todd Juenger, analyst with Sanford C. Bernstein & Co. and a former TiVo researcher, says that a move to C7 would boost ratings for broadcast by 3% and increase cable ratings by 2%, with the biggest gains coming in primetime.

“However, this doesn’t necessarily translate to an increase in aggregate advertising revenue,” Juenger says. “Increasing the tally of extended audiences only serves to increase the (measured) supply of available impressions. All else being equal, most advertisers can now run 2-3% less spots to achieve the same (counted) GRPs [gross ratings points].”

The change would result in the broadcast networks increasing their share of impressions versus cable, and ad revenue should follow. A share increase of 0.5% would bring in $115 million more in revenue.
Since that money would be coming out of cable, it would hurt ABC owner Walt Disney Co., Fox owner News Corp. and NBC owner Comcast, all of which have extensive portfolios of cable networks, leaving CBS the only net gainer, Juenger says.

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