Epicenter of Media (Saber) RattlingFrom retrans to the ad game, questions outweigh answers at San Francisco conferences 3/11/2010 04:26:00 AM Eastern
The topography of
the television business
mapped out in
deciddly hilly San
Francisco last week, because
everyone involved agrees that
there is no smooth ride ahead.
On one side of
the city, the question
of who is entitled
to subscription revenue—
and how much—was the topic
du jour. Not far away, the future,
both near- and long-term, of
the advertising game was being
planned despite the absence of a
clear road map.
CBS Corp. chief Leslie
Moonves and Cablevision CEO
Jim Dolan were at the Morgan
Stanley investor conference talking
about retransmission consent,
which is a major opportunity or a
threat, depending on whom you
ask. Meanwhile, at the transformation-
Agencies conference, Madison
Avenue was sketching out the
beginnings of a new way of buying
television as addressable advertising
starts to scale.
And the takeaways from both were similar: forecasts of more
near-term uncertainty and debate, with the hope it will all lead to a
return to something resembling the halcyon days of the media business.
Or at least just better times. The nagging issue, of course, is
the lack of just how the business is going to get there.
As Cablevision and Disney were digging in and trading barbs over
their carriage agreement in New York, the retrans consent topic was
equally hot across the country as industry execs agreed that recent
retrans battles were precedent-setting.
One senior television executive observing the action at both conferences
told B&C that News Corp.’s deal with Time Warner Cable,
a pact that sees the conglom getting paid for Fox network for the
first time, should be viewed as a game-changing negotiation for all
involved. For all the we-can-work-it-out talk on Disney’s earnings
calls, its rupture with Cablevision was nothing short of volcanic,
according to insiders. And Disney’s newly available shows on Hulu.
com are a particular bone of contention for Cablevision.
Moonves, long a loud voice for broadcasters on retrans, never
passes up a chance to sound his clarion call, as he is expected to do
again this week at the Credit Suisse 2010 Global Media and Communications
Convergence Conference in Palm Beach. Fla.
“The game has now changed,” he said. “Fox is getting paid by
Time Warner [Cable], we’re getting paid by Time Warner. We recently
concluded a deal with Cablevision. We have a deal with
Dish. We have a deal with Verizon. We have a deal with AT&T—to
get paid a second revenue stream. So, no longer can it be ‘network
is doomed’ because they only have a single revenue stream, while
cable is a much better business because they have two revenue
streams. Now we are achieving that dual revenue stream as well,
and that’s going to be signifi cant as we move toward the future. I
think it’s now a given that retrans is part of the game.”
RIGHT IN THE MIDDLE
Sitting in the middle of both the subscription and advertising worlds
is Comcast COO Steve Burke, who spoke at the ad confab. On a positive
note, he said that while there were few indicators of an economic
recovery in general, advertising was picking up for the company.
While the Cablevision/ABC spat wasn’t discussed in Burke’s Q&A
session, moderated by MediaLink’s Michael Kassan, he offered this
much about managing change: “You get in trouble if you do nothing….
Now more than ever, content and distribution put together can
really change everything as long as you’re willing to lean forward.”
The lack of progress perceived by some on the part of Canoe Ventures,
owned by the six major cable operators, was brought up at the
event. But Burke came to the defense of Canoe CEO David Verklin,
explaining it was the “plumbing” that was holding things up rather
than any disagreements among its partners or lack of funding.
He said the partners had committed $100 million to the venture.
Canoe has promised to bring a national platform to media buyers
looking to target particular zones with their ads, but so far has had little to show for its Herculean efforts.
That’s all about to change, say some close to Canoe, noting that
developments and announcements are expected in 2010.
Tracey Scheppach, VP and video innovation director at Starcom,
acted as a kind of Joan of Arc for addressable advertising, evangelizing
from the podium. “We can do it. Start looking at other marketing
dollars on platforms bigger than the Internet,” she told TV
executives. “Think about how to bring a portion of that $50 billion
spent on direct marketing and bring it to TV. Stop being defensive
about money migrating online.”
When asked about the slow progress in the fi eld of addressable
advertising, Scheppach said: “It’s obvious why it hasn’t happened
yet. The people in control don’t care, and the people who care have
been essentially in denial or playing defense.”
Scheppach said that Comcast’s purchase of NBC Universal would
change the dynamic since it would move Comcast toward a bigger
dependence on advertising. Indeed,
Burke suggested that the
deal for NBCU was “a bet that
the advertising business will remain
If there were a buzzphrase
for the 4A’s event as a whole,
it was a toss up between “data
and analytics” and “waste management.”
Thought leaders such
as McCann Worldgroup CEO
Nick Brien called for a “new
blueprint” for the business,
while GroupM’s Marc Goldstein
suggested that there be
And with more targeted measurement
will say that demos and gender buys are so last decade. They’re
already being replaced by descriptors such as “women with children
who earn more than $100,000 and live in a particular geography.”
Good news for boomers: Your age will no longer define whether
marketers care about you. Goodbye, 18-49s, and hello to insights
that identify a target market of existing and potential customers of
Goldstein also talked about how CPM pricing will morph beyond
recognition once fresh value systems emerge, and that ad executives
will be prepared to pay more to hit the right people.
For those on the agency side, the future cannot come quickly
enough. Addressable advertising appears to be one way to satiate
the procurement people who ax deals and cut costs at every turn.
But the question then remains whether talk of cutting waste and
targeting slimmer niches can do good for the TV executives on
the other side.
Agencies argue that TV executives have much to gain from selling
the same airtime to multiple clients. Exactly what effect addressable
advertising will have on the type of content TV channels decide to
broadcast remains to be seen.
But for now, it’s baby steps toward a new future, according to
John Lowell, Starcom senior VP and director of research and analytics.
As Lowell puts it: “We’re trying to build scaffolding.”