October 30, 2006

Message From Michael                    
                                                  October 30, 2006                                                                                                         

• SPOOKY SWEEPS


• THE FUTURE DUOPOLIES


• REACHING BEHIND THE WALLS


• THE SWEET SPOT


• THE GREAT UNWASHED MASSES OF TALENT


• COCKTAIL CHATTER

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• SPOOKY SWEEPS:  How appropriate is it that the ‘lead-in’ to sweeps is Halloween?  I’m not sure which is scarier – kids trying to coerce you to give them candy under threat of a trick; or stations, faced with the threat of tricky ratings, trying to coerce you with candy stories.  Okay, that’s probably a little too cute.  Actually there’s a triple whammy with this month’s sweeps.  Having Halloween at the start, which can actually be a good thing; Having an election during the first week of sweeps, which can be a bad thing; Having Thanksgiving during sweeps which can be either good or bad.  Let me explain:  Halloween gives you an opportunity to have special reports that you can promote ahead of the sweeps.  That builds awareness going into sweeps.  Elections are not ratings drivers, with few people either voting or interested in voting, even in this increasingly nasty election; but elections are important to your image because, despite their lack of interest, people expect you to provide coverage.  Thanksgiving and the day after (the proverbial biggest shopping day of the year) are a challenge because programming is disrupted and viewers’ lives are disrupted.  So you have to decide whether to keep it in the book or take it out.  


• THE FUTURE DUOPOLIES:  A series of recent reports show how much television and newspapers have in common.  One, both are experiencing declining viewership/ readership.  Two, both are facing increasing competition from the Internet, albeit in different ways.  Three, despite that, both are looking to the web for future growth.  Two studies stand out in particular.  The Media Audit released a report that says late news and the web together pack a powerful punch.  The study looked at ‘unduplicated’ (the key word in both studies) use of the two.  By adding the two together, the television stations’ reach was extended dramatically.  In a similar vein, Scarborough Research found that when the ‘unduplicated’ print version and online version of newspapers were combined, the reach (another key word) was extended anywhere from 2% to 15%.  By looking at the “integrated newspaper audience” of the two, the addition translated into ‘hundreds of thousands’ of additional readers in larger markets.  The Newspaper Association of America reported that online newspaper readership jumped by 31% in the first half of the year.  Also, both studies say the Internet offers television and newspapers their best opportunity to reach the 18-34 demographic.  And the web offers the best opportunity for both to grow future viewership/ readership.   As a report by research firm eMarketer shows, more than two thirds (67%) of U.S. children between ages of 8 and 11 are online while nearly three quarters (74%) of those between the ages of 12 and 14 are online.  However, on the flip side of the equation, other studies, notably one done by Merrill Lynch, note that the online ad revenues don’t match the ad revenue generated by the ‘mainstream mother media’ – a term I just made up.  Not just as a percentage of total dollars but in a pure quid pro quo analysis of cost per thousands.  Have I lost you yet?  The CPM charged for Internet does not match the CPM charged for television or newspapers.  The Merrill Lynch study makes a point for newspapers that could probably apply to television as well.  The point is that online revenue still accounts for only 6% to 7% of total ad revenue and despite the rapid growth, will probably not account for 50% of the total ad revenue for several decades.  The Merrill Lynch report says many newspapers may ‘fall by the wayside’ in this transition from print to online.  Research company Outsell makes the point that the challenge is to match the percentage of online audience to the percentage of online revenue derived.In short, the case could be made that the present-day duopolies between television station and television station, or between newspaper and television station, is a short-term revenue generator.  The long-term ‘duopoly’ is between the station/ newspaper and the web.


• REACHING BEHIND THE WALLS:  Both reports also noted that the website product also had an advantage in reaching the audience when the audience is in those hard to reach places – work.  Use of the websites reached their highest between the hours of 8:00 a.m. and 6:00 p.m.  This is especially true in larger markets.  At KUSA.com, for example, nearly three quarters of its users are online during that time, according to The Media Audit report.  The Scarborough Research report also noted that the online audience is more affluent, citing as an example, The Washington Post, where those with incomes over $75,000 account for 60% of the print audience but 73% of the online audience.  Both reports also cited several examples of stations and newspapers that are proving up the value of integrated and complementary products.  The Media Audit report gives kudos to Raycom-owned, NBC-affiliated WLBT-TV in Jackson, Mississippi, as the number one station in the country (out of the 84 markets surveyed).  The combination of the station’s late news audience for a week and a month of web-site visitors gave it an unduplicated net reach of 49.5% in adults 18-plus.  KOTV-TV in Tulsa also scored a 49.5% unduplicated net reach but fell slightly behind WLBT in terms of audience reach in the 18-34 demographic.  The Scarborough Research study noted both the Arizona Republic and the Tampa Tribune as examples of operations that have successfully combined the two products, along with The Washington Post and The Atlanta Journal Constitution. Filling out the rest of the top ten list in The Media Audit study were WOWT/ Omaha, KUSA/ Denver, WRAL/Raleigh-Durham, KETV/ Omaha, WIS/ Columbia, SC, WWL/ New Orleans, WTVF/ Nashville, and WGHP/ Greensboro.  According to the Newspaper Association of America, the top ‘online newspapers’ are the New York Times, Washington Post, USA Today, Wall Street Journal, Los Angeles Times, Boston Globe, San Francisco Chronicle, Seattle Times/ Post-Intelligencer, Chicago Tribune and Houston Chronicle.


• SWEET SPOT:  An interesting side note is that in reading several publications, I noticed several made reference to the “sweet spot,” being the point at which media plans, using the various platforms, are all integrated.


• THE GREAT UNWASHED MASSES OF TALENT:  And there’s lots of them.  On the Internet.  Writing stories.  Creating videos.  Getting hundreds of thousands of hits.  Millions of downloads.  And, according to one of the leading talent agencies in the country, “99.999 percent of which is probably not good enough to have a traditional film and television career.”  But it’s a different matter on the Internet where standards are different but the need for talent is not different.  Ad agencies can’t find people to develop new media strategies and mainstream media organizations can’t find people to help them with new media strategies.  For that reason, United Talent Agency, has opened an on-line talent division.  Other groups, notably International Creative Management, Endeavor and, what the New York Times in its article on the subject called, ‘the venerable’ William Morris Agency have digital media divisions. The point is that they’re all trying to find the Zuckerberg’s (Facebook),  Hurley’s and Chen’s (MySpace) and maybe even the lonelygirl15’s of the world.  


• COCKTAIL CHATTER:  Candy and gun ranked third among food categories in sales in 2005, according to the National Confectioners Association.  Milk was second and carbonated beverages were first.  Women are now the majority in colleges with 59% of all degrees granted in the 2004-2005 academic year going going to women, according to Dan Kindlon, author of the book “Understanding the new American girl and how she is changing the world.”  The Center for Responsive Politics says that, based on the $2.6 Billion being spent on the mid-term election, the votes in the U.S. Senate races will cost an average $59 per vote while the per vote cost in the House races will average $35 per vote.  According to an article in the New York Times, if the respective elections for each politician were held in MySpace, the leading candidates (based on the number of ‘friends’ listed on their site) would be, from lowest to highest:  Sen. John McCain with only 476 friends, Maryland Governor Robert Ehrlich with 637 friends, Hilary Clinton with 12,880 friends, and Barack Obama with 14,995 friends.  But the leading vote getter based on friends would be Kinky Friedman, the independent candidate for governor of Texas with a whopping 33,173 ‘friends.’


• FOLLOW-UPS:  Research firm Hitwise reports that the number of U.S. Internet searches for Second Life shot up 73% last week and the number of visits more than doubled in the past two weeks.  No doubt the result of our report in last week’s MfM.  Since then, General Motors announced it’s opening a car racing site there, along with its Pontiac division.  A travel agency in Italy is offering travel packages, Synthtravel, through the Second Life world.  Several fashion companies have announced they are opening stores there.  On a semi-related Cocktail Chatter note -- the rock stars of South Korea are the video game players who have fan clubs that number more than half a million each.  There are more than 20,000 public “bangs” as they are called, which are the video game equivalent of our Cyber Cafes.  The government has even set up a department to encourage and oversee the video game players.


• CLARIFICATION:  In last week’s MfM about Second Life, we identified Edward Castranova as an associate professor of economics at California State University/ Fullerton.  He was at Fullerton; now he’s at Indiana.    


• SUBSCRIPTIONS:  If you wish to stop receiving this newsletter, e-mail newsconsultant@aol.com with the word “unsubscribe-MM” in the subject line.  Also, back issues of MfM from 2006 are available at the website, media-consultant.blogspot.com.  AND if you wish to reach Michael Castengera, you can e-mail me direct at Michael@MediaConsultant.tv.