Message From Michael -- October 29, 2007

THE EVENING NEWS RACE

THE OLD MEDIA’S NEW MEDIA TARGET

YOUR NEW MEDIA TARGET

THE MOST FAMOUS PERSON YOU DON’T KNOW

STEP INTO THE WAYBACK MACHINE -- WASTELAND

COCKTAIL CHATTER – NOVELS, THE LAST SUPPER AND CURRENT TV


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THE EVENING NEWS RACE: You all know of course about the race between ABC with Charles Gibson and NBC with Brian Williams for first place. According to Nielsen, on average only 34,000 viewers separate the two in the ratings season to date. With Sweeps coming up, I thought it would be interesting to take a historical look. For example, as tight as the present ratings battle seems, in the 1998-99 season, NBC took first place for the season with an average edge of only a thousand viewers, a look back through Nielsen’s records shows. The last time CBS held the #1 spot was in 1988-89, although only by the skin of its teeth, after dominating the ratings for nearly two decades starting in 1970. And in case, you’re wondering, because I know you are, Dan Rather took over the anchor chair from Walter Cronkite in March of 1981. So he was able to hold on to it for seven years. CBS lost the #1 spot to ABC which held on to that position for seven years from 1989-90 to 1995-96. Peter Jennings became sole anchor in 1983, after sharing the anchor duties for five years in the unusual three-anchor format with Frank Reynolds and Max Robinson and after an early disastrous stint as ABC’s evening news anchor in 1965 at the age of 26. NBC took over the #1 ranking in the 1996-97 season. Tom Brokaw had taken over the solo anchor duties 16 years earlier in 1983 after co-anchoring with Roger Mudd for two years. And, continuing to prove I am anal retentive, some last facts from the historic trends. The Networks combined had a 30-plus rating through the 70’s and halfway through the 80’s. In 1988-89, the ratings dropped for the first time below 30. The ratings declined steadily until 2002-03 when it dipped for the first time below 20. So far this season, the average is a 15.2 for the three networks combined.

THE OLD MEDIA’S NEW MEDIA TARGET: The folks at Standard & Poor’s predict that traditional media companies are going to go on a buying splurge for Blogs. As they say in their investing newsletter The Outlook – “they reach large, loyal audiences, they’re fairly cheap to run, and they can be lucrative.” What’s not to like? In classic understatement they say it’s “an attractive business model.” To put it in context, the S&P newsletter points out that the number one blog on the Internet is technology blog Boing Boing which attracts 7.5 Million page views a month. By way of comparison, technology magazine Wired has 1.9 Million print readers. As of September, 2007, blog monitor Technorati says it is indexing 106 Million blogs – 12 Million more than the month before. Newspapers in particular are predicted to turn to bloggers to augment their own strong Web presence. The Outlook report says the move is a recognition by ‘old media companies’ that “Internet users would rather participate in the news than simply consume it.”

A similar but slightly different view comes from former entertainment executive and IAC/ InterActive Corp CEO Barry Diller who says traditional media companies still ‘don’t get it’ when it comes to the ‘disruptive power’ of the Internet. He says they should invest more in research and development and build new things online from scratch.

To provide a little further perspective, the Television Bureau of Advertising projects spot television revenue to ‘surge’ 9% to 10% in 2008, because of the political races and Olympics. BUT it predicts that station web-site advertising will grow 40% to 50% and station wireless 50% to 70%.

YOUR NEW MEDIA TARGET: Looking for your own ‘attractive business model’ for investing? Research firm Hitwise picks five potential Internet Superstars that are getting the attention of the hip, techno savvy younger generation. KeepVid lets users capture and replay streaming video from various sites such as YouTube, Metacafe and iFilm. And there is an online talent show Bix where you can upload comedy videos and karaoke performances. WikiMedia Commons is a central repository for freely licensed photos, music and video. Stickam is a community-based Webcam which allows live video streaming and video conferencing. And, finally, Hitwise picks out Veoh, an online video destination that we’ve mentioned in previous MfM’s.

THE MOST FAMOUS PERSON YOU DON’T KNOW: Or maybe you do. After all she has 1,791,920 MySpace friends. Her name -- Tila Tequila. I’ve mentioned her before in MfM, but now she has her own MTV show which reportedly is #1 in its time period for the 18-34 demographic. Ms. Tequila (real name Nguyen) emigrated to MySpace from a Houston public housing project after her family emigrated from Vietnam. The only reason I mention her is that a) it is part of my never-ending quest to make sure the readers of MfM are ‘in the know’ even if, sometimes, it may be question whether it’s worth knowing and b) because of a great line in Sunday’s New York Times by writer Guy Trebay trying to explain the phenomenon: “When exactly in the Warholian arc of fame did we arrive at a point where we create celebrities of people so little accomplished that they make Paris Hilton look like Marie Curie?” Plus, even more interesting and worth knowing is a series of studies cited by write Jake Halpern in his book Fame Junkies that a third of American teenagers (31%) have the honest expectation that they will one day be famous and four out of five of them (80%) think of themselves as truly important.

STEP INTO THE WAYBACK MACHINE: On May 9, 1961, then Federal Communications Chairman Newton Minnow referred to television as a “vast wasteland.” Years afterward, he said he wished the two words that people remembered from his speech were “public interest.” Proving yet again that I need a life, I recently listened to the 40-minute speech. A couple of notes. He was only interrupted four times and then only with very light applause when he said the free enterprise system must be allowed to work and that he would fight any kind of censorship. Also, interestingly for the time, he urged stations to do editorials. And his quote about television being a vast wasteland was one of only several great quotes in his speech:

To networks – “tell your sponsors to be less concerned with costs per thousands and more concerned with understanding per millions… remind your stockholders than an investment in broadcasting is buying a share in public responsibility.” Public interest isn’t just what interests the public. Talking about his role as FCC chairman, “either one takes this job seriously – or one can be seriously taken.”

About ratings – He said the three great influences on a child were home, school and church, and that television was becoming the fourth. But that if the first three followed ratings, like television did, children would eat a steady diet of ice cream, there would be school holidays all the time and there would be no Sunday school. “If some of you persist in a relentless search for the highest rating and the lowest common denominator, you may very well lose your audience.”

And as an interesting footnote to all this, Minnow noted in his speech that broadcasters were in good financial health, noting that the gross broadcast revenues for all television in 1960 was roughly $1.2 Billion with a before taxes profit of $243 Million, yielding an average return on revenue of 19.2%. Just for perspective, BIA Financial Network reported television revenues in 2006 of $22.5 Billion.

COCKTAIL CHATTER: Besides the countdown to sweeps, there is another countdown – to NaNoWriMo, National Novel Writing Month. The idea is simple – write a 175-page, 50,000 word novel in a month. You can register at NaNoWriMo.org. You start writing November 1st and you have to have it finished by November 30th. A high resolution rendering (16-17 giga pixels) of Leonardo da Vinci’s Last Supper has been posted on the Internet at the site www.haltadefinizione.com by digital imaging company Hal9000 for – as Reuters put it – art lovers and conspiracy theorists alike to study. More than half of the U.S. public (58%) believe that “as Americans we can always solve our problems and get what we want,” according to a survey by the folks at the Pew Research Center. Sounds pretty good until you read further on that the number is a 16 point drop from the three-quarters (74%) who believed that way five years ago. And I know you already have heard this, but it’s so amazing that it’s worth repeating: Microsoft has bought a 1.6% stake in Facebook for $240 Million which, when projected, values the company headed by a 23-year-old at $15 Billion. One you may not have heard comes from that same Forbes conference mentioned earlier – investment company Yucaipa founder Ron Burkle says one of his investments, Current TV, is worth up to $2 Billion after just a few years in existence.

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