Friday, June 15, 2007

Les Moonves vs. Mark Cuban: Who ya Got?

Thinking can sometimes be a very synergistic process for me. There are a multitude of subjects I am interested in thinking about and sometimes in the process of thinking about one thing, I wind up understanding another. It turns out in some weird way almost everything is at least tangentially related in my mind. I understand that often the output of all that is probably some “crazy thinking”.

Things are not always what they seem. I saw record low Nielsen Ratings for the (Stanley Cup) and wondered why my pal Ted Leonsis wasn’t selling the Washington Capitals as fast as he possibly could. On the surface, my approach made a lot of sense. But TV is a place where things aren’t always exactly what they seem, and indeed in the case of Ted Leonsis and the Washington Capitals and the NHL, I was very wrong.

Thankfully I had that all sorted out and didn’t wind up needing to binge on any kind of e-mail exchange with Mark Cuban where I was freaked out looking at the Nielsen Ratings for the NBA Finals and saying, “Oh my God, you’re as crazy as Leonsis!” It’s a good thing too, because I don’t think Mark would have gone nearly as easy on me as Ted did!

Fortunately I do have a gift for self-correction. I can learn.

One thing I am trying to learn is what’s really going on in the television business. I mean what’s really going on. The television industry itself faces the exact same challenges as the major sports franchises. Television bumps up against the same real limits. And there is definitely one real limit: that’s the amount of available free time. You can check out some of this data by the Bureau of Labor Statistics. The bad news is, there’s definitely not unlimited free time. The good news is, as of last summer, TV still won the highest concentration of free time (about 2.6 hours per day). And as you know, on any given night there is way more than 2.6 hours of programming available. All of the programming is fighting for the same free time.

I watched the Dan vs. Katie/Cuban vs. Moonves frenzy the other day and it definitely got me thinking that I was missing something. Something was not right about the whole thing in my mind, but I couldn’t figure out why.

Then, in a somewhat unrelated bit of curiosity, I was looking at the Brand Keys “Sports Loyalty Engagement” (more or less a measure of which sports franchises have the highest loyalty from their fans) and saw all the other “brand loyalty engagement” studies Brand Keys does, including this (rank of evening news by loyalty in 2007):

Evening News Shows

Then I understood the something I had missed in this whole thing. The short version of that thinking is, “Ouch, Moonves is dope!” The truth of it is, here he was a complete and total dope. He’ll never admit it. You won’t likely hear the Les Moonves, “Mistakes were made…” speech. But one very, very, very big mistake was made.

First, it is true that the program “brands” do have some loyalty and you can measure it. That’s true for both the Today Show and the CBS Evening News. There is data that I am missing and this data would be helpful. But there is data that I am not missing, and that’s the actual results (which are not good). I like to focus on results. Also, I wanted to start thinking about this in these terms: “What would I do if I ran a television network?”

There’s a secondary truth as well: the stars themselves have some “loyalty engagement index”. Which shows have the most loyalty and which stars have the most loyalty very often crossover. The data I am missing is the crossover between people who are loyal to both Katie Couric and Dan Rather, and people who are loyal to both morning AND evening news programming. Based on the actual results, and admittedly this is still pretty speculative there wasn’t all that much crossover.

Moonves made a key mistake, I believe. The evening news market was already in a free fall (and that trend will NOT change), the mistake Moonves probably made was that he thought he could change this trend. Given that mistake, I do understand how he made the second and big mistake. Let me be clear: when you have a brand, and the sky is kind of falling (ratings across all evening news viewers combined are down more than 50% over the last 25 years) but there is still value in the brand to be milked out of it – you milk it as long as you can. Creating a “new brand” in the environment of Network evening news is as complicated as launching a new beer brand. Beverage companies spend years with rollouts of new brands and the main reason (in my opinion) the rollouts of “new beer” are handled as slowly as they are is because they don’t want the success of the new brand to come at the expense of any existing brand.

There was an existing brand at CBS News. The brand to be exact, was “The CBS News with DAN RATHER”. Dan Rather actually was the brand and I think in a shrinking market where you have a fairly good brand – killing that brand off and trying to launch a new one is just…absolutely insane. This has nothing to do with Katie Couric. I do not believe there was anyone CBS could have put on aside from perhaps bringing Walter Cronkite back that would draw MORE viewers than Dan Rather. Because Dan Rather was the brand and getting rid of him pushed out the millions of people who were loyal Dan Rather evening news fans.

Katie Couric had loyal fans too – but that was for something else. So one lesson here is that brand loyalty does not (certainly in Network television) cross over from morning shows on one network, to evening news shows on the other.

As a result of the way Moonves went about this – again probably a result of thinking he could change the overall trend, one very, very critical mistake was made. Moonves thought about CBS News as the brand. It wasn’t. Dan Rather was the brand and in this case Moonves completely underestimated the value of the Rather brand.

I really don’t find it surprising that without ever thinking about any of this I hadn’t figured it out. What’s vastly more surprising to me is Mooves didn’t figure it out either. There are studies on brand loyalty by the stars themselves. I would not be shocked at all to find out that programming decisions for smaller networks, whether it be USA or Mark Cuban’s own HDNet are being made by trying to create programming around stars with high brand loyalty that happen to be out of work.

I also won’t be surprised that when it comes to network television, that no matter how steep the trend line down is, that the egos like Moonves will think they can reverse the trend, fire more stars with high brand value and…how long can it really be before Dan Rather and Katie Couric are hosting together a nightly news show on Cuban’s own HDNet?

I’ve got Mark Cuban.

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