Follow the Money: Spanish Language Television

From Variety:

For the first time ever, a Spanish-language show has topped the New York area ratings for the 11PM Saturday news slot. In July, "Noticias Univision 41" on Univision 41 (WXTV) came out at number one in all three key demographics.

From: http://www.variety.com/article/VR1117969725.html?categoryid=14&cs=1&nid=2562

Big, and getting bigger

What's the Value of Concentrated Viewership?

Mark Cuban hypothesizes on the value of concentrated eyeballs on a video stream. He doesn’t remember why he was reminded of Metcalf’s Law, but I do, he brought it up in an exchange we had a few weeks ago regarding the perception that the more people watching at the same time, the more valuable the content is. Cuban hoped to generate thinking and discussion with his blog entry, so here is my “thinking out loud” on the subject.

I agree with Cuban’s hypotheses in his blog entry for the most part, but I am in “simple man asking simple questions” mode when it comes to my examination of the TV space, and so far my thinking boils down to:

The value is to both the producers of the content stream and the broadcasters of the stream(s). How is this value determined?

1. How much people are willing to pay for the content
2. How much companies are willing to spend on advertising
3. a combination of both

One assumption I have not validated is that for the most part in cases like ESPN, people don’t realize they are paying for it specifically. Oh sure, they know they pay for cable, but they don’t associate the fees with “buying the content” until you hit the realm of HBO, PPV, MLB Extra Innings, etc.

For purposes of forward looking thinking, at some point in the future I don’t think the opportunity will exist in the scale it currently does to monetize content via physical media (DVD, etc) distribution. I don’t see the revenue from that drying up completely, but I think for the most part how people will buy content in the future will change and I’m guessing how content is purchased/received/accessed will change dramatically. I believe every single one of those changes (some which are already in progress) will come at the expense of the # of people with eyes on the stream at the same time.

As Cuban himself pointed out to me, the number one show in 2007, American Idol wouldn’t have cracked the top 20 in 1987. More people watched Monday Night Football , the #20 show in 1987, then watched American Idol, the #1 show in 2007. I don’t have the data available, but I’d bet $1000 without the data that the cost for a 30 second spot on American Idol in 2007 was higher (adjusted for inflation, etc) than 30 seconds on 60 Minutes in 1987. If this is correct, 1/3rd of the audience 20 years later has more “value” than three times as many eyeballs in 1987.

This my friends seems to be the new math. Why?

My working theory is : advertisers have no real idea how to value their advertising, but they believe what Cuban is preaching. American Idol may have 1/3rd the eyeballs of 1987’s top show, but it’s the biggest “all eyes on at once” show, and the advertisers do value the concentrated viewership regardless of any real ability to quantify (or even qualify) what the value of this actually is in pure dollars and cents. The thinking seems to be more is better, and “fear” comes into play. Fear of looking stupid, fear of missing opportunity, fear that NOT paying to have more eyeballs at once will impact sales (even though I can find no actual data that would seem to justify such a fear).

What results is the buyers of television advertising and the sellers of the space seem to form one of the most inefficient markets ever, with no real basis for determining “valuations”.

Can it continue? If the top show in 2027 has 1/3rd the eyeballs of American Idol – will the price (relative to inflation) go up, stay the same or go down?
What happens when even 50% of the people are watching 50% of their content via time shifted DVR viewing?

And in the future, won’t I actually be able to get more for less? Is it possible I’ll be able to subscribe to the major broadcast networks, HBO, TNT, all of ESPN’s channels, USA, SciFi, whatever the local cable sports channels are, all in HD and with some kind of “virtual” DVR/On Demand (anything on the channels I’ve subscribed to me is available for X time after it initially airs) and pay significantly less than the channels I have today?

Is there anything prohibiting someone from trying to cut these deals now? In the case of the subscription the individual channels (ESPN, TNT, the local sports channel) would likely get a bigger cut than in the current arrangement with the Cable & Satellite distributors, and honestly, I don’t care about almost ALL of the channels on my package. I’d be better off paying for specific content on a pay per view basis than subsidizing a whole boatload of content I almost never watch on a monthly basis.

I believe these services will certainly come and fragment the concentration of “people viewing the same content at the same time” even further. But it’s a fairer market for the buyers of content.

Why I just went LONG 1000 YHOO in my IRA

Normally I don't invest, but, I saw an opportunity here.

The main factor I attribute to this buy is the education I have received recently, specifically from Ted Leonsis, though not anything to do with YHOO and GOOG.

There is a dynamic currently in place where things with scale, any scale (and especially some kind of scale with people who have and spend money) are increasing in value even as scale is being reduced. Whether it's ABC, NBC or CBS, or MLB, NBA and NHL, it doesn't matter. "Share" may be going down, but valuations are going up.

I take this to mean that YHOO, even as the #2 has so much scale that unless it completely screws up, ultimately (thinking 5 years) it will appreciate in value considerably even as it loses "share".

Think I'm wrong? Maybe I am, but it's a dynamic that's already in place and one way I can show that is the television Networks. ABC, CBS and NBC lost 2/3rds of their "share" during primetime between 1995-2006 seasons. All 3 combined now have the share they each once had. Even adjusting for inflation, and even though I don't know the specific valuations I'm comfortable thinking the values of these networks has…not decreased.

I suspect the same thing to happen w/Yahoo. But if I'm wrong, I won't blame Ted.

update: think "Lowest Rated NBA Finals in History" matters? Not to the NBA or the networks it doesn't, it just got 20% MORE in revenues...I know it's counter-intuitive at first, but, 20% more is 20% more and there's just no getting around that.

NBA announces extensions of TV deals with ESPN/ABC, TNT
The Associated Press
Article Last Updated: 06/28/2007 01:50:29 AM MDT

NEW YORK - The NBA's new television contracts with ESPN/ABC and TNT include rights to technologies that have yet to be invented, an indication of the importance the deals place on newer forms of media. The eight-year extensions go through the 2015-16 season.

The current six-year contracts expire at the end of next season. ''I consider this to be a wonderful vote of confidence by our very sophisticated network partners who are making such a substantial and long-term commitment,'' NBA commissioner David Stern said. The number of games televised on the networks won't change much. What's different are the extensive rights for the networks to broadcast games and other content on the Web and mobile phones.

The NBA will receive about $930 million a year for all its broadcast rights, an increase of more than 20 percent from the previous average of $767 million, according to a person familiar with the deal who requested anonymity because he wasn't authorized to release details. The previous contracts, though, did not include the extensive digital media rights. Stern said the traditional TV rights still are worth more than the digital rights. ESPN/ABC and TNT will each be able to simulcast and offer video on-demand for games on its networks. Stern and network executives downplayed the league's declining TV ratings, insisting there is still plenty of demand for NBA-related content through other forms of media.

More loving on Les Moonves and CBS

(click to enlarge)

Note: the CW [UPN+WB] networks number for 06-07 was charted as if it were UPN

in a more flamboyant piece I pitted Mark Cuban vs. Moonves over the Dan Rather flap and said, I'd pick Mark Cuban. But Les Moonves deserves a lot of credit for what he's done at CBS. The ratings are leaving the big networks: that's not a function of anything the networks have control over, but rather a function of increasing choice.

Given that's the case, really the best you can do is hope to stave your losses and keep the people around as long as possible. In this way, since joining as head of CBS Entertainment in 1995 on his rise to run the whole shebang, Moonves outperformed all his rivals, and based on the chart timing it would be hard to make the case that Moonves doesn't deserve any of the credit, especially relative to his peers at ABC and NBC.

Hello Yahoos!

i ran my Google analytics and saw a little traffic in Sunnyvale and because Feedburner provides ip addresses I got curious. And damn if you can't run NSLOOKUP from a DOS command line just like you could in the 1990s. Yahoo! I'm guessing a little tiny mention from Kara Swisher goes a long way. But as long as you're here...

Google won. Really. The whole thing. However...

I'm thinking about this like I am thinking about the TV business. Did you know that in about the last 11 years (1995-2006) the combined "share" during primetime for CBS, NBC, ABC has decreased by a full 2/3rds? That's right, there are about as as many eyeballs on ABC, CBS, NBC combined now as each used to have. But guess what: ABC, CBS and NBC are worth MORE today than they were 12 years ago (even adjusting for inflation and whatnot).

So even though Google won, it's not over for Yahoo. Not by a long shot. Good luck!

Because Egos are Sooo Fragile: Les Moonves, You’re #1: Really!

Not just because I'm a chronic suck up at all. Moonves really is #1 in the thing networks care MOST about: primetime ratings. We live in a world where you can really make a boneheaded decision and totally undervalue the worth of the Dan Rather brand and still be…#1. Les Moonves lives in exactly that world. A world where America LOVES, LOVES, LOVES CSI.

That America isn't loving on Miss Couric on the CBS Evening News – this I believe isn't Miss Couric's fault at all, but instead just how the whole transition from Rather to Couric was handled (which is to say, very, very badly). Again, I don't think that's a really function of anything to do with Katie Couric.

It doesn't matter. Primetime ratings matter. And here, Moonves or at least CSI in all its variations are killing. While CBS didn't have any of the top 5 programs, either for the season or the May sweeps, CBS still dominated with 13 out of the top 20 shows being CBS products and EIGHTEEN OUT OF THE TOP TWENTY-FIVE shows in the May sweeps. That's dominance. The highest value to the networks come from its ability to score during primetime, so Moonves probably views himself (and correctly so) as the winner.

I wouldn't fault him for that. Except I have no idea what role Moonves had in CSI and its variants or any of the other programming running during primetime. If those decisions were his, I'll give him all the credit for it (and even if they weren't his, I'll give him the credit). What I am sure of is, the Dan Rather/Katie Couric thing was all his, and it was completely botched: not just in execution, but in terms of how he thought about it to begin with. The fact that CBS is #1 during primetime has no bearing on how poorly this was handled, except that I'm sure that Moonves is not under any kind of pressure, say…compared to NBC, which came in last in the primetime sweeps.

Les Moonves is #1 in the thing that really matters, the primetime ratings. But if the goal is to make the most money for your firm possible, and if it isn't, I kind of think it should be, I hold Moonves completely accountable for botching the Rather thing. Because he's #1 where it matters he won't feel any heat for being accountable here. That's human nature, but it's the kind of human nature that usually eventually comes around to bite you in the butt.

Leverage Shifts to the Advertisers

...and Nielsen will try to make both the advertisers AND the networks happy. They will not succeed. Why? Because it's obvious: the Networks had the upper hand and now they don't.

Check out this story from Advertising Age, in the face of the actual viewership data for the commercials themselves, what did the Networks focus on? Getting every sliver of a dollar for the DVR audience that might still watch the advertisements. This seems to imply that the networks didn't like the actual data at all and are searching for a way to stick with the old model.
I don't see them (the networks) getting away with that for long, if at all and I see this as a sign that Mark Cuban was more right than he knew. The leverage isn't moving in favor of the advertisers, I think it must have already moved. The advertisers have the upper hand now.

I note that Nielsen has shared still ZERO data with the general public on the ad ratings themselves (Nielsen too only focused on DVR viewership in their press release, which seems to indicate Nielsen sides with the Networks...Nielsen shouldn't have a side here).

All this noise without any data in the public...strikes me that the commercial ratings themselves may be worse than anyone wants to talk about. The DVR thing is merely a distraction until we see the real data for the commercials themselves. I can't help but feeling if it was "OH MY, PEOPLE LOVE COMMERCIALS! LOVE THEM!" we would have seen some data already. We didn't. That's bad news for the networks and good news for the advertisers.