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MyersBizNet Economic Media Business Report

Upfronts, Freemium Risk and Social TV Engagement - Janney/MediaEntertainment
By: Tony Wible   (04/18/2014)

Early Upfront Read – Projections for the upfronts are relatively timid, reflecting factors such as ratings trends, competition from online video and increased optimism around global ad spend. Upfront commitments from ad buyers for cable could accelerate to 5% YOY growth vs 4.3% last year, while broadcast may not see any increase, according to a FOXA executive.

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C7 and Change at the Upfronts - Brian Weiser-Pivotal Research (Members-Only Report)
By: Brian Wieser   (04/14/2014)

As the broadcast network upfront season is now well under-way by virtue of the cable network presentations which have been made in recent weeks, investor minds (and much of the advertising community) will increasingly focus on the outcomes of negotiations between buyers and sellers. We have written in the past about our "behavioral" model for forecasting pricing, which eschews explicitly "classical" notions that changes in supply and demand can predict a benchmark CPM increase.

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Of Beer, Chocolate and the Commoditization of ad:tech - Brian Weiser
By: Brian Wieser   (04/11/2014)

Ad tech, as it turns out, isn't necessarily much different. The thing that many will view as difficult – the underlying technology of ad tech – can, in fact, be outsourced. For much of the industry involved in selling real-time ad trading products (including companies which compete with each other) Iponweb and AppNexus provide the critical ingredient of technology.

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Google, Discovery, Ad:tech, Pandora and More Wall St Speaks Out - 04-04-14
By: Compiled from Multiple Sources   (04/04/2014)

John Blackledge, analyst at Cowen, published his expectations for Google's (GOOG) 1Q14. In terms of search performance, the analyst explained, "Google is benefiting from solid search industry fundamentals, where 2014 budgets appear to be up 20% y/y, driven by higher paid clicks, rising mobile CPCs, offset by flattish PC/tablet CPCs." He expects a strong quarter from the search leader with +12.3% Y/Y revenue growth, slightly ahead of consensus target of +11%.

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Facebook, Google, Online Video and More Wall St Speaks Out - 3-28-14
By: Compiled from Multiple Sources   (03/28/2014)

While the Internet wasn't happy with the news that Facebook (FB) would acquire Kickstarter-favorite, Oculus Rift, John Blackledge was. The Cowen analyst sees the $2 billion spent on the virtual reality technology as an investment in the network's future social platform. Oculus Rift joins 2 other recent massive acquisitions for Facebook, Instagram and Whatsapp. "FB has demonstrated that management 1) is not afraid to make bold investments and 2) their track record (so far) has been solid.

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Facebook, Nielsen and Online Video: Measure Once, Divide Thrice - Brian Wieser-Pivotal Research
By: Brian Wieser   (03/26/2014)

Measuring the scale of online video content consumption is an important factor in quantifying the strength of new forms of television-like media. However, it's important to assess the means of measurement that drive conclusions, too. When we compare data from two of the leading sources of relevant data – compared in detail over the past five years later in this report – online video content consumption equates to either 3% of TV time or 9% depending on whether one relies on Nielsen or comScore data

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Wible's Weekly: Maker Studios Deal Highlights Awesomeness TV Value
By: Tony Wible   (03/25/2014)

DIS announced the $500 million acquisition ($950 million including performance-linked earnout) of YouTube channel Maker Studios. This deal has interesting implications for DWA, including the validation of the market opportunity and DWA's investment in this area, and a sum-of-parts valuation for Awesomeness TV. We maintain our Buy rating, estimates and $39 Fair Value.

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Millennials, Facebook, Pandora, Apple and More Wall St Speaks Out - 3-21-14
By: Compiled from Multiple Sources   (03/21/2014)

The majority of Millennials (75%) have not cut the cord and subscribed to MVPD service. That's according to a Verizon study mentioned this week by Janney media analyst, Tony Wible. In addition, Millennial TV watching habits are split between live TV (41% of their time), online (34%), DVR (15%), and VOD (10%).

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Wible's Weekly: Sum of Internet Ad Valuations Greater Than the Whole - Janney/MediaEntertainment
By: Tony Wible   (03/18/2014)

Internet valuations have become a focal point after a series of high profile deals and the rapid appreciation in equity values that have left some to justify higher price targets on dubious metrics and bubble inducing logic (i.e. expensive stocks are compared to other arguably overpriced stocks). There is a fixed ad opportunity given finite ad budgets, which we use to find that the market value ascribed to twelve major Internet ad names exceeds the fair value of the global Internet ad spend by about 33% in aggregate.

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Wible's Weekly - Social Addiction, Retrans Regulation, & Media Supplements - Janney/MediaEntertainment
By: Tony Wible   (03/17/2014)

Social Addiction - A recent Pew Research survey suggests that only 11% of consumers would find social media "very hard" to give up, as compared to 28% and 36% who said it would be very hard to live without their fixed telephone line or email, respectively. We believe that this survey does not necessarily reflect on the value that social media creates for users

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Having said that, media owners have been going to see clients directly forever and a day. Generally, if there’s a trusting, strong relationship between client and agency the client picks up the phone to the agency as soon as the meeting is finished, and together agency and client agree on a course of action – maybe doing the deal direct might benefit the client more, which is something most agencies have no problem with. After all they get paid just the same and have to do less to close the deal. Of course sometimes agencies of all shapes and sizes do have a problem with the direct sell as such deals can mess up agency deals based on total volumes. These are deals constructed to benefit the agency as the rebates generated occasionally have been known not to find their way back to the client.

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Outside of House of Cards’ nine Emmy nominations, a television network’s biggest fear is cord cutting. And there are no candidates with the scissors dangling as perilously close to the wire as OTT homes. Once they have comfortably settled into their Netflix streaming queue and Amazon Prime options, what is to keep them paying those monthly cable/satellite/telco bills? Apparently there is plenty. According to research firm GfK, the main driver in U.S. households cutting the cord last year was financial pressure. The need to save money outweighed any provider dissatisfaction or lack of necessity. It is quite possible that the plethora of OTT options has made it easier on households to cut the cord, but as David Tice, senior vice president of media and entertainment of GfK, said in a blog post, “I continue to wait for the economy to really gain traction and pick up, which will be the real test if people maintain their broadcast-only status even as economic concerns lessen. That’s when I’ll decide if I’ll pull my toe out and jump in the deep end of the cord-cutting pool.”

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