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MyersBizNet Economic Media Business Report

Wall St. Speaks Out: Omnicom–Strong; Publicis-Weak
By: Dan Salmon   (07/25/2014)

We are raising our target to $82 from $80 as we roll over valuation to 2015 estimates, implying 17.5x P/E and 8.9x EBITDA. We raise our 2015 EPS estimate to $4.70 from $4.60, reflecting higher share repurchase estimates.

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Wall St. Speaks out on Fox Time Warner
By: Compiled from Multiple Sources   (07/18/2014)

We believe FOX will increase its bid for TWX, as we see earnings accretion on an all-stock deal valued up to $160/share. As we had highlighted in our June note on TV mergers: "TV Merger Matrix - Who Is Next?" we believe this transaction is one of the few mega-cap ones that makes both too much strategic and financial sense to ignore. Essentially, there is significant room to negotiate a higher price before a deal would dilute earnings.

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Wall St Speaks Out on Ad Share Shift, 4K Readiness, and Social Effectiveness
By: Tony Wible   (07/11/2014)

Ad Shifts – DWA's Awesomeness TV is producing two series for a cruise brand (RCL), which has decided to move spending from TV to online video. This is interesting on two fronts. First, this feeds into the concerns that TV ad spend will move to online video. However, we note that this is just one data point, is a very small sample, and RCL was under-invested in digital based on its TV to online ad spend ratio. Second, the move shows how YouTube networks/publishers can use native advertising to improve monetization as these revenues are not split with GOOG.

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Wall St Speaks Out on Twitter Management
By: John Blackledge   (07/03/2014)

Earlier this week, Twitter's board announced Anthony Noto has been appointed as CFO, replacing Mike Gupta, who is assuming the SVP, Strategic Investments role. CFO Noto is a strategic hire given deep relationships in media/tech/sports, in our view. The CFO change comes weeks after Ali Rowghani stepped down as COO. TWTR shares advanced on the news (+3%).

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Wall St. Speaks Out on Aereo Case Impact
By: Laura Martin   (06/27/2014)

CBS, Comcast (NBC), DIS (ABC) and FOXA are up right now owing to the Supreme Court's opinion reversing the lower court's decision and finding against Aereo.

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Wible's Weekly: Aereo Decision Cements Status Quo
By: Tony Wible   (06/26/2014)

The Supreme Court sided with broadcasters in a 6-3 decision that Aereo's service does infringe upon broadcasters' copyrights. The decision reverses the Second Circuit decision and the case has been remanded back to the lower court, although there appears to be little opportunity for Aereo to get around it. We believe this effectively kills the Aereo service and allows broadcasters to maintain current business operations.

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Wall St. Speaks Out on Online Ad Fraud
By: Brian Wieser   (06/20/2014)

The advertising agency industry is, by its nature, very cynical. Far too many of its professionals see far too many promises left unkept by vendors of services and sometimes by their managers who are, admittedly, frequently placed in challenging positions to manage both up and down. And often the best work is undercut by a client's lack of daring or the pricing of a competitor whose effectiveness might leave something to be desired. That is, if the client doesn't ask the agency to do mediocre work for even less money. In this context, the annual Cannes Lions Festival (which has occurred this week in the south of France) is notable for all of the optimism and positivity that it produces among its attendees as they celebrate the best in creative and media agency services.

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Wall St. Speaks Out on C-7, Programmatic, OTT and More
By: Tony Wible   (06/13/2014)

Upfront Updates – C7 is making inroads as the currency for advertising deals, as media buyer GroupM is striking agreements with broadcaster on a C7 basis during this upfront. It is unclear whether a higher C7 rating (vs C3) will translate into significant benefits for networks as we believe advertisers may adjust CPMs to (partially) offset the ratings increase to maintain their ROI. We are somewhat concerned about the tepid 4%-8% upfront CPM increases which is less than prior years, per recent press reports, while management commentary on the ad environment (including scatter) has not been positive either.

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Wall St. Speaks Out on Improved Ad Industry Growth Prospects
By: Brian Wieser   (06/13/2014)

Ahead of the advertising industry's biggest annual event, the Cannes Lions, which are held next week, we find ourselves more optimistic about the industry. And it's not just because we expect to hear much positivity emanating from the leading lights of creative, media and (dare we say) ad tech excellence in the days ahead. Instead, it is because with yesterday's release of the IAB's first quarter estimates for online ad spending we have been able to add a key input into our US industry model. Combining all of the data now at our disposal, we have reassessed our expectations for the year ahead. Much like the French Riviera, it's downright sunny.

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Wall St. Speaks Out on TV Mergers - Who's Next?
By: Tony Wible   (06/06/2014)

As we predicted in out 2014 Outlook, mergers are playing an important role in shaping the media landscape. We believe the consolidation will continue and shift towards the content companies that will seek to balance out changes in purchasing power. An OTT induced deterioration in ad revenue growth and increases in content costs make the TV networks more dependent on collecting larger increases in affiliate fees, which is jeopardized by MVPD consolidation.

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It's been a good week for fans of nostalgia (note to the digerati: that's stuff that happened more than a week ago). First we had five old blokes on a stage at London's O2 Arena talking about dead parrots and lumberjacks (note to the youth: that would be the Monty Python team's last ever live show). Then we had Phil Georgiadis, Chairman of Walker Media, and Claire Beale, the fragrant and recently reinstated editor of Campaign coming over all misty eyed about media in the old full-service era.

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San Diego, CA -- T-E-R-M-I-N-U-S. More than any of the many marketing spectacles during the last four days at the 2014 San Diego Comic-Con, it was the sight of those eight letters plastered near the top of a building (The Hilton Gaslamp Hotel) that stopped me in my tracks. Anyone who watches AMC's The Walking Dead would have felt the same way.

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