|HOME||MEDIAVILLAGE.com||WOMEN ADVANCING||HOOKED UP||MEMBERSHIP INFO||MEMBER COMPANIES||MEDIA BUSINESS REPORT||ECONOMIC FORECASTS||RESEARCH|
Published: December 21, 2007 at 08:44 AM GMT
Last Updated: December 22, 2007 at 08:44 AM GMT
Happy Holidays and Best Wishes for a Successful and Healthy 2008. Here's my suggestion for a happy end-of-year resolution to the Writers Strike.
In the first week of the Writers Guild of America strike, I offered a solution that has been gaining momentum over the past two weeks. "It's time to think out of the box in more ways than one," I wrote on November 9. So here's the solution. Let the advertisers step up and agree to pay a tax on all network television ad expenditures for the next three years, beginning in September 2008, to fund a pool for distribution to writers, actors, directors and related unions. This pool of funds will provide compensation for the writers', directors' and actors' contributions to the digital rights expansion producers need and want, without requiring long –term economic valuation of the new media marketplace. A one percent tax on broadcast and cable network spending represents an estimated $400 million annually, $1.2 billion over three years. Two percent = $2.4 billion. The networks and studios can't complain about this solution. The unions can't complain. While advertisers and agencies might protest at first, this Strike Tax will actually be self liquidating. As Sarah Fay, CEO of Carat U.S. and Isobar pointed out, "the strike is a huge issue for advertisers."
If the WGA strike stretches into the summer and is joined by Screen Actors Guild and Directors Guild members, then the recent gains experienced by the networks as a result of returning late night hosts will be lost. This has the potential to destroy network television as advertisers know and love it. By ending the strike, advertisers will avoid suffering losses to their business resulting from under delivery on their required advertising exposure. They will assure the sustained viability of network television as a powerful medium for their messages, and they will support the industry as it transforms to a digital marketplace. In last year's Upfront, advertisers agreed to pay substantially increased costs because network television is worth it. An additional one or two percent in costs might ultimately be extracted from the networks in negotiations, but networks will make it up by avoiding the substantial ratings declines the strike is causing and will continue to cause.
This strike already has only losers. What's finally beginning to be realized is the real losers are the advertisers who underwrite the network television business because they need it for their own business well-being. Ultimately, they stand to be the biggest long term losers. Their history suggests they will stay neutral and stay above the battle. That would be a mistake. Advertisers need to get involved. They need to get involved now. They need to determine if the Strike Tax or an alternative is a viable solution to bring the AMPTP and the WGA back into a new three way conversation. They need to take fiduciary responsibility for the nearly $40 billion they invest annually in the broadcast and cable network television industry.
Plus, advertisers can take credit in the critical eyes of American consumers for helping to bring back their favorite television shows and saving some marginal series from almost certain oblivion. Media agency executives including Fay, Group M's Rino Scanzoni, and MPG's Charlie Rutman have expressed their desire for reasonable negotiation and an early settlement.
Following last week's exclusive JackMyers report that advertisers and agencies were in active discussions with members of the writers' negotiating groups, additional media agencies have stepped up and expressed an interest in participating in the solution. The one to two percent Strike Tax provides an opportunity for these agencies to introduce a relevant new issue into the discussions. Of course, agencies can't speak for their clients, but they can urge the American Association of Advertising Agencies media committee to engage with both the WGA and AMPTP (Alliance of Motion Picture and Television Producers). Agency executives can ask their clients to push the Association of National Advertisers to become involved. The two trade groups can poll their members to gain consensus regarding the Strike Tax. If the consensus favors advertiser involvement in the negotiations, each trade group should identify two representatives who can join the negotiations and facilitate bringing the AMPTP back to the negotiating table now.
If advertisers and agencies fail to act, the challenge, as I commented in my original column on November 9, is "there is no obvious viable solution to the strike, which is the core issue that will either result in rapid resolution and capitulation by the writers, or result in a long drawn out battle of attrition. The dynamics favor a long battle with an unsatisfying conclusion for all." As 2007 comes to an end, strike dynamics continue to point to either a major concession by the writers in mid-January, which their leaders are adamant will not happen, or continued hostility through mid-March at the earliest and more likely through early Summer when other unions can join the fray.
The AMPTP members and leaders are gaining confidence that strike economics and politics are swinging in their favor. The Directors Guild is entering into early discussions with the AMPTP to resolve their issues prior to their own strike deadline next June. The Directors have conducted extensive research that reportedly argues in favor of a more moderate negotiating position than that taken by the WGA. Late night talk shows are returning to the air, and striking writers who are being economically hurt realize the networks and studios have no incentive to be conciliatory.
As we have reported, while it is reasonable for writers to get a piece of the digital action, the digital marketplace is in its infancy and studios and networks are not yet able to determine future economics. Yet, they are making money. Ironically, the strike will drive consumers to view more off-network programming online, on iPod and mobile phones, and through the purchase of DVDs. Writers won't get their fair share of these increased online, mobile and iPod revenues. Their premature concessions on DVD revenues in their 1988 strike is writers' "Remember the Alamo" call to action that keeps them on the picket lines today. In future years, they hope, as networks and studios reap billions from ancillary revenue streams, the writers are insisting through their strike that they not be left out in the cold.
To accomplish their goals, they will need a strong backbone and the organizational will power to sustain the strike well into the new year. Their adversaries do not expect them to have that staying power. There are only four realistic scenarios. One, the writers concede most of their demands and return to work in January. Two, the advertisers and media agencies step in and offer to mediate and help fund a solution through a Strike Tax. Three, the strike continues into the Summer and the networks introduce some new formula that concedes a share of unknown gross profits after having completely disrupted the business and accelerated major industry restructuring. And finally, the courts intercede and empower the WGA to negotiate with individual studios and networks, changing the power structure. The only solution that offers a win-win-win for the AMPTP, the WGA and other unions, plus advertisers is option number two: the advertisers step in. With option one, the inevitable is simply delayed for a few years. With option three and four, the writers gain a Pyrrhic Victory but the industry suffers and advertisers suffer.
MediaBizBuzz: Disney, Omnicom, CBS, Nielsen and Gannett
MediaBizBuzz is a roundup of the week's key news from MediaVillage member companies and the wider media industry. This week, the financial reporting season continues with mixed results from Disney and Time Warner, optimism from Omnicom and Nielsen, and Upfront predictions from CBS. Plus more about how Vice plans to shake up the TV business and Gannett’s reported plans to puts its newspaper delivery trucks to good use.
Nielsen: New Activities Show Progress -- Pivotal Research
Nielsen reported 4Q15 results that were consistent with expectations of mid-single digit growth for the quarter and the year. Constant currency growth was +5.6% for the quarter, with Watch up +5.2% and Buy up +5.9%, both on constant currency bases. For the full year, Watch was up +4.9% while Buy was +5.0%. Inside of Watch, Audience Measurement of video and text was up +7.6% in constant currency terms. Growth in the Watch segment was aided by the consolidation of Nielsen Catalina Systems and acquisition of eXelate. Other Watch businesses (especially the former Arbitron) were down in the quarter. In Buy emerging markets were strong at +8.4%, while developed markets were up by +4.8%, both in constant currency terms.
Mindshare: Facebook's Secret Chess Moves
This week on Mindshare’s Culture Vulture Live, Kyle Ranally looks at Easter eggs and hidden culture.
Access Confidential Twitter Tips for February
Whether you’re pitching new business or retaining current business, Lisa Colantuono’s tips below offer an easy-to-follow guide applicable for both agencies and media companies alike.
Eric Steinert of Adspace Networks on Capturing Consumers at the Point of Sale
Eric Steinert, CRO of Adspace Networks, has always been in the out of home marketing and advertising sales space. From college he joined the sales training program at News America Marketing selling print space to packaged goods clients and gaining experience with retail signage before joining MasterCard. From there he moved to Adspace Networks and helped to build a massive video network with the nation’s top mall developers. According to Steinert, “The moment of truth [to make consumer buying decisions] is in the common area of the mall. We reach the consumer when they are in a shopping frame of mind and cannot skip the ads.”
ANA: Content Marketing is Heating Up. But Don’t Burn Out!
Creating and publishing emotional, engaging content continues to be one of the hottest trends for marketers going into 2016. The ANA’s Ask-the-Expert research team has received a steady stream of questions about content marketing over the last five years.
The Future of National Television, Addressables, Content Creation: Part 4
One might say that the initial impact of the Internet and the World Wide Web were to devalue content, e.g. news, and that would be a true statement. For the years right before the bubble burst on the naïve expectations of the '90s, my companies and I were warning clients that the math didn’t work, and that the main impact of digital was going to be price wars and lower margins, not only in content but in all product categories. This turned out to be the case.
KCRW: A Destination for Discovery
The radio industry recently touted stats from Nielsen’s Music 360 report about the dominance of radio as a music discovery source versus the big streaming services to the surprise (and delight) of some. While on-demand audio track streams have doubled in a year, people listing AM/FM radio as their destination for new music actually rose 7%. Yay radio. But it takes a diligent radio station to be all things to all music lovers given increasingly easy access to platform choices. The paragon of multi-platform audio meets music discovery source? Santa Monica College-owned KCRW.
Final Review: MediaVillage Team Coverage of Super Bowl Sunday
A Note from Jack Myers: The editorial team at MediaVillage this year brought a fresh perspective to our annual coverage of the Super Bowl telecast. Last week, veteran media columnist Stuart Elliott sized up the competition between long-time Super Bowl advertisers and newcomers, while Charlotte Lipman revealed how fantasy football has given young women a new appreciation of the sport -- especially the Super Bowl. This week, Stuart offered his signature distinctive commentary about the commercials, while Charlotte reported on the Super Bowl from an entirely new perspective, focusing on ads that ran during competing programs on other networks. Meanwhile, Connor Zickgraf explained how the depiction of gender roles in commercials changed from Super Bowl XLIX to SBL; Kristi Faulkner exposed the absence of brand stories in most Super Bowl commercials, and Ed Martin weighed in on the telecast’s biggest surprise: CBS’ official announcement that this would be the last season for its long-running blue-chip drama “The Good Wife,” which made almost as much news as the commercials themselves. Scroll down for links that will take you directly to all of the columns mentioned here.
Hot from Hulu: Triumph the Insult Comic Dog Takes on P.C. Millennials
Warning: Politically correct or overly sensitive young people should be careful watching this video, as their heads might explode. It's from the hilarious Hulu and Funny or Die series "Triumph's Election Special 2016," in which the infamous dog with no filters has been reporting on the presidential primary in New Hampshire. He's hit his targets hard, especially Donald Trump and Jeb Bush. But he saved his most poisonous exchange for a group of college students at the University of New Hampshire. It may not be the funniest thing ever, but it's close.
Forward Thinking: How to Get a Seat on the Board
For many, serving on a company board would be the pinnacle of a career. It’s a lofty long-term goal, but if you actively build the skills needed for board seat throughout your career, you’ll be better positioned for opportunities to present themselves later.
Donald Trump’s Ten Brand Secrets -- Revealed!
And… From stodgy magazine to multimedia juggernaut – how "The New Yorker" did it.
A Possible New Path for Newspaper
For the better part of their storied history, IBM focused all of its energies against selling hardware. And for a good long time that’s all that was required as they were the only game in town. In the 1980’s that began to change. Competitive pressure on the personal computing front forced them to begin to cut distribution deals with national retailers -- a decision that would have at one time been considered heresy. Ensuing pricing pressure would force IBM to ultimately sell off their personal divisions and reconsider their overall go-to-market strategy.
Pivotal Research’s Brian Wieser on Ad Technology and 2016 Trends
Jay Sears, Senior Vice President Marketplace Development of Rubicon Project discusses ad technology and 2016 trends with Pivotal Research’s Senior Analyst Brian Wieser.
Attention Award Shows: Live TV Musicals are Not Movies!
NBC did a sensational job with “The Wiz Live!” two months ago, by far the best of its live Broadway musical adaptations. Wonderful cast from top to bottom, dynamite direction and choreography and, despite not having a live audience in the studio to make the live performance more electric (the only major flaw, especially in the wake of “Grease Live!” on Fox), a triumph for all involved.