David Letterman is right: The late night NBC war controversy is all about money. Late NBC local TV newscasts airing after "The Jay Leno Show" have seen ratings declines by 25% among key viewers, which is costing NBC stations $22 million every three months. Media agency Harmelin Media said local TV newscasts across 210 TV markets lost one-quarter of their respective adult 25-54 viewership, the main viewer group for TV news advertisers. The reason: NBC programming "The Jay Leno Show" in the 10 p.m. time period four months ago. If NBC keeps "The Jay Leno Show" in prime time, the top 20 stations would continue to collectively lose about $10 million in revenue per quarter. Looking at all 210 TV markets, NBC affiliates would lose a massive $22 million every three months. Harmelin's data comes from TNS Media Intelligence market-specific cost-per-point data from SQAD.
The analysis says the monetary losses do not take into account the additional revenue declines that NBC affiliates suffered directly in prime time and in late night, as a result of the "Leno" move. Other analysis has pointed out that "The Tonight Show with Conan O'Brien" ratings are also down, partly a result of a lower ratings lead-in from "The Jay Leno Show" and lower late-night news viewership from local NBC stations. Bernie Shimkus, vice president of research for Harmelin, stated: "Even if 'The Jay Leno Show' was itself profitable from a production standpoint, as NBC executives continued to assert to the end, the overall revenue picture for the company was not moving in a positive direction. The situation has turned into a public relations disaster with affiliates."
Should NBC bring back Jay Leno to his long-held 11:35 p.m. time slot, they will have some explaining to do to viewers -- dramatically changing his marketing message. For the better part of last summer, NBC launched a massive campaign telling viewers that Jay Leno was moving to the 10 p.m. time slot. Now, all that could drastically change. What could this new marketing message be? "Jay Leno is back where you love him," says Bill Carroll, vice president and director of programming for TV stations sales rep Katz Television Group.
News reports on Thursday from Web site TMZ.com, The New York Times and The Wall Street Journal revealed that NBC -- under pressure from network affiliates -- has a plan in place where Jay Leno would return to 11:35 p.m., but as a half-hour show. "The Tonight Show with Conan O'Brien" would then move from 12:05 a.m. and "Late Night with Jimmy Fallon" would start at 1:05 a.m. NBC would resume programming the 10 p.m. hour with scripted dramas, reality shows and news programming, all to hopefully lift ratings of struggling NBC affiliates' newscasts. What will Leno's new ratings look like? "Best-case scenario, he goes back to what he was doing prior to his prime-time stint. Worst-case scenario, the audience has moved on to "Letterman" and "Nightline," and he flops," says David Scardino, entertainment specialist for Santa Monica, Calif.-based media agency RPA Inc.
While NBC's move seems impulsive -- the "Leno" show is only 4 months old, and O'Brien in the "Tonight Show" host role is a mere seven months -- program analysts say it makes sense, at least in the short term. "The Jay Leno Show" posted an average 1.7 rating among 18-49 viewers. NBC's 10 p.m. time periods suffered 50% declines in viewership -- time-shifting was lower for "Leno" -- and NBC stations did see 15% to 20% rating reductions in their late newscasts.
But NBC may have misfired when considering O'Brien ratings, which suffered among 18-49 viewers, coming in much lower than Leno's. (O'Brien, however, has had greatly improved younger viewership.)
In an extraordinary statement in which he turned somber, Conan O'Brien indicated Tuesday he would be leaving NBC -- unless the network changes its mind. An NBC spokeswoman said the network declines comment. He said he would not be accepting NBC's offer to host "The Tonight Show," starting at 12:05 a.m. Separately, he said he has no deal to move to Fox or another network were he to leave. Apparently believing he is out the door, he took multiple shots at the network. O'Brien, who is being displaced in the 11:35 p.m. time slot by Jay Leno, blamed NBC's lackluster prime-time ratings for hurting "The Tonight Show's" performance. He assailed NBC for failing to give him time to build an audience that would allow his ratings to top David Letterman's on CBS.
"It was my mistaken belief that like my predecessor, I would have the benefit of some time and, just as important, some degree of ratings support from the prime-time schedule," O'Brien said. "Building a lasting audience at 11:30 is impossible without both. But sadly, we were never given that chance. After only seven months, with my "Tonight Show" in its infancy, NBC has decided to react to their terrible difficulties in prime time by making a change in their long-established late-night schedule."
After Leno took over "The Tonight Show" and began going head-to-head with Letterman in 1993, he trailed the CBS showman's ratings for about two years before pulling ahead in 1995. He stayed there until he stepped aside for O'Brien in June. By O'Brien's logic, Leno has had at least some role in hurting his "Tonight Show" results. NBC has been airing "The Jay Leno Show" in the 10 p.m. slot since September. And the ratings have been below the dramas that have traditionally aired in the hour. Those helped lead an audience through the late news to "The Tonight Show."
But does Conan O'Brien's contract give NBC the right to bump him to 12:05 to make room for Jay Leno at 11:35? That's the $40 million legal question hovering over O'Brien's open defiance.
If O'Brien's deal says his "Tonight Show" will be broadcast at 11:35 p.m. (or the equivalent post-local news slot in the markets that air him earlier), then NBC would be in violation of his contract by attempting to bump him. If there isn't any time-slot language in his deal, O'Brien's refusal to take the 12:05 slot would put him in breach if he doesn't do his show, presumably allowing NBC to void his deal without paying him off. "The contract, NBC is arguing, guaranteed Mr. O'Brien would be installed as host of 'The Tonight Show' -- and unlike many other deals for late-night stars, Mr. O'Brien's contract contains no specific language about the time period the show would occupy,” NBC executives said. David Letterman, for instance, has a time-slot language in his deal, so some are already blaming O'Brien's lawyers for not thinking ahead and specifying his slot. But it's likely not that cut-and-dried a legal issue.
If the breach-of-contract claim ever got to court, perhaps O'Brien could argue that specifying a time slot was not necessary because "The Tonight Show" has aired in essentially the same time period for decades. O'Brien already suggested in that moving "Tonight" essentially makes it a different program; in other words, he's saying the essence of "The Tonight Show" is that it follows the local news. NBC would ask where in his deal language it says that, but the history of the show is on O'Brien's side on that issue. Also, the name implies a show at night, not during the early morning. NBC could counter that its "Late Night" airs in the morning hours, but a "Tonight Show" that doesn't air, you know, tonight, would be a good fact for O'Brien. (Letterman appeared to agree with his rival, joking Tuesday that it should be renamed "The Tomorrow Show.") O'Brien also could argue that by replacing his show with something starring the former host of "The Tonight Show," NBC effectively breached his agreement because viewers would believe that Leno is hosting the "real" "Tonight Show," regardless of its name. NBC could be in violation of the state's requirement that parties negotiate deals in good faith. Again, NBC would likely point to O'Brien's deal and ask where it specifies that it can't hire Leno to do another show.
NBC's late-night TV troubles are proving embarrassing and costly for the network -- but the drama could pay dividends down the road: it could draw more viewers to the network, media executives and advertising experts said. "Controversy is sometimes great PR and could reinvigorate Leno's show. More viewers may turn in out of curiosity," said Gabelli & Co analyst Christopher Marangi. Analysts and industry executives think that NBC will put on a tried-and-true staple like "Law & Order" at 10 p.m. until they have new scripted programming in place. Some believe the move could boost NBC in the hot market for last-minute ad spots at the expense of its competitors. "While we don't anticipate that NBC's ratings fall will completely reverse as they introduce new 10 p.m. programming and return Jay Leno to late-night, these changes could slightly impact NBC's competitors who have gained relative share on the national and local level," Michael Nathanson, an analyst with Bernstein, said in a research report.
No doubt, a stronger 10 p.m. show could help the NBC station owner and negatively affect rival CBS, ABC and FOX local stations including owned and operated stations. When all the dust settles it could be a benefit for NBC. They had offered deep discounts and may be able to command better pricing for the 10 o'clock scatter market now. In the short-term, the network's going to take a hit. They're radically changing their schedule on short notice, but longer term, they'll put scripted programming and the best of their pilots on and they'll come out ahead of where they are now. Michael Nathanson an analyst with Bernstein said, "Looking into the 2010-2011 and 2011-2012 season, the network should be re-programmed and rescheduled and should be getting higher ratings than what they have been with Leno at 10 p.m." Others see this episode as a setback. "They have a hole in the programming and will now have to spend about $300 million a year to put programming back and rush it, which does not necessarily guarantee success, versus $100 million they spent for the Leno show," said RBC analyst David Bank, who thinks that it might annoy advertisers. And there are also concerns Leno faces an uphill battle to reclaim his ratings and advertisers after suffering a drop in his audience during the prime-time experiment.
ABC television entertainment chief Stephen McPherson said, "Seeing a great network tumble is not something we rejoice over. We are all competitive but we want a vibrant TV landscape...We want them (NBC) to be a good competitor." David Letterman, the host of CBS' "Late Show with David Letterman" said in his opening monologue. "Things are getting interesting in late-night television. Chaos and craziness and mayhem — a couple of minutes ago, Conan O'Brien ... announced that he would not follow Jay Leno at 12:05. Yeah, so you know what this means — that's right, I knocked off another competitor."
Thursday, January 14, 2010
Conan, Jay, Dave And The Money War
David Letterman is right: The late night NBC war controversy is all about money. Late NBC local TV newscasts airing after "The Jay Leno Show" have seen ratings declines by 25% among key viewers, which is costing NBC stations $22 million every three months. Media agency Harmelin Media said local TV newscasts across 210 TV markets lost one-quarter of their respective adult 25-54 viewership, the main viewer group for TV news advertisers. The reason: NBC programming "The Jay Leno Show" in the 10 p.m. time period four months ago. If NBC keeps "The Jay Leno Show" in prime time, the top 20 stations would continue to collectively lose about $10 million in revenue per quarter. Looking at all 210 TV markets, NBC affiliates would lose a massive $22 million every three months. Harmelin's data comes from TNS Media Intelligence market-specific cost-per-point data from SQAD.
The analysis says the monetary losses do not take into account the additional revenue declines that NBC affiliates suffered directly in prime time and in late night, as a result of the "Leno" move. Other analysis has pointed out that "The Tonight Show with Conan O'Brien" ratings are also down, partly a result of a lower ratings lead-in from "The Jay Leno Show" and lower late-night news viewership from local NBC stations. Bernie Shimkus, vice president of research for Harmelin, stated: "Even if 'The Jay Leno Show' was itself profitable from a production standpoint, as NBC executives continued to assert to the end, the overall revenue picture for the company was not moving in a positive direction. The situation has turned into a public relations disaster with affiliates."
Should NBC bring back Jay Leno to his long-held 11:35 p.m. time slot, they will have some explaining to do to viewers -- dramatically changing his marketing message. For the better part of last summer, NBC launched a massive campaign telling viewers that Jay Leno was moving to the 10 p.m. time slot. Now, all that could drastically change. What could this new marketing message be? "Jay Leno is back where you love him," says Bill Carroll, vice president and director of programming for TV stations sales rep Katz Television Group.
News reports on Thursday from Web site TMZ.com, The New York Times and The Wall Street Journal revealed that NBC -- under pressure from network affiliates -- has a plan in place where Jay Leno would return to 11:35 p.m., but as a half-hour show. "The Tonight Show with Conan O'Brien" would then move from 12:05 a.m. and "Late Night with Jimmy Fallon" would start at 1:05 a.m. NBC would resume programming the 10 p.m. hour with scripted dramas, reality shows and news programming, all to hopefully lift ratings of struggling NBC affiliates' newscasts. What will Leno's new ratings look like? "Best-case scenario, he goes back to what he was doing prior to his prime-time stint. Worst-case scenario, the audience has moved on to "Letterman" and "Nightline," and he flops," says David Scardino, entertainment specialist for Santa Monica, Calif.-based media agency RPA Inc.
While NBC's move seems impulsive -- the "Leno" show is only 4 months old, and O'Brien in the "Tonight Show" host role is a mere seven months -- program analysts say it makes sense, at least in the short term. "The Jay Leno Show" posted an average 1.7 rating among 18-49 viewers. NBC's 10 p.m. time periods suffered 50% declines in viewership -- time-shifting was lower for "Leno" -- and NBC stations did see 15% to 20% rating reductions in their late newscasts.
But NBC may have misfired when considering O'Brien ratings, which suffered among 18-49 viewers, coming in much lower than Leno's. (O'Brien, however, has had greatly improved younger viewership.)
In an extraordinary statement in which he turned somber, Conan O'Brien indicated Tuesday he would be leaving NBC -- unless the network changes its mind. An NBC spokeswoman said the network declines comment. He said he would not be accepting NBC's offer to host "The Tonight Show," starting at 12:05 a.m. Separately, he said he has no deal to move to Fox or another network were he to leave. Apparently believing he is out the door, he took multiple shots at the network. O'Brien, who is being displaced in the 11:35 p.m. time slot by Jay Leno, blamed NBC's lackluster prime-time ratings for hurting "The Tonight Show's" performance. He assailed NBC for failing to give him time to build an audience that would allow his ratings to top David Letterman's on CBS.
"It was my mistaken belief that like my predecessor, I would have the benefit of some time and, just as important, some degree of ratings support from the prime-time schedule," O'Brien said. "Building a lasting audience at 11:30 is impossible without both. But sadly, we were never given that chance. After only seven months, with my "Tonight Show" in its infancy, NBC has decided to react to their terrible difficulties in prime time by making a change in their long-established late-night schedule."
After Leno took over "The Tonight Show" and began going head-to-head with Letterman in 1993, he trailed the CBS showman's ratings for about two years before pulling ahead in 1995. He stayed there until he stepped aside for O'Brien in June. By O'Brien's logic, Leno has had at least some role in hurting his "Tonight Show" results. NBC has been airing "The Jay Leno Show" in the 10 p.m. slot since September. And the ratings have been below the dramas that have traditionally aired in the hour. Those helped lead an audience through the late news to "The Tonight Show."
But does Conan O'Brien's contract give NBC the right to bump him to 12:05 to make room for Jay Leno at 11:35? That's the $40 million legal question hovering over O'Brien's open defiance.
If O'Brien's deal says his "Tonight Show" will be broadcast at 11:35 p.m. (or the equivalent post-local news slot in the markets that air him earlier), then NBC would be in violation of his contract by attempting to bump him. If there isn't any time-slot language in his deal, O'Brien's refusal to take the 12:05 slot would put him in breach if he doesn't do his show, presumably allowing NBC to void his deal without paying him off. "The contract, NBC is arguing, guaranteed Mr. O'Brien would be installed as host of 'The Tonight Show' -- and unlike many other deals for late-night stars, Mr. O'Brien's contract contains no specific language about the time period the show would occupy,” NBC executives said. David Letterman, for instance, has a time-slot language in his deal, so some are already blaming O'Brien's lawyers for not thinking ahead and specifying his slot. But it's likely not that cut-and-dried a legal issue.
If the breach-of-contract claim ever got to court, perhaps O'Brien could argue that specifying a time slot was not necessary because "The Tonight Show" has aired in essentially the same time period for decades. O'Brien already suggested in that moving "Tonight" essentially makes it a different program; in other words, he's saying the essence of "The Tonight Show" is that it follows the local news. NBC would ask where in his deal language it says that, but the history of the show is on O'Brien's side on that issue. Also, the name implies a show at night, not during the early morning. NBC could counter that its "Late Night" airs in the morning hours, but a "Tonight Show" that doesn't air, you know, tonight, would be a good fact for O'Brien. (Letterman appeared to agree with his rival, joking Tuesday that it should be renamed "The Tomorrow Show.") O'Brien also could argue that by replacing his show with something starring the former host of "The Tonight Show," NBC effectively breached his agreement because viewers would believe that Leno is hosting the "real" "Tonight Show," regardless of its name. NBC could be in violation of the state's requirement that parties negotiate deals in good faith. Again, NBC would likely point to O'Brien's deal and ask where it specifies that it can't hire Leno to do another show.
NBC's late-night TV troubles are proving embarrassing and costly for the network -- but the drama could pay dividends down the road: it could draw more viewers to the network, media executives and advertising experts said. "Controversy is sometimes great PR and could reinvigorate Leno's show. More viewers may turn in out of curiosity," said Gabelli & Co analyst Christopher Marangi. Analysts and industry executives think that NBC will put on a tried-and-true staple like "Law & Order" at 10 p.m. until they have new scripted programming in place. Some believe the move could boost NBC in the hot market for last-minute ad spots at the expense of its competitors. "While we don't anticipate that NBC's ratings fall will completely reverse as they introduce new 10 p.m. programming and return Jay Leno to late-night, these changes could slightly impact NBC's competitors who have gained relative share on the national and local level," Michael Nathanson, an analyst with Bernstein, said in a research report.
No doubt, a stronger 10 p.m. show could help the NBC station owner and negatively affect rival CBS, ABC and FOX local stations including owned and operated stations. When all the dust settles it could be a benefit for NBC. They had offered deep discounts and may be able to command better pricing for the 10 o'clock scatter market now. In the short-term, the network's going to take a hit. They're radically changing their schedule on short notice, but longer term, they'll put scripted programming and the best of their pilots on and they'll come out ahead of where they are now. Michael Nathanson an analyst with Bernstein said, "Looking into the 2010-2011 and 2011-2012 season, the network should be re-programmed and rescheduled and should be getting higher ratings than what they have been with Leno at 10 p.m." Others see this episode as a setback. "They have a hole in the programming and will now have to spend about $300 million a year to put programming back and rush it, which does not necessarily guarantee success, versus $100 million they spent for the Leno show," said RBC analyst David Bank, who thinks that it might annoy advertisers. And there are also concerns Leno faces an uphill battle to reclaim his ratings and advertisers after suffering a drop in his audience during the prime-time experiment.
ABC television entertainment chief Stephen McPherson said, "Seeing a great network tumble is not something we rejoice over. We are all competitive but we want a vibrant TV landscape...We want them (NBC) to be a good competitor." David Letterman, the host of CBS' "Late Show with David Letterman" said in his opening monologue. "Things are getting interesting in late-night television. Chaos and craziness and mayhem — a couple of minutes ago, Conan O'Brien ... announced that he would not follow Jay Leno at 12:05. Yeah, so you know what this means — that's right, I knocked off another competitor."
Monday, January 11, 2010
10 brand and marketing trends for 2010
Niels Bohr once noted that "prediction is very difficult, especially about the future," but then he didn't have access to predictive loyalty metrics. As they measure the direction and velocity of consumer values 12 to 18 months in advance of the marketplace and consumer articulations of category needs and expectations, they identify future trends with uncanny accuracy.
Having examined these measures, Robert Passikoff of Brand Keys offers 10 trends for marketers for 2010 that will have direct consequences to the success — or failure — of next year's branding and marketing efforts.
1) Value is the new black
Consumer spending, even on sale items, will continue to be replaced by a reason-to-buy at all. This spells trouble for brands with no authentic meaning, whether high-end or low.
2) Brands increasingly a surrogate for "value"
What makes goods and services valuable will increasingly be what's wrapped up in the brand and what it stands for. Why J Crew instead of The Gap? J Crew stands for a new era in careful chic — being smart and stylish. The first family's support of the brand doesn't hurt either.
3) Brand differentiation is brand value
The unique meaning of a brand will increase in importance as generic features continue to plague the brand landscape. Awareness as a meaningful market force has long been obsolete, and differentiation will be critical for success — meaning sales and profitability.
4) "Because I said so" is so over
Brand values can be established as a brand identity, but they must believably exist in the mind of the consumer. A brand can't just say it stands for something and make it so. The consumer will decide, making it more important than ever for a brand to have measures of authenticity that will aid in brand differentiation and consumer engagement.
5) Consumer expectations are growing
Brands are barely keeping up with consumer expectations now. Every day consumers adopt and devour the latest technologies and innovations, and hunger for more. Smarter marketers will identify and capitalize on unmet expectations. Those brands that understand where the strongest expectations exist will be the brands that survive — and prosper.
6) Old tricks don't work/won't work anymore
In case your brand didn't get the memo, here it is: Consumers are on to brands trying to play their emotions for profit. In the wake of the financial debacle of this past year, people are more aware then ever of the hollowness of bank ads that claim "we're all in this together" when those same banks have rescinded their credit and turned their retirement plan into case studies. The same is true for insincere celebrity pairings: think Seinfeld and Microsoft, or Tiger Woods and Buick. Celebrity values and brand values need to be in concert, that's authenticity.
7) They won't need to know you to love you
As the buying space becomes even more online-driven and international (and uncontrolled by brands and corporations), front-end awareness will become less important. A brand with the right street cred can go viral in days, with awareness following, not leading, the conversation. After all, everybody knows GM, but nobody's buying their cars.
8) It's not just buzz
Conversation and community is all; eBay thrives based on consumer feedback. If consumers trust the community, they will extend trust to the brand. Not just word of mouth, but the right word of mouth within the community. This means the coming of a new era of customer care.
9) They're talking to each other before talking to the brand
Social networking and exchange of information outside of the brand space will increase. Look for more websites using Facebook Connect to share information with the friends from those sites. More companies will become members of LinkedIn. Twitter users will spend more money on the Internet than those who don't tweet.
10) Engagement is not a fad. It's the way today's consumers do business
Marketers will come to accept that there are four engagement methods including Platform (TV; online), Context (Program; webpage), Message (Ad or Communication), and Experience (Store/Event). But there is only one objective for the future: Brand Engagement. Marketers will continue realize that attaining real brand engagement is impossible using out- dated attitudinal models.
Accommodating these trends will require a paradigm change on the parts of some companies. But whether a brand does something about it or not, the future is where it's going to spend the rest of its life. How long that life lasts is up to the brand, determined by how it responds to today's reality.
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