TV Ad Market Picks Up
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ThE MaStEr
2010-09-27
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TV Ad Market Picks Up
Viacom, Time Warner Optimistic They’ll Maintain Some Momentum
By Mike Farrell -- , 9/27/2010 12:01:00 AM
Building on strong gains in the second quarter, two top cable-programming executives said last week that the domestic advertising market continues to show signs of life and that momentum should continue for the rest of the year.
At Viacom, which has lagged the rest of the cable industry in domestic ad sales growth over the past several quarters, the third quarter is expected to be even better than the previous threemonth period, according to CEO Philippe Dauman. Building on robust ratings from reality hits like MTV’s Jersey Shore and comedy programming like Comedy Central’s The Daily Show With Jon Stewart — and with a crop of new advertisers coming into the mix — Dauman said at the Goldman Sachs Communacopia conference last week that third-quarter domestic ad sales will rise by more than 4% (the second-quarter mark) and the fourth-quarter growth will be even higher.
First-quarter U.S. ad sales rose about 1% at Viacom, which includes MTV: Music Television, Comedy Central, BET, TV Land, and Nickelodeon and second-quarter growth was 4%. In contrast, Discovery Communications saw domestic ad revenue rise 9% in the first quarter and 13% in the second quarter.
But Dauman was encouraged by ratings growth — he said that MTV’s overall ratings are up 28% this year. And he added that the top 10 shows in the 12-to-34 year old demographic are all MTV programming, and the No. 11 show in the age bracket is Nickelodeon’s iCarly, a show targeted at tweens. “It’s not just the Jersey Shore,” Dauman said of MTV’s hits.
SCATTER ON THE RISE
At Time Warner, which includes cable powerhouses CNN, TBS and TNT, chief financial officer John Martin said that the ad market continues to be “really strong,” adding that scatter pricing is up 20% in some cases over the upfront.
The two men differed slightly in their approaches to online video distribution, with Martin predictably embracing the TV Everywhere concept pioneered by Time Warner and Comcast and Dauman taking a more wait and see attitude.
“I can’t remember a time when our content had more demand around it. There are more and more players that want to help us try to monetize our content,” Martin said at Communacopia. “We have a very strong view that digital is going to be good for our business.”
Dauman pointed to Viacom’s own Epix partnership and its recent streaming deal with Netflix as an example of how online distribution can work. It has been reported that the five year deal is worth about $1 billion. But he said other online venues — notably Apple TV — are not quite as appealing.
Nevertheless, Dauman said Viacom is following developments at Hulu and is in tests with several distributors (cable, satellite and telco) with TV Everywhere. With TV Everywhere, Dauman said that questions remain regarding the user interface and whether the service will be measured by a ratings company like Nielsen to allow the networks to monetize the content.
“We’re working with the players there. Once all those things get figured out, it can be a valuable service for consumers and should be good for us,” Dauman said.
NOT OVER-THE-TOP YET
On the subject of over-the-top video, Martin said that Time Warner would not undermine its own economics by endangering its relationships with traditional distributors. And though Martin said that at the moment over-the-top video does not offer a compelling customer experience, his company is poised to take advantage of any shifts in the landscape.
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