ping conservatism_IS_compassion: Note Boriss' designation of journalism as entertainment.
That giant sucking sound you hear is the formation of the unified InterTainment industry. And it’s taking down newspaper, TV news, and Hollywood jobs with it 12/9/07
Posted by Steve Boriss in InterTainment.
trackbackAs the Internet continues its spectacular growth, it has been revealing some shocking truths never before known or long denied. One of them that many will not want to hear is that journalism is entertainment. News, like other forms of entertainment, is almost purely about giving us diversion from the worries of our day-to-day lives. Political happenings give us a sense of belonging to something bigger than ourselves. Sports, entertainment, and human interest features allow us to imagine living more thrilling, glamorous, or emotion-laden lives. Gossip about the troubles of the wealthy, sexy, and successful help us even-up the score with those we envy, feeding our pride to make our own mediocre lives seem more acceptable. And murders, sex crimes, and car accidents quench our all-too-human thirsts for lust and morbid curiosity. Just like all other forms of entertainment, virtually none of what we see in the news has any direct impact on our personal lives - that’s because the Old Media’s falsely-marketed “news we can use” drills-down no deeper than the few interests we have in common with everyone else in our metropolitan areas.
By placing all forms of entertainment, including news, on the same medium, the Internet has launched a Darwinian struggle where the news, entertainment, and video game industries are now direct, head-to-head competitors for the distraction of audiences from their daily concerns. Crueler still, they must also now compete against mere amateurs, talent around the globe, blogs, porn, and also their former selves — their own archives of older articles, older movies, older programs, and older games never before available. That’s why audiences are plunging and pink slips are flying across all media - newspapers, TV, and Hollywood. The emerging, unified Internet entertainment, a.k.a. “InterTainment,” industry is now just one big happy family - but only if you happen to be a member of the audience.
Big media sees reversal of fortune
Slowing DVD sales, ad forecast erasing sector’s first-half gains
By Georg Szalai
Dec 11, 2007
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Wall Street continues to turn sour on media and entertainment stocks heading into 2008, even though several sector biggies already are seeing their stocks near their 52-week lows.
After gains in first-half 2007 for many sector biggies, the second half has brought a reversal for many, with Sony and Viacom the big exceptions among the conglomerates.
Bear Stearns’ Spencer Wang on Monday became the latest analyst to turn bearish on the sector as he cut his rating on the overall industry from “market weight” to “market underweight,” citing slowing DVD sales and slipping TV usage of younger demographics.
The DVD malaise along with lowered advertising market expectations have been key factors that have driven media and entertainment stocks lower in recent weeks.
“The biggest problem is slowly eroding expectations” across the industry, said Lawrence Haverty, portfolio manager at Gamco Investors, pointing to the ad and DVD concerns, as well as a reduced likelihood of big buyouts amid the global credit crunch.
Shares of Time Warner, News Corp., Disney and CBS Corp. have all declined during the second half and are close to their year lows.
Smaller firms with a pure-play entertainment focus also have suffered.
For example, Lionsgate shares closed at $11.03 on June 29, but finished at $9.55 on Monday — down 13.4% since the midyear point and off the $10.73 price as of the end of 2006.
Similarly, DreamWorks Animation’s stock finished the first half at $28.84, down slightly from its 2006 closing price of $29.49. But since the midyear point, it has declined 12.3% to $25.29.
Not all stocks have been depressed though. Sony’s American depository shares are up 6.7% to-date in the second half. The stock has benefited from a continued turnaround in the conglomerate’s electronics business, a strong boxoffice and a recent investment from Dubai. And Viacom shares have bounced higher amid Wall Street confidence that the company’s cable networks are gaining ratings momentum.
Goldman Sachs analyst Anthony Noto was one of the first on Wall Street to downgrade the entertainment sector in the fall. He established a “cautious” rating on the industry in September. He followed that up with a report last month that said there have been numerous company and macro-economic data points since then that have only strengthened his conviction that this was the right call.
A decline in DVD sales momentum is one negative trend that observers have pointed out as of late, and things could get worse from here.
“The DVD market is rolling over and is down 3.5% year-over-year through the third quarter,” Wang noted in Monday’s report. “With little traction on HD so far, pricing pressure and less penetration opportunity left, we believe that the decline in the DVD market will accelerate in 2008 and beyond.”
Pali Research analyst Richard Greenfield echoed Wang’s bearishness on the DVD market in the U.S. In a blog post Monday, he said that his prediction that 2007 would be the first year of decreased consumer spending on DVDs “appears to be coming true.”
Hollywood had hoped the strength of this summer’s boxoffice would boost DVD trends, but “we believe the failure of several key fourth-quarter DVD titles (such as “Spider-Man 3” and “Shrek the Third” among others) will result in a modest decline in 2007 consumer spending on DVDs,” Greenfield said.
Overall, the standard-definition DVD business has matured, catalog sales are “now falling rapidly,” plus TV-DVD sales, which had so far been a pocket of strength, “have reached a plateau,” he added.
Wang also fears that TV networks will start losing more audience reach. “Erosion is more pronounced in the younger 18-49 demo, likely due to broadband penetration now exceeding 50% of U.S. homes,” he said. “This could negatively impact ad spend on TV over time.”
Beyond the DVD and TV usage concerns, the sector also has been thrown into disarray by other factors, including the writers strike.
Longtime media analyst Hal Vogel said the strike could lead to a further disintegration of the ad market. “It may play havoc with the upfront market and opens the possibility that loyalty of viewers will be diminished or lost” further, he said.
This month, key advertising forecasts for 2007 and 2008 already were reduced amid talk of a possible recession in the U.S. and challenges in the local ad market (HR 12/4).
The Beijing Olympics and U.S. presidential election will in 2008 “put a bit of a floor under advertising spending, (but) there will likely be a notable (underlying) reduction anyway, especially from banks and mortgage providers on local TV,” Vogel said. “My guess is ad spending overall will be up only slightly and will be close to flat in real terms.”
Links referenced within this article
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http://www.hollywoodreporter.com/hr/content_display/news/e3i7b442387433f415da0fc3a4160ca133a
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http://www.hollywoodreporter.com/hr/content_display/business/news/e3i673a8f2e7c46c211f9ba331bcef2e14d
http://adage.com/mediaworks/article?article_id=122495
Lingering Strike Threatens $9 Billion Upfront Market
If Walk-Out Continues Through January, Nets Could Be Short on Shows
By Brian Steinberg and Jean Halliday
Published: December 10, 2007
NEW YORK (AdAge.com) — If the writers strike continues until January, it will endanger the $9 billion TV upfront market.
Marketers and agencies have tried for years to change the way TV time is bought and sold, arguing that committing such a large portion of their budgets ahead of the start of the fall season no longer makes sense. And it’s looking increasingly like the Writers Guild of America strike could be the catalyst for retooling the annual May upfront process.
Ed Gentner, senior VP-group client director at MediaVest USA
“If we don’t have any [next-season pilots] developed and we are at the end of the first quarter, I have to believe that’s when everyone is starting to think that the upfront may be in jeopardy,” said Ed Gentner, senior VP-group client director at MediaVest USA. “Once you get beyond January, the traditional network development presentation that is generally in March is probably going to be off.”
Less shrimp come May
Networks typically spend millions of dollars to hype their fall schedules, wooing advertisers during upfront week in May with song-and-dance numbers and huge bowls of shrimp. Those celebrity-studded confabs could be delayed or even canceled next year due to the strike, but some deals still would get done. Without a robust slate of original dramas and sitcoms, however, there won’t be so many.
“If you can’t line up your marketing needs with program availability, you can’t do a deal. It’s irresponsible,” said Jason Kanefsky, senior VP-group account director at MPG.
This is “the quiet before the storm,” said an auto-company marketing executive who requested anonymity. “The longer the strike goes on, the broader the impact.” Already the pipeline is far from brimming. “This time of year, there are usually 70-plus pilots and shows that are in production. They don’t have that bulk of work,” said one executive producer.
Carol Barbee, executive producer of cult favorite “Jericho” on CBS, said while her show would only benefit (a full season is already in the can), the damage could wreak havoc beyond the upfront. “If this goes past January, [the networks] have lost the entire development season, which means that they’ve lost all the new shows and the midseason replacements.”
Network executives, cognizant of continuing negotiations, were not available for comment. But instead of bringing marketer and agency executives together in May for a presentation, networks most likely will opt for a series of private meetings to lay out plans for the summer and beyond. Many advertisers’ budgets are locked in for the rest of 2007, and networks have largely been able to keep original programming on the air. Reality shows and replacement programs are due in 2008. Some of them are of high quality, such as Fox’s “American Idol” and Showtime dramas that could land on CBS. Marketers can judge in early to mid-January, when options open to move around previous ad commitments or even ask for cash back.
Getting ahead
The upfront has shown signs of erosion for the past two years. Johnson & Johnson gained notice by not taking part in the May brouhaha so it could deploy marketing dollars closer to the timing of its business planning. A goal of NBC Universal ad-sales chief Mike Pilot is to get advertisers to discuss ways to tie promo messages to various shows earlier in the cycle.
If the networks manage to do deals in a series of individual meetings, freed from the pressure of getting all of the deals done following group presentations, marketers and agencies may decide they like that way of doing business better.
The strike could accelerate recognition that consumers don’t “revolve around prime time and the networks’ new seasons anymore,” said Rino Scanzoni, chief investment officer for WPP Group’s Group M media-buying consortium. With people using DVRs and watching programming online, a better system of buying and selling needs to be put in place. If the strike were to help people see that, he said, “that might actually be a silver lining.”