The Sternberg Report

Intro to Fall TV Preview Edition

Following is an exerpt from my introduction of Baseline's latest Primetime TV Insight report, the Fall Preview Edition.

In the 1960s, media philosopher and visionary, Marshal McLuhan, dubbed the new electronic media world of television a global village.  For the first time, people at opposite ends of the country were able to simultaneously see and hear live events as they were happening.

 

Nearly 50 years later, the global village has become a personal village.  People still have access to the same information at the same time, but they no longer have to access it at the same time, on the same platform, on the same device, or even at the same speed. 

 

Over the past five decades, television has undergone several fundamental changes, each affecting not only what programming is available to view, but also when, where, and how it can be viewed.

 

The remote control, which started gaining widespread use during the late 1970s/early 1980s enabled viewers to switch channels at will, and affected the way both commercials and programs were structured. 

 

The home VCR, started to grow during the late-1980s, eventually being owned by more than 90% of all TV households.  While having a major impact on daytime soap operas (many of which had high degrees of time-shifted viewing), the average delayed viewing impact on primetime television never really exceeded 5 or 6%.  But watching pre-recorded videocassettes became a major new use of the television set, and had a strong contributing affect on the broadcast networks giving up on original scripted Saturday programming.

 

At the same time, as more and more people started receiving cable television, the number of channels available to the average home started to rise.  This started to give people more choices, and the phrase “audience fragmentation” entered the media lexicon.  Pre-digital, cable systems had limited channel capacity.  As recently as 1990, the average home could only receive 33 channels.  This grew to 61 in 2000, and stands at more than 150 today.  In 2000, only 11% of the U.S. could receive 100 or more channels.  By 2010 that had grown to more than 75%.

 

In 2005, the first video iPod was released.  The same year, Disney made a deal with Apple to make episodes of several of its series, such as Desperate Housewives and Lost available to download via iTunes (for $1.99 an episode) soon after the initial broadcast.  This ushered in a new era whereby old and current television content would be made available to view online and through mobile devices.

 

In 2008, hulu, a joint venture between Newscorp (FOX) and NBC was launched (Disney joined the following year). Containing commercials, Hulu allowed users to view current television series episodes for free.  This was one of the contributing factors turning FOX’s Glee into a hit, as the pilot episode, as well as various clips and behind-the-scenes footage was available throughout the summer leading up to the show’s fall premiere.  Hulu is now second only to Youtube in terms of the number of video streams each month.

 

Hulu Pus, a monthly subscription service debuted in 2010.  Also containing commercials, it offers an expanded content library in the form of full seasons and more episodes of shows already available on hulu.

 

In 2010 Apple released the iPad, followed by the iPad 2 in 2011.  Similar tablets (most notably Samsung’s Android Galaxy Tab) from several other companies were quickly rolled out.  While not yet widely owned (10-15% of the U.S.) mobile video viewing is poised to grow significantly over the next few years.  

 

DVR penetration continues to inch upward.  By the start of next season, 40% of homes will own at least one DVR, while the percent penetration among adults 18-49 and 25-54 will be approaching 50%.  Unlike VCRs, which never lived up to the promise (or threat) of allowing viewers to program their own networks to watch at their leisure, DVRs are doing just that – and making commercial avoidance easier than ever.  For many of the most popular scripted series, the percentage of live viewing is diminishing each season (and the bulk of time-shifted viewing includes fast-forwarding through commercials).

 

At the same time that DVRs, hulu, and mobile media were starting to grow, social media, in the form of Facebook and Twitter, among others, was becoming more prevalent in people’s lives. 

 

During their recent upfront presentations, all the broadcast networks talked about how they are utilizing social media to enhance the experience of their content exposure to their fans.  CW has taken the lead in incorporating social media into their advertising plans.  But the current impact of social media on television viewing is unclear.  It seems to be able to have some impact on special event programming, but there is no evidence that it has yet moved the TV ratings needle at all.  It may have contributed to both Chuck and Fringe being renewed, but hasn’t added viewers (at least as measured by Nielsen).

 

At this writing, an amazing 13.8 million people “like” Glee and Grey’s Anatomy on Facebook.  About 7 million like The Vampire Diaries and 9 million like Gossip Girls (both on CW). Nearly 8 million fans like The Office and Desperate Housewives on Facebook.  These shows might be expected to draw lots of Facebook fans.  But more than 7 million fans like Criminal Minds, 11 million like NCIS, and more than 6 million like CSI – all older skewing series on TV.  It’s interesting to note that the DVR time-shifted audience is about 10 years younger than the live TV audience.  The social media fan base is likely at least that much younger.

 

What all this means going forward is unclear.  The only thing that is clear is that social media does not take away from TV viewing – it has the potential to tremendously enhance it.  Everyone is trying to figure out the best approaches.

 

TV May Be Everywhere, But Research is Still Nowhere

Through all these sea changes in the viewing environment, the basic unit of TV audience measurement, used as marketplace currency, has remained essentially unchanged. Since the 1960s, when three broadcast networks accounted for 90 percent of all viewing, and were the conduits for Mr. McLuhan’s global village, the way Nielsen measures the average minute has not evolved. 

 

In that pre-remote-control era, when it took a minute or more for someone to actually get off the couch and change the channel, it didn’t really matter much how Nielsen chose to measure the average minute.  Minutes were simply averaged up to the program rating, and no one thought about any potential need for more granular data.

 

Today, of course, people can easily switch channels a dozen times in a minute.  Nielsen can’t really pick up all that activity.  Today, 40% of homes have DVRs and time-shift much of their viewing.  Most DVR playback involves the use of fast-forwarding through commercials.  Nielsen, even after switching to C3, can’t accurately measure fast-forwarding.  Now Nielsen is trying to measure online video streaming and cross-platform viewing.

 

We guess the real question is, can relatively small samples still accurately measure an increasingly more diverse and segmented viewing environment.  The whole idea of a sample is that you and your cohorts have similar viewing patterns.  In other words, there are a dozen or so factors Nielsen uses to determine which homes are like which other homes (presence of children, primary language, income, etc.).  Up until to the early 1990s, when the average home could get only 30-40 channels, it worked quite well.  If I was watching Seinfeld, chances are someone else of my age, income, household makeup, and other factors Nielsen decides are significant, was also watching Seinfeld. 

 

I question whether that is necessarily true today.  I happen to have more than 200 channels, three DVRs, and DirecTV.  I happen to like poker, while someone else who is otherwise exactly like me in every measurable way – wife, 12-year-old son, same type of job, same income, same level of education, etc., happens to hate poker – but loves going to flea markets.  Well, I might be watching ESPN’s World Series of Poker, which I taped three days ago, while he’s watching Antique Roadshow.  How can Nielsen possibly take our differing niche interests into account and project it out on a national basis?  This is why census-like set-top data is important.  So important, in fact, that it would be better to use just set-top household data than Nielsen age/sex data.  If only the industry could get set-top data that actually covers a representative portion of the entire country.

 

People still like watching TV at home on a television set.  We can spend all the time we like talking about how the industry should buy and sell programs and commercials.  We can talk all we want about flaws in current measurement systems.  Consumers don’t really care.  They still just want to relax and be entertained. 

 

Despite new devices designed to speed up or make viewing more convenient, and despite multiple new platforms on which to download and watch videos, one simple fact remains – the combined ad-supported broadcast and cable television ratings are remarkably stable from year to year across virtually all age groups.

 

That’s because television is the only medium where the message is still, sit back, relax, let us entertain you, bring your friends and family along, you can interact if you want, but you don’t need to – still an incredibly appealing prospect to most people – especially those of us who work for a living (or spend much of the day seeking work).

Listen Up TV, Marketing, and Advertising Executives: I'm Not My Father

In less than a month I will turn 55.  This is a significant number in the world of television programming, marketing, and advertising.

Having already moved out of the 18-49 demographic, I am about to move out of the key 25-54 group and become part of the dreaded and nebulous 55+ category. 

What will happen between now and next month that will change how advertisers and networks see me? 

I will still have more disposable income than ever.  I will still watch lots of TV. go to lots of movies, and buy lots of stuff.  I will still use numerous mobile devices, from my blackberry to my iPad2.  I will still subscribe to Netflix, have three DVRs (and time-shift most of my viewing), stream video, text, and spend a good deal of time on Facebook.  I will still play games with my 12-year-old son on Playstation 3 and Wii.  And I will continue to try new brands (at least those who acknowledge I exist).

But advertisers, marketers, and networks will now see me as though I was part of my father's generation.  I am not.  Ignore me and those like me at your own risk.

When my father was my age his son had already graduated from college, moved out of the house, and started working.  I have a 12-year-old son, and have probably spent more money this year on video games than on food.

My dad grew up during the Depression, which resulted in a whole different way of seeing the world, consuming products, and dealing with money.  I grew up during the 1960s and 1970s, in the heart of the middle-class Baby Boom generation.  

My dad was in the army during World War II.  I turned 18 the year we got out of Vietnam (part of the last group to actually get a draft card, and the first generation in many years not to go to war).

In short, I'm part of a completely different generation from my father, with a completely different mindset.  I was also among the first generation to grow up with television (he grew up with radio).

Three years ago, the Council For Research Excellence (CRE) released its landmark Video Consumer Mapping Study, which dubbed 45-54 year-olds "Digital Boomers."  This group tends to watch television similarly to the next older age group, but uses computers and mobile devices more closely to the next younger age group.

These Digital Boomers are now moving into the 55-64 age group.  Adults 45-64 should be one of the key advertising demos.  It is no coincidence that the average median age of the broadcast networks' primetime audience falls smack in the middle of this group.  They are also the heaviest DVR users.

The very idea of age being the primary driver of media usage may well be an antiquated notion.  My son just moved out of the 6th grade.  When I was his age, my classmates' parents were generally similar in age, income, marital status, and even number of kids per household.  Lifestage didn't matter much when it came to measuring media, because people of a certain age were typically in similar life stages. When I look at my son's class today, I see parents who range in age from their mid-30's to late 50s, half of whom are divorced. 

I have friends who are the same age as me, some with no kids, some with kids in college, some married, some divorced, some single.  I have friends in their 30s and 40s with kids the same age as mine.  Whose media habits are closer too my own?  When it comes to radio listening or what I load on my iPod, probably someone closer to my age (unless my 12-year-old son is in the car).  When it comes to home computer use, what movies I go to see or download, how much I text, or my video game usage, there are almost certainly more similarities to younger parents with kids the same age as mine.  My TV viewing and time-shifting are probably somewhere in the middle.

What's the bottom line?  I forget.  Oh yeah, lifestage trumps age, but if the industry insists on using age/sex as a key metric, 45-64 should be among the most significant groups to target.  

Getting Inspiration from the ARF

I don't go to nearly as many industry conferences as I used to.  But I always try to make sure that the Advertising Research Foundation's (ARF) annual Audience Measurement Symposium is one of them.

This is not because I tend to learn a lot.  I actually think they should find a way for more junior researchers to attend - they would benefit tremendously.  While I don't necessarily learn something I didn't already know, however, I always come away from each day thinking about something I wasn't thinking about before.  I invariably feel revitalized and inspired.

It always makes me realize that there is a lot going on in this business beyond what I do.  There are also a hell of a lot of folks in this industry who are smarter than me.  Hearing different perspectives from extremely talented people i just as important to professional (and personal) growth as learning new things.

This morning's sessions were quite interesting.  OpEd New York Times columnist (among many other pursuits) David Brooks gave a fascinating presentation called "Rethinking Thinking:  What's in Your Cognitive Toolkit?"  Frankly, the title didn't make me think it would be particularly inspiring.  But it was.  How people think and make decisions, the role of emotions, the unconscious, and socialization.  It can't really be covered in this small space, but it made me want to get his book, The Social Animal.

I also liked the panel of journalists, with Stuart Elliot (The New York Times), Chuck Ross (TVWeek.com), and Joe Mandese (Editor-in-Chief, Mediapost), all of whom I know.  I've had many intense discussions with Joe Mandese about the press and how they report on research issues, so I was obviously interested to hear their perspectives.  Given that Dave Marans (EVP, Media, ARF), who, when on the agency side was one of the most heavily quoted executives in the business, was the moderator, I expected some harder-hitting questions, but I still thought it was excellent.

The other morning panels, one covering TV, print, radio, out-of-home (they are purposely avoiding the overused term, "traditional media"), the other covering digital and social media, were also very good.

The one compliant I have is that I think the Concurrent Key Issue Forums contain a number of presentations that should be part of the main conference.  I always have to choose, and wind up missing stuff I want to see.  But I guess that means the ARF staff has chosen the topics wisely. 

Can Traditional, Digital, and Social Media Occupy the Same Space at the Same Time? Notes from Nielsen's Consumer 360 Conference - Part 3

 I just got back home after attending Nielsen's Consumer 360 Conference at the Bellagio hotel in Las Vegas.  This is the third of three blog entries.

Before continuing, I'd just like to comment on how smooth the whole process was, from registration, to the ease of finding the various presentation areas (despite being so spread out).  It's not easy putting on such a large event, and the people behind the scenes who made sure everything ran so seamlessly deserve a lot of credit.  They are too often overlooked for all the hard work they do, so I'd just like to add my "well done!"

I say this every year, but I wish some of the exceellent "Insight" breakout sessions would be scheduled for the general sessions instead.  There were three, in particular, which I think could have benefited all attendees.

Forecasting Consumer Adoption of the Latest Media Technology - Unfortunately I had to miss this one.  But I always anjoy listening to Scott Brown's take on this stuff.  This is certainly a topic worthy of a wider audience.

Converging Platforms: Untangling Video in the Interactive Age - This was one of the more compelling sessions of the conference, and I would think all Nielsen clients would have a stake and interest in this subject.  Howard Shimmel is one of Nielsen's best presenters, and this session shoould have been given a larger stage.

The Council for Research Excellence (CRE) Presents "Viewing in Context" - The work that the CRE has done (and is doing) is some of the best research the industry has ever seen (I say this despite, not because of, the fact that I was heavily involved in the design and implementation of the Video Consumer Mapping Study) - and I thank Laura Cowan for the shout out to me and Sharianne Brill at the start of the presentation.

While research and many media folks are somewhat familiar with the CRE and its groundbreaking work, many other Nielsen clients are not.  This presentation deserved a much larger stage.  At the very least it could have replaced the general session's CRE Highlights and Current Projects presentation.

The fact that I would have liked several of the Insight sessions to be on the larger stage, of course, means that I thought they were excellent, as was the Conference in general.  Good job Nielsen.

 

Can Traditional, Digital, and Social Media Occupy the Same Space at the Same Time? Notes from Nielsen's Consumer 360 Conference - Part 2

 I'm attending Nielsen's Consumer 360 Conference at the Bellagio hotel in Las Vegas.  This is the second of three blog entries.

I've been trying to think of how I feel about the Tuesday afternoon presentations from Nielsen folks.  Virtually everyone I've spoken to thought it was boring and more of the same stuff we've been hearing for years, without nearly enough detail or time-tables for implementing promised improvements.  It could be they were just comparing the afternoon to the excellent morning sessions.

Nielsen's media strategy and product road map is simple, open, and integrated; multi-platform, global (in more than 100 countries), and insights driven (more forward looking).  It sounds good, but we have heard it before.

Extending panels, combining samples, and data ascription (a term I've dreaded since i sat on my first committee - Nielsen's VCR measurement committee) are at once exciting and uncomfortable.  We were asked to trust Nielsen's research expertise to make sure they do these things correctly (or at least acceptably).  "Trust but verify" came to mind.

While I don't necessarily disagree with these complaints, I did come away thinking that Nielsen has made a number of behind-the-scenes (yet very important) areas, and has made inroads in terms of speeding up data delivery (although still far from perfect).  I also got the feeling that Nielsen believes they can accomplish everything they are promising (which has not always been the case).

Nielsen's goal, of course, is to measure everything that people watch, and to have cross-platform measurement in its currency sample so TV Everywhere can become a reality.

When they started talking about advertising effectiveness, they started to lose me.  I readily admit it has a lot to do with my bias against IAG as a robust analytical tool, which is based in part on the fact that I never see any deep analysis of the data, and few people know how to use it or what it means, or how it's derived.

I've heard from Nielsen and other sources, that social media helped the ad recall of the Lost finale increase by 51%.  I don't understand how social media can impact ad recall (aside from the Super Bowl).  I was a regular Lost viewer. The finale was the only episode I watched live in the past three years - because I didn't want to find out what happened before I watched it. I DVR almost every episode.  I'm sure my ad recall for the finale, the only episode where I did not fast-forward through commercials, was up by at least 50%.  Yet I've heard nothing about anyone even looking into this as a potential reason for that increase.  That's what I mean by no deep analysis - just get top-line data and throw it out there without any thoughtful evaluation of what the data means.

I'm heading home tomorrow morning, so my final blog om thr conference will come out on Fruday.  Overall, it's been a very satisfying experience.

 

Can Traditional, Digital, and Social Media Occupy the Same Space at the Same Time? Notes from Nielsen's Consumer 360 Conference - Part 1.

I'm attending Nielsen's Consumer 360 Conference at the Bellagio hotel in Las Vegas.  This is the first of two or three blog entries I'm planning.  Way too much happening to ask you to read it all in one sitting.  This basically just covers Tuesday Morning.

While you can disagree with some of the things Nielsen does (and I often do), these annual get-togethers always highlight the fact that the company has many of the best and most dedicated researchers in the business.  And I invariably leave invigorated, not just by what I hear in the presentations, but from discussions I have with my peers in the hallways and food time.  It always helps keep me grounded when I see how many people in this business are smarter than me.

Common themes included, Social media is changing everything.  It's a digital world.  Mobile video is poised to grow dramatically.  But traditional television remains stronger than ever, as neither the online or mobile screens are cannibalizing the TV audience.  And if people watch it, Nielsen is going to be able to measure it.

Here are some of my random thoughts on the conference...

Facebook COO Sheryl Sandberg gave a fascinating presentation on the wonders of social media.  She asked how many people in the room used email today.  AFter virtually everyone raised their hands, she pointed out that only 11% of teens email daily.  They text.  The implication seemed to be that email usage was going to diminish over time.  I say let's see what happens when those teens become adults and get jobs.

She went on to discuss how social media is changing consumer behavior, and that not long ago it was unthinkable to put your real identity online.  Much of her talk was a sales pitch, but it was interesting nonetheless.  Some highlights...

Facebook enables the creation of communities and has become a major source of communication throughout the world.  Facebook has grown from 150 million to 400 million users worldwide since last year. The average Facebook user has 130 friends, and 50% of users return daily (she cited this as significant, because that 50% return rate has not declined as Facebook's user base has grown - which is unusual and impressive).  She was a bit flippant when asked about privacy concerns, talking about how new technology always changes social mores. 

It was mentioned that people spend about 7 hours per month on Facebook, about 3 times the number 2 website, Yahoo.  Of course, when someone wants to make relatively small numbers look bigger, they talk in terms of monthly usage.  But let's not forget that 7 hours per month is less than 15 minutes per day.  So while it's not yet the major force many claim, there's no question that it is growing.

Nielsen's Vice Chair and EVP, Susan Whiting interviewed ESPN President, George Bodenheimer.  Again, what could have been just a sales pitch was interesting and insightful.

ESPN.s mission is simple - "to serve sports fans (and surround them wherever they are)."  While 80% of ESPN's usage remains on television, the 2nd and 3rd screens are growing (but not cannibalizing traditional TV).

One of Mr. Bodenheimer's more interesting (and I think insightful) comments was that they don't spend a lot of time deliberating when a new device becomes available.  They will go wherever the sports fan might be.  They want "first-mover advantage."  If something doesn't work they move on, if it does work, they stick with it. It sounds simple, but for such a large company to be so nimble is impressive, and one reason ESPN remains the most profitable ad-supported cable network.

ESPN is conducting major cross-platform research into the 2010 FIFA World Cup Soccer event - partnering with Nielsen and several other research companies.  He mentioned that 10% of people who viewed the World Cup this past weekend did so without television.  I would have liked to have seen more initial (even preliminary) findings, but I assume none were yet available.

Kraft Foods Chairman and CEO, Irene Rosenfeld, gave another insightful presentation, which ended with a call to action.  Her theme was "That Was Then, This is Now: Consumer Connections in a Changing World.  Some highlights from her very well received remarks...

In the past, everything was promotion, price, and placement - one ad agency, one message, one group of consumers - they bought national TV and magazines, did some awareness tracking, and waited for the Nielsen ratings to come in.  Now, they have iPhone apps, push notifications, and location-based messaging.

Brands were teachers - they told stories - they outlined a problem and gave the "solution" - in 30-second units with a beginning, middle, and end.  Today brands must be the students, learning what the consumer wants.

It used to be "take it or leave it" (with a single unique selling proposition). Today shared values matter more(she cited Kraft's successful annual Hockeyville contest and promotion in Canada).

Brands used to be thought of as either functional or emotional.  Today they must be both, and she added in cultural as the third leg (citing the pop-culture pairing of Stephen Colbert and Miracle Whip).

In the 80s and 90s it was all about me.  Today it's all about us.

Brands used to say consumers need us (example - "Be Like Mike"). Now, she said, "the paradigm had been turned upside down." Brands need to follow the consumer, she cited how many cream cheese recipes they receive on facebook and twitter from consumers.

The call to action?  The need for deeper consumer understanding.  Developing new, innovative techniques to get consumers to share with us, new real-time measurement tools that can gauge social and cultural values - what are consumers really passionate about?  She ended with, "Act now, the world is waiting for us."  It is indeed.

 

CW's Program Development - Passionate Viewers, Beyond Just on Traditional TV

CW viewers continue to be substantially younger than the other broadcast networks, with roughly half under 35.  FOX's median age is in the mid-40s, CBS in the mid-50s. while ABC and NBC have been hovering around 50 for a couple of years now.

CW also has some of the most passionate and engaged viewers, who don't really care if they're watching something on TV or online.  As the network pointed out at this morning's program development meeting I attended, the amount of video streaming by adults 18-34 has tripled in the past three years.  In addition, CW dramas tend to have the highest degree of DVR playback (a clear sign of a more attentive audience).

But CW is also a prime example of how content viewership is outpacing audience measurement.  The current currency measurement used in the buying and selling of commercial time (which also has much to do with program longevity) is in-home tuning to the average commercial minute on a television set, within three days of the initial broadcast.  This obviously artificially lowers CW's reported audience.  Once Nielsen starts including episode online streaming in its regular peoplemeter ratings, CW as a network will benefit most (although many individual shows on the other networks will benefit as well).

One of the biggest stories, according to CW, has been social networking.  They claimed to be the most followed broadcast network on Twitter (I checked - it's hard to tell because of so manay program and sub-groups, but on a strict network basis, they certainly are).  CW is also up 50% over a year ago on Facebook, with about 6.6 million fans.  Pointing out that they actually picked up the most fans on Top Model, CW correctly believes that Facebook can help shows stay young and keep them alive.

The network acknowledged, however, the "TV still drives everything," and CW will push ahead next season, continuing its laser-focus on women under 35.  It expects to have two new hours of programming (maybe three). They mentioned that the CW brand is well-established, digital is in their DNA (they are always focused on the 3 screens - TV, Online, Mobile) and freshman drama, The Vampire Diaries, has become its number 1 show.

CW announced it has renewed Gossip Girl, 90210, America's Next Top Model, Supernatural, Vampisre Diaries, and Smallville for the fall (if you include ANTM repeats, that accounts for 7 of its 10 hours).  The network touted the critical acclaim and passionate audience of Life Unexpected, but the show has not yet been officially picked up.

Some new shows in development were discussed at this morning's meeting, and a few sounded interesting.  What looks good on paper, can easily change once I see the pilot, but here are the four that seemed most promising at the moment.

Wyoming Project - Soapish drama about a twenty-something horse trainer who inherits his family's ranch in Wyoming (and the responsibilty of raising his three younger sisters after the death of their parents (didn't the same thing happen in Party of Five?).

Hellcats - Drama centering on cheerleaders, described by CW as Bring it On meets Election (if you've never heard of them, you're likely not in the target audience).  Ashley Tisdale (High School Musical) has signed on as a regular.  Inspired, no doubt, by the success of Glee.

Nikita - Based on La Femme Nikita, about a secret government intelligence agency.  CW compared it to Alias, but said it was more grounded.  This might also bring in some younger men to join CW's young female target.

Amy Holden Jones Project - Young woman from a blue-collar town goes to a Harvard-type medical school.

CW, along with the other broadcast nets, will officially unveil their fall schedules in May.  I'll be there to report on them all.

-Steve