We usually start off our day with Media Bistro’s news roundup — as goes advertising and circ, so goes entertainment — and today’s state of the industries leaves nothing but a blasted heath crawling with robot soldiers watching Hulu on their Androids in its wake. Let’s take a look around, shall we?
¶ Perhaps most germane to our own situation, with Time Warner officially announcing plans to divest AOL, Newsweek declares the end of the giant media conglomerate:
It’s an idea that was born when Time Inc. merged with Warner Communications Corp. in 1989, to form Time Warner. It endured as the industry’s prevailing business model for nearly a generation, spawning such clones and mongrel breeds as Viacom, News Corp and GE’s NBC Universal. The vertically integrated media conglomerate was—or was supposed to be—many amazing things, giving a handful of companies unprecedented power over the media—and the chance to earn outsized profits in the process. But its defining characteristic was its sheer size, earning it a fitting nickname: Big Media.
We’re a little skeptical that giant congloms controlling content has totally gone away (¿Google?) but no questions that a lot of them didn’t work out quite the way they were planned.
¶ That said, this year’s upfront TV advertising revenues could be down as much as 20 percent:
Early predictions for this year’s TV-upfront market are grim. The betting on Wall Street is that the broadcast networks will see a 10% to 20% decline from the about $9.23 billion in commitments from marketers secured last year, which could mean the networks will be lucky to notch a take between $7.4 billion and $8.2 billion.
¶ AND Swedish-based Metro International is selling off its network of US free papers, while keeping on operations in other countries:
Metro Int’s finance officer Anders Kronborg said the sale of the loss-making US operations was part of the company’s strategy to get through the economic and financial crisis.
This also includes the closure of Metro’s Spanish operations, announced in January, and savings made from relocating the company’s head office from London to Stockholm.
“I don’t see any growth in the market this year or in 2010,” Kronborg said. Meanwhile, Metro Int is focusing on Latin America, Asia and Russia, where the prospects for the advertising market are better than in the US and Europe.
¶ PLUS — the New York Times has pretty much mortgaged its future to a loan shark.
BUT, a few people are still scheming about ways to make money.
¶ Hulu is turning out to be the wave of the future:
With 42 million viewers in March — an audience nearly twice the size of TV’s most popular show, Fox’s “American Idol” — Hulu whizzed past Yahoo and Microsoft’s MSN, and is now nipping at the heels of Google’s YouTube.
“Hulu has certainly exceeded all of our expectations,” said Jean-Briac Perrette, NBC Universal’s president of digital distribution. “We’ve come a long way from Clown Co.”
¶ And that same American Idol that is now the benchmark for successful IPM is increasingly relying on licensing and brand extensions to augment and replace that ad revenue:
Despite losing viewers in each of the last three years, “American Idol,” still the top-rated series on television, is generating ever-growing profits for its creators and, it appears, for Fox Broadcasting through brand extensions, marketing arrangements and licensing fees.
The deals, which include products as disparate as ice cream and trading cards, as well as the more familiar partnerships with iTunes and AT&T, have driven tremendous growth in the profitability of “American Idol,” according to the public financial statements of the parent of 19 Entertainment, the company founded by Simon Fuller, the creator of the show.
¶ And finally, remember how News Corp will make readers pay “handsomely” for online content? So what’s the plan? MICRO-PAYMENTS.
News Corp is planning to introduce “micro payments” for individual articles and premium subscriptions to the Wall Street Journal’s website, WSJ Managing Editor Robert Thomson said on Sunday.
“It’s a payments system — once we have your details we will be able to charge you according to what you read, in particular, a high price for specialist material,” Thomson said in an e-mailed response to Reuters questions.
Earlier the Financial Times said the move would be a milestone in the news industry’s search for better business models for online outlets and quoted Thomson as saying the micro payments service would launch this autumn. (Reporting by David Holmes in London and Robert MacMillan in New York, editing by Leslie Gevirtz)
[Cartoon © Milt Priggee, from Daryl Cagle’s website.]