August 8, 2011 – 12:03 am
Here's today's TVexchanger.com news round-up... Want it by email? Sign-up here.
Targeted TV's True Test
For investors and media companies, the last week was a time of nervousness and gloom with all-too-brief glimmers of hope. The plunging stock market indices, topped off by Standard & Poor’s unprecedented downgrade of the U.S.’s credit rating, mixed with positive earnings results – thanks in large part to cable TV revenues -- from companies like CBS and Viacom.
So with fears of a double dip recession seeming more serious, what does this mean for advertising and targeted TV? At the moment, growth projections remain stable.
AdAge’s Bradley Johnson’s call for calm provides a good deal of common sense-based relief. Take a look at advertising bellwether Procter & Gamble, which has raised its ad spending this year by 8 percent to a record $9.3 billion so far. The packaged goods marketer expects sales to continue to rise between 5 percent to 9 percent and has said it will increase ad spending accordingly. That’s very good news for TV, considering that P&G is the biggest U.S. spender on cable TV.
Targeted TV’s promise of clear return on investment and efficiency is certainly in the ad format’s favor. The space is still nascent and has plenty of room to grow. Even the bad economy represents a silver lining, as tough times tend to spur marketers to shift spending to more direct kinds of advertising. The next few months will offer a true test to see whether the main providers of targeted TV advertising are ready to make good on the space’s promise.
Still, the market goes up and it goes down, but the larger trends for the over-the-top TV and VOD space appear as secure as ever.
In a report issued last Thursday, electronics industry consultant IMS Research, looking way out to 2016, says OTT video services will generate $16.4 billion in 2016 and video-on-demand (VOD) services from pay-TV operators will generate another $14.7 billion, for a combined $31.1 billion in on-demand revenues. More details in the release.
Dentsu's 'Japanese Hulu'
Considering all the economic, environmental and human suffering that Japan has experienced following last spring’s tsunami and nuclear catastrophe, the movements on the targeted TV ad front are particularly inspiring.
Dentsu, Japan’s largest ad agency, has assembled five of the country’s leading broadcasters to on an advertising venture designed to let consumers watch both TV shows and related online episodes via a single point of entry, the Nikkei business daily reported (via Reuters). Instead of asking viewers to visit five different broadcast sites, the agency and the TV networks are creating a Hulu-like portal that will run about 6,500 shows.
Although Asian manufacturers have been ramping up production of connected TV’s, particularly through Japan-based Sony Bravia’s line and South Korea’s Samsung, most TV receivers in Japan are not equipped for connected TV watching. There’s an existing industry initiative to add that capability to the nation’s TV sets, and the Dentsu project is timed to take advantage of those efforts. The ad agency and its broadcast partners are aiming to have the cross-platform TV program available by next spring.
Although similar to Hulu Plus, which charges $7.99 for a month’s worth of unlimited viewing, the unnamed Japanese service will charge 300 yen (about $3.89) per one-hour episode.
Rentrak’s Value Misunderstood?
Rentrak CEO Bill Livek feels investors just don’t get the VOD measurement company, which saw its total revenues and share price drop recently. In an attempt to show his personal confidence in the company’s worth, Livek bought $350,000 to buy Rentrak shares over the past four months, which is more than his annual cash compensation, Mediapost’s David Goetzl reported.
The data provider’s stock has fallen 37 percent over the past year, according to Dow Jones Newswires. One reason company investors and Livek don’t see eye-to-eye is Rentrak’s uneven performance in Q2. In its earnings release, Rentrak saw revenues slide 8.9 percent to $22.4 million, while Q2 profits were $113,000 compared to $1.3 million the same period the year before.
At the same time, revenues for its core measurement business, which includes tracking for national networks and local stations, rose a healthy 13 percent to $9.1 million.
That increase does highlight the company’s progress. There are currently 80 local stations using its data and it also struck a key deal with Omnicom.
The company is also looking to independent producers as part of an effort to diversify its client base. Rentrak says it will data for the brand-marketing company ARC Entertainment, which is distributing the Sarah Palin documentary The Undefeated on VOD within the next few weeks.
But Wait. There’s More!
- Kantar denies ‘stealing’ TRA secrets during merger talks – Research Magazine
- Rovi Sues Hulu for Patent Infringement – PCMag.com
- Rovi Kicks Off Targeted TV Ads For Connected Devices In Canada – Vision2Mobile
- Clearwire To Take LTE Plunge – Multichannel News
- Lucid Commerce Raises $8 Million Series C Financing From Rho Ventures – Press release
August 8, 2011 – 12:03 am