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Radio To The Rescue...

 
Monday, September 18, 2023
 
Disney and Charter Communications resolved the latest carriage dispute but it hasn't solved what some are calling the collapse of the pay TV model, where penetration has dropped to less than half of US homes...
 
Meanwhile, radio is being positioned as a way for marketers to recover audiences lost to cord cutting...
 
Media analysts at Moffett Nathanson have coined the phrase "doom loops" to describe two distinct trends conspiring to cause a significant erosion in American pay TV. "Media firms with sports rights keep raising the affiliate fees for cable distributors who pass these costs onto consumers. This causes entertainment viewers to defect from pay TV to streaming," according to Pierre Bouvard of Cumulus Media/Westwood One...
 
"The erosion of the pay TV business model forces media companies to move their best shows to their streaming services rather than their linear networks. This in turn causes entertainment viewers to defect from traditional pay TV to streaming." As a result, some investors are calling for pay TV distributors to stop offering TV services, which would make them more profitable while freeing up a massive amount of bandwidth for broadband internet...
 
Before patching things up with Disney, Charter Communications appeared to be contemplating an exit from the pay TV business. "The video ecosystem is broken," Christopher Winfrey, Charter's President and CEO told investors last week. "We're either moving forward with a new collaborative video model, or we're moving on."
 
Bouvard says the pay TV "doom loops" mean advertisers will see "stunning erosion in cable audiences locally and nationally" during the next several years. "Auto dealers who have relied heavily on spot cable, as have the auto brands, will need another media platform to build their brand and drive sales effect," he writes in this week's Westwood One blog post...
 
During the roughly 11-day blackout on Charter's Spectrum cable service, the reach of Disney networks (ESPN, ABC and Fox) declined by 13.6%, representing 22.3 million viewers, according to MRI-Simmons. Had the blackout not been resolved, ESPN's "Monday Night Football" would have lost 2.2 million viewers, a 13% audience loss. The impact for local advertisers would have been more significant...
 
Reallocating a portion of TV budgets to broadcast radio can generate "significant incremental reach," according to Bouvard. Based on Nielsen Commspoint research, a $1 million national TV buy reaches 14% of persons 25-54. The same $1 million invested in AM/FM radio reaches almost three times as many people - 38% of 25-54s...
 
To buttress his case for advertisers to use radio to fill in the gaps in TV's eroding reach, Bouvard looked at a $15.1 million network TV campaign done by IBM in September 2022 where the majority of the investment (58%) was run on ESPN/ABC. Allocating a modest 9% of the total plan to AM/FM radio would increase reach from 44.5% to 71.5%...
 
"Radio can come to the rescue," Bouvard says in a 10-minute video companion to the blog post. "It can recover lost TV audiences due to the collapse of pay TV and generate significant incremental reach. And with a 10 to 20% reallocation, you can see reach you've never seen before in your media plan as we saw in the example of IBM."
 
Did You Know???
  • Making plant-based meals the default has reduced food-related greenhouse gas emissions by 36% at the New York City Health and Hospitals Corporation, the country’s largest municipal health system...
  • Ticket prices for a recent match between Inter Miami and Los Angeles hovered around $690. For comparison, average MLS ticket prices used to cost $110 before soccer superstar Leo Messi joined the league...
  • This year marks the 25th anniversary of the founding of Google...
  • The first over-the-counter naloxone, a drug used to reverse an opioid overdose, will be available in retail stores and online...
  • The world has experienced the hottest summer on record, according to a new report from the European Union's Copernicus Climate Change Service...
  • Eight years after world leaders approved a landmark agreement in Paris to fight climate change, the first official report card is out: Countries have made only partial progress in staving off the most dangerous effects of global warming...
  • The White House Situation Room has undergone a $50 million renovation to make it even more secure and prevent adversaries from listening in...
  • The Merriam-Webster definition of Gerrymandering: the practice of dividing or arranging a territorial unit into election districts in a way that gives one political party an unfair advantage in elections...
  • Facebook and YouTube have become the internet's most popular social network's among people over 50...
  • By 2034, there will be more Americans past retirement age than there are children...

 

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