UBS 2015 Final Final WithNotes
UBS 2015 Final Final WithNotes
UBS 2015 Final Final WithNotes
Good Morning
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The majority of the Top 10 cable networks are down from last
season in the key demos.
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If you broaden the view to encompass all of the Nielsenmeasured networks, you see a two-to-one ratio of down
networks to up networks .
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The important summer season did not see the arrival of any
new strong cable programs and many of the bigger summer
cable franchise program s experienced significant declines.
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Last fall was a particularly strong one for the networks in the
introduction of successful new series.
While this season has not quite matched that performance, it
has been a solid year, significantly better than 2013.
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Here are the results for LIMITLESS, one of this seasons top
performers.
When you add up the DVR time-shifted viewing beyond the
day of the telecast, plus the VOD viewing and the online
Streaming of this program, the total audience adds up to
almost 16 million viewers, 62% more than the Live+Same
Day audience of just under ten million.
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Through the first two months of the new season, we are not
seeing significant increases in the sources of time-shifted
viewing compared to those early, post-digital conversion
years.
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The DVR, with its ad skipping feature, has been the most
problematic of the new time-shifted viewing options for the
broadcast networks. If, in fact, younger viewers are moving
to VOD and Streaming, where their viewing will be fully
monetized, that is welcome news to these networks.
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This point becomes even more critical when we see that the
length of time from the Live broadcast to the DVR playback
of that broadcast is lengthening.
This post-seven day time-shifting is currently not monetized
by the broadcast networks. If they can convert it to VOD or
Streaming, it would be of value.
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I would like to point out that CBS has accounted for much of
the gains in these non-prime dayparts.
To conclude this portion of the presentation, I do not
anticipate that any performance issues will significantly
impact the broadcast networks ability to take advantage of
the stronger demand now being seen in the Scatter market.
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The first reason for the lower reported viewing levels is a change in
the measurement itself. Nielsen is now including Broadband Only
homes in the base sample. From last season to this season, these
homes have grown from 2.6% to 3.2% of the sample.
Broadband Only households are defined as homes having a TV or
monitor with a broadband connection capable of showing online video
and no TV or monitor connected to a traditional source.
Needless to say, Broadband Only homes watch very little traditional
television. Their inclusion in the sample, therefore, lowers the overall
HUTs and PUTs. However, the little that they do view is added to the
audiences of the programs viewed.
The concern about adding these homes at this time is whether the
increases shown in the number of these homes are a function of real
growth in this type of household or Nielsen improving in its ability in
recognizing and effectively recruiting these homes.
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(Build 1)
Nielsen is reporting no change in the number of Broadcast
Only Homes with High Speed Internet. Last year, that
percentage had grown from 5.0% to 5.6%.
(Build 2)
On the other hand, Broadcast Only Homes without high
speed Internet did continue to show growth, up 0.6% points.
(Build 3)
This change is good for broadcasters, since, in these homes,
they are losing their cable competition and not getting any
new internet competition.
(Build 4)
Netflix continues to add homes, albeit at a slower pace. This
years gain of 6% points is just half of last years 12%
increase in subscriber homes.
(Double click to go to next slide)
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You can see from this chart that viewers in Netflix homes do
not confine their streaming to Netflix alone. You can also see
that they are more likely to record more than less streaming
activity to all of the streaming options.
Some of this streaming of television programs by Netflix
households is to the broadcast network programs on the
broadcast network websites.
But that viewing does not constitute the total involvement of
the broadcast networks. These networks also license past
episodes of their programs to Netflix and other SVOD
players.
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framework?
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Are the Millennials truly different from previous generations? Will they
continue to stay away from television viewing as they age?
I have had to deal with this question twice before in my career. First, it was
whether the anti-establishment Baby Boomers would embrace alternative
media. Next, it was whether the Gen Xers, the so-called MTV generation,
would continue to reject the broadcast networks programming.
Lets see what happened.
(Build#1)
This three year snapshot of viewing patterns for 1990, 2001 and 2006 shows
that as these generations aged, their amount of television viewing increased
as well. The percentages were essentially the same for all three years.
The current question is whether the Millennial generation will follow this
pattern or continue to deviate from the path of previous generations.
The leading edge of the Millennials has now moved from the 18-24 to the 2534 age segment. How has their viewing changed as they made this
transition?
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(Build#2)
They clearly appear to be following the pattern of previous
generations.
(Build#3)
TV viewing increased slightly more than the historical pattern to
+44%, as Millennials moved past 25.
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(Build#1)
When we focus on the viewing of the primetime broadcast programs,
(Build#2)
the Millennials are shifting their viewing towards these programs
(Build#3)
at a far faster rate than previous generations, albeit coming from a lower
base.
And remember this is measured viewing. A significant amount of their
viewing of broadcast network programming is through distribution
sources not yet included in this viewership total, distribution sources
that were not available to previous generations.
The fact is that, when it comes to popular television programs, young
adults have always enjoyed them as much as older adults. The
difference in viewing levels has always been life stage related. Younger
adults spend less time in the home where measured television viewing
takes place. This is particularly true of the Millennial generation.
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Here are the results of the Fall 2015 fusion of the Nielsen
Peoplemeter results and the Media Landscape
segmentation.
The composite ratings for the four networks vary somewhat
by segment, but the pattern is similar to the overall viewing
pattern.
CBS, the overall number one network, is number one in 5 of
the 7 categories and a close second in the other two.
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And here are the top ten non-sports programs. Note how
many of the same programs can be found on all of the lists.
Certainly, the members of the Digital Selectives and the TV
Traditionalists could not be more different in life stage,
lifestyle and demographic composition. Yet. six of the top 10
programs are common to both segments.
Despite what you may have heard, the top broadcast
programs still have universal appeal.
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Now lets move to the 4th quarter of 2014. We see that both
brands have now abandoned broadcast prime and both
brands have also seen significant drops in their weekly
reach.
Lets look a little deeper at the comparative reach of the
campaigns.
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Together the two brands only reached about one half of the
category buyers each week.
Almost three-quarters of those buyers saw ads from both
brands. Brand A had more buyers exposed to their ads
exclusively, 15% compared to 11% for Brand B.
Lets look at how each brand did with the buyers that saw
both ads and the buyers that just saw the one brands ads.
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First, Brand A.
We see that those exposed to their ads exclusively
accounted for 7% more in revenue than those that were not
exposed to their ads.
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Not only does this increase the weekly reach, it increases the
overall campaign reach and it accelerates the reach build-up
trajectory.
It also increases the all-important Effective Reach level from
17.5 to 19.5%
Bottom line, either of these brands could have gained a
significant competitive advantage by adding broadcast prime
to their schedule, broadcast prime that had delivered a
positive ROI for them in the past.
Instead, they both cut out broadcast prime and reduced what
was a positive ROI TV campaign.
Bottom line, both brands lost market share and had sales
declines.
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Again, the return for the CBS programs was higher, +7.5%...
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.I would also remind you that through the years research has
shown that the longer term, brand equity building value of
television advertising multiplies the full ROI provided by
television advertising.
This historical work was confirmed by a major study
conducted by CBS, Nielsen and Kelloggs and first presented
at the ARF Audience Measurement Conference in June of
2014.
That initial work was then expanded and presented again at
this years annual ARF Conference.
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To measure
the wisdom of this tactic, we had Nielsen do a complete
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reach/frequency analysis of the actual television and digital schedules
for over 300 brands covering a range of budgets, digital/TV mixes and
product categories.
Since the goal stated by many advertisers in most cases is to extend
the reach of the television campaign, we first looked at the reach of the
television and digital portions separately.
As you can see, the digital campaigns reached far less HHs in the
target categories. Over the 300 campaigns, the maximum threshold for
the digital campaigns was around 40% compared to the maximum
threshold of the television campaigns of around 80%.
If I could have you remember just one slide from this presentation, this
would be the slide.
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