This past week Time Warner Cable came close to dropping the Fox Network from its system due to a dispute concerning retransmission fees. In case you aren’t aware, cable companies like Time Warner and Comcast pay networks for transmitting their channels on their systems. For broadcast networks that opt out of must-carry regulation these payments are called retransmission fees. For cable networks they’re called carriage fees. In both cases they have become more important given the recent drop in advertising.

Fox had been asking Time Warner Cable for $1 per subscriber. The counter offer was only $0.30 and SNL Kagan believes that they settled at $0.50 with a likely “increase over the life of the new agreement.” Since most networks receive less than $0.50 per subscriber Fox’s deal seems pretty good but based on Fox’s large audience it’s arguable that they should have gotten more. Fox’s primetime audience is double that of ESPN but its carriage fee is less than a fifth. Using a ratio of carriage fees to primetime ratings points, Fox stands at 0.22, below most networks.

Negotiations between service providers and networks are closely guarded so it is very difficult to ascertain just how deals are struck. Audience ratings are certainly not the only factor. ESPN attracts a lot of “hard-to-get male viewers, and even harder-to-get young male viewers” and its relatively high carriage fee is often justified because of this. Network bundling and company associations can also help boost fees. In any case it’s likely that the difference between network carriage fees, in proportion to their respective audiences, will lessen in the future.

Avatar, James Cameron’s new film, premiered to the public late last night. Since James Cameron’s last movie, Titanic, is currently the number one domestic grossing movie of all time, in the long term Avatar is expected to do well and a lot of articles are appearing that are trying to predict and compare its potential success. The Economist published a chart yesterday comparing the top domestic grossers, ranked by inflation-adjusted dollars as well as accounting for multiple theatrical releases. Under these parameters Titanic drops to the sixth position. The following graph lists the same movies, based on number of tickets sold instead of inflation-adjusted dollars, which is basically the same metric.

Continue reading How big will Avatar be?

The second installment of the “Twilight Saga,” New Moon, had an extremely successful opening last weekend, grossing $142,839,137 domestically, which is the the third highest weekend opening of all time. Unfortunately, the following weekend the movie made substantially less substantially less, only $42,870,031, a drop of over 70% which is much greater than what most movies experience. On average, for the top 100 grossing movies of 2008, titles dropped 50% on the second weekend. Out of the top 100 openings of all time, only New Moon has dropped over 70%. So how or why did New Moon lose its shine?

One factor is surely reviews. Looking at the top 100 second weekend drops it is clear that many of the movies were simply bad. Scathing reviews from critics and bad word of mouth from opening weekend customers can obviously deter people from seeing a movie. An approximation for this relationship can be seen by graphing a movie’s box office (BO) drop to its Rotten Tomatoes (RT) score, a well known index that  averages critics’ reviews into a simple average. Titles that mark above 60% are deemed ‘fresh’ while those below are ‘rotten.’ Taking the titles that had BO drops of over over 70%, in terms of average gross per theater, and plotting them against their RT scores yielded the following graph.

Continue reading New Moon drops big

Yesterday a deal was announced between Univision and YouTube whereby the U.S. Hispanic network would bring a “hefty stable of short- and long-form programming to YouTube.” While this is “the first time any Univision programming is available on the Web outside of its own properties” a great deal of the network’s programming, particularly material from Televisa, has been illegally posted on YouTube. Back in February TubeMogul estimated that this content drawing was over double any other U.S. network.

Number of views of clips from the 10 most-pirated shows on each major network
Univision: 583,750,247*
Fox: 289,074,325
ABC: 260,299,418
CBS: 127,334,729
NBC: 120,890,835
Source: TubeMogul
*Includes Televisa content pirated from El Canal de las Estrellas

As I mentioned in a posting in February, Univision’s view count is mostly attributable to Televisa content, specifically material copied from El Canal de las Estrellas where their telenovelas air months ahead of Univision. Similar to how different regional premieres have encouraged piracy in the movie industry, pirated telenovela clips have flooded YouTube to the delight of thousands of fans.

Continue reading The Wild World of Online Telenovelas

On Sunday night my favorite TV show Mad Men ended its third season. It was a terrific finale and I recommend watching it if you haven’t done so already. The episode’s initial airing had an average audience of 2.3 million, about 31% more than last season’s finale, and the highest audience the show has had since this season’s premiere that drew 2.8 million.

Continue reading Madder than Ever

Apple has an impressive position in the music market. Through its iTunes store, the company currently has a 69% share of the U.S. digital music market and a 25% share of the total U.S. music market. Their position isn’t as strong however in the video market. This is especially apparent when you compare iTunes music and video sales on an average unit sold per user basis.

The iTunes store launched in early 2003 and by the end of the year it had almost 700,000 registered users. With the launches of the iPhone and iPod Touch, iTunes greatly expanded its customer base and they now reach over 100 million users.

Continue reading Apple’s Video Challenge and Probable Success

Last week Ad Age posted the spot prices for the new Fall’s season, based on a “survey of media buying firms.” Combining this information with ratings data for the top 20 programs I compiled approximate CPMs (Cost per Thousand) for the overall audience and the 18-49 demographic.

Most advertisers are not focused on overall audience, since they have far more precise targets for their products or services. In many cases, they also target younger viewers since it’s generally accepted that they’re psychologically they’re less set in their purchasing decisions and more likely to be swayed by marketing messages. This focus on younger viewers has been criticized as “simplistic” by CBS CEO Les Moonves, motivated perhaps to CBS’s dominance of the general audience market. Out of the 20 shows in the following list, 12 are on CBS.

Continue reading Bargain Shopping in Television

The digital video market, being nascent, promising and hot, is the equivalent of a precocious young celebrity. They both attract a lot of attention, press coverage, and debate concerning which projects and relationships are worth pursuing. Of course, I have my own opinion, but just about digital video and not celebrities.

If you divide the digital video market by delivery methods (streaming or downloaded) and business models (consumer paid or ad supported), four sectors emerge.

Continue reading Pause the FF Button

Yesterday TiVo released the results of an examination of how political party affiliation differs among top rated news and primetime programs. The results are based on viewership for July, fed by TiVo’s Stopwatch ratings service, which compiles from a consumer panel of  35,000 volunteer households.

Most of the information released is categorized by either Republican or Democrat partisanship, so it is difficult to compare how a particular program performed across party lines. The full press release detailing the viewership of 40 programs between the two parties can found here. The partisanship strength for the shows is indicated by an “index,” which I roughly equated to being the 18-49 rating divided by the rating of how many Democrat or Republican households watched the program. The following graph lays out all the results with the  18-49 rating on the horizontal axis and the partisanship index on the vertical axis. The news programs, with their relatively low ratings form a cluster on the upper left while the primetime shows form a file in the lower right.

Continue reading Partisanship in TV Audiences

Most of the new broadcast television shows have premiered during the past three weeks and I thought it was time to draw a comparison among the top performers.

The number one show in terms of overall viewers was NCIS, with a total audience of 18.9 million. Unsurprisingly, NCIS‘s lead-out and spin-off, NCIS: Los Angeles, also had a strong premiere with 1.74 million viewers and placed in third. In between at second place The Jay Leno Show drew 17.7 million viewers. ABC placed two shows in fourth and fifth place (Dancing With the Stars and Grey’s Anatomy), but CBS nabbed by far the most spots in this list with six spots.

Continue reading Fall Premiere Report Card