Experts See Thorns in Rosy Forecasts

Publish date:
Updated on

New York -- Ad-agency buyers are voicing concerns about
commercial clutter and increased media fragmentation as consumers' menu of media choices

On the selling side, a cable operator and two
broadcast-television station executives who compete in the No. 1 market recently pondered
the advent of digital-terrestrial multiplexing -- and the resulting explosion of TV and
cable channels.

They also fretted about VCR-like personal-television
devices that can time-shift programs and -- horrors -- delete commercials.

Doug McCormick, chairman of McCormick Media, said digital
broadcasts and the World Wide Web are two key issues that face sellers, while buyers are
concerned with inadequate audience research. He led a panel on local TV trends at a
International Radio & Television Society meeting in New York earlier this month.

Michael Wach, general manager of Fox broadcast network
flagship station WNYW in New York, criticized personal-recording technology from TiVo Inc.
and Replay Networks as potentially harmful to the TV business.

Thomas Kane, president and general manager of New
York-based ABC flagship WABC-TV agreed, calling the products an "abuse of
technology" because they allow viewers to screen commercials from programming.

The "big four" broadcast networks are involved in
TiVo or Replay but "I'm not sure I know why," said Wach. (Network parents News
Corp., CBS Corp. and The Walt Disney Co. have also joined the Advanced Television
Copyright Coalition, to protect their content from "unfair" use by
personal-television services.)

Digital technology, meanwhile, will enable stations to
multiplex "down the road," said Kane.

The challenge, said Time Warner CityCable president Larry
Fischer, is "how to deal with viewership in a multichannel universe." Many are
still trying to figure that out.

Faced with a digital-driven proliferation of channels, Wach
wondered: "What are we going to put on five [digital] streams? We have no idea."

One likely change is the way that ratings service Nielsen
Media Research conducts its business. Changes on that front are already happening, said
Wach, citing Nielsen's recent move to offer ratings for the 2 a.m. to 6 a.m. overnight

"In a couple of years you're going to see them get
away from the sweeps," Wach predicted. Instead of four-times-per-year ratings
compilations, television will be "rated on a random basis" so networks can no
longer "stunt" to bolster ratings during the sweeps, he predicted.

Maggie Ross, executive vice president and director of local
broadcast at Young & Rubicam Inc.'s The Media Edge unit, pointed to increasing
popularity of the Internet as an option which complicated buyers' lives. "The
challenge for us is how to communicate with the new consumer … [and] find new ways to
communicate our message more effectively," she said.

The sellers also pointed to the Web's higher profile on the
ad-sales side. Kane said the so-called dot-coms could quickly become his station's
second-largest category, behind automotive, though he conceded that recent budget cutbacks
at some Internet companies is making that look less than certain.

Despite rosy talk about the ongoing cable and broadcast-TV
ad sales boom, Howard Nass, executive director of local broadcast at TN Media Inc., warned
that commercial clutter is a potential thorn on the stem.

"Too [many] commercials means loss of impact," he
observed. "We've got to find ways to make the advertiser stand out."

The trend toward selling inventory across several different
media platforms, as CBS Corp. has done with CBS Plus, is likely to grow in the wake of
that company's acquisition by Viacom, said Y&R's Ross. Such buys "are difficult
on both ends to execute," she cautioned.

Addressing another form of consolidation, Ross asked
Fischer if the New York Interconnect is likely to become whole again. Time Warner
CityCable pulled out of the DMA-wide buying group well over a year ago.

"There are a million reasons why it hasn't come back
together" from the perspectives of both Time Warner and Cablevision Systems Corp.,
Fischer said. And a reunion is not likely, at least in the near future, because both
companies have seen strong sales without the arrangement, he added.