AllThingsD » ad dollars

Time Inc.'s Magazines Get Less Bad, With Some Help From People

Peter Kafka — Wed, 03 Feb 2010 18:41:24 +0000

If you’re waiting for Apple’s (AAPL) iPad to rescue the magazine business, you may have to wait a very long time indeed. But the present-tense magazine industry–the ink-and-paper version everyone has left for dead–may be limping its way to a recovery.

It’s not close yet. But we are seeing signs that things are at least getting less bad. As Nat Ives notes, the slide in newsstand sales seems to have slowed in the second half of last year, and some titles are even reporting an uptick.

Meanwhile, industry heavyweight Time Inc. also had comparatively good news to report today-things are still down, but not as dire as they have been.

The numbers: The Time Warner (TWX) unit says Q4 subscription revenue was down six percent and ad sales were down 12 percent. Not stellar, but better than Q3, when they were down 13 percent and 22 percent, respectively.

The bottom line, in the meantime, helped by two rounds of major layoffs, stayed steady, with an operating margin of 14 percent.

It’s hard to tell how widespread the recovery is, because different titles have different stories to tell. Time Warner did note that its News unit–that includes Time, Fortune, etc.–lagged behind and that its Style group–overseen directly by CEO Ann Moore–did well.

“Well,” that is, by magazine standards: Revenue was flat in Q4, aided in large part by People magazine. (Now you can see why the Time Warner executive I talked to last year said it was hard to see the company dumping that title in particular.)

The company said that while ad dollars were down nine percent in the U.S., ad rates only shrank by “low single digits,” which is a bit encouraging. And Time Warner said numbers for the current quarter are improving over Q4.

Requisite caveat here: These numbers, and the ones you’re going to see for the next couple quarters, are being compared with really terrible numbers from previous quarters. So the fact that Time Inc. can’t show actual growth tells you that this is still an industry with really big problems. But maybe they’ll be more manageable than we thought–even without the help of a “magical and revolutionary device.”

Here’s the Q4 breakdown (click tables to enlarge):

And, for comparison’s sake, here are the Q3 numbers:

Dude Web Site Publisher Breaks Into Games (Heh heh. Heh heh.)

Peter Kafka — Mon, 25 Jan 2010 19:59:00 +0000

For the past several years, Keith Richman has run a Web publishing company that specializes in video and stuff for dudes. Which means he ought to be struggling and/or out of business by now–both sectors have had way too many competitors chasing not nearly enough ad dollars.

Not so, says Richman. He won’t divulge numbers, but says his Break Media has seen revenue climb 40 percent in the last year and is sort-of profitable (sort-of technical term: “Ebitda profitable”) to boot.

Break.com and its associated sites (CagePotato.com, HolyTaco, etc.) have plenty of competition from the likes of College Humor and Heavy et al–not to mention Google’s (GOOG) YouTube and Hulu–but they’re holding up quite nicely: ComScore (SCOR) pegs their audience at six million monthly uniques. Just as important: Minority owner Lionsgate Entertainment (LGF), which plunked down $21 million for a 40 percent stake in the company in 2007, doesn’t seem to be demanding a payout anytime soon.

Richman is now tackling another market that already has way too many competitors: Social games, dominated by the likes of Zynga, Electronics Arts (ERTS), and Playfish, etc.

No matter. Richman has hired a staff of 13 to kick off his games effort–you can get a taste of what he’s up to here–and says he’ll have a staff of 30 by March (most of them will be in China). Richman’s idea is simple: These games are hot now, but they’re only going to become bigger, so best to jump in while you still can.

Plus, you can iterate through this stuff pretty quickly–Richman’s team put together a supercrude and pretty popular “Tiger Woods Wife Outrun” game within three days of Woods’s car crash last fall–so the sooner you start, the more you can learn.

We talked about all of this in a brief chat last week in New York:

[ See post to watch video ]

Ad Spending 2009: Coupons Up, Almost Everything Else Down

Peter Kafka — Thu, 10 Dec 2009 17:00:38 +0000

From the things you already know department: Ad spending has been pretty lousy this year. By Nielsen’s count, U.S. ad dollars are down $10.9 billion, or 11.5 percent, through the first nine months of the year.

Something else you likely know: One big exception to the rule has been cable TV advertising, which is up nine percent for the year and is one of the reasons companies like Viacom (VIA) have been in favor with investors. It also helps explain why Comcast’s (CMCSA) investors are only mildly upset about the NBC Universal deal.

Something you may not know: Those newspapers no one reads or advertises in anymore? They’re increasingly filled with coupons, or “free-standing inserts,” in industry parlance. Those are up 11.2 percent this year.

One big caveat: In the table below, note that the “Internet” category isn’t really Internet advertising because it doesn’t include Google (GOOG), the world’s biggest Internet company. Nielsen is only measuring conventionally sold display ads here, which means it is missing search ads, pay-for-performance ads and just about every other way of reaching consumers on the Web. According to Nielsen, Internet ads are down slightly for the year, but I’d take the tracking company’s number here with several grains of salt.

[Image credit: Ken Ratcliff]

TV on the Web: Growing Fast, Still Small

Peter Kafka — Mon, 29 Jun 2009 13:49:09 +0000

Here’s a quick way to describe the state of TV on the Web, via two graphs from a new research report from Screen Digest analyst Arash Amel.

Graph one: Look how fast this business is growing! Broadcast and cable shows on the Web will generate less than $600 million in ad dollars in the U.S. this year, but four years from now that number will be close to $1.5 billion (click to enlarge).

Graph two: Look how tiny this business is! That $1.5 billion will be a drop in the bucket for TV advertising as a whole, which is a $70 billion business, give or take a billion. (It’s so small it’s literally almost impossible to find, but if you squint hard you can see a tiny sliver of dark green on the top part of the chart below.) And crucially, it will be smaller than the $2 billion that Amel predicts will flow out of conventional TV advertising.

Amel is the same analyst who cause a bit of a stir last year when he predicted that Hulu, the joint venture owned by News Corp.’s (NWS) Fox, GE’s (GE) NBC and Disney’s (DIS) ABC, was on track to eclipse Google’s (GOOG) YouTube in gross profit. This report is less pointed–it’s basically a landscape piece–but there are still some good nuggets.

Such as:

Apple’s (AAPL) iTunes dominates the market for paid TV shows delivered over the Web and controlled 60 percent of the market last year. Amel figures iTunes will hold on to 43 percent of the market by 2013. But he thinks that market will be significantly smaller than advertising on free TV shows delivered over the Web: $800 million vs. $1.5 billion in four years.
Web TV purveyors like Hulu and CBS (CBS) have been reluctant to run as many ads online as they do on conventional TV. But Amel says that will change. Web TV shows carry an average of five ads per hour, but he figures distributors can eventually boost that number to 12 ads an hour.

One big caveat here: Amel’s report only addresses TV shows on the Web, not video on the Web. Amel doesn’t spell this out, but I assume that’s because he’s most concerned here with the fate of existing players like NBC, ABC, et al. And, I’m guessing, because he doesn’t think that video on the Web that isn’t TV has much value.

There’s a whole ecosystem of players creating and distributing Web-native video who would argue with that. But they’ll have a stronger case when they can show significant revenue of their own.

A Little Boost for Joost: Mobile Ads on the iPhone

Peter Kafka — Tue, 07 Apr 2009 19:25:08 +0000

Web video publishers are still trying to get their heads around their existing sites, which attract plenty of eyeballs but not much in the way of ad dollars. But at some point, they’re going to have to figure out what will happen as video moves from the PC to the phone.

Here’s one small step in that evolution: Joost, the once-hyped video site, is going to start selling ads for clips it shows via its Apple (AAPL) iPhone app. Doing the heavy lifting will be FreeWheel, a well-regarded start-up that already handles ad-serving for some of the Web’s biggest video players.

As with video, everyone knows the mobile ad market will be worth something–maybe a lot–one day. But right now, there’s no there there. The Internet Advertising Bureau, for instance, doesn’t even bother to break out mobile ads in its annual breakdown of digital marketing spend.

Still, Joost needs any boost it can get: Like a lot of other video start-ups in the past few years, the company has raised an awful lot of money but hasn’t made much of a dent in the market. Maybe it can get some traction by staking an early claim to mobile video. Last week, Veoh, another well-funded video site chasing after the same eyeballs, made drastic cuts to its staff and announced that it would put its resources into a new browser-based app.

Separately, the Joost announcement is a nice get for FreeWheel, which is staffed by veterans of Google’s (GOOG) DoubleClick, and which last I heard, was looking for a significant funding round.