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HIGHLY CONFIDENTIAL 1 {Almost} Everything you need to know about the television industry! TV 101.

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Presentation on theme: "HIGHLY CONFIDENTIAL 1 {Almost} Everything you need to know about the television industry! TV 101."— Presentation transcript:

1 HIGHLY CONFIDENTIAL 1 {Almost} Everything you need to know about the television industry! TV 101

2 HIGHLY CONFIDENTIAL 2 TABLE OF CONTENTS TV BY THE NUMBERS Slide 4: History of TV Slide 5: Audience Fragmentation Slide 6: Ad Spend/Viewership Graphs TV DEEP DIVE Slide 14: Broadcast Networks Slide 17: Parent Companies & Subsidiaries Slide 23: Cable Networks Slide 24: Operators Slide 25: Data Slide 28: Devices Slide 31: TV Types Slide 32: Trade Publications Slide 33: Buying Agencies Slide 34: TV Initiatives TV ADVERTISING SPECIFICS Slide 36: Day parts Slide 37: Ad Types Slide 39: Markets Slide 41: Creative Content Slide 42: TV Ad Process Slide 43: TV Glossary

3 HIGHLY CONFIDENTIAL 3 TV STATS AND TRENDS This section contains graphs, diagrams, and numbers that will help you understand TV history, viewership, and ad spend.

4 HIGHLY CONFIDENTIAL 4 HISTORY OF TV 1884: Pictures first sent through wires. 1925: Long distance TV image first transmitted. 1930: First broadcast television commercial. 1936: About 200 TVs are in use worldwide. 1937: CBS, the first major network, is established. 1939: TV is shown to the US public at the Worlds Fair. 1946: America has 12 broadcasting TV stations. 1950: Color TV is released to the public. 1954: TV ad revenue surpasses that of radio and magazines. CBS becomes largest advertising medium in the world. 1967: First Super Bowl airs on CBS and NBC. A 60 second ad costs $85,000. Today, it costs $4 million for 30 seconds. 1969: First transmission from the moon. 1975: VCR hit mass market and gave consumers the ability to record TV and fast forward through ads. 1997: The first flat screen is developed. 1998: TiVO introduced- power to bypass TV ads (time-shifted viewing amplified) 2009: Simulmedia is born! 2011: There are over 1,700 TV channels. 2013: 99% of households in the US possess at least one television

5 HIGHLY CONFIDENTIAL 5 INCREASING AUDIENCE FRAGMENTATION Audience fragmentation : This chart shows the increase in TV viewership alongside increasing cable consumption. There are more networks, more shows, and more outlets for television viewing, making it more challenging for advertisers to target dispersed audiences.





10 HIGHLY CONFIDENTIAL 10 CABLE TV SEEING MOST GROWTH IN AD DOLLARS Source: Spot TVNetwork TVSyndicationCable TVTV Grand Total Jan-Mar 12$3,718,650.83$6,953,119.53$1,286,401.24$5,964,231.08$17,922,402.69 Jane-Mar 13$3,622,835.18$6,821,041.73$1,272,567.19$6,267,171.58$17,983,615.67 Change (%)-2.6-1.9- Ad Spending: Q1 2013 vs. Q1 2012 Television

11 HIGHLY CONFIDENTIAL 11 MOST POPULAR TV GENRES AMONGST VIEWERS Sources: In the US in 2011, almost one-fifth ($14 billion) of the money spent on TV advertising was spent on 5 traditional prime time genres – drama, news, reality, sitcom, and sports Genres by popularity amongst viewers and advertisers: Dramas : 41% of prime time viewership and 35% of ad spend Sports: 22% of viewership and 29% of ad spend Reality: 16% of viewership and 17% of ad spend

12 HIGHLY CONFIDENTIAL 12 5 YEAR AD SPEND PREDICTION Source: This chart depicts steady TV ad spend in the future

13 HIGHLY CONFIDENTIAL 13 TV DEEP DIVE This section is designed to outline major broadcast networks, cable networks, measurement/analytics companies, operators, buying agencies, and trade publications to understand the scope of the television industry.

14 HIGHLY CONFIDENTIAL 14 BROADCAST VS. CABLE Source: Broadcast TV networks create and aggregate programming on a national basis, and affiliate with local broadcast TV stations to distribute that programming to viewers. These are networks like ABC, CBS, CW, Fox, MyTV, and NBC. Local broadcast TV stations use the public airwaves to distribute free, over-the-air programming to households with TV antennas, and negotiate with local cable, satellite, and telephone companies to distribute that same programming to the distributors' customers. The local broadcast TV stations often create local news and other programming, and are typically known by their call letters or channel numbers, like NBC4 or Fox5. Cable networks create and aggregate programming on a national basis, and negotiate with local and national distributors like cable companies, satellite companies, and telephone companies to distribute them to customers. They typically do not use the public airwaves. Some major media companies own all 3 types of programming vehicles.

15 HIGHLY CONFIDENTIAL 15 BROADCAST BASICS Broadcast Networks- Broadcast networks use antennas to broadcast their programming over the airwaves rather than via ground cables. As someone aptly put it, Its radio you can see. –Provide live television or recorded/syndicated content.

16 HIGHLY CONFIDENTIAL 16 BROADCAST VALUE CHAIN Source: "The Ultimate Video Advertising Deep Dive." Media Economy Report, Magna Global. 3. (2013). This diagram illustrates the vertical integration of the broadcast value chain. Above are some of the key players and the assets controlled by the main groups.

17 HIGHLY CONFIDENTIAL 17 PARENT COMPANIES & THEIR SUBSIDIARIES Parent corporations are listed vertically on the left, and their subsidiaries are to the right. Source:

18 HIGHLY CONFIDENTIAL 18 PARENT COMPANIES & THEIR SUBSIDIARIES Parent corporations are listed vertically on the left, and their subsidiaries are to the right. Source:

19 HIGHLY CONFIDENTIAL 19 Source: PARENT COMPANIES & THEIR SUBSIDIARIES Parent corporations are listed vertically on the left, and their subsidiaries are to the right.

20 HIGHLY CONFIDENTIAL 20 TOP PRIME BROADCAST SHOWS (WEEK OF JULY 15, 2013) Source: CBS: Under the Dome, NCIS, 60 Minutes, The Big Bang Theory, Big Brother 15-Thu NBC: Americas Got Talent FOX: FOX MLB All-Star Game(s) ABC: The Bachelorette

21 HIGHLY CONFIDENTIAL 21 Nielsen Television (TV) Ratings for Network Primetime Series Top 20 Network Primetime Series: March 18-24, 2013 Source:,0,2436061.htmlstory,0,2436061.htmlstory

22 HIGHLY CONFIDENTIAL 22 MAJOR BROADCAST NETWORKS/SHOWS/VIEWERS IN PRIMETIME (MARCH 18-24, 2013) Source:,0,2436061.htmlstory,0,2436061.htmlstory

23 HIGHLY CONFIDENTIAL 23 TOP CABLE NETWORKS IN TERMS OF VIEWERS Source: -Fun Fact: There are over 130 different cable networks.

24 HIGHLY CONFIDENTIAL 24 OPERATORS AND # OF SUBSCRIBERS Source: Operators- a service provider delivering video programming services, usually for a subscription fee. Operators are key players in the distribution of content from cable networks and distribute local inventory. –Headquarters: Comcast: Philadelphia, PA DirecTV: El Segundo, CA Time Warner Cable: New York, NY Dish Network: New York, NY Cox Communications: East Orange, New Jersey

25 HIGHLY CONFIDENTIAL 25 TYPES OF TV DATA Source:, Data, Data, Data: Data is becoming a vital component of the advertising industry, and more companies are relying on viewer-behavior data to concentrate their marketing efforts and gain audience attention. Types of Data: Set Top Box: set-top box (STB) or set-top unit (STU) is a device that connects to a television and an external source of signal, turning the signal into content which is then displayed on the television screen or other display device. Over the Top Devices (OTT): refers to content that arrives from a third party, such as NowTV, Netflix, WhereverTV, Hulu, or MyTV. Consumers can access OTT content through internet-connected devices such as PCs, laptops, tablets, smartphones including iPhones and Android phones, set-top boxes, smart TVs and gaming consoles.

26 HIGHLY CONFIDENTIAL 26 THE COLLECTION AND DISTRIBUTION OF TV DATA Data Providers: collect TV viewing data then sell to networks to help marketing/advertising efforts by understanding consumer behavior. Nielsen - Nielsen licenses its data, providing companies with analytics that measure trend, behavior, and viewership across multple platforms and media outlets with an emphasis on television. GfK MRI- Determines who American consumers are, what they buy, how they think, and the best ways to reach them. Founded in 1979, GfK MRI is the country's leading provider of magazine audience ratings, multimedia research data and penetrating insights into consumers' behavior and motivations. Comscore - Similar to nielsen, but with a focus on the internet, comscore monitors web activity for consumers and helps businesses find their audiences.. Experian- Experian delivers data driven insights by cross referencing consumer credits reports/history against their clients' business objectives. Source: Source Here and Source Here Source Here

27 HIGHLY CONFIDENTIAL 27 THE COLLECTION AND DISTRIBUTION OF TV DATA (CONTD) TRA- TRA aggregates and then licenses out data that monitors consumer purchases and correlates that information against what advertisements the consumers are watching. Rentrak - Rentrak is a research company that delivers multiscreen reporting and analytics. They merge TV viewing and consumer behaviors across all media platforms.. Kantar Media- Kantar Media sells research and consulting services based on consumer behavior, audience research, digital insights, and social media influence for digital consumers across all media platforms. TiVo - TiVo, a pioneer in home entertainment, created a brand new category of products with the development of the first digital video recorder (DVR). Today, the Company continues to revolutionize the way consumers watch and access home entertainment by making TiVo the focal point of the digital living room, a center for sharing and experiencing television, music, photos and other content. TiVo connects consumers to the digital entertainment they want, where and when they want it. Source: ro ro

28 HIGHLY CONFIDENTIAL 28 LEADING DATA-COLLECTING DEVICES Devices play a pivotal role in the delivery of managed media. They can provide valuable viewing-data to media owners regarding who is viewing or interacting with their content and are the medium through which media is consumed. ROKU : ROKU is an over the top device that enables users to plug it directly into their TV, new or old, and access streaming content from the internet instantly. They allow you to watch/access any existing subscriptions (i.e. Netflix, Hulu, and AmazonPrime) as well as a ton of free content. ROKU is in its third generation as of June 2013. APPLE-TV : Apple-TV is an over the top device produced by Apple, Inc that allows you to stream wireless content from the internet onto you tv. The device also connects directly to your iTunes store so you can purchase movies, TV shows, and music. Using airplay, an app that Apple developed, you can also stream content wirelessly from your iOS devices (i.e. iPhone, iPad, iTouch, etc). Source:, SourceSource

29 HIGHLY CONFIDENTIAL 29 LEADING DATA-COLLECTING DEVICES (CONTD) Chromecast : Chromecast is Googles version of the over the top device (OTT) that is really an on the side device. This Dongle (a device used to connect to protected software or a wireless network), runs for only $35, as of July 2013 about 1/3 the price of its competitors, and links to your TV via an HDMI outlet. This device will allow google to take over your TV, provide streaming content, and the most important revelation being that it allows you to run the device via a smartphone. This is HUGE, why? Up until now, delivering attribution (relevant data saying who exactly is watching in a household and at what times) to the individual viewer has been impossible. Now, Google can track who is watching and when based off of the interaction with the smartphone. TiVO: TiVO is another OTT device that allows viewers to record their favorite tv shows, then play them back later. This allows viewers to time shift their viewing and even opt out of commercials by fast forwarding. This invention caused Nielsen to recalculate the way they count impressions because Networks demanded that they receive credit for the people watching the commercials time-shifted. The additions to the impressions are what we refer to as C+1, C+2, C+3, and C+7. Source:, SourceSource

30 HIGHLY CONFIDENTIAL 30 KEY DEVICE MANUFACTURERS AND THEIR PRODUCTS Source:, SourceSource Device Manufacturers: –Device manufacturers are responsible for the ways in which the consumer interacts with their media. In the past few years, User Experience (UX/UE) and User Interface (UI) designer have become extremely important to device manufacturers and are responsible for balancing aesthetics with functionality in the devices they create. They also need to run the most up to date operating systems (OS) and be compatible with as many types of media and media delivery platforms as possible. LG : LG Global Electronics is the world's largest producer of CDMA handsets, DVD players, optical storage devices, air conditioners, canister vacuum cleaners and micro ovens. LG Electronics is comprised of four business units: Mobile Communications, Digital Appliance, Digital Display and Digital Media. (LG Meta Tag: Description) Samsung : Samsung is a global leader in screen technology, TVs, batteries, and chip design. Apple : Apple designs and creates iPod and iTunes, Mac laptop and desktop computers, the OS X operating system, and the revolutionary iPhone and iPad. Even though Apple is well-known for its devices, it's the software and content that people use that make it valuable.

31 HIGHLY CONFIDENTIAL 31 4 MODERN TYPES OF TELEVISION Source:****Social****Social TV Types: –Linear TV: Pre-Set Video Programming & Ads, As It Airs –Connected TV: TV connects to the Internet with widgets featuring social networks –Social TV : a way to connect to viewers, content, and friends, powered by mobile platforms and social networks –Expanded TV: Tablet and Smartphone apps that give fans a deep dive into a specific show or network.

32 HIGHLY CONFIDENTIAL 32 INDUSTRY RELEVANT NEWS SOURCES Trade Publications- Companies whose sole responsibility is to stay on top of the most breaking news in the media and advertising world. These publications are a must read for anyone in the industry. –News mediums that you should keep up with to stay current on TV and advertising are as follows: B+C AdAge Media Post Variety

33 HIGHLY CONFIDENTIAL 33 MAJOR MEDIA BUYERS AND THEIR CLIENTS Source: Found on company websites and sales force. Buying agencies- Agencies that are in charge of buying inventory (TV ad spots) for their clients based on the plan given to them by media planners. They actively negotiate the price they are paying with regard to how many people will see their ad... –Buy commercial time or advertising space based on guaranteed impressions and views.

34 HIGHLY CONFIDENTIAL 34 WHATS GOING ON IN BROADCAST Source : –NBCU moves USA to TV everywhere- TV Everywhere, the industry's answer to piracy and over-the-top competitors, gives viewers who subscribe to cable, satellite and telco video providers access to programming online and via mobile devices. Subscribers using USAs website or its USA Now app will be able to see the network's original content, hours after it premieres on the west coast. –Broadcast networks seek carriage fees: –CBS is seeking money from Time Warner Cable for carrying their network. The Broadcast Giant, CBS, doesnt actually pay for their ability to run on the airwaves and they get it for free from the government. CBS wants to not only remain getting the free air time, but also get paid for being hosted on channels. –FOX Sports 1, a Division of News Corp, is a new network launching on August 16 th to try and compete with ESPN. They have committed over $16 Billion dollars over the next 9 years to make this happen. Prior to their announcement of the new network in March, Murdoch and News Corp sought out major rights agreements to ensure they will have high quality content. Such content includes NCAA basketball, NFL Football, NASCAR, UFC, Rugby, and Soccer (futbol).

35 HIGHLY CONFIDENTIAL 35 TV ADVERTISING SPECIFICS In this section, you can find information regarding day parts, ad types and the ad process, markets, creative content, and key TV terms.

36 HIGHLY CONFIDENTIAL 36 24 HOUR AD DAY: DAYPARTS Media sellers price inventory and negotiate their prices for avails. Every network has a different rate card and their day parts/prime time slot/night parts are based on their rate cards so most 24-hour breakdowns are custom to the network. Morning- typically around 6a-9a Daytime- Somewhere around 9a until early afternoon. Early Fringe/Prime Access- This is the lead into prime time and starts after daytime parts are over. Primetime- The hours within this day part are considered the golden hours of TV and are heavy with the best content from all the major networks and all the largest advertisers. Late Night/Overnight- Anything after primetime is grouped into this category and can sometimes be separate out in smaller parts as well.

37 HIGHLY CONFIDENTIAL 37 WAYS TO ADVERTISE ON TV Source: Ad Types: These are measured in ad units and usually range between :15, :30, and :60 seconds. National ads : National ads run on national networks and are not geographically discriminatory in that they run across all DMAs. These are effective for big chains and brands who exist nationally and whose audience and product offering spans across the entire country. Local Ads/Spot Ads : These ads are geographically discriminatory and are effective for businesses that dont operate on a national level or larger organizations who only want to target specific areas of the country. Addressable : technology that enables advertisers to selectively segment TV audiences and serve different ads or ad pods (groups of ads) within a common program or navigation screen. Segmentation can occur at geographic, demographic, and behavioral and (in some cases) self- selected individual household levels, through cable, satellite and Internet Protocol television (IPTV) delivery systems and set-top boxes (STBs).This is done by INVIDI and VisibleWorld.

38 HIGHLY CONFIDENTIAL 38 WAYS TO ADVERTISE ON TV (CONTD) Source: Rotators/Direct Response Spots/Overnight Spots: When working out your airtime, you can request such things as "0 to 24 rotator spots," "direct response spots" and/or "overnight spots"- -all of which will give you the most bang for your buck. If you purchase "0-24 rotator spots," your commercial will air on specified days randomly over the course of 24 hours. "Direct response" advertising means you'll be required to include a call to action within your commercial, such as a "call now" audio request that plays while a phone number is displayed on the screen. "Overnights" are spots that are aired from midnight to 6 a.m. Spot-Specific: gives businesses the flexibility to buy local cable in specific geographic areas while delivering key messages to targeted demographic audiences with maximized impact and reduced waste. Sponsorship/Integration: When you see an advertisement in the beginning of a show or preceding a commercial break that says this segment brought to you by _____. These are famously used in sports half time shows and news segments.

39 HIGHLY CONFIDENTIAL 39 TV AD MARKETS: THE UPFRONT Source: Source: Markets: Upfront: Every May, TV networks host a series of presentations that reveal existing shows that have been renewed or cancelled. They additionally introduce shows premiering in the fall. In exchange for purchasing ad time on programs that have not aired yet, networks give brands discounts for buying early. However, there is no guarantee that the program will be a success, so allocating 80% of a brands yearly budget to the upfront is risky.

40 HIGHLY CONFIDENTIAL 40 TV AD MARKETS: SCATTER AND DIRECT RESPONSE Markets (cont) : Scatter: In broadcasting, buying commercial time that corresponds to the calendar year. The four quarters in the scatter market reflects the various seasons of the year. DR: Short form commercials are 30-second to two minute commercials while long forms are half an hour. This paid programming is made for TV and asks viewers to place an order during the advertisement through a toll-free number or web address. The benefit here is that attribution can be calculated for each purchase and correlated to each ad spot.

41 HIGHLY CONFIDENTIAL 41 Source: Source: Creative Content: Branding: The marketing practice of creating a name, symbol or design that identifies and differentiates a product from other products Delivers the message clearly Confirms your credibility Connects your target prospects emotionally Motivates the buyer Concretes User Loyalty Direct Response: Selling products direct to consumers via spots or shows driving response to the phone or web. THE MARKETING SIDE: BRANDING

42 HIGHLY CONFIDENTIAL 42 HOW A BRAND ADVERTISES ON TV Simulmedia works with media planners and buyers, and sometimes directly with clients to sell TV ad space. Clients Want to sell a good or service Reach out to an agency (media planners/buyers) to ad space that will help them influence consumers. Planners Determine who to reach and figure out how media channels work together Use research and analysis to determine target audience Plan where ads will live) Buyers Negotiate prices with networks in CPMs and measure results in GRPs Want a lower cost and higher effectiveness for ad spend. Media Owners Buyers work with media owners, the people who own the media content and therefore create the room for advertising to occur on their networks.

43 HIGHLY CONFIDENTIAL 43 TV GLOSSARY Target Audience: The demographic/group to which a particular advertising effort is being directed. Rating: The % of the target universe exposed to a particular TV show. GRP: Gross Rating Points are the sum of the ratings for an advertising schedule. Impression: The total number of times an ad is seen by members of the target audience. Universe: The number of individuals within a given target. Reach: The number of the target audience exposed to a commercial message at least one time. This represents every individual who was exposed. Frequency: The average number of times that a person is exposed to an ad. CPM: The cost of delivering one thousand impressions within a target audience. CPP: The cost of delivering one percent or one rating point against a target audience.

44 HIGHLY CONFIDENTIAL 44 TV GLOSSARY (CONTD) Demo: A large, specific group of people who share similar traits and characteristics. DMA: A geographical divider for radio, television, and other media service providers. Fragmentation: The breaking d own of a large group of TV viewers who are switching their attention to different channels, devices, applications, games, and consoles. STB: Set Top Box Data is information collected from the box on top of your TV OTT: Over the Top Data is data collected from devices that live on top of your TV like a TiVo, x-box, Apple TV, or anything else that provides you content. Time-Shifted Viewing: When a viewer records a live television show and watches it later. Bundling: The process by which high value inventory is coupled with underappreciated inventory to make sure the networks sell all of their ad space. Sellers do this so they arent left with perishable inventory that nobody wants.

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