CBS reports 12% higher revenue in first quarter

 
CBS Corp. reported solid earnings Tuesday on higher revenue and advertising sales.

The New York-based broadcasting company reported net earnings of $363 million, or 54 cents per diluted share, up from $202 million, or 29 cents per diluted share, over the year earlier period. The higher margin came from growth in operating income as well as lower weighted average shares as a result of the company's stock repurchase program.

For the quarter ended March 31, the broadcasting company reported revenue of $3.92 billion, an increase of 12% from the first quarter of 2011. CBS attributed the increase to content licensing and higher distribution fees. Advertising revenue was up 5%.

Investors have been expecting CBS to post a strong year -- lifted by hundreds of millions of dollars in political spending expected to flood its TV stations and fees paid by cable and satellite providers for the retransmission of CBS' broadcast signal. The company also is collecting millions in fees paid by online distributors, including Netflix.

CBS shares closed Tuesday at $33.42, up 4 cents.  The shares are trading 33% higher than last year at this time.

CBS owns its flagship CBS television network, which broadcasts such shows as "NCIS," "Survivor" and "Two and a Half Men," television and radio stations, a billboard unit, premium cable channel Showtime, and the Simon & Schuster publishing house.

CBS is expected to discuss its results in an earnings call with analysts later this afternoon.

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Photo: CBS corporate logo.  Credit: CBS Corp.

Changing TV habits center stage at digital media presentation

NEW YORK -- The prime-time television ratings drop took center stage at the Digital Content NewFront presentations in New York, with former ABC Entertainment Chairman Lloyd Braun seizing on the numbers as an opportunity to talk about changing viewing habits -- and the rise of digital media.

In an onstage conversation with MediaLink Chairman and digital guru Michael E. Kassan, introductions had barely been concluded before the topic was broached: The four broadcast networks have lost viewers in recent weeks. And, unlike in years past, audiences aren't gravitating to the cable networks.

Braun, who joined the world of digital media after being forced out in 2004 as the top programming executive at ABC, referred to a trend reported in the New York Times as evidence that viewers are moving away from watching television shows live, when they initially air. Viewers increasingly are using online services, such as Netflix Inc., to get caught up on past seasons of award-winning shows, such as the PBS series "Downton Abbey" or AMC's "Mad Men," and watch current episodes through digital on-demand offerings, he said.

"There is no reason anymore -- for most of this kind of programming -- to watch it live," Braun told a group of advertising buyers attending Microsoft Corp.'s digital advertising presentation Tuesday. 

The trend has been on the horizon for years, Braun noted, adding with obvious frustration that advertisers continue to pay higher rates to air commercials during prime-time TV, despite the gradual erosion of the audience. He said he expects the trend to continue, as buyers attend next month's presentations by the major networks of new fall shows and commit billions of advertising dollars for the upcoming season.

This year's ad sales season, known as the upfront market, is expected to raise nearly $9.2 billion in commitments from advertisers.

"What I think has been driving people crazy on the digital side, we've all seen these charts which show time spent on the Internet versus where the [ad] spend is going," said Braun, co-founder of BermanBraun, an independent media company that develops television, feature film and digital programs. "There's this huge gap where the audience is spending time online and with tablets and smartphones, and the ad dollars are not commensurate with that."

The desire to grab advertisers' attention -- and dollars -- is behind the Digital Content NewFronts, during which five major online distributors will highlight their new shows for buyers.

Microsoft brought out some star power -- including U.S. Olympic gymnast and gold medalist Dominique Dawes, now a Fox Sports analyst, actress Felicia Day of "The Guild" and Kate Snow, NBC News correspondent with "Rock Center With Brian Williams" -- to promote the content available through its MSN portal and through the Xbox Live service offered via its game console.

Ross Honey, Xbox Live general manager of entertainment and advertising, sought to portray the Xbox 360 as a broad-based home entertainment device that offers more than video game play. It has struck some 50 content deals in recent months, including agreements with cable giant Comcast Corp. and Time Warner Inc.'s premium cable network, HBO, that offer subscribers access to TV shows via the game console.

The Xbox Live service has grown 30% in the last year to 40 million members, Honey said. Indeed, Xbox 360 consoles outsold other individual devices that connect the TV to the Internet, including Blu-ray disc players.

Entertainment usage on the Xbox Live has more than doubled, year over year, Honey said.

"In the U.S., entertainment usage has surpassed multiplayer gaming on Xbox Live," Honey said, referring to the video game industry term for players who connect via the Internet to oppose one another. "That's a profound event. When Xbox Live started 10 years ago, what it was all about was mutliplayer gaming. Now, Xbox Live really is an all-in-one entertainment platform."

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Photo:  Lloyd Braun. Credit: Yahoo

Nielsen study finds that dramas are recorded at higher rates

In a new study of television audience trends, ratings giant Nielsen found that viewers recorded and watched scripted dramas at a much higher rate than sitcoms, sports and reality shows.

Hourlong dramas accounted for 58% of time-shifted viewing, according to Nielsen's Advertising & Audiences Report released Thursday. Comedies made up 16%, reality shows accounted for 14%, sports represented 8% and news, 4%.

Network executives are closely monitoring audience trends now that more than 40% of all TV households in the U.S. are equipped with digital video recorders.  Many viewers fast-forward through the commercials, which have long generated the dollars that support the high cost of television production.

The Nielsen report found that nearly 43% of people who digitally record shows watch the episode the same day. Nearly 88% of people who recorded a program watched it within three days. 

The finding is significant because advertisers currently pay the networks for viewers who record and watch an episode within that three-day window. Some network executives are lobbying advertisers to extend the period to seven days.

Nielsen said that dramas drew 41% of the viewers in prime time and generated 35% of the television advertising dollars. Reality shows, once red-hot, have cooled slightly. In 2011, they attracted 15.5% of the prime-time audience, down from 17.4% in 2009.  Meanwhile, sit-coms have become more popular.

Last year, $72 billion was spent on TV advertising in the U.S., with $14 billion allocated for the five leading prime-time genres: dramas, comedies, sports, news and reality shows.

Advertisers spent $4.1 billion last year in prime-time sports, which accounted for 29% of the total. 

And not surprisingly, more than half the product placements on the major networks during prime time occurred in reality shows (4,664 occurrences).

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Graphic: Advertising and audience trends in prime time.  Credit:  Nielsen

Internet advertising hits record $31 billion

This post has been corrected as indicated below.

Internet advertising reached a record $31 billion last year -- a gain of 22% over 2010 spending, according to a report released Wednesday by the Interactive Advertising Bureau.

Advertising tied to Internet searches continues to dominate the category, accounting for 46 cents of every dollar spent online. Revenues for search advertising reached $14.8 billion in 2011, an increase of 27% from a year earlier, according to the IAB.

Mobile advertising showed the fastest growth -- amid the popularity of smartphones -- and the ability of marketers to deliver timely, relevant ads in a way that previously wasn't possible. The IAB reported that revenues rose to $1.6 billion in 2011, up 149% from the prior year.

"Clearly mobile has become a key category," said David Silverman of PricewaterhouseCoopers, in a briefing with the media Wednesday morning.

Another category showing significant growth is advertising associated with digital video. Revenue reached $1.8 billion last year, compared with $1.4 billion in 2010 -- representing a 29% year-over-year gain.

Retail advertisers continue to represent the largest buyers of Internet ads, accounting for about 22% of spending in 2011, according to the IAB.

[For the record, 10:52 a.m. April 18: A previous version of this post misidentified the Interactive Advertising Bureau as the Internet Advertising Bureau.]

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Photo: An Internet cafe in Australia. Credit: Rob Griffith / Associated Press

Ad campaign seeks to end kills at L.A. animal shelters

A high-profile ad campaign rolling out this week is not designed to sell tickets, cars or computers. Instead, a prominent group of advertising executives is taking creative license to try to prevent the deaths of an estimated 17,000 animals killed in Los Angeles shelters each year.

Lee Clow, a dog-lover best known for being one of the creative minds behind the groundbreaking "1984" Super Bowl commercial that introduced the Apple Inc. Macintosh computer, is leading the "NKLA" effort. The largely pro-bono campaign, which stands for No-Kill Los Angeles, has a goal of dramatically reducing the number of animal euthanasias performed by 2017.

"Our hope and our goal is to raise the conscience and the awareness of the entire community to this problem," Clow said Tuesday in an interview. "We want to start a conversation that creates its own velocity. We want to make it a movement."

The campaign has been in the works for nearly a year.  It brings together a loose-knit coalition, spearheaded by the Best Friends Animal Society and Let There Be Dragons, a unit of the advertising behemoth Omnicom Inc. 

Let There Be Dragons drew on the talent of the TBWA\Chiat\Day agency in Los Angeles (part of the corporate family) to create the campaign's visuals, website and other media platforms.

Stark, black-and-white billboards and print advertisements depict the faces of Fang, Shep, Jewel, Kringle and other abandoned cats and dogs. The animals are proxies for the thousands of occupants of city shelters.

The coalition is trying to raise awareness about the plight of unwanted animals by facilitating adoptions and encouraging people to spay and neuter their pets.

Best Friends Animal Society this year began operating a shelter in Mission Hills that the City of Los Angeles built in 2007 at a cost of more than $19 million -- but then lacked the funds to open and manage. Best Friends turned the facility into an adoption center, and plans to spend about $1 million a year managing it, according to Francis Battista, one of the group's founders. 

The NKLA coalition would like to lower the euthanasia rate to 10% of animals in shelters, reserving the practice for those that are injured, sick or aggressive. Last year, Los Angeles shelters euthanized 17,000 of 56,000 animals, or 30%, according to the NKLA website. 

As part of the NKLA effort, Best Friends has allocated more than $1.2 million to make grants to area rescue leagues to encourage more adoptions, and to provide financial assistance to help people who don't have money to neuter their pets. 

Nissan, a client of TBWA\Chiat\Day, donated a vehicle which has since been dubbed "The Neuter Cruiser" that will be used to ferry pets to the procedures. OMD, another unit of Omnicom, secured media placements valued at about $500,000 for the print campaign. Media organizations donated space.

"We are just trying to support this coalition of rescue groups who are the real heroes in this campaign," Clow said.

Battista, of the Best Friends Animal Society, added: "We think that we can move the needle. But the only way for us to be successful is for this campaign to be owned by the entire community." 

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Photo: Kringle, a homeless dog featured in the No Kill Los Angeles advertising campaign that rolled out Tuesday in Los Angeles.  Credit: TBWA  

Producer Mark Burnett invests in Youtoo

Some technology and entertainment companies expect "social TV" to be the next wave in digital entertainment.

That means money has been flowing to start-up ventures that investors hope will become the next Facebook, Twitter or Zynga. On Thursday, Dallas technology company Youtoo (not related to YouTube) announced that Mark Burnett, the television producer behind "Survivor" and "Celebrity Apprentice," has made an undisclosed equity investment in the venture, which launched in September 2011.

Youtoo makes interactive TV and games for the television industry. Last year it launched its social network, Youtoo.com, and Youtoo TV, a cable channel available in about 15 million homes. Users can record 15-second videos of themselves on Youtoo.com and submit them to run on the television channel.  

Chris Wyatt, chief executive of Youtoo, said Burnett hopes to incorporate Youtoo's interactive features into some of his TV productions. Youtoo plans to license its technology to TV networks and producers so they can augment their shows with interactive elements. The additional platform is designed to serve as a vehicle for advertising.

Burnett has been getting increasingly interested in the digital entertainment space. He also invested in Vimby -- short for Video in My Backyard -- a network of producers who create original short form video for the Web, segments for television and sponsored programming for major advertisers.

"In the next few months, you are going to see an entire pipeline of producers who will be using our technology," Youtoo's Wyatt predicted.

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Photos: Top: Producer Mark Burnett, center, is flanked by Vimby CEO Dean Waters and Vimby Chief Creative Officer David Goffin at Sony Studios in Culver City in 2011. Credit:  Robert Gauthier / Los Angeles Times

Lower right: Youtoo CEO Chris Wyatt. Credit: Youtoo

Hallmark Channel revamps daytime programming block

The Hallmark Channel is setting a new table for daytime with two original programs set to launch this fall: a talk show featuring Marie Osmond and a lifestyle show called "Home & Family," which will be shot in Los Angeles on the Universal Studios lot not far from Wisteria Lane of "Desperate Housewives" fame. 

The Studio City cable network is regrouping after its 2-year-old partnership with Martha Stewart Living Omnimedia produced more lemons than lemonade. 

In the coming months, the Hallmark Channel plans to begin phasing out Stewart's programming.

The lifestyle maven's signature how-to show, shot before a studio audience in New York, will end production in late April.  Hallmark Channel will continue with reruns of "The Martha Stewart Show" until September. Stewart's other shows, including "Mad Hungry with Lucinda Scala Quinn," are expected to continue on Hallmark -- at least through the end of the year, Hallmark executives said.

"It's time for us to provide our own take on lifestyle programming," said Bill Abbott, chief executive of Crown Media Holdings, parent company of the Hallmark Channel and its sister Hallmark Movie Channel.

After failing to squeeze money from Stewart's programs, Crown Media intends to own the shows that it runs on its two channels. 

The Hallmark Channel's daytime strategy switch comes as the company embraces, once again, its trademark brand of wholesome family fare. The Hallmark channels have ordered 34 original movies this year, representing a 48% increase over their 2009 slates.

Read the full story in the Los Angeles Times.

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Photo: Marie Osmond in 2001. Credit:  Gary Friedman / Los Angeles Times

U.S. advertising spending totaled $144 billion in 2011

Television advertising once again formed the bedrock of the U.S. advertising industry, which closed the books on 2011 at $144 billion in spending.

Overall advertising spending rose slightly -- 0.8% -- over 2010, according to data just released by Kantar Media, which tracks spending.

Network television advertising fell 2% last year, despite a strong fourth quarter lifted by popular NFL football games, Major League Baseball's World Series between the St. Louis Cardinals and Texas Rangers, and Fox's new singing competition, "X Factor."

Ad revenue to national syndicated TV programming jumped 15.4%, with department stores and health and beauty brands increasing their buys. Spanish-language television ad spending climbed 8.3% for the year. Cable television advertising grew 7.7%, the Kantar study found.

Advertising revenue for Internet media inched up a mere 0.4% for the year. Internet display ads were up 5.5% but paid search was down 2.8%.

Most worrisome to media companies that rely on advertising was a pullback in spending by marketers during the fourth quarter.  Revenue declined 1% compared with the fourth quarter of 2010 -- marking the first quarterly decline since the end of 2009.  Kantar said ad growth rates have been slowing sequentially for five consecutive quarters.

“Some mature digital media formats were also touched by the year-end tide of reduced spending," said Jon Swallen, senior vice president of research at Kantar Media Intelligence North America. "Whether this is an isolated occurrence or an early sign of digital dollars moving more quickly toward emerging and unmeasured digital platforms bears watching as 2012 unfolds.”

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Photo: Former St. Louis Cardinals slugger Albert Pujols celebrates his team's victory in the 2011 World Series.  Pujols now plays for the Los Angeles Angels of Anaheim. Credit: Matt Slocum / Associated Press

Rush Limbaugh to advertiser: I don't want you back

The intense campaign to cut advertising to “The Rush Limbaugh Show” took another turn Thursday when one of the first companies to pull its ads reportedly asked to return to the radio show -- only to be told by Team Limbaugh that the conservative host no longer would give his endorsement.

A Limbaugh spokesman said that California mattress company Sleep Train asked to restart a “voiced endorsement” from Limbaugh that it had publicly cut off last week. The company said at the time that it “does not condone such negative comments toward any person.”

Several activist groups have called for companies to drop their ads after Limbaugh called a Georgetown law school student a “slut” and a “prostitute” for her support of a proposal to mandate birth control in standard healthcare coverage.

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Sleep Train's departure from the program had been billed by some observers as particularly significant because the mattress retailer had been with Limbaugh show for 25 years. Yet the tone of Sleep Train's withdrawal statement last Friday hinted it might not be pulling out for the long run.

“As a diverse company, Sleep Train does not condone such negative comments directed toward any person,” Sleep Train said at the time. “We have currently pulled our ads with Rush Limbaugh.”

Still, Washington Post blogger Erik Wemple called Sleep Train's decision "an act worth crediting," saying that lost ads would have more of an effect on Limbaugh than "well-crafted expressions of outrage from the usual organs."

Limbaugh spokesman Brian Glicklich on Thursday forwarded a copy of an email that he said had been sent to Sleep Train Chief Executive Dale Carlsen. In it, Glicklich wrote that Limbaugh had personally received the company's requests to resume advertising on his show. 

“Unfortunately," Glicklich wrote, "your public comments were not well received by our audience, and did not accurately portray either Rush Limbaugh's character or the intent of his remarks. Thus, we regret to inform you that Rush will be unable to endorse Sleep Train in the future.”

Limbaugh and Carlsen met in the 1980s, when the conservative host was based in Sacramento and still trying to make a significant mark in the radio business. Carlsen’s mattress store, which now claims to be the biggest such retailer in the West, was also in its formative stages.

Glicklich said Limbaugh received a strong response from fans displeased with Sleep Train and other sponsors that pulled out of the show.

“They have had a very long relationship and friendship as well,” Glicklich said of Carlsen and Limbaugh. He would not speculate on whether the relationship would be permanently broken by the dispute.

Carlsen and Sleep Train representatives could not immediately be reached.

Limbaugh opened his show Thursday again disputing claims by liberal groups that he had suffered severe advertising losses. 

Media Matters, a liberal watchdog group, strongly disagreed. The organization said 46 advertisers had reported leaving the three-hour program, which is syndicated to more than 600 stations. The organization said that it monitored WABC in New York and that there were two periods of "dead" air Thursday, when no advertisements filled normal sponsorship spots.

"This all comes after he said yesterday lost advertisers aren't a problem," said Jess Levin, a spokeswoman for Media Matters.

Conservatives, meanwhile, said the furor had been used to distract from the underlying issue of whether it was appropriate to mandate that birth control be part of health insurance policies. They have also protested that other media figures received much less blowback than Limbaugh for their sexist or derogatory remarks.

More than a week into the episode, the campaign over Limbaugh advertising -- and the meaning of the advertising defections -- showed little sign of slowing. 

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Photo: Rush Limbaugh said through a spokesman Thursday that he would not welcome back Sleep Train, an advertiser that left his show last week in protest of Limbaugh's comments on a student activist at Georgetown. Credit: Ron Edmonds / Associated Press

Oscars 2012: A hit in social media

 

Although the 84th Annual Academy Awards came across decidedly old school in its television broadcast, the event delivered high marks in new media. 

Sunday's Oscar ceremony generated 3.8 million comments on Twitter, Facebook and other social media sites, according to data generated by Cambridge, Mass.-based Bluefin Labs. That made this year's awards show the second most talked-about entertainment event on TV since the company began measuring and analyzing social media traffic several years ago.

CBS' telecast of the Grammy Awards this month was the undisputed champ with 13 million social media comments. The third most popular awards event was last year's MTV Video Music Awards with 3.1 million comments, according to Bluefin Labs.

The ABC television network, the Academy of Motion Picture Arts and Sciences and advertisers stepped up their social media campaigns promoting the Oscars this year, in large part, to keep the TV ratings high. Their efforts appeared to have paid off with Nielsen's estimates that more than 39 million viewers tuned in -- an increase of 1.4 million people compared with last year's show. 

Comments on social media sites surrounding Sunday's ceremony and red carpet arrivals surged nearly 300% over last year's gala. In 2011, there were fewer than 1 million comments. The trend suggests that more people are turning to social media outlets while watching TV by using a "second screen" -- a tablet, smartphone or laptop computer -- to stay connected to their friends and followers who are also watching TV.

Bluefin Labs' analysis found that the gender breakdown for the social media pundits was roughly in line with the composition of the TV audience. An estimated 57% of those who commented were women; men made up 43%.

It was more difficult to ascertain the mood of commenters. Bluefin found that 22% of the comments about the Oscars were positive, 16% negative and 62% neutral.

Peaks in the social media traffic came at somewhat predictable intervals.  The most talked-about moment came at the end of the evening when the nearly silent film, "The Artist," won for best picture. The second most popular portion was the presentation of three awards by Tina Fey and Bradley Cooper -- two crowd-pleasing comedians particularly popular with the social media demographic. 

The pair was on screen several minutes, presenting honors for film editing, won by "The Girl With the Dragon Tattoo," and sound editing and sound mixing, both won by Martin Scorsese's 3-D family film "Hugo."

Octavia Spencer's emotional acceptance speech for supporting actress for her performance in "The Help" was the third most popular highlight in social media. Remarks about Spencer ranked highest in terms of "most positive." 

And even though, at age 82, Christopher Plummer would seem to be well beyond the Facebook demographic, his win for supporting actor in "Beginners" registered as the fourth most buzzed-about Oscar moment. 

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Photo: Octavia Spencer, escorted by Christian Bale, after Spencer's win for supporting actress for her performance in "The Help." Credit:  Al Seib / Los Angeles Times