Lies, Damn Lies and Les Moonves: More Fun with Numbers

With apologies to Mr. Moonves, CBS crushed the competition last week, but I love a catchy headline.

One thing that’s always bothered me and always will because it’s not like it’s ever going to change is the way numbers get used. Misleading statistics make it out into the media stream and then there is this tendency to just start parroting the statistics because they’re out there. Recently I saw this Moonves quote:

"But DVRs are getting counted, and you're seeing that they are not as disastrous to commercials as everybody thought. Nobody would have thought that only [about] 45 percent of people zap commercials. Not only that, but commercials you zap through are still effective to a certain extent. When you see that Crest toothpaste logo, that goes into your brain. More and more people are going to be viewing [commercials] with the logo throughout,” said Moonves in a story on Jack Myers’ mediaVillage.

Wow, 55% of DVR owners don’t zap through commercials! At the risk of some perilous branding here: you have to be kidding me! Maybe it’s true. What I suspect is really the case is that only 45% always zap through commercials. I’m pretty sure the way the data actually works out is that most DVR users zap commercials most of the time when they are watching something time shifted.

That is not the song Moonves was singing here. I do believe that only a small % of DVR users always zap through commercials. I often find myself not zapping through them. Usually it’s when I wasn’t actually paying attention to what I was watching! I watch ESPN’s PTI religiously on the DVR, but I often watch it on my computer and am just listening while I surf the web or try to get the tvbythenumbers.com web site looking much better than what you see here before we launch next month.

I could be wrong in my assumptions and it could be Les Moonves is right. But I’ll tell you what, I’d bet $1000 that the data doesn’t show that 55% of DVR users never zap through commercials. I contacted Nielsen for clarity on the data, but so far my request has fallen on deaf ears (it’s been over a week and I asked more than once). I think the clarity is very, very important, but admittedly it’s far more important if you’re buying advertising based on the numbers that include DVR viewership than it is if you’re selling the advertising.

It’s not just the networks. When it comes to TV data, it’s just plain hard to get. I wanted to provide Bill Gorman with some numbers so he could make a chart on the growth of homes in the US with HDTVs. I tried to compile some data from the internet and it looks like this: (again, I am only talking homes in the United States, not worldwide):

March 2004 1.6 million homes (source = In-Stat)
March 2005 4.0 million homes (In-Stat)
Dec 31, 2006 27.7 million (source Global Analysis)
Dec 31, 2007 52 Million Homes (source CEA)

In the most recent data point provided by the Consumer Electronics Association is projecting end of year stats based on the sales of HDTVs during the first six months of 2007 that a total of 16 million additional homes will be added to the number of homes with at least one HDTV. I have 2, three if you count the plasma screen hanging on Michael Raneri’s basement wall – hey, I have a 61” DLP set, and bigger is better. Hanging the plasma screen on my office wall and using it as a computer monitor seemed excessive, besides it is five years old now and can only do 1024x768 resolution. If it could do 1920x1280, I’d have already ripped it off Mike’s wall.

Enough about me. I don’t take issue with the 16 million additional homes with an HDTV in 2007. But, they say that 16 million additional homes in ’07 brings the US Total to 52 million. I couldn’t find any data showing 36 million homes at the end of 2006 which is more than 8 million more homes than with the data I could find.

It doesn’t mean the data doesn’t exist, only that if it does I couldn’t find it or it’s a stat that is not freely available anywhere. We’ll still probably make the chart anyway and whether it’s 52 million homes or 44 million, it’s getting to be a lot of homes.

But here’s another statistic from the CEA from the same press release predicting the 52 Million homes, 44% of the homes with at least one HDTV receive no HD programming at all.

It’s bad enough that I don’t get Mark Cuban’s HDNet or HDNet Movies channels via my Comcast HDTV package, but at least I’ll be able to watch him dance in HD if the sources for this story are correct.

Who spends all the money for an HDTV and then doesn’t get any content? Apparently a whole lot of people.

Marc Cuban vs. Steve Jobs: Who ya Got?

The problem with my love of sports and shows like ESPN’s Pardon the Interruption and Around the Horn is love of creating “the contest”. Your team vs. my team, with the ensuing smack talk (your team sucks, my team rules!). I’m 45, and it never gets old for me. And I’m OK with this because sports is one of the few places this should happen. I don’t think it’s good that this same emotional nature, including all the smack-talk seems to drive the political arena as well.

When it comes to Mark Cuban and Steve Jobs, my answer is: BOTH. I pick both. If I could only pick one, sorry Cubes, I gotta go with Jobs but, dude, he invented the iPhone, maybe you’ve heard of it!? (indeed, I am lamenting the outing of Fake Steve Jobs!) I use my iPod/iPhone much more than I watch any HDTV, HDNet or otherwise. But I don’t have to pick just one here, so I pick both. They both announced some new products this week.

Apple announced its new line of computers including a sweet 24” iMac. I am not historically a user of Apple computers, but I have been leaning towards buying one when the new Apple Store opens up on Chestnut Street about 5 blocks from where I live in San Francisco. It’s just an elegant machine and all the issues I had with the Mac vs. PC debate years ago are no longer issues for me.

The only ding against the iMac I have at all is that there aren’t more options and it’s not very customizable. It apparently doesn’t come with a high end video card and that’s disappointing. If you want an iMac with a high end video card, too freaking bad: you can’t have one. You have to buy a Mac Pro, and that’s way more computer (for way more money) than I need (or need to spend). I like the elegance of the all-in-one iMac, but I am big into video applications on my computer and am disappointed there aren’t more options.

Mark Cuban recently announced Ultra HD Video on Demand, which, according to a write-up in Variety:

Cuban is offering it to DirecTV, Time Warner Cable, Charter, Verizon and other cable-network distributors as a snob-appeal add-on to Cuban-financed and -distributed films that show up, for free, on his 24/7 HDNet Movies on the same day the pics open in theaters.

A shout out to Variety write John Dempsey because the phrase “a snob appeal add-on” will forever be etched in my vernacular! I have not been in love with the movie theaters and their $10 ticket prices for some time. Ultra HD aims to bring you theatrical releases sometimes even weeks before their theatrical releases at a retail price of $12.95-$19.95 depending on the movie.

I find this pricing extremely reasonable and I wonder years from now if these types of services won’t pummel the movie houses. Sure, for one person it’s more expensive, but add a second person in your living room and it’s either cheaper or competitive. If there are four people in your living room, it’s a fantastic deal, especially when you factor in the “you got to see it first!” aspect. There’s definitely something to be said for snob appeal add-ons. I hope the studios like this model and that it takes off rapidly.

Cuban is ahead of Jobs on this front, but those of you who have read any of my screeds on Apple’s Four Steps to Total World Domination know that I believe getting stuff from iTunes on to your big screen is a part of that plan. If that’s true, ultimately Steve Jobs and Apple will be offering the same type of thing as Ultra HD.

Over the long haul, unless Cuban somehow beats Jobs to the punch with some easy way of getting that UltraHD movie onto my iPhone/iPod, I think Jobs will win this contest. But it’s not clear to me yet whether several years from now when Apple TV is no longer a “hobby” whether Apple will do deals directly with the studios or just cut a deals with offerings like Cubans. If I have to guess, I am guessing Apple will cut the deals directly with the studios itself, but my guessing is often wrong.

Update 10:26 PDT: I just saw this poll on the Motley Fool and was a little sad because I don't need to buy any of them, but things are looking good for Cuban if this sentiment can be extrapolated to the rest of the world:

Which item do you need to buy right now?
Plasma screen, high definition TV
(6296 votes - 40%)
Computer
(3569 votes - 23%)
Washing machine
(1875 votes - 12%)
iPhone
(1875 votes - 12%)
Air conditioning
(1992 votes - 13%)

Eight Years Later and I Can’t Buy Entourage over the Internet

On the 8th anniversary of the broadcast.com IPO, I can’t help but wondering, what is HBO thinking about? You can’t even buy a four pack of Entourage episodes on iTunes for $8.00. I believe the $1.99 pricing would work out for HBO, it just needs to price stuff where if you subscribe to more than 2 things, it’d be a better deal just subscribing to HBO. I know, HBO like all the Time Warner schmoes on the music business side that came before it are worried about cannibalization. But there are a few ways around worrying about cannibalizing the HBO subscription service and the DVDs. Update: 7:35am, according to Cuban, it's the 9th anniversary of the IPO and the 8th anniversary of closing the broadcast.com deal, a special day for Mr. Cuban no matter how you look at it!

Does HBO think in 10 years the fate of the DVD is going to be any better than the CD? The DVDs purpose in life at that point will be very cheap media you can cram a lot of stuff on. Otherwise most people will be buying their content digitally already. And since that’s the way content will be sold anyway, why not get in ahead of the curve for a change? Otherwise you just encourage the countless sites up and available on the Internet aimed at providing immediate (and free) access to Entourage, the Sopranos, John in Cincinnati. I can understand not wanting to deal with Apple and although I think it’s dumb to fight that trend, I think Time Warner has a chance to sell its HBO content via its AOL arm. None of that synergy stuff seems to be playing out and it rankles me.

You don’t even have to do this in a way that cannibalizes the mothership or the DVDs. First, make it something that would be high quality on the iPod or iPhone but not so great on the TV. Or make the video high quality anyway – it’s not like iTunes includes any of the director’s or actor’s commentary tracks. There will still be a reason to buy the DVDs until all the content providers have thrown in the towel and realize digital distribution is going to win and they have to even include the good stuff digitally. For now though, that is a ways off.

I don’t know if there’s a penalty for HBO and others not being first movers here. It seems like the penalty is that people who might otherwise buy it wind up stealing it because it’s the fastest way to go. I have to be honest, I pay for HBO and various DVRs and record Entourage. I still find downloading the free torrent is faster than converting the huge file on my DVR into a format for my iPhone (mp4 or m4v) So, I’d already be willing to pay HBO or Comcast a small extra fee for access to “optimized for iPhone/iPod” files of shows I have already paid for in high definition.

The question for me is does HBO think about this at all and decide it’s not right for them or are they just not even thinking about it? A real decision not to do it I couldn’t find fault with, but if HBO isn’t even thinking about it, that’s another story.

I understand as well that the various producers of content may have different deals in terms of digital distribution and I think HBO not necessarily owning those rights right now isn’t a big deal if that’s the case. But I think such things will be a fairly huge deal in the 5-10 year time range.

Some have suggested via the comments under Cuban’s blog entry that perhaps Cubes has broadcast.com II up his sleeves. I hope so, but I think his focus is on owning sports franchises now and judging from the content I can download via hd.net, Cuban has become a content owner now and doesn’t want to cannibalize his content either. The only thing available for streaming/download from hd.net is 2 hours of Dan Rather content that is decidedly NOT in high definition. It’s good enough to look at and watch, but if my whole brand was based on high definition, I don’t know if I’d release much lower than HD quality content to the internet, even in consideration of bandwidth constraints. The file wasn’t so big that even doubling the file size and breaking it up into 2 pieces would’ve curtailed my desire to download it. My only point with this is that unless Cuban is deliberately trying to look “backwards compatible” with what’s available on HD.Net, he’s not looking to do “Broadcast II, and this time we mean it!”

The latest Dan Rather episode (from July 10th) is available for streaming via the Google Video player, and the production value isn’t nearly as good as some shorter stuff, like “Will it Blend: iPhone" via YouTube.

Another Update: 7:40a: In the credit where credit is due, much as this pains me, credit goes to Major League Baseball (MLB!). For $4.99 via iTunes I was able to buy all the coverage of the All Star Week festivities here in San Francisco (the rookie game, celebrity softball game, the Home Run Derby and the All Star Game itself). I thought it was a good value so I downloaded it. I was disappointed (come on, you knew I would be disappointed with something!)it was in 4:3 format instead of 16:9 widescreen, but it's optimized for the iPod, not my big screen. Still a good value for $4.99

iPhone in the IHOP

I pulled a semi all nighter last night and after a few hours of trying to learn how to do tables efficiently in CSS and writing a blog entry on Nielsen//Netratings new measurements (that will hopefully be published somewhere else) I wound up starving at 3am and needing food. I didn't think I'd be able to sleep so I headed to IHOP with my iPhone.

I'm sitting there eating my eggs and watching 24 on the iPhone when at about 3:30 I get a beep in my ears that I have an e-mail. It was from Mark Cuban -- who I believe was probably on the east coast and up early. He was responding to an e-mail I'd sent him based on his blog entry about HDNet & HDNet Movies leading in the High Definition ratings according to TNS Media Research.

There wasn't actually any numeric data in the release and the way I read it was unclear to me what it really meant. It indicated the combined HDNets were the ratings leader both in HD-Exclusive networks and broadcast/cable HD simulcasts. So I wrote to Cuban and asked if when Fox ran it's MLB game on Saturday if the combined HDNet/HDNet Movies had more eyeballs than were on the HD version of FOX's MLB broadcast.

This is a case where I believe even when I'm a "focus group of 1", I'm representative. Sports is something that really is enhanced by HD, and so if HDNet beat out the MLB Game of the week in HD, I would have found it astonishing.

Cuban e-mailed to say, no, HDNets didn't have more eyeballs than the MLB game in HD on Fox, but that on average for the day, HDNets averaged more viewers than Fox HD (and all other HD).

I'm happy for HDNet, and I think it is a nice achievement that I would likewise trumpet if I were running an HD tv network. But I'm not and am more into head-to-head comparisons with real numbers. I think eventually there will be some publicly available data that's sliced like that, but we're not there yet.

In the meanwhile, being in IHOP (or maybe they will change it to iHOP) at 3:30 a.m. watching TV on my iPhone and getting e-mail from Mark Cuban -- it made me smile.

Les Moonves vs. Mark Cuban: Who ya Got?

Thinking can sometimes be a very synergistic process for me. There are a multitude of subjects I am interested in thinking about and sometimes in the process of thinking about one thing, I wind up understanding another. It turns out in some weird way almost everything is at least tangentially related in my mind. I understand that often the output of all that is probably some “crazy thinking”.

Things are not always what they seem. I saw record low Nielsen Ratings for the (Stanley Cup) and wondered why my pal Ted Leonsis wasn’t selling the Washington Capitals as fast as he possibly could. On the surface, my approach made a lot of sense. But TV is a place where things aren’t always exactly what they seem, and indeed in the case of Ted Leonsis and the Washington Capitals and the NHL, I was very wrong.

Thankfully I had that all sorted out and didn’t wind up needing to binge on any kind of e-mail exchange with Mark Cuban where I was freaked out looking at the Nielsen Ratings for the NBA Finals and saying, “Oh my God, you’re as crazy as Leonsis!” It’s a good thing too, because I don’t think Mark would have gone nearly as easy on me as Ted did!

Fortunately I do have a gift for self-correction. I can learn.

One thing I am trying to learn is what’s really going on in the television business. I mean what’s really going on. The television industry itself faces the exact same challenges as the major sports franchises. Television bumps up against the same real limits. And there is definitely one real limit: that’s the amount of available free time. You can check out some of this data by the Bureau of Labor Statistics. The bad news is, there’s definitely not unlimited free time. The good news is, as of last summer, TV still won the highest concentration of free time (about 2.6 hours per day). And as you know, on any given night there is way more than 2.6 hours of programming available. All of the programming is fighting for the same free time.

I watched the Dan vs. Katie/Cuban vs. Moonves frenzy the other day and it definitely got me thinking that I was missing something. Something was not right about the whole thing in my mind, but I couldn’t figure out why.

Then, in a somewhat unrelated bit of curiosity, I was looking at the Brand Keys “Sports Loyalty Engagement” (more or less a measure of which sports franchises have the highest loyalty from their fans) and saw all the other “brand loyalty engagement” studies Brand Keys does, including this (rank of evening news by loyalty in 2007):

Evening News Shows
ABC
NBC
FOX
CNN
CBS
MSNBC

Then I understood the something I had missed in this whole thing. The short version of that thinking is, “Ouch, Moonves is dope!” The truth of it is, here he was a complete and total dope. He’ll never admit it. You won’t likely hear the Les Moonves, “Mistakes were made…” speech. But one very, very, very big mistake was made.

First, it is true that the program “brands” do have some loyalty and you can measure it. That’s true for both the Today Show and the CBS Evening News. There is data that I am missing and this data would be helpful. But there is data that I am not missing, and that’s the actual results (which are not good). I like to focus on results. Also, I wanted to start thinking about this in these terms: “What would I do if I ran a television network?”

There’s a secondary truth as well: the stars themselves have some “loyalty engagement index”. Which shows have the most loyalty and which stars have the most loyalty very often crossover. The data I am missing is the crossover between people who are loyal to both Katie Couric and Dan Rather, and people who are loyal to both morning AND evening news programming. Based on the actual results, and admittedly this is still pretty speculative there wasn’t all that much crossover.

Moonves made a key mistake, I believe. The evening news market was already in a free fall (and that trend will NOT change), the mistake Moonves probably made was that he thought he could change this trend. Given that mistake, I do understand how he made the second and big mistake. Let me be clear: when you have a brand, and the sky is kind of falling (ratings across all evening news viewers combined are down more than 50% over the last 25 years) but there is still value in the brand to be milked out of it – you milk it as long as you can. Creating a “new brand” in the environment of Network evening news is as complicated as launching a new beer brand. Beverage companies spend years with rollouts of new brands and the main reason (in my opinion) the rollouts of “new beer” are handled as slowly as they are is because they don’t want the success of the new brand to come at the expense of any existing brand.

There was an existing brand at CBS News. The brand to be exact, was “The CBS News with DAN RATHER”. Dan Rather actually was the brand and I think in a shrinking market where you have a fairly good brand – killing that brand off and trying to launch a new one is just…absolutely insane. This has nothing to do with Katie Couric. I do not believe there was anyone CBS could have put on aside from perhaps bringing Walter Cronkite back that would draw MORE viewers than Dan Rather. Because Dan Rather was the brand and getting rid of him pushed out the millions of people who were loyal Dan Rather evening news fans.

Katie Couric had loyal fans too – but that was for something else. So one lesson here is that brand loyalty does not (certainly in Network television) cross over from morning shows on one network, to evening news shows on the other.

As a result of the way Moonves went about this – again probably a result of thinking he could change the overall trend, one very, very critical mistake was made. Moonves thought about CBS News as the brand. It wasn’t. Dan Rather was the brand and in this case Moonves completely underestimated the value of the Rather brand.

I really don’t find it surprising that without ever thinking about any of this I hadn’t figured it out. What’s vastly more surprising to me is Mooves didn’t figure it out either. There are studies on brand loyalty by the stars themselves. I would not be shocked at all to find out that programming decisions for smaller networks, whether it be USA or Mark Cuban’s own HDNet are being made by trying to create programming around stars with high brand loyalty that happen to be out of work.

I also won’t be surprised that when it comes to network television, that no matter how steep the trend line down is, that the egos like Moonves will think they can reverse the trend, fire more stars with high brand value and…how long can it really be before Dan Rather and Katie Couric are hosting together a nightly news show on Cuban’s own HDNet?

I’ve got Mark Cuban.

Advantage: HDNet?

Mark Cuban knows how to leverage the pop culture better than the geniuses at Time Warner. I didn’t even know Dan Rather was doing some investigative journalism for HDNet until Mark’s blog post this morning.

I am not a huge fan of “The News” on television. In fact, I try to avoid it whenever possible (which believe me, is every time) taking my news in from the New York Times, Google, Yahoo, etc, and a large, large dose of ESPN.

Anyway, Mark capitalized on all the press about Dan Rather saying Moonves at CBS was “tarting it up” in an attempt to attract younger audiences. Moonves has apparently said if they don’t attract a younger audience, the nightly news will die. Moonves shot back that Rather was being sexist in his “tart-ing it up” comment and Rather responded that he wasn’t calling Katie a tart. Just commenting on CBS’ approach.

I look at this chart at and see that the nightly news (in the aggregate, this chart represents total viewers across all 3 major broadcast networks) has been in a steady free fall for over 25 years. It’s not turning around. The overall audience for nightly network news shrunk in half during a 25 year period where there was definitely a bit of population growth. The good ship “Nightly News” has sailed and isn’t going to turn around and come back.

We know for sure, advertisers are willing to pay more for the coveted 18-49 demographic. I only have about 5 years left to be coveted and I want to know WHATS IN IT FOR ME? (I mean besised ads trying to whip me into a frenzy that I need this or that product or I’m a total loser). But beyond that, all that’s clear to me is that that chart is going to continue to trend down. CBS will ultimately have less viewers than they do now. So will ABC. So will NBC.
This speaks to some of the same fragmentation issues I wrote about yesterday, and is every bit as inevitable.

The interesting thing to me is that it does seem that the advantage has shifted to the smaller guys like HDNet. If HDNet could attract even a million viewers to one of its broadcasts I believe that will be a profitable piece of content for HDNet. I do not believe there is any chance in it current set-up that CBS can produce a nightly news show and make money on it for one million viewers, for an audience of one million.

The HDNets do seem to have an advantage with the "smaller" market fragments.