MEDIACOM Marketing Digest 10 February 2004

10 FEBRUARY 2004

TELEVISION

TVNZ have just unveiled their latest ratecard, for the period May through August 2004, and TVNZ are cashing in on the current high demand for airtime - with a vengeance.

Monthly peaktime average rate increases (year on year) range from a low of 11.7% to a high of 35.6%! And the highest individual increase is reserved for the final series of FRIENDS - the Tuesday 8.30-9pm timeslot is up 61%.

Monthly average peaktime rate increases by channel:

* TV1 May up 16.2% YOY
* TV1 June up 16.7%
* TV1 July up 12.5%
* TV1 August up 28.4%
* TV1 Aug 14-30 (Olympics) Up 35.6%
* TV2 May up 16.8%
* TV2 June up 16.8%
* TV2 July up 11.7%
* TV2 August up 13.2%

With rate increases like this, one might be forgiven for expecting accompanying performance increases. Alas, audiences have been steadily declining for both channels, and there's little in forthcoming programming to suggest that the decline will be arrested any time soon.

TV1 has seen its core 25-54 audience slide for most of the last 12 months, the most notable exceptions being in October and November 2003 (thanks to the Rugby World Cup). Year on year, TV1 peaktime audiences have been down anywhere from 4% to 19%.

TV2 similarly has shown steady audience loss of its 18-39 target audience every month since April 2003, with declines of between 5% and 19% (year on year) for the last ten months.

Overall TV spending was up 16.5% for the period October-December 2003 (compared with Q4 1002), and it is this statistic which is driving the latest round of rate increases. In a nutshell, advertisers want more airtime than is currently available, and there's been no increase in available inventory (i.e. no new free-to-air channels). So TVNZ is steadily hiking its rates to cash in on this unsatisfied demand, alienating small and large advertisers alike.

DOWNLOADS

The internet has dramatically reconfigured the music industry, and now the same sea-changes are underway for the movie business.

This time, however, the major studios are trying to grab a piece of the download pie before pirate movie downloading reaches terminal velocity. The leading US Internet Service Provider, America Online, has just joined forces with Movielink for a Winter Movie Special, a five-week program that lets broadband AOL members exclusively download and rent some of the year's biggest movie titles for as little as 99 cents or less each. Until February 26, AOL members can choose from:

* Charlie's Angels: Full Throttle
* Finding Nemo
* Legally Blonde II: Red, White and Blonde
* Pirates of the Caribbean: The Curse of the Black Pearl
* Terminator 3: Rise of the Machines
* The Hulk
* The Italian Job
* The Matrix Reloaded
* Tomb Raider: The Cradle of Life
* 2 Fast 2 Furious

AOL members can download Movielink movies and store them on their hard drive for up to 30 days. Once play is initiated, they can watch a movie as many times as they wish in a 24-hour period. Movies can be viewed at home via the PC or a television connected to the PC, or downloaded to a laptop for travelling.

For legal movie downloading to catch on in New Zealand, it'll have to be driven by an ISP like Xtra or Ihug - but something will need to happen about NZ's extortionate broadband pricing structure first. Otherwise, we'll be paying 99 cents for the movie download - and perhaps another $20 for the bandwidth we're using to download each movie.

ABOUT MEDIACOM

MEDIACOM, with offices in 80 countries, is one of the world's largest and most respected media service companies. We create media solutions that build business for a wide range of local, regional and worldwide clients. With $10 billion in global billings, a commitment to strategic insight, total communications planning, tactical media brilliance and tough but creative media negotiating, MEDIACOM provides unsurpassed value in today's chaotic media marketplace.

RADIO

We received a junk fax yesterday from More FM, offering "3 months advertising on Auckland's 91.8 More FM and a return flight to Sydney, Brisbane or Melbourne for just 3 monthly payments of $695 + gst per month".

We'll ignore the fact that, later in the fax, the pricetag is stated as "$665 + gst per month". Instead we'll simply note that More FM have been offering this sort of travel incentive virtually ever since they launched, so the offer is obviously both attractive and successful, and has immense sales advantages ... no need to get into discussion about reach, frequency, ratings, audience levels, station popularity or any of those other little measurements which normally determine the relative effectiveness of the medium.

Instead, the dominant thought is all about the perceived value of the "free" premium, and whether it is sufficiently compelling to lure advertising dollars which would normally be spent elsewhere, if at all.

In this case, the Gift With Purchase (a trip to Oz) still represents good value for money, and - although we might bleat about the loss of objective measures - we have to salute the offer as an effective business-getting tool.

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IN THEIR OWN WORDS

"Sales will continue to be the death of many retailers in New Zealand. I queried several people over the holiday period about sales at Briscoes. 'Suss' and 'shonky' were the two comments I thought captured their advertising practice best." NZ HARDWARE JOURNAL EDITORIAL, ROSS MIDDLETON.

NOCALLS

If you live in the USA and have Caller ID, you'll now know when a telemarketer is trying to reach you.

New Federal Trade Commission regulations have just kicked in, requiring telemarketing firms to identify themselves.

Such calls had shown up on Caller ID as "out of area." Now the name displayed by Caller ID must either be the company trying to make a sale or the firm making the call.

The change is part of the rules that set up the do-not-call registry, which consumers can use to block certain telemarketers from calling.

The do-not-call registry, which took effect in October, now contains 56.3 million phone numbers. Because telemarketers must update their lists of who does not want to be called every three months, consumers who sign up now can expect to see the volume of calls decline in April.

FTC spokeswoman Cathy McFarlane said the agency thinks that the registry has been a huge success. "People are talking to other people who say, 'I don't get telemarketing calls any more,' " she said.

The government says people on the list can expect about 80 percent of telemarketing to be blocked. Exempted are charities, pollsters and political campaigns, as well as companies that have recently done business with someone on the do-not-call list.

The FTC has received more than 100,000 complaints so far. Firms that call numbers on the list face fines of up to $11,000 for each violation.

NEWS

For people under 30, the Internet now rivals newspapers as a source of news, according to a recent US consumer survey.

Analysts say it appears that the Internet has permanently shifted the reading habits of young people, and they are unlikely to take up reading printed newspapers when they grow older as earlier generations did.

It's not the first time newspapers have faced erosion of the youth audience. For more than 20 years TV has siphoned off young readers and advertising aimed at them, said David Card of New York-based Jupiter Research.

"Printed newspapers are not going away in our lifetime," Card said. "But I doubt that a lot of young people who grew up on TV and the Internet are going to retreat to the printed newspaper as they settle into middle age."

Published by MEDIACOM (NZ) LIMITED, P O Box 3369 Auckland New Zealand, Phone 09 914 4940 Fax 09 914 4903 Editorial Comments or requests: newsletter@mediacom.co.nz To subscribe to this newsletter, please send an email with SUBSCRIBE in the subject line to subscribe@mediacom.co.nz

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