Legacy TV - Media Group Online › ... › 02 › LegacyTV18.pdfLegacy TV: Not Fading to Black pg. 5Continued from page 4 African Americans’ attraction to live TV is also reflected

Legacy TV: Not Fading to BlackA Special Report from Media Group Online, Inc.

A Script of Almost Endless PagesIn most movie and TV scripts, the last direction at the bottom of the last page is typically “fade to black.” Whether legacy (or linear or traditional) TV ever reaches that last page is still to be determined, but it isn’t happening any-time soon.

The set is fully illuminated, the cameras are rolling and the actors are in position for another take, another scene – and the American public, as well viewers globally, are still attracted to our ubiquitous “window on the world” and mesmerized by what they see and hear.

Various facts and forecasts make it very clear that legacy TV still retains its position as the premier medium. After decades of challenges from other major traditional media – print, radio, outdoor and direct mail – TV remains the leader in that realm. Even with a slight erosion of total daily TV viewing time, US adults will spend more than two hours per day more than the time they spend watching digital video during 2017, 2018 and 2019.

Daily Time Spent Viewing TV and Digital Video, 2017–2019

Medium 2017 2018 2019

Legacy TV 3H, 58M 3H, 53M 3H, 47M

Digital video 1H, 17M 1H, 20M 1H, 26M

eMarketer, November 2016, January 2018

Considering all the various devices, with the two most common being mobile, and all the new streaming services and channels and their flood of new programs, TV’s contin-ued strength is truly remarkable.

This Special Report from Media Group Online will explore similar comparisons – and other good news –as well as the challenges legacy TV faces. It provides more than enough information, data and insights to prove to your prospects and clients that, in most cases, TV is still the best advertising medium to reach their audiences.

Legacy TV: Not Fading to Black

www.mediagrouponlineinc.com pg. 2

The TV Biz Buzz2017 was clearly the year of mergers & acquisitions in the broadcast industry. The total of $8.24 billion, which includes radio and TV, was the largest amount since 2014, and the third most since 2008. TV M&A accounted for a sizeable majority, or $5.03 billion.

The top TV deal, totally $3.76 billion, was, of course, Sinclair Broadcast Group merging with Tribune Media Company; however, Nexstar’s merger with Media General Inc. was also big.

During Q4 2017 alone, there were deals valued at $500.5 million, with Tegna’s $303 million purchase of Midwest Television Inc.’s San Diego stations the largest. Other Q4 M&As of note were all of ZSG Communications Inc.’s stations being added to NBCUniversal’s Telemundo Station Group’s holdings for $75 million and HC2 Holdings spending $33 million to acquire the Azteca American network from affiliates of TV Azteca SAB de CV.

TV M&A Volume, 2010–2017Year Amount

2010 $175 M

2011 $1.21 B

2012 $2.07 B

2013 $11.38 B

2014 $7.26 B

2015 $1.27 B

2016 $5.30 B

2017 $5.03 B

TVTechnology (Kagan), January 2018

Other major M&A activity that affects TV include Discovery’s acquisition of Scripps, QVC buying HSN and Disney acquiring most of 21st Century Fox’s assets. Plus, the proposed Warner and AT&T merger is still in the hands of government regulators.

Next Gen TV Enters the Competition

With the FCC’s late-2017 approval of ATSC 3.0, or “Next Gen TV,” over-the-air TV stations will be able to implement this new, advanced standard. Although the system has digital capabilities and other competitive tools, it won’t be compatible with existing TV sets.

This is a challenging issue and will likely extend the time required for widespread introduction and use; however, ATSC 3.0 will provide stations with advanced advertising tactics, such as personalization, or targeting demographics by device and location. In addition, the technology will allow local stations to add numerous sub-stations that could help to target local audiences more precisely and more efficiently and effectively for advertisers.



Broken News or Breaking News?Considering Americans’ multiple news sources, it shouldn’t be surprising that an August 2017 survey from Pew Research Center shows continuing erosion in viewership of network, cable and local TV news. The first bit of good news for you is that local TV news still attracts the largest audience of any of the three TV platforms.

TV Platforms Where US Adults Often Obtained News, 2017 vs. 2016

TV Platform 2016 2017

Network TV 30% 26%

Cable TV 31% 28%

Local TV 46% 37%

Pew Research Center, January 2018

A cursory review of detailed data from the Pew Research Center survey may seem to reinforce the general trend; however, closer examination and analysis indicate some “hidden” strengths in these numbers.

Demographics of TV News Consumption, August 2017

MetricLocal

TVNetwork

TVCable

TV

Men 33% 24% 29%

Women 41% 27% 28%

Caucasian Americans 35% 24% 29%

All other ethnicities 41% 29% 28%

18–29 18% 8% 10%

30–49 28% 13% 16%

50–64 47% 35% 35%

65+ 57% 49% 58%

High school or less 47% 31% 29%

Some college 37% 23% 28%

College+ 26% 21% 28%

less than $30,000 46% 32% 27%

$30,000–$74,999 36% 24% 29%

$75,000+ 28% 20% 30%

Pew Research Center, January 2018

Viewership of TV news, especially local news, is mostly older adults and fewer young adults, but which group controls more of the total wealth, owns the largest homes and has more discretionary income? Plus, more Baby Boomers are extending their careers or continuing to be economical productive, even in retirement.

Unlike previous generations, Millennials are still struggling to start their “American Dream,” as many are burden with student loan debt, making it difficult to amass a down payment for a home. In addition, more of them marry at an older age, which also limits and/or delays their value to advertisers as family-based consumers.

The table also shows larger percentages of adults with moderate income and education levels watch local TV news. An argument could be made that this trend is an upside for advertisers since these viewers are the bulk of US consumers, not adults with larger incomes and more education.



The Power of ProgrammingTV programming – entertainment, news and sports – is the essence of the medium and what attracts and holds viewers and advertisers.

According to March 2017 survey results from ThinkNow Research of US Internet users, 18–64, live TV (or when a show airs on network TV) was the top source for watching TV content among the four major ethnic groups, except Asian Americans. This was despite the billions that other sources are spending for original content. Netflix, for example, is expected to spend $8 billion on content during 2018.

A number of points make this data very significant.

1. These are Internet users, who presumably are attracted to the Web to search for and view TV/video content more than non-Internet users.

2. The age range of 18–64 includes both older Gen Z members and Millennials at the young end of the spectrum.

3. The age range excludes the oldest Baby Boomers and the even older members of the Silent Generation, who are the largest age groups of TV viewers.

4. Another major takeaway from the table on this page is African Americans are the largest percentage of Americans, by ethnicity, watching live TV.

The buying power of African Americans consumers now exceeds $1.1 trillion annually and is forecast to reach $1.5 trillion by 2021. In addition, Nielsen reports that African American households with an annual income of $75,000 or more are increasing at a faster rate than all other ethnically defined households.

US Internet Users’ Sources for Watching TV Content, by Ethnicity, March 2017

TV Content SourceAfrican

AmericansCaucasian Americans

Latino Americans

Asian Americans

Total

Live/When a show airs on network TV

73% 69% 64% 55% 68%

Netflix 55% 59% 61% 49% 58%

YouTube 50% 59% 61% 49% 50%

Recorded via DVR 37% 42% 31% 24% 38%

DVD (rented or purchased) 32% 38% 29% 19% 34%

Amazon Prime 28% 33% 26% 33% 31%

Hulu 25% 29% 25% 20% 27%

Roku 11% 13% 11% 12% 12%

Apple TV 8% 12% 10% 7% 11%

Google TV 7% 9% 7% 5% 8%

Sling TV 5% 8% 4% 3% 6%

eMarketer (ThinkNow Research), August 2017



Continued from page 4

African Americans’ attraction to live TV is also reflected in Nielsen’s Q2 2017 Total Audience Report. The total US population (persons 2+) spent 24 hours, 26 minutes weekly watching live TV; however, the African American population’s live TV viewing time was slightly more than 50% more, at 36 hours, 52 minutes. By comparison, Latino Americans’ time was 19 hours, 3 minutes and Asian Americans’ 11 hours, 20 minutes.

African Americans 50–64 and 65+ certainly contribute to the large percentages of all older Americans who are loyal TV viewers; however, African Americans in the very important 18–24, 25–34 and 35–49 age groups significantly exceeded the monthly time their Latino American and Asian American counterparts spent watching live TV.

These younger African American age groups are also important to advertisers because, since 2008, the number of African American-owned business has increased 34%. Undoubtedly, this is contributing to the increase in the percentage of African American households with annual incomes of $75,000 and more.

Monthly Time Spent Watching Live TV Among African-Americans, Latino Americans and Asian Americans, by Age Group, Q2 2017Ethnic Group 18–24 25–34 35–49 50–64 65+

African Americans

88H, 31M

120H, 48M

164H, 8M

233H, 8M

290H, 10M

Latino Americans

43H, 22M

62H, 22M

89H, 9M

125H, 58M

170H, 46M

Asian Americans

23H, 9M

34H, 1M

50H, 22M

73H, 48M

116H, 28M

Nielsen, November 2017

Scripted Original Series on Broadcast TVData from FX Networks Research via Statista reveals that during 2017 broadcast TV was second only to basic cable in the number of original scripted TV series. Those that online services produce and present are increasing rapidly, but they were third.

Estimated Number of Scripted Original TV Series Aired in the US, by Source, 2013–2017

YearBasic Cable

Pay Cable

BroadcastOnline

ServicesTotal

2013 155 30 130 34 349

2014 165 33 145 46 389

2015 180 35 140 67 422

2016 180 35 155 85 455

2017 175 48 160 104 487

Statista (FX Networks Research), January 2018



TV Advertising Remains StrongAccording to BIA/Kelsey’s US Local Advertising Forecast 2018, local TV will be second only to direct mail in total expenditures, at $20.8 billion and $38.5 billion, respectively. Maybe, more importantly, local TV will account for more than 60% of the local video advertising market, making it the largest source. Local TV will also benefit from 2018 being an Olympics and mid-term election year.

Another aspect of the information about TV news on page 3 of this report is the precarious position digital news sources find themselves. The revelations about Russians’ manipulation of social media content, including news, and the proliferation of so-called “fake news” from other questionable sources, certainly erodes the trust Americans have in these digital news sources. Young people, in particular, may decide that TV news can be more trusted.

A 2017 study from Kantar Millward Brown also addresses the trust factor, as it reported consumers are more receptive to advertising from TV than all but two other media, and much more than all digital media listed in the study results.

Consumers’ Positive Receptivity to Advertising, by Channel/Format, 2017Medium Percent

Cinema 49%

Outdoor 46%

TV 44%

Magazine 44%

Newspaper 43%

Radio 39%

Online search 27%

Online display (PC or laptop) 25%

Video (PC or laptop) 25%

Video (phone or tablet) 25%

Online display (phone or tablet) 24%

Local Search Association (Kantar Millward Brown), January 2018

Phase 2 of the Disney-ABC Television study of attribution analysis, which Accenture conducted, indicates programs with a 1.0 rating or greater deliver twice the ROI of programs with a rating of 0.4 or less. In addition, higher-rated programs were shown to deliver sales per impression 92% greater than the cost per impression for advertising in that programming.

Shows that consumers deem to be of higher quality provide 1.7 times the ROI, compared to programs consumers find less attractive. Medium-to-high social commentary associated with highly viewed programs deliver 1.6 to 2.0 times the ROI of programs with very little or no social commentary.



A Smart and Connected DeviceAccording to a late-2017 report from Parks Associates, a smart TV was the only category of home entertainment devices Parks has measured since Q1 2010 that increased in ownership from Q1 2016 to Q2 2017, at just more than a total of 40%.

More recent home entertainment devices, a smart speaker with a personal assistant (Amazon’s Echo with Alexa, for example) and virtual reality headsets, were the only other devices to increase in ownership during the same period.

Parks Associates also reported that smart speaker adoption in US broadband households increased from 16% at the end of 2016 to 22% at the end of 2017. The penetration will increase into 2018, with Canalys’s December 2017 Smart Speaker Analysis estimating 38.4 million more of them will be sold during 2018.

A smart TV was the first of all entertainment devices US broadband households that are device owners or service subscribers said they would like to control with a smart speaker/personal assistant.

Smart Home Products Consumers Prefer to Control with a Smart Speaker/Personal Assistant Device*, 2017

Smart Home Product Percent

Smart lighting 23%

Smart programmable thermostat 18%

Smart door lock 12%

Home security system 30%

Smart TV 20%

Streaming media players 16%

DVR/PVR 13%

Smart sprinkler system 5%

Pay-TV service 10%

Parks Associates, December 2017 *ranked first

The important point here is that new household digital devices may enter the market – and become popular quickly – but TV is perceived as being THE “partner” with those devices.

The TV as a Shopping DeviceT-commerce is one of the next trends in the use of the television. It refers to the purchasing of merchandise via the TV seen in TV commercials and featured in TV shows. According to a December 2017 survey from Connekt, 76% of the responding consumers said they would use their TV for such purchases as a feature of a smart TV. Of those surveyed, 42% are likely to make such purchases during 2018.

Products Consumers Are Most Likely to Buy Via T-Commerce, December 2017

Product Percent

Household items 76%

Electronics 67%

Clothing/Apparel 47%

Home & garden 44%

Groceries 24%

Sporting goods 23%

Movie tickets 18%

Connekt, December 2017



TV and Social Media Are Still the Best PartnersIt’s long been understood that TV viewership is a primary driver of consumers’ search and social media activity – and now there is new data from Nielsen and the Outdoor Advertising Association of America (OAAA) to reinforce this partnership.

In two categories in the survey of 1,089 US adults – searched for information and visited a Facebook page/posted on Facebook – TV commercials are first among the 5 types of ads/commercials measured.

Clearly, these results support a meaningful strategy for your clients that Media Group Online has strongly advocated for years: using some or all of a TV commercial message to drive viewers to advertisers/retailers’ Websites and/or social media pages to view product information and to purchase those products.

To date (although based on anecdotal observations), most brands and advertisers, especially those using local TV, have failed to take advantage of the strong correlations presented in the table on this page.

Instead of relying on consumers to make a subtle connection between the TV commercial they are viewing and simultaneously using a mobile device to visit the advertisers’ Website and/or social media page, their TV spots (at least some) should feature a specific product that is available for purchase within the next 5 or 10 minutes via their Website and/or social media page. The offer of an online coupon or discount could be included in the TV commercial message to maximize visits and purchases.

This strategy is an opportunity for local advertisers/retailers to compete in an Amazon-driven environment, not only to sell more product, but also to capture more data about local consumers, and then put that data to optimum use, as major brands and retailers do.

Sources: HuffPost Website, 1/18; eMarketer Website, 1/18; Forbes Website, 1/18; TVTechnology Website, 1/18; Ooyala Website, 1/18; Pew Research Center Website, 1/18; Statista Website, 1/18; Black Enterprise Website, 1/18; The Business Journals Website, 1/18; Nielsen Website, 1/18; MediaPost Website, 1/18; BIA/Kelsey Website, 1/18; MediaVillage Website, 1/18; Local Search Association Insider Website, 1/18; Insideradio Website, 1/18; TechCrunch Website, 1/18; Parks Associates Website, 1/18; Connekt Website, 1/18; Marketing Charts Website, 1/18.

Prepared: January 2018

© 2018 Media Group Online, Inc. All rights reserved.

Consumers’ Search and Social Activity in Response to Traditional Media and Banner Ads, 2017

ActivityTV

CommercialsOut-of-

Home AdsBanner

AdsNewspaper/

Magazine AdsRadio Spots

Searched for information 57% 46% 36% 36% 35%

Visited a Facebook page/posted on Facebook

40% 38% 32% 27% 25%

Posted on Instagram 22% 25% 20% 17% 16%

Posted on Twitter 22% 23% 19% 16% 16%

Marketing Charts (Nielsen and OOOA), January 2018

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Legacy TV - Media Group Online › ... › 02 › LegacyTV18.pdfLegacy TV: Not Fading to Black pg. 5Continued from page 4 African Americans’ attraction to live TV is also reflected