CONSOLIDATION GOOD FOR PUBLIC, ADVERTISERS, KARMAZIN TELLS TVB
Panelists at opening session of TV Bureau of Advertising conference in N.Y. Tues. agreed more ownership consolidation was in TV’s future. “It’s inevitable,” said Dennis FitzSimons of Tribune Bcstg. via videotape. Viacom Pres. Mel Karmazin said owners of TV stations or groups that remained small would be at “huge disadvantage… It’s better to be strong… Consolidation has been good for the public, not bad,” as well as for advertisers. Larry Divney of Comedy Channel said “there’s no doubt in my mind that consolidation will continue… We will end up competing with ourselves.”
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Karmazin said Viacom and its broadcast and cable affiliates were prepared for consolidation, citing cost efficiencies for advertisers and package deals that included several media: “Not only can we give [advertisers] television, but we also can give them radio and outdoors.” What’s needed, he said, is right to own “real duopolies” that didn’t include restrictions in FCC rules. Citing high programming costs, Irwin Gotlieb said “perhaps the only way you correct it is to permit the networks to own larger and larger stakes in the U.S. economy.”
Analyst Thomas Wolzien of Sanford Bernstein presented TvB members with his revenue projections. There’s “definitely a comeback” from recession under way for TV stations, he said. “Everybody feels things are getting better.” But he predicted only 1% growth in TV revenue this year, with radio “flat.” Big 4 TV network revenue will increase 3% in 2003 and cable networks 2%, he said: “I'm not a forecaster [but] we're encouraged by the first quarter.” Gotlieb said industry was “cautiously optimistic” that TV would “do better than all other media” in 2002 in its recovery from 18-month recession. Karmazin said Viacom’s revenue was up last year despite recession, but didn’t say by how much. FitzSimons said Tribune stations had “a slow start in 2002 but a strong 2nd quarter.”
Current TV practice of selling upfront will remain common practice, Karmazin said, with advertisers buying scatter on CBS and Viacom-owned stations “later and later.” He said spot market was “doing extraordinarily good” right now and “we're doing as good a job [selling] as we can.” There are just not enough advertising dollars available for “dozens” of cable channels, he said. Gotlieb said “in a lot of ways 2001 was an… extraordinary year.” Divney said last year was “tough” for cable “but we learned a lot of lessons” and Comedy Channel is up 8-10% so far in 2002.
TvB’s one-day session was first time conference has been divorced from NAB convention in last 10 years and record crowd of more than 700 attended conference held in conjunction with N.Y. Auto Show. TvB probably will return to N.Y. next year, said Pres. Chris Rohrs, who said annual meeting with TV’s biggest advertiser (car manufacturers and dealers) would become “a tradition we think we can build on.” NAB Exec. Vp Charles Sherman said separation of conventions was “in the best interests of the broadcast industry” and that TvB still would play prominent role at NAB’s show, programming one panel. Breakup was said to be by mutual agreement, with TvB giving up 6-figure stipend NAB had been paying for ad group’s participation. NAB Exec. Vp James May reported on key congressional races -- about 10 for Senate seats, 40 in House -- that he said would produce large local TV expenditures.