December 2008

The older you get, the more TV you watch, according to a report due from Deloitte indicating that "millennials," the generation of ages 14-25, watch just 10.5 hours of TV a week. That compares with 15.1 hours for those belonging to Generation X (ages 26-42), 19.2 hours for baby boomers (43-61) and 21.5 hours for matures (62-75). Lest one assume millennials are shunning broadcast and cable in favor of watching DVDs on their TV screens, they're not. They spend less time watching DVDs of movies and TV shows on television sets, 4.8 hours a week, than do Gen Xers. They are, though, spending more time watching DVDs on a computer -- 1.9 hours a week -- than any other age group. But while millennials are watching the least TV, they are spending the most time with media in general, making that up with video games, music and the Internet.

Time Warner expects to soon find itself atop a mountain of fresh cash at a time when liquidity is scarce, the media industry is in turmoil and valuations are at an all-time low. It all adds up to a rare opportunity for an embattled, old media empire to reinvent itself from a position of financial strength as a pure branded content company for the digital age. But with its stock at six-year lows and its disastrous marriage with AOL a not-too-distant memory, Time Warner said it will forego big acquisitions to focus on rewarding shareholders with steady cash flows from its existing businesses. Analysts say Time Warner is unlikely to consider any broadcast assets that may be offered up by the likes of NBC Universal or CBS Corp. (CBS), though it could entertain film studio assets or cable networks at the right price. Time Warner bowed out of the bidding for the Weather Channel, which NBC Universal acquired last summer for $3.5 billion, because it got too expensive. Cable networks owned by Scripps Networks, like Food Network and HGTV, could be targeted by Time Warner, as could those owned by Discovery Communications; Cablevision's Rainbow Networks division, which owns AMC; and Viacom, which owns MTV Networks and Nickelodeon. Also, having recently consolidated its film division under Warner Bros., Time Warner is looking for growth opportunities abroad in the film business.

Ad market forecasters have been ratcheting back their outlooks for months now, but media economist Jack Myers just upped the ante with his prediction of an "advertising depression." Myers, a longtime industry consultant who runs JackMyers.com, is now forecasting an unprecedented three straight years of declines in advertising and marketing spending in the U.S. starting this year. To put that in perspective, the industry hasn't suffered even a two-year spending decline in advertising since the 1930s. All the money expected to leave advertising has weighed on the media sector, especially the ad agencies. "It's not just economic," Myers said. "It's secular and systemic. It's like moving from an agrarian economy to an industrial economy. Anyone connected with the advertising business is challenged right now." After growing at a blistering pace over the past several decades with just a few isolated recession years along the way, the marketing and advertising engine that has propelled the US economy is sputtering. If Myers' forecast is accurate, the industry, which has long been viewed as being riddled with inefficiencies and extravagance, is likely headed for a massive shakeout.

The New York Times is planning to launch a new "Instant Op-Ed" next month that will allow the paper's Web site to post immediate expert viewpoints on breaking news, according to Editorial Page Editor Andrew Rosenthal. "Our Op-Ed now is very rapid response, but it is at the most the next day," said Rosenthal. "We are looking at a way to take advantage of the expandability of the Internet, the back and forth of it and the instantaneous nature of the Internet. Taking ideas that have existed in Op-Ed form and giving them a robust position online." Rosenthal said three editors, among them former editorial writers, are teaming up with a Web producer to oversee the initiative. He said the team is gathering a list of numerous experts on a variety of issues to be ready to provide quick comments, essays and columns on issues or stories that come up in the news. He said the idea is to have a group that provides opinions soon after news occurs, with a solid Web space dedicated to them.