Spots N Dots
The Daily News Of TV Sales
May 23, 2017

BROADBAND SUBS SURPASS PAY-TV SUBS

MVPD GROWTH IN HIGH-SPEED WEB

For the first time ever, according to Leichtman Research Group (LRG), broadband subscribers now outnumber pay- TV subscribers in the U.S. In line with other recent reports, LRG calculates that the major MVPDs lost about 410,000 net video subs in Q1, dropping the tally for the major providers (about 95% of the market) to 93.3 million. At the same time, the major cable and telco companies (also about 95% of the market) added about 960,000 net broadband subs to end the quarter at 93.9 million.

The major cable companies added just over 1 million broadband subscribers in Q1, while they lost 114,000 pay-TV subs. And while Comcast was the only big cable company to add pay-TV subscribers—41,000 of them— that was eclipsed by its addition of 430,000 broadband Internet subscribers. The difference can’t be attributed solely to cord-cutting, since some of the broadband additions are business customers, but cable companies are clearly having success in growing their high-speed Internet business as the traditional cable business shrinks a bit. They’re also beating their telco competitors, who lost nearly 44,600 net broadband subs in Q1 while also losing 326,000 pay-TV subs.

With no way to piggyback broadband Internet onto their satellite TV services, the two DBS companies have jumped into the virtual MVPD business, selling cable-like video packages to be streamed by subscribers via whatever Internet service they may choose. Dish Network reports combined subscriber numbers for its two services, but LRG calculates that Dish lost 318,000 net satellite TV subs in Q1—dropping it to 12.17 million—but added 175,000 Sling TV subs to hit 1.36 million. DirecTV, meanwhile, held steady with just over 12 million satellite subs in Q1—in part because parent AT&T is pushing the satellite service over the land-based AT&T U-verse service, which lost 233,000 subs—but still-new DirecTV Now added 175,000 to take its total to 375,000.

The biggest players in broadband are the two biggest cable companies. LRG says Comcast has 25.1 million Internet subs, exceeding its 22.5 million TV subs. Charter Communications has 23.1 million broadband subs, topping its 17.1 million TV subs. Third place in broadband belongs to AT&T at 15.7 million, while U-verse, DirecTV and DirecTV Now combined have 25.4 million pay-TV subs. Verizon checks in with 7.10 million broadband subs and Verizon FiOS with 4.68 million TV subscribers.

Other cable companies showed patterns similar to the two giants in Q1. LRG’s figures show that Altice, Mediacom and Cable One all lost net pay-TV subscribers, while gaining broadband Internet customers.

ADVERTISER NEWS

The Detroit Free Press reports customers are lining up to get the now-available Volkswagen diesels that have been in limbo for two years, as they will be the last diesels VW plans to sell in the U.S. for the foreseeable future. The available vehicles include Beetle coupes and convertibles, Jetta and Passat sedans, and Golf hatchbacks and wagons. Although lower than the original mileage claims, the fuel economy is now rated at 29 MPG in the city, 40 on the highway, and 33 combined with a dual-clutch automatic transmission……Ace Hardware is incentivizing co-op members to upgrade their stores and/or to expand. Ace store owners can now get as much as $200,000 in an equity match loan on a dollar-for-dollar basis for opening a new store or buying out a competitor. Since co-op members are Ace stockholders, the loans can be repaid immediately using the owner’s existing Ace stock or repaid over time using future patronage distributions (a rebate paid back to stores based on their purchases)……After a successful six-month test in a few scattered markets, Golden Corral is rolling out brunch nationally, geared for the 9:30AM-2PM daypart. Priced around $9, the test markets saw higher sales, traffic and profit and the CEO noted that with comp store growth difficult to come by in the industry, ”we were looking for strategic opportunities…to expand daypart and bring about more options”……Although about 60% of Sprouts Farmers Markets sales comes from perishables, the company is looking to profit more from non-perishable private label offerings, which have grown to about 12% of total sales. Supermarket News says the success of private labels has helped Sprouts reach 40 consecutive quarters of positive comp store sales and in the most recent quarter Sprouts was up 1.1% despite an estimated 3% deflation…… Destination XL Group finished its fiscal quarter with comp store sales down 2.1% and total sales down 0.2%. It adds that April sales picked up (comp sales up 6.4% for the month with good results continuing into May) after its spring advertising campaign broke on 4/2. But in a sign of the time that says a lot about the state of retail right now, the CEO felt he needed to comment “A recent report which has been repeated by various media outlets has called into question our ability to repay our debt. This report inaccurately assesses our financial position and business outlook……We remain on track to generate free cash flow of $15 to $20 million which will be used to repay our debt and repurchase our shares in the open market.”.... Kellogg’s wellness focused cereal brand Special K has a new campaign out. It replaces the “Eat Special. Feel Special” tagline with “Own It,” AdAge reports. The takeaway is that women should “own” their eating choices. The spot was produced by Leo Burnett.

NETWORK NEWS

Sasheer Zamata will be leaving NBC’s Saturday Night Live after four seasons. Zamata’s decision marks the third cast member departure for the late-night sketch comedy over the past week. This past Saturday’s episode was the last for Bobby Moynihan and Vanessa Bayer, who announced their departures prior to this season’s finale. The departing cast members were not given official goodbyes following the episode, but photos have surfaced online indicating that they were given special treatment off-air……NBC has closed a deal for a 10-episode second-season renewal of Trial & Error. The network plans to bring back the comedy in midseason. NBC executives are said to be excited about the storyline planned for Season 2 of Trial & Error. The comedy’s ratings were modest but on par, and sometimes slightly higher than those for fellow freshman comedy Great News, which landed the Thursday 8:30 PM (ET) timeslot next fall behind the new season of Will & Grace. The first season Trial & Error averaged a 1.3 rating in adults 18-49 and 5.5 million total viewers in the Nielsen live +7 survey……The son and daughter-in-law of the late iconic Mexican singer and songwriter, Juan Gabriel, have filed suit in Florida state court in Miami-Dade County against Univision, Telemundo, and other defendants for defamation and other related causes of action. In the amended complaint, Ivan and Simona Aguilera allege that the defendants have falsely stated, among other defamatory statements, that Ivan contributed to his father’s death; that Ivan and Simona robbed Juan Gabriel and/or his estate of properties; and that Ivan and Simona have handled the estate against Juan Gabriel’s wishes. The amended complaint states that these claims are 100% false and highly defamatory. The lawsuit will seek more than $100 million in damages against Univision, Telemundo, and other defendants……CBS Corporation has extended the contract of chairman, president, and CEO Les Moonves for an additional two years. The extension will keep Moonves in charge at CBS until June of 2021……NBC has launched a new Snapchat version of its new competition series World of Dance. The World of Dance Snapchat features some of the best dancers in the world going head-to-head in a freestyle dance-offs. Snapchat users are responsible for voting on the final winner……Toronto rapper Drake won 13 of his 22 nominations at the 2017 Billboard Music Awards on ABC Sunday night. The number of awards, including the award for top artist, broke the record held by Adele for the most Billboard Music Award wins in a single year.

ACCOUNT ACTIONS

CP+B, Miami (aided by its Brazil office), has been appointed global agency of record for aircraft manufacturer Embraer. The appointment includes creative, social, media planning and media buying duties. Embraer spent $1.7 million on measured media in 2016, according to Kantar Media……MediaPost reports that LRXD, Denver, is the first AOR for Washington, DC-based dining chain Matchbox. The company currently has 11 locations that serve wood-fired brick oven pizza, grilled Angus mini-burgers and craft beer.

BIG SHAKEUP AT FORD

The success of a Chief Executive Officer is judged by the stock price of the company he runs, and for Ford’s Mark Fields the numbers were not good. Despite last year being the second most-profitable year ever for Ford, its stock price is now 35% lower than when Fields became CEO on 7/1/14. The Wall Street Journal reports the Board of Directors had started to consider a move earlier this year when Ford’s market value fell behind start-up Tesla. CNBC says major criticisms of Fields were that he had failed to move the company past the core auto business and lagged in developing the high-tech cars of the future. Just last week Ford had announced about 1,400 job cuts, a move that had been seen as an attempt to push up its stock price, but that came after first quarter profit had been down 30% from last year’s first quarter and the company had seen a small share decline.

So Fields is out, and Jim Hackett will become the new CEO. Hackett had at one time been a Board member at Ford, recruited by Fields to run Ford Smart Mobility, which had been investing in autonomous vehicles and new mobility services. And if the name sounds familiar in a different context, Hackett had been interim athletic director at the University of Michigan where he hired Jim Harbaugh.

BUSINESS BYTES

It’s not just retailers that are being hurt by the shift to online shopping—the new CEO of Coca-Cola says his business has been impacted also. James Quincey, who moved into the job on May 1, told Bloomberg he’s facing a challenge his predecessors never did: digital disruption. As part of his explanation, Quincy suggests that when shoppers skip trips to a store or mall because their purchases are coming via delivery, their opportunities to buy Coke at a food court or from a vending machine are gone. “Digital is changing the way you behave,” he said. “It affects other categories that are not the primary reason you thought about making a shopping trip.”

AUTOMOTIVE UPDATE

Think self-driving cars will reduce auto insurance costs? Think again. Accenture forecasts that insurance coverage for autonomous vehicles will bring $81 billion in new premiums to the U.S. auto insurance industry by 2025, driven by risks related to cybersecurity, software and hardware and by the need for additional public infrastructure coverage. But with safer roads, the report says premiums should start declining in 2026....The Association of Hispanic Advertising Agencies (AHAA) has named Ford Motor Company as 2017 AHAA Marketer of the Year Award. David Rodriguez, multicultural marketing director for Ford, will accept the award and discuss the automaker’s commitment to the Hispanic and multicultural market at AHAA’s 2017 Annual Conference June 14 in Chicago…… Ford say it will invest $350 million in its Livonia Transmission Plant in Michigan, creating or protecting 800 hourly jobs. The money being spent supports production of a new, advanced transmission for front-wheel-drive vehicles.

OPPORTUNITY FOR INDEPENDENT RESTAURANTS

While chain restaurants are far from dead, a new report from consulting firm Pentallect Inc. and researcher Critical Mix has found traffic and revenue growth coming from independent restaurants is now outperforming growth from chains—and that’s a shift from the past when chains were driving the growth in the industry. Moving forward, Pentallect projects independents will see annual revenue growth of 4-5% through 2020, while chains are more likely to grow by 2-3%.

Nationally, the National Restaurant Association sees a 4.3% gain for all restaurants’ sales this year (including inflation) and about a 1.7% gain inflation-adjusted. But Pentallect partner Bob Golding commented, “In the top 10 and 20 major metros, independent restaurants are absolutely knocking it out of the park… Restaurants in urban areas in particular are doing fantastic. People, especially millennials, are moving downtown to more gentrifying neighborhoods and they’re frequenting local establishments that are winning on these factors.”

AVAILS

WATE-TV6 Nexstar Media Group in Knoxville, TN is in search of a Digital Sales Manager. The DSM is responsible for directing digital sales efforts for all core digital and digital marketing services. The successful candidate will be an expert in local digital and cross platform sales, have a solid understanding of the local digital marketplace, and be knowledgeable about how to effectively package digital assets to maximize digital advertising and digital marketing services revenue. All candidates must APPLY HERE. EOE.

Comcast seeks a Regional Advertising Sales Manager for a position in Atlanta, GA. This position is responsible for identifying client business challenges and identifying solutions that drive strategic initiatives. Develops objectives and procedures that are consistent with the overall direction of all sales activities within the regional market area. Accountable for the management of an ad sales team in a major regional market. CLICK HERE to apply. Comcast is an EOE/Veterans/Disabled/LGBT employer