TV Industry Faces Billions in Lost Ad Sales With Sports Hiatus

Kantar Media estimates that $2B+ in sports ad revenue could be lost due to COVID-19 related cancelations.

The leagues/events impacted include:
1) 
March Madness basketball tournament
2) NBA regular season
3) NHL regular season
4) MLB spring training and opening day

Source of NBA TV ad revenue in 2018:
1) 
Playoffs – 62%
2) 
Regular season – 38%

March Madness accounts for 80% of the NCAA’s annual revenue, including ≈ $800M in TV rights fees generated from CBS and Turner.

March Madness ad revenue for CBS/Turner:
1) 
2019 – $910M
2) 
2020P – $1B+

The big question: If the Olympics are canceled, what happens to the $1.25B+ in ads that NBCUniversal has already sold?

Mr. Screens’ idea:  ESPN is set to release a 10-part miniseries about the 1998 Chicago Bulls in June.  They need content to fill the void left by sports cancelations, and we need something to watch besides the Contagion movie (see below).  Why wouldn’t they move this up ASAP?

More #1: Sports TV Networks Take a Hit as Major Leagues Suspend Operations Over Coronavirus

More #2: NCAA built tournament safety net of nearly $400 million and then spent it

More #3: ESPN scrambling to figure out programming while live sports shut down indefinitely

Streaming Surge Turns U.S. Recorded-Music Sales Up to $11 Billion

Music industry retail revenue (YoY growth) according to the RIAA:
1) 
2010 – $7.0B (↓ 10%)
2) 2011 – $7.1B (↑ 1%)
3) 2012 – $7.0B (↓ 1%)
4) 2013 – $7.0B (↑ 0%)
5) 2014 – $6.7B (↓ 4%)
6) 2015 – $6.7B (↑ 0%)
7) 2016 – $7.6B (↑ 13%)
8) 2017 – $8.8B (↑ 16%)
9) 2018 – $9.8B (↑ 11%)
10) 2019 – $11.1B (↑ 13%)

Fun: The same view broken down by format via Statista.

Source of music industry retail revenue (YoY growth):
1) 
Streaming – 80%
2) 
Physical – 10%
3) 
Digital downloads – 8%
4) 
Synch – 2%

Streaming revenue for the music industry (YoY growth):
1) 
2016 – $4.0B
2) 2017 – $5.7B (↑ 43%)
3) 2018 – $7.4B (↑ 30%)
4) 2019 – $8.8B (↑ 19%)

Streaming subscribers for the music industry (YoY growth):
1) 2015 – 11M
2) 
2016 – 23M (↑ 110%)
3) 2017 – 35M (↑ 56%)
4) 2018 – 47M (↑ 33%)
5) 2019 – 60M (↑ 29%)

Quick math on music streaming:
1) 1.5T 
songs streamed in 2019
2) $8.8B in streaming revenue
3) $0.006 per stream
4) 60M streaming subscribers
5) $5.9B in streaming subscription revenue
6) $98.25/subscriber/year
7) $8.19/subscriber/month

More #1: Jimmy Iovine Knows Music and Tech. Here’s Why He’s Worried.

Another TV Offering From AT&T? Don’t Groan

Key details for AT&T TV:
1) $40
/month when bundled with AT&T wireless service
2) $50/month as standalone
3) 70+ channels including local affiliates
4) 500 hours of cloud DVR space
5) Self-serve installation

The big picture #1: This is a replacement for both DirecTV and U-Verse.  HBO Max and AT&T TV are the future.

The big picture #2: This works with any internet connection allowing AT&T to offer pay-TV outside of their broadband footprint.

Video: Watch CNBC’s full interview with AT&T CEO Randall Stephenson

More: AT&T TV’s Odd Play As ‘The Future Of TV’

Comcast Pulls A FAST One

Big news: Comcast is buying ad-supported streaming service Xumo for a reported $100M+.

Key details for Xumo:
1) 
Formed in 2011 as a joint venture between Panasonic and Viant Technology
2) 55 employees
3) 10M monthly viewers
4) 190 channels

Why this matters #1: Xumo joins Pluto, Tubi, and Vudu as ad-supported services that were acquired or an acquisition appears imminent.  This space is red hot!

Why this matters #2: Comcast is making a significant investment in its upcoming streaming service Peacock, and this gives them a head start on the ad side of the business.

More: Xumo CEO On Acquisition Rumors And The Unique Challenges Of CTV Advertising

Extreme Reach: 2019-Q4 Video Benchmarks

Share of impressions by length according to Extreme Reach:
1) 30s – 69%
2) 
15s – 30%
3) 
6s – 1%
4) 
60s – 0%

Share of impressions for 6s:
1) 2017-Q1 – 0.04%
2) 
2017-Q2 – 2%
3) 
2017-Q3 – 3%
4) 
2017-Q4 – 5%
5) 
2018-Q1 – 3%
6) 
2018-Q2 – 1%
7) 
2018-Q3 – 2%
8) 2018-Q4 – 1%
9) 2019-Q1 – <1%
10) 2019-Q2 – 1%
11) 2019-Q3 – 1%
12) 2019-Q4 – 1%

Share of impressions by device (YoY share change):
1) 
Connected TV – 47% (↑ 3%)
2) Mobile – 29% (↑ 3%)
3) Desktop – 16% (↓ 2%)
4) Tablet – 4% (↓ 2%)
5) Other – 4% (↓ 2%)

Completion rate by device:
1) 
Connected TV – 97%
2) 
Tablet – 89%
3) 
Desktop –  81%
4) 
Mobile – 80%

Average view time by length:
1) 30s  – 27s (90%)
2) 15s  – 13s (87%)

More: CTV Now Half Of All Digital Video Ad Impressions, Growing Fast

What states/markets are voting?

Key details for Super Tuesday:
1) 16 
states/territories will vote on March 3rd
2) 92 different media markets touch Super Tuesday states
3) 7 media markets/state
4) 15 media markets touch more than one Super Tuesday state
5) Shreveport touches three different states (AR, OK, and TX)
6) There are more likely Democrat primary voters in Los Angeles (2.3M) than the #2 state (Texas – 2.0M)

Super Tuesday states with delegate totals according to Sabato’s Crystal Ball:
1) 
California – 415
2) 
Texas – 228
3) 
North Carolina – 110
4) 
Virginia – 99
5) 
Massachusetts – 91
6) 
Minnesota – 75
7) 
Colorado – 67
8) 
Tennessee – 64
9) 
Alabama – 52
10) 
Oklahoma – 37
11) 
Arkansas – 31
12) 
Utah – 29
13) 
Maine – 24
14) 
Vermont – 16
15) 
Democrats Abroad – 13
16) 
American Samoa – 6

Top 5 states ranked by likely Democrat primary voters:
1) 
California – 5.5M
2) 
Texas – 2.0M
3) 
North Carolina – 1.6M
4) 
Massachusetts – 1.4M
5) 
Virginia – 817K

Top 5 media markets ranked by likely Democrat primary voters:
1) 
Los Angeles – 2.3M
2) 
San Francisco/Oakland – 1.5M
3) 
Boston (Manchester) – 1.2M
4) 
Raleigh-Durham – 585K
5) 
Sacramento – 554K

Super Tuesday states ranked by share of 18+ population that turned out for the 2016 Democrat primary:
1) 
Vermont – 27%
2) 
Massachusetts – 22%
3) 
California – 17%
4) 
North Carolina – 14%
5) 
Virginia – 12%
6) 
Oklahoma – 11%
7) 
Alabama – 10%
8) 
Arkansas – 10%
9) 
Tennessee – 7%
10) 
Texas – 7%
11) 
Minnesota – 5%
12) 
Maine – 4%
13) 
Utah – 4%
14) 
Colorado – 3%

Who is winning?  How many delegates are left?

Delegate totals (% of total) heading into Super Tuesday according to NBC News:
1) 
Bernie Sanders – 60 (39%)
2) Joe Biden – 53 (34%)
3) Pete Buttigieg – 26 (17%)
4) Elizabeth Warren – 8 (5%)
5) Amy Klobuchar – 7 (5%)

Likelihood of winning half of the pledged delegates according to FiveThirtyEight:
1) 
No one – 69%
2) 
Bernie Sanders – 17%
3) Joe Biden – 14%
4) 
Michael Bloomberg – 0.1%
5) Elizabeth Warren – 0%

Delegates (% of total) by date/election according to 270toWin:
1) 
February – 155 (4%)
2) Super Tuesday – 1,357 (34%)
3) March 4-31 – 1,091 (27%)
4) April – 854 (22%)
5) May – 300 (8%)
6) June – 222 (5%)

Ad spending on 2020 primary tops $1 billion

Wow: Ad spend for the Democratic primary has reached $1.03B with four months remaining before the final state’s vote.

Ad spend by candidate (% of total) according to Advertising Analytics:
1) Michael Bloomberg – $538M (52%)
2) Tom Steyer – $186M (18%)
3) Bernie Sanders – $49M (5%)
4) Pete Buttigieg – $35M (3%)
5) Elizabeth Warren – $24M (2%)
6) Amy Klobuchar – $16M (2%)
7) Joe Biden – $14M (1%)
8) Other – $175M (17%)

Ad spend by party (% of total):
1) Democrat – $969M (93%)
2) Republican – $68M (7%)

Top 5 states by ad spend:
1) California – $110.3M
2) Iowa – $75.2M
3) Texas – $61.5M
4) Florida – $57.7M
5) New Hampshire – $45.2M

Super Tuesday ad spend:
1) 2016 – $30M
2) 2020 – $247M

More #1: Most Democrats Think Obama Has Endorsed a Democrat for President. (He Hasn’t.)

More #2: The media buyers behind the 2020 presidential race revealed

More #3: The Political Fundraising Model Is Breaking Down. The Success Of Bernie Sanders And Mike Bloomberg Are The Clearest Sign.

ViacomCBS’s Parts Might Add Up to a Greater Whole

ViacomCBS announced that it is launching a new subscription video service that will expand on CBS All Access.

Key details for ViacomCBS:
1) 140K 
episodes of premium TV content
2) 3.6K film titles
3) $13B+ content spend
4) 15% share of prime-time viewing
5) $16/subscriber/month from pay-TV providers
6) ≈ 5M subscribers for CBS All Access
7) ≈ 5M subscribers for Showtime OTT
8) 20M monthly users for PlutoTV
9) $8.6B (31% of total) in affiliate revenue

Why this matters: Cord-cutting (see above) is reducing the number of households that generate affiliate fees for networks like CBS.  Building a direct-to-consumer relationship for both subscriptions and advertising is the future for these companies.

Quick math on the impact on affiliate fees from cord-cutting:
1) $16/month/subscriber for ViacomCBS
2) $196/year/subscriber
3) 3.7M subscribers left the pay-TV ecosystem in 2019
4) $733M in potential lost affiliate revenue

Flashback: Viacom-CBS Deal Drama Was Worthy of the Fall Lineup

Monthly per-subscriber fees:
1) 
Walt Disney – $22
2) 
ViacomCBS – $16
3) 
AT&T – $13
4) 
Comcast – $7
5) 
Fox – $7
6) 
Discovery – $4

Potential assets for new streaming service include:
1) CBS
2) MTV
3) Nickelodeon
4) BET
5) Comedy Central
6) Paramount Pictures
7) Showtime
8) PlutoTV

PlutoTV monthly viewers (YoY growth):
1) 
2016 – 5M
2) 
2018 – 12M
3) 
2019 – 20M (↑ 67%)

ViacomCBS streaming revenue (YoY growth):
1) 2019 – $1.6B
2) 2020P – $2.2B (↑ 67%)

More #1: Exclusive: For the First Time Shari Redstone Tells Her Side Of The Battle To Merge Viacom And CBS

More #2: ViacomCBS to launch new streaming service blending CBS All Access with Paramount films, Viacom channels

Fox Looks to Buy Streaming Service Tubi 

Big news #1: Fox is rumored to be buying streaming service Tubi for $500M+.

Key details for Tubi:
1) 25M 
monthly viewers
2) 229 employees
3) 250 content partners
4) 20K movies and TV shows
5) 163M hours watched in December
6) 6.5 hours/month/viewer
7) $100M estimated content spend in 2020

Tubi hours watched (% growth):
1) 
May-19 – 94M
2) 
Dec-19 – 163M (↑ 73%)

Tubi hours/month/viewer (% growth):
1) 
May-19 – 4.7
2) 
Dec-19 – 6.5 (↑ 38%)

Big news #2: NBCUniversal is rumored to be buying streaming service Vudu from Walmart.

Key details for Vudu:
1) 
Founded in 2004
2) Purchased by Walmart in 2016 for $100M
3) 10K 
movies and TV shows

Big news #3: Smart TV manufacturers such as Samsung and Vizio have launched ad-supported video offerings.

More #1: 2020: Are You Ready For Mass TV Disruption?

More #2: Virtual Pay TV Providers May Soon Battle Over Ad Inventory