Related > Viewer Watch 2017: Download the Complete Report

Though TV has long been a numbers game, hard data showing changes in the way consumers access video remains a hotly debated subject.

It’s not just that there’s considerable disagreement over how to interpret these changes among executives overseeing what Magna calls the $67 billion TV ad market and PwC describes as the $101 billion subscription pay TV business. There is also much grumbling over the kind of data that is available to answer these multibillion-dollar questions.

“I don’t think we’ve made as much progress as we should have made” in measuring the consumption of video on all platforms and devices, Turner Broadcasting System chief research officer Howard Shimmel said.

There also isn’t much agreement on how the growth in multiplatform video consumption will affect pay TV subscriptions. Some contend that the rise of over-the-top streaming options will sharply reduce the pay TV subscriber ranks; others believe the issue is much more complex.

“From its peak in the first quarter of 2012, the major providers have lost about 1.8 million subscribers,” Bruce Leichtman, president and principal analyst at Leichtman Research Group, said. “The industry is clearly saturated and in a slow decline.”

Interpreting those numbers remains controversial, in part because data on the size of the pay TV universe rests on different assumptions. Leichtman, for example, includes data from services like Sling TV in his company’s estimates, while SNL Kagan does not.

Nielsen also provides different numbers. It reports the number of homes that have TVs connected to a pay TV service, which is different than the number of total pay TV subscribers reported by operators, Nielsen executive vice president of research Glenn Enoch said.

“You have to be very careful about the numbers you use and [about] drawing a straight line from those numbers to revenue, because things are much more complicated than that,” he said.

Related > New Normal: Digital Distribution

CORD-CUTTING CALCULUS

A number of researchers agreed. The proportion of “people dropping pay TV subscriptions is now about 2.6%,” Leichtman noted, which is about the same rate as 10 years ago, when the industry was growing.

“The problem is that the number of new customers has declined,” Leichtman said. “We only see 1% [of homes] moving into pay TV. That is down from 3.5% a decade ago and it has had a real impact on the dynamics of the pay TV industry.”

The declines have been smaller than some had expected, SNL Kagan research director Ian Olgeirson noted. “We are seeing a slight acceleration in the decline in subscribers for multichannel services from a roughly 1% decline in 2015 to a decline of what will probably be 1.3% or 1.4% in 2016,” he said.

The causes of those declines are also hotly debated. “Service providers would say that a lot of those declines are driven by price” and economics, Olgeirson said. But that isn’t the whole story, as the economy has rebounded and housing starts have grown over the past two years, he said.

A recent Frank N. Magid Assoicates survey found that 75% of likely cord-cutters said the ability to watch content via the Internet and OTT platforms was a key reason to drop pay TV service, Magid Advisors president Mike Vorhaus said. Only 29% of respondents cited costs.

Research also challenges the prevailing assumption that pay TV and SVOD services are competing offerings, said Howard Horowitz, president and founder of Horowitz Research, who sees them as complementary to traditional pay TV.

Horowitz survey data shows that 52% of whites and 58% of Hispanics have both a multichannel subscription and a subscription VOD service, while only 5% of whites and 6% of Hispanics have just a SVOD service.

STAGNANT AD SPENDING

Much unease also surrounds the ad market. Brian Wieser, senior research analyst, advertising at Pivotal Research Group, said the economy faces considerable uncertainty over the next year.

“I don’t think anyone can say with any certainty what is going to happen next and that uncertainty is going to curtail advertising,” he said.

National TV ad revenue will drop slightly by 0.4% in 2017 to $44.6 billion, Wieser predicted, and remain essentially flat through 2020, when it will hit $45.2 billion.

Magna’s Letang also sees a weak TV ad market combined with bullish prospects for digital media. “In 2017, we see high single digital inflation [in pricing] but high single-digit declines in ratings,” Letang said. “National TV will be up 1% in 2017 from 2016 if you exclude P&O” — meaning the 2016 revenue from political ads and the Summer Olympics — “and down 1% if you include P&O.”

With political and Olympics spending included, Magna projects that total TV spending will drop by 4.8% to $64.2 billion in 2017, declining further to about $62.2 billion in 2021.

Digital spending, though, will continue to grow rapidly. By 2020, Magna forecasts that mobile advertising will more than double to $78.4 billion (38.2% of all advertising) and social media will hit $31.8 billion in 2020 (a 15.5% share). TV, meanwhile, will slip to a 32.4% share.

Given the uncertainty over the ad market and pay TV subscriptions, programmers and operators have been rethinking their operations.

NEED TO BE NIMBLE

The drive to adapt to new consumer habits has prompted a number of projects to make operations more nimble, Discovery Communications chief technology officer John Honeycutt said.

For example, Discovery’s recently deployed “On Ramp” project allows about 80% of the content produced by 600 production suppliers to be uploaded to the Amazon cloud, where it can be immediately available to Discovery employees and channels all around the world.

“Going from 0% to 80% makes us so much more flexible and efficient,” Honeycutt said.

Equally dramatic upgrades are occurring in the pay TV infrastructure. After ticking off a long list of new products and initiatives to deliver more content to more devices, Comcast Cable executive vice president, general manager, video and entertainment services Matthew Strauss noted that these efforts are built on major improvements to the MSO’s infrastructure.

“We are rolling out DOCSIS 3.1,” he said. “We are rolling out Gigabit speeds. We are transitioning more and more to all-IP, which will allow us to innovate and deliver more of these newer services.”

Rapid innovation has also become the norm for digital platforms. “In 2016, we launched 30 new products and made hundreds of enhancements on dozens of platforms,” Alex Wellen, senior vice president and chief product officer at CNN, said.

Much remains to be done, particularly in the area of measurement. This year will mark a notable improvement on that front, with Nielsen planning to begin syndicating its Total Content Ratings on March 1.

“But some of the networks have been saying they won’t be ready for Nielsen’s public rollout in March, and it isn’t clear if everything will be ready in time for the upfronts,” Jane Clarke, CEO and managing director of the Coalition for Innovative Media Measurement (CIMM), said. “It is a very complex process to get it implemented in the apps for every kind of player and all the devices.”

Others worry about the TV industry’s ability to maintain its share of ad spending without better data. “Measuring crossplatform video consumption is important, but it is a 2006 problem,” Turner’s Shimmel said. “Today, when we talk to advertisers, what they really care about is outcomes [such as sales] and I don’t see that kind of measurement anywhere in Nielsen or comScore’s future.”

More debates surround commonly held perceptions of the OTT market.

Michael Leszega, senior analyst of market intelligence at Magna, said that “in 2016, we have [more than] 25 million cord-cutters and cord-nevers,” and that this group will continue to grow. By 2020, he predicted, about 28.6% of all households will be outside the traditional pay TV ecosystem. “It is a sizable portion of the population that can’t be ignored,” he said.

That has prompted a number of companies to develop streaming bundles of channels like Dish Network’s Sling TV, Hulu, Sony’s PlayStation Vue and AT&T’s DirecTV Now.

“If you look at the rumors about Amazon or YouTube coming out with OTT bundles, there could be a whole bunch of them, maybe seven or eight by the end of 2017,” Steve Shannon, general manager of content and services at Roku, said.

Tony Goncalves, senior vice president of strategy and business development for AT&T Entertainment Group, described DirecTV Now “as a mobile-first-centric platform” that will deliver the kind of advanced digital features consumers expect from their mobile apps.

“DirecTV Now is pay TV as an app and it opens up a market that has not historically been addressed by pay TV,” he said.

Dish Network also sees great promise in the melding of pay TV packages, OTT delivery and app experiences, Niraj Desai, the company’s vice president of product management, said.

“TV is becoming an app,” he said. “We have been talking about that trend for a while, but 2016 was really the year TV as an app came into its own” with better TV everywhere offerings and the streaming OTT bundles such as Dish’s Sling TV and DirecTV Now.

COMPLEMENTARY PLAYS

Even better, these products open up new markets and are not designed to cannibalize traditional pay TV offerings, he added. “Sling is complementary to DBS,” he said, meaning Dish and DirecTV’s satellite-TV platforms. “Sling over-indexes with urban millennials and DBS resonates with suburban and more rural customers that are more traditional TV watchers.”

Similar views come from programmers that have aggressively targeted consumers without traditional multichannel TV subscriptions.

“We launched HBO Now with the theory that its subscribers were going to look very different from the traditional subscribers,” Bernadette Aulestia, executive vice president of worldwide distribution at HBO, said of the premium programmer’s standalone app.

HBO Now subscribers are 10 years younger than customers of HBO’s premium cable network and typically live in broadband-only households, she said.

“We look at it as an entry point to customers that are coming into the category,” Aulestia said.

The growing popularity of skinny bundles and streaming OTT offerings has also helped HBO’s premium pay TV business, she added.

“There was a time, as a premium service, that we were only sold at the top of the bundle,” Aulestia said. “The idea that HBO should be sold at every level of the bundle, and even as a standalone service, means there are fewer barriers to get HBO.”

The rise of OTT and skinny bundles has been more worrying for ad-supported networks.

“Getting more creative packaging of content to create more customized solutions for the consumer can be very challenging for content providers because you have increasingly fragmented audiences,” Joe Atkinson, technology, infocomm, entertainment and media advisory leader at consultancy PwC, said.

Atkinson and others said OTT distribution can also open up a number of new opportunities.

For instance, the growing SVOD market encouraged Turner’s recent launch of an OTT movie service called FilmStruck, Coleman Breland, president of Turner Content Distribution and president of TCM, said.

“As the bundle became tighter, we decided to go direct to consumer instead of trying to launch a linear network and push it through the ecosystem,” which would be difficult in the current pay TV environment, he said.

Turner has also been pushing to expand the content made available on all platforms both in terms of reach and quantity, with the addition of offerings like full seasons on-demand.

“We now have 450 affiliate partners for our TV everywhere products” and have seen usage jump by “triple digits” in the last year, Breland said.

TIME TO TARGET

Many of these newer products can be traced to a more fundamental change in the way operators think about their customers.

“Today, service providers have to figure out how to target different individuals in household,” PwC’s Atkinson said. “That is a tough challenge, but I think it is really the keys to the kingdom.”

One example of such a targeting effort is the development of packages targeted to consumers at different life stages. “College students have different needs than a single-family home with kids, and we are very focused on meeting all those different needs,” Comcast’s Strauss said. He said the Xfinity on Campus product has been a success in that regard.

Operators have also been greatly expanding the content sources via apps on Internet connected set-top devices such as Dish Network’s Hopper. “You can watch live TV with your Dish subscription, or recorded TV on your DVR or you can watch Netflix and YouTube all in one convenient place,” Dish’s Desai said.

Adding more choices has also been a top priority for Cox Communications, Steve Necessary, executive vice president of product development and management at the Atlanta-based cable operator, said. “We have more than doubled our VOD offerings from 50,000 to over 120,000,” he said.

Cox also has revamped its TV app to expand the content available on digital devices and speeded up the rollout of Contour — Cox’s version of the Comcast X1 Internet-connected set-top platform — from 3,000 customers to more than 600,000 in 2016.

Very importantly, such efforts are also beginning to pay off. Both Comcast and Cox are seeing some of their best video-subscriber efforts in a decade.

Programmers are also reporting strong gains from their digital platforms.

“There is a blending of content types and expansion of the platforms,” translating into some record-setting numbers, ESPN vice president of digital media research and analytics Dave Coletti said.

In year when some live sports audiences have declined, Coletti noted that Watch ESPN’s live stream of the Nov. 26 college-football game between third-ranked Michigan and second-ranked Ohio State — which went into double overtime before OSU prevailed, 30-27 — tallied 1,273,000 unique viewers, making it ESPN’s most streamed regular college football game. (The game telecast also aired on ABC.)

“Eight of our top 10 most-streamed regular season college football games have occurred this year,” he noted.

The 2016 presidential election helped CNN set a number of network records, Wellen said, including a record audience level on Nov. 9 with 77 million unique users, 83 million video starts, 483 million page views and 29 million live streams.

Equally notable was social media. CNN racked up 169.7 million video views on Facebook and 47.6 million Facebook Live views, he said.

“Those results show that it has become very important to be both a destination for content and a distributed brand,” he said. “We have apps and websites where people can access our content but, we’ve also seen that we can be very successful on Facebook Live” and other outside platforms.

Additional encouraging news can be found in TV use, Nielsen’s Enoch said. “The decreases that we saw in TV usage that really started to accelerate in the mid-2014 have lessened,” he said. “TV consumption remains at near record level.”

“We are also seeing a shift back to the more traditional way of hooking up a TV” to a pay TV service or an antenna, he added. “The universe of homes that can watch TV or can stream video to the big screen has actually grown,” reversing a trend that began with the digital transition and the 2008 recession.

That said, Enoch said the “fastest growing area of overall usage — not just video — is the smartphone.”

In the second quarter of 2016, Nielsen reports that consumers ages 18-34 spent almost as much time each week with their smartphones (14 hours and 36 minutes) and tablets (three hours and 27 minutes) as they did with traditional TV (18 hours and 27 minutes).

Less discussed but equally important are connected TVs. “TVs connected to the Internet by any device have grown from about one-quarter of all households in 2010 to about two-thirds of all households,” Leichtman said. “There are now more connected TV devices in American than there are pay TV set-top boxes.”

Said CBS Interactive president and chief operating officer Marc DeBevoise, “We are seeing explosive usage in those connected TV experiences.” He added that “time spent on connected TVs with our products has grown by more than 300%.”

As an illustration, consumers in October of 2016 spent about 347 minutes per month consuming CBS news content via desktop computers, compared with 360 minutes via Apple TV and 496 minutes via Roku, per unique viewer, DeBevoise noted.

“That is a lot of usage, and we are spending a lot of time making certain we can capitalize on that by getting those experiences right,” he added.

LINES ARE BLURRING

Connected TVs also offer much more advanced capabilities for search and discovery. For example, the Roku platform allows users to search for TV shows and movies across more than 100 apps, Roku general manager of content and services Steve Shannon said.

Advanced features are helping to blur the line between connected devices, pay TV operators and the new bundles of streaming channels.

Companies such as Hulu and Sling are increasingly bundling their subscription packages of channels with a free Roku, Shannon said. Also, Charter, Comcast and a number of other operators have either launched or plan to launch TV everywhere apps on the Roku platform so that subscribers can access a large bouquet of channels on the pay TV apps, he said.

“You have the normalization of OTT, where you are seeing massive amounts of traditional broadcast style content viewing on OTT platforms,” Shannon said.

Former Turner Broadcasting CEO Phil Kent has been nominated to sit on the board of Scripps Networks Interactive.

Kent, who retired from TBS in 2013, is succeeding David Galloway, who is retiring from the Scripps board.

“We are delighted to add a media executive with the knowledge and experience of Phil Kent to the board of Scripps Networks Interactive,” company chairman Kenneth Lowe said. “Phil has led complex organizations that grew in the face of increased competition, and has a deep understanding of the international media landscape that will be critical as we continue to focus on growth outside the United States. His strategic knowledge and commercial acumen will be invaluable to the board and the company.”

In a 20-year career with Turner, Kent headed up home entertainment, international networks and CNN.

Overall revenue increased 3% and adjusted operating income was up 11% in the first quarter at Time Warner Inc., driven by gains  at its Turner Broadcasting cable networks and HBO.

Consolidated adjusted operating income increased 11% to $2 billion in the period.

At Turner, revenue increased 7% to $2.9 billion, driven by an 11% increase in subscription revenue and a 5% rise in ad sales. Adjusted operating income increased 10% to $1.2 billion at the cable unit, partially offset by a 4% rise in programming costs.

At HBO, revenue rose 8% to $1.5 billion, spurred by a 5% increase in subscription fees and a 23% rise in content and other costs, mainly due to higher international licensing fees. Adjusted operating income was up 6% to $486 million, partially offset by an 11% rise in original programming costs.

At its Warner Bros. film studio, revenue declined 3% to $3.1 billion, due to lower box office revenue. But adjusted operating income increased 29% in the period.

 “We’re off to a terrific start to 2016, as we benefit from the investments we’ve been making in great content and new capabilities in order to take advantage of the growing demand for high-quality video content around the world," chairman and CEO Jeff Bewkes said in a statement. 

iStreamPlanet, the over-the-top video services company acquired by Turner Broadcasting, said it launched a new Atlas Digital Rights Management cloud service.

Atlas allows iStreamPlanet customers to deliver media to millions of users on multiple devices and provides content encoding and security.

“We listened carefully to our customers to ensure we prioritized the right features for their business needs, and we’re excited to bring more capabilities to the iStreamPlanet product portfolio with the launch of Atlas DRM,” said Tim Davis, VP of Product Management at iStreamPlanet.

Turner will be Atlas’ first client.

Read more at broadcastingcable.com.

When viewing done on devices not measured as part of the ratings are included — screens including subscription video on demand, PC and mobile — Turner, as part of a year-end review, said viewing among the adults 18-49 demo networks crave was up 3% industry wide.

Also up 3% was viewing among 18-34-year-olds. Viewing by those 50 and older was up 4%.

“People are not spending less time with professionally produced video content,” Howard Shimmel, chief research officer for Turner, said.

Shimmel said he cobbles together numbers from Nielsen, comScore, Rentrak and Omniture to get a picture of who’s watching Turner programming.

“While we today lack a comprehensive, cross-platform service that measures television, digital and mobile in an integrated fashion, we’re closer to the syndicated solution now than we’ve ever been,” he said. “We are hopeful with both Nielsen’s Total Audience service and the potential of the comScore/Rentrak merger."

Read more at broadcastingcable.com.

A Viacom spokesperson this week confirmed the company is reducing its ad load during primetime. The company has been notorious for stuffing some of its shows with so many ads that it could fit only five half-hour shows into a three-hour programming block.

The move comes as ratings are eroding, partly because of competition with streaming services, many of which are either commercial free or have greatly reduced commercial loads.

Among other programmers, Turner Broadcasting recently announced plans to cut commercial loads on its truTV network next year; Discovery said that with ratings up, it was running fewer commercials on some of its networks; and for two seasons Fox has been running its hit Empire with fewer commercial interruptions.

Viacom CEO Philippe Dauman talked about cutting ad loads during an investor conference in September. Viacom has been working on non-Nielsen metrics to sell advertising as more of its younger viewers watch on non-traditional platforms. The company has introduced products like Viacom Vantage, which is designed to capture viewer engagement on digital, mobile and social platforms. Dauman said Vantage was a major driver of its upfront sales and that those initiatives would be taking effect during the new broadcast season.

“With those kicking in we’ll be in position — we’ve been talking to a lot of advertisers about it, which they like — to reduce ad load in primetime across our networks, which will improve the consumer experience and drive pricing,” Dauman said.

Viacom declined to be more specific about which networks and shows have lower ad loads, or how that’s affecting revenue. He might address the issue during Viacom’s earnings report Thursday (Nov. 12).

According to stats compiled by analyst Todd Juenger of Sanford C. Bernstein, the number of commercial hours in Viacom’s non-kid primetime programming (not including sports and news) rose 1% from a year ago. Viacom reduced the amount of promotion material it runs, so its total commercial and promo hours were down 1% for the quarter. Other media companies, including A+E Networks, Time Warner, 21st Century Fox and the Walt Disney Co. increased commercial hours by more than 2% during the quarter.

On Time Warner Inc.’s earnings call, CEO Jeff Bewkes stressed the importance of improving the consumer experience, and said its networks were looking for opportunities to reduce ad load, as with truTV.

Read more at broadcastingcable.com.

RELATED ADVANCED ADVERTISING STORIES:Bulking Up | Programmatic Ad Platforms Proliferate

As traditional advertising loses appeal, media companies and media agencies are looking for ways to help marketers tell their stories through engaging content. One tool they are using to do that: data.

The process is being turbocharged by data and technology that offers more information about the target audience and can deliver the right content and messages to the appropriate consumers.

One company exploring these new methods is Turner Broadcasting System, which has introduced several data-driven products for advertisers and is ramping up its custom content capabilities.

“Things are heading from brand advertising in the traditional sense to brand storytelling, with data underpinning it to get the stories to the right people,” Dan Riess, executive vice president of integrated marketing and branded content at Turner, said.

Riess said some content projects start with data, while others start with a big creative idea. In either case, data still plays a key role in identifying the audiences Turner and its clients are trying to reach.

Turner looks to see which of its brands — networks, shows and talent — can deliver the target audience a marketer is pursuing.

For example, last year Taco Bell teamed up with TBS late-night host Conan O’Brien on a humorous branded video. O’Brien visited Taco Bell’s test kitchen, where he created chaos and some new products that ranged from interesting to inedible.

“They’re coming to us because of Conan’s audience and how he reaches them, and we find the creative idea,” Riess says. He noted Turner is increasingly using data to push the content to audiences most likely to be buyers of the advertiser’s products and services.

O’Brien is also an example of the kind of “influencer marketing” that is popular using the stars of YouTube videos. But Riess notes that O’Brien, the stars of TNT’s Inside the NBA and other Turner personalities are bigger stars and more influential than online personalities.

Turner is also looking at new ways of working with advertisers and agencies. With media agency Starcom MediaVest, it has formed a unique partnership that has been renewed for three years.

Instead of buying integrations for specific brands in specific shows during the upfront, the agency and programmer agreed to do a certain number of integrations per year. Turner learns about all of Starcom’s clients’ brands and essentially puts giant posters in the writers’ rooms of every one of their original shows. As the writers produce scripts, they have the flexibility to use the portfolio of brands in natural ways.

“It’s worked out fantastically because we’ve been able to come up with very natural, very creative ways to incorporate [brands] into a show that you wouldn’t get if you had jammed together a brand and a show nine months before you were in production,” Riess said.

Riess said the branded content is increasingly becoming a part of cross-platform campaigns. “We’re doing them across on-air and social and real time,” he said. Data is being used to take “the creative idea and see who it resonates with, augmenting it for different groups and delivering it to them in natural ways.”

He pointed to video Turner produced for Snickers around last Halloween as an example where the company moved fast to get it on the air and amplified it via social media within a day or two. Those efforts built reach to about 5 million consumers in the target market.

This month, Turner announced a big content project with producer Mark Burnett and Intel. The initiative is built around a TBS reality series tentatively titled America’s Greatest Makers, which will pit teams of innovators looking to produce the next big smart wearable device using Intel’s Curie technology. It will incorporate the use of different Turner brands to create content to reach specific consumer segments.

“The focus is around the show, but what the partnership is, is creating content,” Riess said. “We’re working through some of the extensions of this, but we will certainly have late-night funny people doing things with this content and with these makers and these teams that will be in their own voice and deliver that audience. And we’ll look on the CNN front, because [technology] is an area we cover all the time.”

Even sports will be involved. “We’ll be figuring out how we deliver exactly the right message to those fans as part of a broader reach partnership,” Riess said.

Meanwhile, Starcom MediaVest has come up with a way to attach branded content to paid media. The agency first aimed Content@Scale at display advertising, but has since branched out to video applications.

“Video was obviously one of the best places to connect with consumers,” said Lindsay Lichtenberg, senior vice president, Starcom director of publishing platforms and partnerships. “You have the scope to tell a really relevant, engaging, emotional story. And we know people are spending more and more time with online video in particular, so we knew we needed to crack that space.”

The video product is powered by Innovoid, a dynamic video ad service, and delivers standard pre-roll spots with interactive experiences in an overlay.

Lichtenberg said many brands use spots and other content they’ve produced for TV as pre-roll. That works, she added, “but the opportunity is to really speak to consumers and understanding the environment they’re in and the engagement you have at your disposal.”

Content@Scale uses data to target specific groups of consumers for appropriate messaging. One recent campaign for Mondelez brands was designed to reach people interested in the U.S. women’s soccer team.

Several Mondelez brands were involved in Pass the Love, a promotional campaign for women’s soccer. The company also had videos that could be published as overlays that included a video game focused on national team star Alex Morgan and other players. There was also a click-to-buy option that allowed viewers to purchase Ritz, Chips Ahoy or Trident at Target or Walmart.

Data was used to select media, and a big portion wound up on desktop and mobile video from Fox Sports that carried highlights from games as the U.S. team advanced through the tournament.

Consumers who watched the content spent an average of 56 seconds of additional time with the experience beyond watching the pre-roll ad — which was anywhere from 15 to 30 seconds in length, Lichtenberg said. That translated into raising awareness of Mondelez’ brands’ support of the women’s soccer team.

Lichtenberg said the success of Content@Scale changes the conversation the agency has with media partners. “The fact that we can build these experiences means we can make these advertising messages a lot more rich and engaging for consumers,” she says.

Doing something similar with TV is something the agency is looking into for the future, Lichtenberg said.

“The coolest thing is the opportunity that lies ahead,” she said. “The success we’ve seen and continue to see with the product leads us to believe we’re on the right path. I’m encouraged by where the industry is heading creatively and through data and technology. It’s exciting to work in this space right now.”

Time Warner Inc. reported higher earnings as cost cuts at Turner Broadcasting boosted operating income. Profits were lower at HBO as it spent on marketing and technology to launch HBO Now.

Second-quarter net income rose 14% to $971 million, or $1.16 a share, from $850 million, or 95 cents a share, a year ago.

Revenue rose 8% to $7.3 billion.

The results were ahead of Wall Street expectations. The company also reaffirmed its guidance for full-year results.

At Time Warner’s Turner Broadcasting unit, adjusted operating income rose 20% to $1.1 billion as revenue rose and costs — including programming costs — declined. Turner’s revenue rose 3% to $2.8 billion.

Ad revenue was down 1% because of the strong dollar. Domestic ad revenue was up because of growth at its news networks and strong March Madness sales. Those gains offset the absence of NASCAR programming and having fewer NBA playoff games.

Adjusted operating income fell 8% at HBO, which had higher marketing and technology costs because of the launch of the HBO Now streaming service. Revenue at HBO was up 1% to $1.4 billion.

Read more at broadcastingcable.com.

The Turner Data Cloud, a platform announced at the company’s upfront in May, enables audience targeting by aggregating Turner’s data sources with other third-party information about audiences. That data can be used to mount campaigns using inventory from the Turner Premium Marketplace.

“We are joining forces with industry-leading data and technology companies to power the Turner Premium Marketplace powered by an unrivaled central repository of data,” Stephano Kim, chief data strategist, Turner Broadcasting, said in a statement. “Fueling multi-screen ecosystems, Turner Premium Marketplace will enable our sales divisions to take their client conversations to a new level of insight and strategy to more effectively execute advertising campaigns across Turner’s portfolio."

Read more at broadcastingcable.com.

Turner Broadcasting said it is replacing traditional demo guarantees for some of its ad sales with audience-based guarantees similar to digital-based advertising.

At its upfront presentation Wednesday (May 13), Turner introduced what it calls Audience Now, which allows advertisers to target viewers regardless of daypart. “In this new world, dayparts are dead. These are pure audience-based guarantees for television, just like you get in digital,” said Donna Speciale, president of ad sales at Turner.

Turner is hoping to generate premium pricing for those viewers, particularly those not watching in traditional primetime.

Audience Now is the latest step in a concerted digital strategy by the cable TV programmer designed to combine content and data. It also signals that while most TV networks at talking about data, Turner is ready to disrupt its traditional ad sales model in search of growth at a time when ad revenue growth is limited because increasingly viewers and ad dollars are going online.

At Turner, Audience Now joins a number of data products, starting with Targeting Now, which is moving from beta to wider availability during this year’s upfront. Targeting Now gives advertisers a more concentrated delivery of viewers within a target.

Read more at B&C.

Adult Swim will look to bolster its already strong appeal to young adults with more than 30 new and returning shows, the network announced in advance of its upfront presentation Wednesday evening (May 13).

"Adult Swim has always been known as a place for taking risks and for great talent to try interesting and unique things," said Christina Miller, president and general manager, Cartoon Network, Adult Swim and Boomerang in a statement. "Mike [Lazzo] and his team continue to raise the bar in knowing what the Adult Swim fan wants, and this new slate of original programming adds to our growing line-up of primetime comedies."

Among the new shows on the docket are a new comedy pilot starring Jason Alexander, as well as Brad Neeley-helmed animated series TV Sucks, a new miniseries from Jon Glaser, and live-action comedy specials from Brett Gelman and Jon Daly, network officials said.

The as-yet unnamed series, based on the duo's family road trips, stars Jones, Natalie Zea (Justified, The Following), Ashley Gerasimovich (Louie, We Need to Talk about Kevin) and Liam Carroll (The Neighbors) as a nuclear family on a vacation where everything goes wrong. Think the Vacation film franchise meets a new generation.

Jones and Bee are serving as executive producers on the TBS project. They also wrote the pilot, which was directed by Steve Pink (Hot Tub Time Machine, About Last Night). The duo has been working on Comedy Central's The Daily Show With Jon Stewart and had been mentioned as possible replacements when Stewart leaves the show later this year, but Jones announced via Twitter on Tuesday afternoon (Feb. 24) that he is leaving the satirical news show.

TBS said the new series will start production this summer and will premiere in the fourth quarter. The network has three other scripted comedies set to debut this year, including Angie Tribeca, starring Rashida Jones and created by Daily Show alum Steve Carell and Nancy Carell; Your Family or Mine, starring Kyle Howard, Kat Foster, Richard Dreyfuss, Ed Begley Jr. and Cynthia Stevenson; and Buzzy's, a workplace comedy with Ashley Tisdale, Mike Castle, Lauren Lapkus, Ryan Pinkston, Matt Cook and George Wendt.

RELATED STRY: Kevin Reilly to Reorganize TNT, TBS Programming Divisions

Turner Broadcasting's Korean entertainment channel Oh!K launched in Malaysia on Astro. The high-definition channel secured carriage in Singapore on Singtel TV last month and on StarHub TV on Oct. 20, 2014, when the channel officially launched in the region (see "Turner Launching Oh!K Channel In Southeast Asia").

Phil Nelson, Turner’s senior vice president and managing director of North Asia and Southeast Asia Pacific, said in a release: “Turner’s leading brands – CNN and Cartoon Network – have been key news and kids channels in Astro’s portfolio for years, so we can’t wait to delight Malaysian audiences with Oh!K, our latest general entertainment channel. Since its regional debut last year, Oh!K has already gained strong popularity, with some of the very best Korean drama and variety series airing within 24 hours of their original telecast.”

Oh!K is powered by content from leading Korean broadcaster, MBC, best-known for its popular drama productions. Astro is running the channel as a free preview (Channel 394) until the end of February. It will be available on Astro’s Korean Pack from March 1 onwards.

Turner Broadcasting System will present a unified front during its upfront presentation.

Breaking from the past, the programmer, rather than conducting individual networks presentations as it has in the past, will bring all of the TV, digital and mobile offerings under one rook on May 13 at The Theater at Madison Square Garden.  Joining forces for the singular 2015 Turner upfront event are  Adult Swim, Boomerang, Cartoon Network, CNN, HLN, TBS, TNT, truTV and Turner Sports.

In years past, TBS and TNT, and CNN and HLN, have made joint pitches to the media buyer and planning set.

"As a global leader in content spanning all platforms, we look forward to sharing our diverse portfolio of leading brands with the industry like never before," said  Turner Broadcasting Systems president David Levy. "In today's fragmented environment, advertisers and media companies continue to search for enhanced targeting and insights. Turner continues to invest in data and analytics that allows us to better understand our audiences, collaborate with partners and continually innovate across all platforms. When combined with our ongoing investment in premium content for our entertainment, news, sports and kids brands, the quality and scale of our portfolio will continue to thrive across multiple viewing windows."

"We are coming to market this spring with one Turner Upfront event and one unified vision," said Turner Broacasting Sales president Donna Speciale (pictured). "Data and content are changing the very nature of marketing, and providing greater opportunity. Across Turner, we are creating the future of video advertising by combining the strengths of digital and television to help our clients excel. From more sophisticated audience targeting, to breakthrough branded content, Turner continues to set the pace for the industry. Throughout it all - we are focused on driving results for our partners, and proving campaign effectiveness. We look forward to shining a spotlight on all of this during our event this May."

In addition to the main upfront presentation at The Theater at Madison Square Garden, Adult Swim will once again host that week's always anticipated post-Upfront party that evening. Additional details, including musical performer, will be released at a later date.

Brenda Freeman, the former Turner Broadcasting and DreamWorks Animation marketing executive, has been hired as chief marketing officer for National Geographic Channel and Nat Geo WILD, filling the post that was vacated when Courteney Monroe was made CEO of National Geographic Channels last April. Freeman's hire follows the appointment in September of Tim Pastore as president of original programming & production as Monroe moves to bolster her senior team.

Freeman joins from her most recent post as global head of television marketing for DreamWorks Animation, where she spearheaded the vision and global marketing efforts for the rapidly expanding DreamWorks TV business, managing brand marketing and advertising plans for more than 1,000 hours of original content around the world, NGC said in a release.

As CMO, Freeman will oversee the channels' marketing efforts, including brand development and strategy, consumer on-air and off-air campaigns, trade marketing, digital marketing, digital content, social media, media strategy, partnership marketing and all creative for NGC and Nat Geo WILD. She also will oversee the network’s consumer communications efforts, including consumer publicity campaigns, talent relations, special events, public affairs, education outreach and digital publicity for both networks.

“Brenda’s energy, insight and vast experience in entertainment marketing make her a great fit as we continue to elevate the National Geographic Channels within the industry and in the minds of consumers,” Monroe said in the release. “With her talents, we have another great addition to our senior team poised to take us to the next level.”

“I am thrilled to join Courteney and her team at such an exciting time in the evolution of the National Geographic Channels,” Freeman, who was a Multichannel NewsWonder Woman in 2014, said in the release. “Both channels have such exciting projects in the works, I cannot wait to get started. And it is a real treat to be able to return to my hometown.”

Freeman earlier spent six years at Turner Broadcasting, most recently as chief marketing officer for Turner Animation, Young Adults and Kids Media. At Turner, Freeman was responsible for all areas of marketing and network operations, including digital, games, on-air, advertising, consumer and trade communications, special events and affiliate support for the global multiplatform Cartoon Network, Adult Swim and Boomerang brands.

The American Dad! season premiere Monday night drew 2.5 million viewers (live plus same day) across two airings on TBS and Adult Swim, Turner Broadcasting said. The Time Warner-owned programmers last year ordered a new 15-episode season of the Seth MacFarlane-created animated comedy after it ran 10 seasons on Fox.

TBS's 9 p.m. premiere telecast drew 1.1 million viewers in Live + Same Day, with 851,000 adults 18-49 and 630,000 adults 18-34, Turner said in a release. The Adult Swim encore at 10 p.m. delivered 1.4 million viewers (L+SD), including 798,000 adults 18-49 and 530,000 adults 18-34. After this, American Dad! episodes will premiere on TBS each Monday night at 9 p.m. (ET/PT), with encores on Adult Swim the following Monday night at 10 p.m. (ET/PT).

Turner said the cumulative audience made the show basic cable's most-watched entertainment program for the night, and said the show's 1.6 million adults 18-49 and 1.2 million adults 18-34 gave it the best performance among basic-cable entertainment shows in those demos.

Turner had previewed the episode on Web outlets Sunday.

Time Warner Inc.'s Turner Broadcasting System has acquired the network television premiere windows for The Walt Disney Studios' upcoming releases Cinderella and TheJungle Book. In a licensing agreement with The Walt Disney Studios, the two movies will be available to networks across the Turner portfolio -- including TBS, TNT and Cartoon Network -- starting about two years after each film's theatrical release. The tentative network premiere windows are slated to begin in mid-2017 for Cinderella and early 2018 for TheJungle Book. Both films are set to hit theatres in 2015.

"We are confident Disney's new live-action versions of Cinderella and TheJungle Book will appeal to a wide range of demographics and will enjoy extremely successful runs across our various branded networks," Deborah K. Bradley, senior vice president, head of program acquisitions, content strategy and licensing for Turner Broadcasting System, said in a release. "These movies are the kind of tent-pole releases that will fit perfectly with Turner's ever-growing stable of blockbuster titles."

Turner recently did a big licensing deal for the network television premiere windows for the next five theatrical releases from Disney subsidiary Marvel, including Avengers: Age of Ultron and the third installment in the Captain America franchise.

Cinderella, first given Disney treatment on the animated side in 1950, is slated for theatrical release on March 13, 2015. Directed by Kenneth Branagh, it stars Cate Blanchett, Lily James (pictured), Richard Madden and Helena Bonham Carter.

The Jungle Book, directed by Jon Favreau, is slated for 3D theatrical release on Oct. 9, 2015. The voice cast includes Bill Murray as Baloo, Ben Kingsley as Bagheera, Christopher Walken as King Louie and Lupita Nyong'o as Raksha. Idris Elba appears as Shere Khan, Scarlett Johansson as Kaa, Giancarlo Esposito as Akela and Neel Sethi as Mowgli.

Turner Broadcasting System Asia Pacific signed a volume deal with Korea’s leading broadcaster, MBC, locking in content for Oh!K, a new general-entertainment channel launching in Southeast Asia.

Ricky Ow, president of Turner Asia Pacific (pictured at left), and Kwang Han Ahn, president of MBC, praised the partnership in a release that said “Oh!K combines the best in content with Turner's proven history in curating some of the most successful channels in Asia Pacific.” A Turner representative said the channel had not announced any carriage deals yet.

Oh!K will have first pick of MBC content, including first-runs and exclusives soon after their initial transmission debut in Korea, with some shows airing within a week. The broadcaster has a proven track record, including the epic royal court series Jewel in the Palace, that have dominated the market over the past five decades, Turner said.

MBC produces 1,400 hours of content each year distributed in more than 100 countries. Current hit shows include drama series Diary of a Night Watchman, You Are My Destiny, Triangle and the long-running variety show, Infinite Challenge, and reality show Dad, Where Are We Going?.

The launch of Oh!K launch follows Turner's April announcement that it will assume full operational and programming control of WarnerTV, the No. 1 English-language entertainment channel in Singapore.

Turner Broadcasting System said Thursday that it has named Time Warner senior vice president and controller Pascal Deroches chief financial officer, effective Jan. 1. He succeeds John Kampfe, who currently holds the post. Kampfe has announced that he will leave Turner at the end of the year. He will pursue outside interests.

In his new role, Deroches will assume oversight of all financial operations of the company related to its worldwide news, entertainment, kids, sports, advertising and distribution sales and corporate units. Desroches will work closely with Turner parent company Time Warner on various financial matters, including forecasting and reporting.

"Pascal is a world-class finance executive," said Turner Broadcasting chairman and CEO John Martin  in a statement. "During his tenure as Time Warner's controller, he has been involved in virtually all matters important to Time Warner and has developed a deep understanding of Turner's business. He will be a key member of our senior executive team as we execute a strategy to extend our competitive leadership, deliver strong growth and exercise prudent capital allocation. I have the utmost respect for Pascal's professionalism and integrity, and appreciate the continuity that he brings to this critical Turner executive role."

Martin has been shaking up the ranks since becoming CEO in January. In June he introduced Turner 2020, a plan to shoft costs toward aeras with the most growth opportunities. In August, the company offered buyouts to about 500 company veterans,  

Desroches was most recently senior vice president and controller of Time Warner Inc., serving as the company's principal accounting officer and responsible for internal and external reporting, planning and analysis, as well as providing support for mergers & acquisitions activity and other significant transactions. He joined Time Warner in 2001 from KPMG LLP, where he was a partner in the Department of Professional Practice-Assurance & Advisory Services in New York. Previously, Desroches was a Professional Accounting Fellow with the Office of the Chief Accountant at the United States Securities and Exchange Commission (SEC).

The awards were launched in 2007 to honor HR professionals within the cable and satellite industry whose outstanding achievement, leadership and innovation have positively impacted business results. Since the inception, the awards have been sponsored by Multichannel News.

Here are the recipients:

Team Innovator of the Year:Turner Broadcasting System Inc.’s Global Technology and Operations Human Resources Team. This award recognizes a company that demonstrated innovative, creative problem solving that positively impacted business results. Composed of Caron Cone, director of HR; Nicole Johnson, manager of HR; and Josephine Wong, HR generalist, Turner Broadcasting System’s Global Technology and Operations (GTO) HR Team was selected as this year’s recipient for successfully realigning the company’s visual effects and animation division resulting in increased internal utilization of the division’s services.

Aspiring Leader:Beth Biggs, Charter Communications. This award recognizes an emerging HR professional whose fresh perspective, inventive ideas and innovative approach have positively impacted the leadership and culture of the organization. Since joining the company in 2010, Beth Biggs has been an invaluable resource with respect to driving quality programs, delivering results and ensuring Charter is competitive in its benefits offerings.

Leadership Excellence Award:Kerri St. Jean, senior vice president of HR for Comcast Cable, Northeast Division. This award recognizes an HR executive who has demonstrated extraordinary and visionary leadership in addressing a critical business issue, challenge or opportunity by enhancing the organization’s efficiency, performance, cost management or profitability. Kerri St. Jean’s recent work leading a national team of HR senior executives has led to the development of Comcast’s first change management strategy for high-impacting business initiatives.

CTHRA’s Excellence in HR Awards Luncheon which will take place during its Insight & Impact Symposium on Tuesday, Oct. 14, in Philadelphia. To register, visit http://www.cthra.com/symposium.

New York -- With ABC currently enjoying boffo ratings for this year’s NBA Finals, it has shined a light on the growing importance of live sports and event programming within the TV marketplace.

But it has also given the leagues a lot of leverage as they negotiate new media rights contracts with the networks that so desperately want their games.

Since 2011, new media rights deals have been cut for the NFL, MLB, World Cup, English Premier League, MLS and Olympics, among others, which each new deal marking a stark increase over the previous ones. With all the increases in sports rights, that caused many to wonder if at the end of the day, it’s the consumer who will have to foot the bill.

“I don’t think people mind paying for sports,” argued Will Funksenior VP, sponsorship integration and business development for Turner Sports Ad Sales, about the rising cost of sports programming. “As long as you’re getting the right value proposition.”

Funk was speaking during B&C/Multichannel News’ Multiplatform TV Summit on Wednesday, during a keynote session moderated by B&C executive editor Dade Hayes.

The topic of live sports rights comes as Turner Sports and ESPN are negotiating with the NBA on a new rights deal; the current one expires following the 2015-16 season.

“Sports, unlike other programming, there is a passion and a following for it,” continued Funk, who mentioned that Turner has many subscribers for their ancillary TV Everywhere packages including NBA League Pass Broadband.

The ratings for the NBA Playoffs leading up to the Finals have been very good for both ESPN/ABC and Turner; Funk said that NBA Playoff games were the No. 1 show during May in the all-important adults 18-49 demographic in primetime, posting year-over-year increases.

Funk admitted that they weren’t sure how well this year’s playoffs would perform on TV without the two most popular teams in the two biggest markets: The New York Knicks and Los Angeles Lakers (the Brooklyn Nets and LA Clippers made the playoffs, but those teams are considered less popular in their respective markets).

But as Funk explained, sometimes the stars on the teams can shine no matter what city they play in, and pointed to this year’s Championship between Miami and San Antonio. “Miami and San Antonio are not the two biggest markets…but the ratings are beating everybody in primetime.”

Compared to Turner Sports’ other major property, Major League Baseball, Funk said that while our national pastime does skew older than NBA, it’s also a more upscale audience. “That’s the nature of the beast.”

Funk also noted the difference in Turner Sports and their competitors in the sports business such as ESPN and Fox Sports 1. “We’re not a 24-hour sports network at TNT and TBS,” he said. “We’re highly rated entertainment networks.”

Less than six months after taking the helm of Turner Broadcasting System, CEO John Martin continues to put his stamp on the popular cable networks group, mapping out what appears to be a sweeping reorganization that could lead to more staff changes.

Dubbed “Turner 2020” — for the year the programmer will turn 50 — the initiative will build on past efforts and introduce new programs to drive growth.

“We’ve been shifting resources already, and I would ask that you think carefully about how and where to get the greatest return on the assets you control,” Martin wrote in a memo to employees. “This may mean staff changes. In fact, I’ll be surprised if it doesn’t.”

Just what Martin meant by that is unclear, and Turner executives have declined comment. But the home of such cable programming icons as TNT, TBS and CNN has been in a ratings slump lately, in part because of some channels’ reliance on older syndicated broadcast shows.

Already Turner has lost several key managers. In April, former Turner Entertainment Networks president Steve Koonin left to become CEO of the NBA Atlanta Hawks, and CNN chief operating officer and head of ad sales Greg D’Alba resigned. In March, Turner Animation Young Adults & Kids Media division president Stu Snyder and longtime Turner Broadcasting chief research officer Jack Wakshlag left.

Whether more heads will roll remains to be seen.

Most observers believe Turner president David Levy, who was named to that post in August, is relatively safe. But the jury is out on TNT, TBS and Turner Classic Movies president and head of programming Michael Wright.

Wright is under pressure for the ratings slump and faces competition for TNT’s NBA programming from Fox Sports. At the same time, Levy has said publicly that Wright is a candidate to replace Koonin.

Some observers have noted that Fox Broadcasting chairman of entertainment Kevin Reilly’s decision to step down from that post at the end of June has added some uncertainty to Wright’s future — losing out to Reilly for Koonin’s job could force Wright to leave.

But others said they believe the recent management turmoil is merely a function of having a new boss. Martin joined Turner in January after a five-year stint as CFO of Time Warner Inc., and new executives typically prefer to assemble their own teams.

On Tuesday, the CNN brunch is from 12-2 p.m. Take a time-out from walking the show floor to enjoy brunch with CNN, and pick up a CNN branded travel mug at booth 1821.

TNT Happy Hour is from 3-5 p.m. Come by for afternoon beverages and pick up some giveaways from TNT’s upcoming original series The Last Ship.

On Wednesday, from 1-3 p.m., Cartoon Network characters Scooby-Doo, Regular Show’s Mordecai and Rigby and Jake and Finn from Adventure Time will be at the booth. And from 3:30-5:30 p.m., come celebrate TCM’s 20th anniversary with a Champagne toast and t-shirt giveaways.

Each day of the convention, during booth hours, the CNNx Digital Lounge will be open. Stop by to demo CNN’s newest digital product CNNx -- an innovative, next generation product that redefines how users consume news. Available via the CNN App for iPad to customers of select TV providers today, it will be offered to all TV subscribers later this year. Additionally, Watch CNNx will debut on set-top boxes and CNN.com by the end of 2014.

In an attempt to rebrand as a network for a younger, dual-gender audience of “funseekers,” truTV has ordered six new series and renewed two of its current shows across several genres. 

The network has greenlit two competition shows: Fake-Off, which finds performers recreating iconic moments in pop culture history, and Motor City Masters, a car design competition sponsored by Chevorlet. 

TruTV has also ordered series such as Hair Jacked, an ambush game show in which unsuspecting contestants compete for prizes while receiving a haircut, adult lifestyle series How to Be a Grown Up and Friends of the People, the network's first sketch comedy series.   

Based on the social media success achieved by the April 1 sneak peak of magician Michael Carbonaro’s reality series The Carbonaro Effect, truTV has ordered an additional 13 episodes before the series officially premieres on May 15.

The network has also ordered two additional new reality series, Way Out West and Local News (working title), as well as a fourth season of Impractical Jokers and a spin-off entitled Jokers Wild!

TruTV is working with branding agency loyalkaspar in order to hone its new creative strategy, which will include new design applications for all platforms.  

“TruTV’s brand evolution will be a reflection of our new programming focus and the attitude of our target audience of funseekers. Knowing that funseekers are tech-savvy, truTV can push the envelope on creative disruption to drive interactivity across all fan touchpoints,” said Puja Vohra, senior vice president of marketing and digital for truTV in a release.