McCormack Media Newsletter 11/30 & 12/07

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A D V E R T I S I N G TV Spend Research firm MoffettNathanson projects an overall TV ad sales growth of nearly

5% in 2016, due to the boost the category will receive from the Summer Olympics and presidential elections:

Category % Increase Local TV Stations +10.0% Local Cable +7.4% National Cable +1.2% National Broadcast +1.0%

B R O A D C A S T FCC/Retransmission Rights

Rumors are circulating that the FCC is studying proposals that would prevent broadcasters and networks from blocking online access to their programming in order to gain leverage during cable retransmission negotiations.

Fox/Live + Same Day Fox announced that it will no longer issue live plus same day ratings with the

exception of live events – becoming the first broadcast network to do so. Instead, the broadcaster will focus on Live 3, Live 7 and multiplatform data.

C A B L E Comcast/Justice Department

The Wall Street Journal reported that The U.S. Justice Department is investigating whether Comcast’s business practices violate federal antitrust laws. The issue: does Comcast’s monopolization or attempted monopolization of the spot cable ad sales in locations where Comcast offers service such as its local efforts (Comcast Spotlight) and its majority ownership of NCC, which has deals to also represent commercial inventory in telcos and satcasters, create an unlawful restraint of trade environment.

Cox/Copyright Case U.S. District Judge Liam O’Grady in Alexandria, Virginia ruled that Cox

Communications, as an internet service provider, is not protected against copyright infringement or in this case, illegal downloading by its subscribers. Last year, BMG and Round Hill Music sued Cox alleging that Cox, the internet service provider, deliberately turned a blind eye to illegal downloading by its subscribers – failing to set up and enforce a “repeat-‐infringer” policy.

Discovery/Engage Discovery Communications launched a new division, Discovery Engage, whose

mission is to create a portfolio of data products for clients, aimed at improving ad effectiveness and accountability.

Weeks of November 30 & December 7, 2015

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C A B L E (cont’d) GunTV GunTV is soon to be a new home shopping channel dedicated to the sale of

firearms and related items with a planned launch of January 2016. Programming will run from 1am to 7am, seven nights a week with the hope of expanding to 24 hours in the longer future.

C O R P O R A T E AT&T/DirecTV AT&T announced that it will phase out the DirecTV name commencing January.

Also, the company plans to migrate all of its TV product names to AT&T Entertainment “to symbolize our move to a single entertainment portfolio”.

Mattress Firm/ Sleepy’s

Mattress Firm Holding, the largest U.S. specialty-‐mattress retailer by number of locations, is purchasing second place rival Sleepy’s for $780 million. The combined entity will have 3,500 stores and $3.6+ billion in sales over the past 12 months.

D A T A iSpot.tv/TV Squared iSpot.tv, which tracks media schedules and digital responses to TV ads in real

time, and TV Squared have pacted to provide a service which offers brands a return on media investment the same day a TV commercial airs. How it works: iSpot.tv will share data with TVSquared’s Advantage platform, which the companies say will connect a commercial to the point of purchase.

Nielsen/Comparable Metrics Report

Nielsen released its first Comparable Metrics Report, whose mission is to simplify comparisons across all media platforms. Its measurement includes total usage of platforms among adults by age, race and ethnicity as well as breaking down digital reportage into video, streaming audio and social networking.

D I G I T A L Facebook/Buy Tickets/Live Events

Facebook has begun selling concert tickets directly through events pages. How it works: the option appears via a simple “Buy Tickets” button, which will take you to a shopping interface right within the Facebook app or website.

Note: Presently, Facebook is not taking any cut of the ticket price.

F I N A N C E Largest 2015 Deals A merger between pharma entities Pfizer and Allergan, which would be worth

more than $150 billion, would become the largest deal by value so far this year, according to Dealogix, as reported by The Wall Street Journal:

Buyer Target Deal Value (Billions) Pfizer Allergan $150.0+ Anheuser-‐Busch InBev SABMiller $105.6 Royal Dutch Shell BG Group $69.8 Dell EMC $65.7 Charter Communications Time Warner Cable $56.8


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M U S I C Adele Adele’s new album, 25 is the fasting selling album ever with more than 4 million

copies sold in 10 days, according to Nielsen Music. Also, the album is the biggest selling album of the year – besting Taylor Swift’s 1.8 million copies of 1989. Additionally, the album is the highest selling since Nielsen SoundScan started tracking album sales in 1991.

Justin Bieber Justin Bieber’s latest effort, Purpose broke streaming music service Spotify’s

global record for most streams in the first week of an album’s release, racking up 205 million streams worldwide.

Drake Spotify announced that rapper Drake earned 1.8 billion streams in 2015 and his

January mixtape, If You’re Reading This It’s Too Late topped the list of USA’s most streamed albums. Rihanna was the year’s most streamed female performer with 1 billion streams.

Top Streaming Apps Top music streaming apps by revenue worldwide (iOS & Google Play combined),

Third Quarter 2015, according to App Annie: Rank Music App Rank Music App 1 Spotify 6 Rhapsody 2 Pandora 7 Rdio 3 Deezer 8 Slacker Radio 4 Beats Music 9 Line Music 5 Tidal 10 TuneIn Radio

P E R S O N A L I T I E S Bohemian Rhapsody Rock group Queen’s classic Bohemian Rhapsody celebrated its 40th anniversary in

late November. Kobe Bryant Los Angeles Lakers guard Kobe Bryant, the 17-‐time NBA all-‐star, five-‐time

champion, twice Olympic Gold medalist and 37-‐year old veteran, informed the Lakers that he will be retiring after this year.

Note: His salary this year is $25 million, making him the league’s highest paid player this season.

Colors/Pantone Color authority Pantone has for the first time anointed two colors of the year for

2016. The ten year style setting Pantone picks: Year Color(s) Year Color(s) 2016 Serenity, Rose Quartz 2011 Honeysuckle 2015 Marsala 2010 Turquoise 2014 Radiant Orchid 2009 Mimosa 2013 Emerald 2008 Blue Iris 2012 Tangerine Tango 2007 Chili Pepper


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P E R S O N A L I T I E S (cont’d) Saeed Jaffrey Indian actor, Saeed Jaffrey (The Man Who Would Be King, My Beautiful

Laundrette, A Passage to India) has passed away. He was 86 years old. Medal of Freedom The Medal of Freedom is the highest civilian honor the President of the United

States can bestow. This year’s 17 recipients included: Willie Mays (baseball player), Barbra Streisand (singer), Itzhak Perlman (classical musician), James Taylor (singer), Gloria and Emilio Estefan (musicians), Stephen Sondheim (composer and lyricist), Steven Spielberg (filmmaker), Bonnie Carroll (founder of Tragedy Assistance Program for Survivors), Katherine Johnson (mathematician), Billy Frank Jr. (Indian rights advocate), Senator Barbara Mikulski (longest serving woman in Congress), former Representative Lee Hamilton (led panels on the Iraq war and the attacks of 9/11), Yogi Berra (baseball player), Shirley Chisholm (first African American woman elected to Congress) and Minoru Yasui (Japanese civil rights activist).

Thanksgiving Day According to an article in The New York Times, in 1939, the nation’s largest

retailers sent then President Franklin D. Roosevelt, an urgent plea. Thanksgiving fell on the last day of November that year, giving merchants too few days before Christmas to unleash the season’s sales. Would the president consider moving the day up by a week. The President acquiesced, helping to cement the pre-‐eminence of the post Thanksgiving sales rush, now known as Black Friday.

P H A R M A Mergers/ Acquisitions

Mergers and acquisitions deals among pharmaceutical companies, ranked by total announced dollar value (in billions), according to Bloomberg, as reported by USA Today:

Buyer Target Deal (Billions) Year Pfizer Allergan $160.0 2015 (TBD) Pfizer Warner-‐Lambert $87.3 2004 Sanofi Aventis $73.5 2004 GlaxoSmithKline Smithkline & Glaxo Wellcome $72.4 2000 Pfizer Pharmacia $64.3 2002 Pfizer Wyeth $64.2 2009

P L A C E Clear Channel/AT&T Data Patterns

Clear Channel Outdoor and AT&T have pacted to offer outdoor marketers insights into the type of people that have exposure to Clear Channel billboards and displays – such as age, gender, ethnicity and income level – through exploitation of the mobile operator’s data through a new offering named AT&T Data Patterns.

P U B L I S H I N G Magazine Newsstand Sales

According to MagNet, which tracks single copy sales at retail for U.S. magazine publishers, the total number of print magazines sold via newsstands and other retail channels fell 10.3% from 128.8 million in the third quarter of 2014 to 115.5 million in the third quarter of 2015. Total dollar value of these sales fell 9.8%, from $697 million to $628.9 million.


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R E T A I L Amazon/Prime Air Amazon’s latest drone service iteration weighs in at 55 pounds, can carry

packages of up to 5 pounds, flies under 400 feet and uses sense and deploy technology to dodge potential obstacles en route to its delivery destination.

Q4 Revenue Domination

There are 12 retailers in the broad Standard & Poor’s 1500 that are expecting to generate a third or more of their yearly revenue from fourth quarter sales, according to S&P Capital IQ, as reported by USA Today:

Retailer % of Revenue Expected in 4Q GameStop 39.0% Kirkland’s 36.5% L Brands 36.4% Signet Jewelers 36.1% Amazon.com 35.8% Cabela’s 35.7% Best Buy 34.4% Express 34.2% Tuesday Morning 33.9% Kohl’s 33.8% Blue Nile 33.6% Williams-‐Sonoma 33.0%

S O C I E T Y Salt Warning/New York State

Commencing last week, chain restaurants in New York City are required to put warnings on high sodium food under a new law meant to curb salt consumption. How it works: any item with a salt shaker icon beside it contains at least 2,300 milligrams of sodium – about a teaspoon, and the equivalent of the daily recommended intake.

T R A V E L Thanksgiving The Transportation Security Administration forecast that during the Thanksgiving

period, approximately 25.3 million people would take to the air – a 3% increase from last year and the highest since 2007.

V I D E O Apple/Faceshift Apple purchased Zurich based startup, Faceshift, which can turn people’s faces

into animated avatars in real time. Discovery Go Discovery Communications unveiled its on demand app, Discovery Go. The

company has rolled up 9 of its networks into a single app for authenticated cable subscribers. The service allows users to browse by network, across 14 genres and curated playlists.

Facebook/Live Video Facebook Live Video, a new feature in testing mode, enables users to add live

video to their timeline so that it endures forever. Also, friends can add live comments, just like people do with Periscope and Meerkat.


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V I D E O (cont’d) Snapchat/Story Explorer

Snapchat introduced a new feature, Story Explorer, which allows users to mine content in the social network’s Live Stories, with highlighted clips leading interested users to a selection of similar clips.

Univision/Udisea Spanish language broadcaster Univision launched a new digital platform and

YouTube channel called Udisea aimed at multicultural, Spanish-‐speaking millennials.

Yahoo/Video in Search

Yahoo is testing an auto-‐play version of a video ad in its search results pages. How it works: a video ad unit serves up when searching on a specific brand name.

YouTube/Original Content

Rumors are circulating that YouTube is negotiating with production companies for the rights to TV programs and theatricals to stream ad-‐free to customers of its new $9.99 a month video and music streaming platform, YouTube Red.


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BIA/KELSEY 2015 TV STATION GROUP RANKING

RANK TV STATION GROUP # STATIONS # MARKETS % COVERED

1 Fox 29 17 37.224

2 CBS TV 30 18 38.117

3 Media General 125 54 34.008

4 TEGNA 55 39 29.113

5 Comcast/NBC 28 20 36.704

6 Sinclair 137 82 36.563

7 Tribune 51 32 42.912

8 ABC/Disney 8 8 22.893

9 Hearst 34 27 18.629

10 Univision 59 25 44.555

11 Raycom 58 40 12.705

12 Scripps 35 24 17.772

13 Gray 106 51 8.191

14 Cox 15 11 11.149

15 Nexstar 80 59 17.259

16 Graham 5 5 6.194

17 Sunbeam 3 2 3.537

18 Entravision 61 24 13.900

19 Hubbard 13 6 3.207

20 Cunningham 19 16 5.816

21 ION 62 56 65.132

22 Mission 23 20 3.650

23 Stephen Mumblow 12 10 6.011

24 Liberman 10 9 11.233

25 NRJ TV 17 11 21.423


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TOP BROADBAND PROVIDERS IN THE U.S. (CLOSE OF THIRD QUARTER 2015)

CATEGORY COMPANY SUBSCRIBERS

Cable Comcast 22,868,000

Time Warner* 13,016,000

Charter* 5,441,000

Cablevision 2,784,000

Suddenlink 1,202,400

Mediacom 1,067,000

WOW (WideOpenWest) 712,300

Cable ONE 496,865

Others* 6,675,000

Total 54,262,565

Telcos AT&T/DirecTV 15,832,000

Verizon 9,223,000

CenturyLink 6,071,000

Frontier 2,415,500

Windstream 1,109,600

FairPoint 313,982

Cincinnati Bell 281,300

Total 35,246,382

TOTAL -‐ 89,508,947

Source: Leichtman Research Group *Includes Cox and others **Proposed merger of Charter, Time Warner and Bright House into New Charter


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TOP SELLING ALBUMS: FIRST WEEK UNIT SALES The New York Times reported that singer Adele’s latest album, 25, is expected to break the first week most album sales by breaking the 3+ million barrier. The last time an album sold nearly as well was in 2000, when 2.4 million copies of No Strings Attached by N Sync were sold. However, at that time, annual CD sales were more than five times what they are today. The record holders, according to Nielsen Music, as reported by The New York Times:

ARTIST ALBUM SALES WEEK RELEASED

Adele 25 3,380,000 11/26/15

N Sync No Strings Attached 2,416,000 3/26/00

N Sync Celebrity 1,880,000 7/29/01

Eminem The Marshall Mathers LP 1,760,000 5/28/00

Backstreet Boys Black & Blue 1,591,000 11/26/00

Eminem The Eminem Show 1,322,000 6/2/02

Britney Spears Oops!…I Did It Again 1,319,000 5/21/00

Taylor Swift 1989 1,287,000 11/2/14

The Beatles 1 1,259,000 12/24/00

Taylor Swift Red 1,208,000 10/28/12

50 Cent The Massacre 1,141,000 3/6/05

Backstreet Boys Millennium 1,134,000 5/23/99

Lady Gaga Born This Way 1,108,000 5/29/11

Usher Confessions 1,096,000 3/28/04

Garth Brooks Double Live 1,085,000 11/22/98

Whitney Houston The Bodyguard Soundtrack 1,061,000 1/3/93

Limp Bizkit Chocolate Starfish and the Hot Dog Flavored Water 1,055,000 10/22/00

Taylor Swift Speak Now 1,047,000 10/31/10

Norah Jones Feels Like Home 1,022,000 2/15/04

Lil Wayne Tha Carter III 1,006,000 6/15/08

McCormack Media Newsletter 11/30 & 12/07

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Transcript of McCormack Media Newsletter 11/30 & 12/07