Posts by David Card from April 30, 2008

David Card | April 30, 2008, 11:23 PM
This Just In: American Idol May Be Fixed

Stoopid judges expose Idol as Quiz Show, 21st century edition. Wotta surprise. And who cares? It's pop entertainment, people.

As Mr. Seacrest anxiously glanced offstage for help, Mr. Jackson, beside Ms. Abdul at the judges’ table, gently prompted her to make comments “just on the first one.” Confused, Ms. Abdul said to Mr. Castro, “I thought you sang twice.” After realizing what had occurred, she then explained that she got her notes mixed up and had meant her comments to be about the next singer, David Cook. But instead of repeating that she thought Mr. Cook had given an uninspired performance, she told him, “You were fantastic.”

David Card | April 30, 2008, 08:36 PM
AOL 1Q08 Ad Revenue Details

Some more details on AOL's ad business after I finally got to listen to Time Warner's 1Q08 earnings call.

Overall advertising was up 1% to $552 million. That's down 11% from Q4. Besides screwing up its sales force, management blamed that result on:
- $19M accounting difference a year ago
- Ad.com's biggest customer, Apollo (aka University of Phoenix) only spent $17M this Q versus $56M a year ago. Apollo generated $250M$215M in revenues for AOL last year.
- It got rid of $10M worth of bounty fees from an unprofitable sponsorship deal with Goldrush
- CPM compression was was "an issue of our own yield management" -- ie they sold too much network inventory instead of premium O&O inventory

Display ad sales on AOL's own properties were down 18% to $191 million. This was blamed mostly on the sales channel conflict between the network ad sales force and the AOL properties sales force, which should be fixed now (though full benefits beyond Q2). Users are flat (relatively good as AOL access business fades) and page views and pages/users were actually up nicely.

Third-party network sales were up 25% to $188 million. If you strip out Apollo and acquisitions, growth was "much higher."

Global search revenues were up 4%. US search was up in the high single digits. AOL.com search was up 89% but that was offset by the decline in AOL access (client software) searching.

Net domestic ex-TAC ad revenue was down 13% to $292 million. That's down 18% from Q4.

So, if you're keeping score, and my calculations are correct, worldwide online ad sales growth for Q1 is looking like this:

Google (ex-TAC)                              $3.75 billion, up 45%
Yahoo (ex-TAC)                              $1.1 billion, up 13%
Microsoft (minimal TAC included)   $619 million, up 39%
AOL (ex $60M-ish of TAC)             $495, down 2%

David Card | April 30, 2008, 08:30 PM
Time Warner Loves Day and Date VoD

A tidbit from Time Warner's earnings call. Warner Bros. et al are very pleased with VoD day and date trials. That is, releasing a movie to VoD at the same time it's released to DVD. (DVD used to have the earlier release window.) So much so it's planning to release "essentially all" its titles that way this year.

Time Warner maintains that DVD sell-through is not affected -- it even claims sell-through is up a bit because there's less competition with used rentals. VoD margins for the studio are in the 60-70% range, while DVD rental margins are 20-30%, it says. So, Blockbuster and Netflix are the only victims.