I love the way Google Finance can output a chronology of a company’s major press stories against its stock price over time. Examining some of the major conglomerate television / media stocks I became curious to know what it would look like if I charted a company’s share price against its ratings performance over time. While CABLEU.tv analysts monitor ratings performance every month, I’ve yet to see anything that endeavors to visually illustrate the relationship between viewership and stock value.

The above chart is the result of my effort for Discovery Communications (NASDAQ: “DISCA”) and I have affectionately titled this work of art, “Statistical Masochism.”

My analysis: To put this graph in perspective, Discovery Communications has gone from $14 / share in April 2006 to its closing price today of $41.69. That’s 300% growth over the past five years!!! Meanwhile, Discovery’s ratings haven’t seen anywhere near that sort of upward trajectory, with the last few months down 10-25% from April 2006.

Sure, we’re comparing two different things impacted by a huge number of variable and to really work towards some more satisfactory conclusion about the correlation between ratings and share price I’d have to chart out the ratings for all of Discovery Communication’s channels (maybe I will in a future post) but at the very least I can say comfortably, from this effort, that if the stock price accurately reflects the actual growth in the strength of the company that Discovery’s acquisitions, channel swaps and rebranding efforts have been effective in creating shareholder value.

Granted, I’m no W. Buffet, and I realize Science and I.D. are way up, but I’d probably be more comfortable as an investor if I started to see the thick blue of the flagship channel pushing up above the red line in pace with share price! All things considered, I’d want viewer-interest in my flagship product to be in line with investor interest in my company.

To actually read about what’s going on at Discovery Channel, click here to read our latest analysis.

Note on scale: I’ve scaled the ratings percentage change to match the percentage change in share price by setting the y-axis extreme to 300% which, as mentioned, is the approximate share price percentage change over the past five year. So, while we’re not comparing the same units we’re seeing a pretty accurate view of their percentage-based relationship. The y-axis for the shaded area is price per share and the y-axis for the solid line is ratings percentage change relative to April 2006, which is our baseline — depicted in red in the graph. The performance is measured over the exact same period so the x-axis is consistent.

Chronology:
———————————–
April 2006 – ID – The New York Times sells stake in Discovery Times back to Discovery Communications, ending its ownership in the channel.

August 1, 2007 – TREE HUGGER – TreeHugger acquired by Discovery Communications

September 1, 2007 – ANIMAL PLANET – Animal Planet HD simulcast launched.

September 1, 2007 – SCIENCE CHANNEL – Science HD simulcast launched

September 1, 2007 – TLC – HD simulcast of TLC launched.

October 15, 2007 – HOW STUFF WORKS – Discovery Communications announces it bought HowStuffWorks.com for US$250 million.

December 2007 – SCIENCE CHANNEL – Science Channel debuts brand new on-air look and altered logo

January 27, 2008 – ID – Discovery Times renamed to “Investigation Discovery”

February 3, 2008 – ANIMAL PLANET – Animal Planet “relaunched” under new image that “sheds its soft and furry side” … endeavors to add “programming with more bite.”

June 4, 2008 – PLANET GREEN – Discovery Home replaced by “Planet Green”

April 30, 2009 – DISCOVERY KIDS – Hasbro acquires a 50% stake in Discovery Kids, the resulting joint-venture alters the channel’s name to The Hub.

January 1, 2011 – OWN – Debuts in approximately 80 million homes, replacing the former Discovery Health Channel.

February 1, 2011 – FitTV – Merges with Discovery Health Channel to become Discovery Fit & Health.

June 8, 2011 – SCIENCE CHANNEL – Drops “Channel” from its name and launches a new logo.

Fourth Quarter of 2011 – HD THEATRE – To be rebranded as Velocity, a new network for men.

3D is seen by many companies as the next frontier in entertainment.

Manufacturers are busy developing and producing new HDTV’s in 3D.  As of right now, the viewer will have to wear special glasses to watch the programs. In-fact, there are many hurdles: a third of viewers may be physically unable to watch 3D; movie makers are not convinced the picture is really better; the cost of eyeglasses; the disconnect between the way you have to watch 3D television and the normal way most people typically watch television (while they’re doing something else).

But beyond all this, significant investments are being made into 3D programming as well. Specifically, Discovery Channel and ESPN are unveiling new channels solely dedicated to 3D programming. We have posted network needs for the new Discovery 3D channel here. The first wave of original and acquired programming, like hour-long series and big blockbuster films are all converting. But is the content coming fast enough? While there has been a big marketing blitz around 3D the reality still remains: the technology is expensive and the lack of content could be an issue for both the networks distributing and the consumer technology manufacturers investing large sums in the development of expensive devices that support it.

Maybe it’s just a matter of time before programming supply and distribution potential reach a balance. Thanks to modern technology, 2D programming is rapidly being converted to 3D. There is no question that the American appetite for 3D programming will escalate in the next few years. The seemingly quick fix, which is available to programming, are those with libraries that can do the conversion process on the existing content. Seems like a no brainer? But executives are realistic. There is no crystal clear certainty in the emerging 3D world. Conversion is expensive, and shooting in 3D can be cheaper but sometimes the results are unpredictable. The special effects cannot be produced in the same way.

So is 3D TV the next thing in television viewing or is it just the latest gimmick?  For the basic consumer will it be a “friend” or a “foe”?  My take: for special events like sports and movies, it’s pretty hard to beat the in-home experience but it really is not as necessary if you just want to watch the evening news.  And of course there are the early adopters who are rolling the dice.  For now, it seems it’s coming full bore, whether we want it or not. Eventually, as always, consumer demand will dictate the amount manufacturers invest in 3D technology and, consequently, how much networks invest in 3D programming.  In early reports the new 3D TV technology, under the right conditions, is impressive and definitely delivers a “wow” factor that appeals to the many fans of home theater, gamers, and early adopters.  But we are an advanced society of bigger and better.   New technology goes through a lot of growing pains, and haven’t we gone through a lot of the same obstacles before?  TV was being used in the home in the early 1940′s, but in the past decade look how far technology and our viewing habits have evolved. Starting in 2000 we went from DVD’s to flat screen tv’s to HD tv’s to Blu-Ray DVD’s, to all broadcasts being sent via high def digital formats, to the present where 3Dtv movies and sets are all the rage. And even with all of 3D’s obstacles, you can’t stop new technology or the viewer’s appetite for it.

Update: “About 25% of TV Viewers Expect to Upgrade to 3D in 18 Months, According to Survey” (Broadcasting and Cable, 11/17/2010)

On occasion you see documentary series, based upon archive, interspersed with interview and maybe a bit of reenactment to boot. Or even a straightforward, fly on the wall or verité program — which is usually a special or a simple one off. Many people still like this form but it is endangered.

Television, cable and otherwise, is an an entertainment medium; nothing is clearer than people wanting to be entertained. Yet there is a need for information and cable usually meets that need. News and information programming is entertaining but ultimately it is not entertainment. This type of programming operates under different rules.

The answer of what happened to traditional documentaries is this: they are still there, just in hiding. Many if not all reality programs contain the seeds, if not the form, of the traditional documentary. Take, for example, the “workplace” reality show. This is a popular genre. Since the beginning of the year there have been 61 new workplace series on cable and network. Some of these have been the most popular programs on cable, brushing network audience numbers in popularity at times. Almost all feature personalities which “pop.” Most are shot verité style in HD and edited aggressively, unlike most verité programs.

But, and this is the key, most have a good deal of real content. If you examine them, even within the most personality-driven workplace series, there is a lot of information.

I hate to say it but most have “educational” value. The best producers understand this even when they are going for laughs, which is often.

So where are the traditional documentaries? They are hidden in these other forms. But I am waiting for a bit of archive to sneak into a series or two. It will happen.

This type of “reality” is not a lower form. Its just different.

And the next thing that occurs to you is “What do UNDERCOVER BOSS and MYTHBUSTERS have in common, much less all these other series?” Apart from being nominated in the same category, not much.

Except they’re all entertaining.

The EMMY-nominated Reality Competition series was a somewhat less motley crew:  THE AMAZING RACE, AMERICAN IDOL, DANCING WITH THE STARS, PROJECT RUNWAY and TOP CHEF. “RUNWAY” AND “CHEF” seem to be related, as do “IDOL” and “DANCING.” But I have a hard time comparing any of these shows to “AMAZING RACE.”

But they do share one value:  They’re all entertaining.

We’re witnessing a sea-change in the whole of Non-Fiction.  It was ripe for it.

To begin with, defining an entire category of programming by what the genre is NOT, has never made much sense to me. By that method, the category could as easily be called “non-comedy,” “non-news” or “non-sports.”

And it’s been evolving right under our noses. It used to be predominantly about information. Then the hybrid “info-tainment” came into being.  We never quite figured out exactly what we meant, even as we launched series that we knew carried heavy doses of either “info” or “‘tainment,” and  sometimes both.

But as programmers we know a lot about defining “reality.”  First and foremost, “Reality” shows don’t repeat well.  By that I mean series like SURVIVOR and its many spawns:  THE APPRENTICE, THE BIGGEST LOSER, BIG BROTHER and the entire “competition” sub-genre may do well, even very well — in their premiere telecasts — but the numbers fall off dramatically for the first repeat and beyond.  This is why what was the Fox Reality Channel is now National Geographic’s “Wild.”  Fox Reality never had enough money to mount high-rated reality originals and their repeats just didn’t rate.

It’s a different story for the “other” reality series, like DIRTY JOBS and MYTHBUSTERS.  Not only do they rate very well in their premieres, but they have strong repeat value.  Take a several-year-old stack of three MYTHBUSTERS that all have to do with, say, James Bond, and you can nail a pretty good rating on a Saturday night. You can’t do that with UNDERCOVER BOSS. Why? Maybe I’m biased (I love DIRTY JOBS and MYTHBUSTERS) but I think it’s because of the greater density of information packed into these two series which gives them a longer shelf life over, say, the competition or pure entertainment reality programs.

The same blend holds true for another “reality” series that repeats very well:  History’s phenomenal PAWN STARS.  The barely-one-year-old series about the owners and customers of a Vegas pawn shop has been a game-changer for the non-fiction networks.  PAWN STARS — and its close cousin, AMERICAN PICKERS — have catapulted History’s ratings about 30 % above the pack of networks it used to run with.  And, of course, it has everyone trying to duplicate its runaway success. truTV has already launched HARDCORE PAWN and there is much, much more to come from everyone trying to catch up to “PAWN” and “PICKERS.”

All of this adds up to an enormous shock to the non-fiction “eco-system.” In a nutshell, charismatic characters in entertaining formats now dominate the high rungs of the non-fiction ratings ladder.  And, for the near future, those “entertain first, inform later (if at all)” shows are crowding out the relatively unpopular, information-led, character-less series.

This isn’t something to bemoan unless you’re a programmer or producer who can’t (or won’t) adjust to this new reality of reality.  Fun is in, sobriety is out and if you don’t start stocking your network with charismatic characters doing cool things, you will be roadkill on the ratings highway. Darn viewers voting with their remotes again!

For years I had been coming to MIPTV and MIPCOM with a fixed schedule: no variations, additions or cancellations. This time it was baptism by fire as my first day with the CABLEready was the first Monday of the market. It was my first time being located in the Riviera Hall and the amount of foot traffic and drop by activity was something that immediately stood out to me. While CABLEready has long been established as a premiere source for factual entertainment content, even the most casual passers by stopped to read catalog one-sheets, watch videos and learn more about the services my new company has to offer. Much of this can attributed to a bold but cohesive look to the stand and smart comprehensive catalog materials. You can deal in many genres as a company but the messaging has to be uncluttered.

MIPCOM 2010 was also the first time I was in a stand that wasn’t barricaded by a reception desk. This atmosphere of accessibility led to immediate dialogue between buyers and sellers. Questions were asked, appointments were made, new business contacts were established and long time clients were introduced to new material and services. Being familiar with the nuances and challenges finding the right program for their channels, it was easy to get a lot accomplished even if the conversation only lasted 10 minutes.

Thinking back, the differences I experienced as a first time CABLEready employee seemed almost academic; it reminded of the economic principles stating that when there are fewer barricades between buyer and seller, it’s often easier to really communicate and get things accomplished!  For me, it felt like the first time the clutter was removed from the pitch.

No, not multitasking while watching television.  That’s been around since I began watching television as a kid.  And not because I’m watching in a hotel room on yet another business trip.   Far more commonplace than I would like.  No, what makes watching this broadcast unusual is that I’m watching it live.  Not on my DVR.  Not online at NBC’s website or Hulu or Fancast.  Not on my Slingbox.  Not on a mobile phone.  Live.  As originally scheduled by the network, including all of the commercial breaks.

Recently, I spent a week out of the country on business.  Luckily, ABC, NBC, and CBS were imported to the hotel.  It allowed me to keep up with a couple of summer favorites, but all of my cable viewing was still out of reach.  TNT, USA, A&E, History, MTV, TBS, AMC and E! all have summer originals on my viewing list.  What to do?  Network websites, Hulu, and Fancast were inaccessible outside the US.  Slingbox continues to have issues and their $30/call tech support is no longer of interest to me.  Still, no worries.  My DVR was cranking away back home, ensuring that everything would be there on my return.

Lately it seems that all my viewing is time shifted.  Not quite true, but we’re getting close.  The aforementioned DVR dominates of course.  VOD is fast becoming a reliable alternative.  AMC’s Mad Men, Starz’ Pillars of the Earth, and most of USA’s series can be found within a week of their scheduled premiere.  Checked out Comcast’s Fancast service recently. Initially, some cable nets were slow to feature their current series, but more and more are jumping on board.  Came in handy for TBS’s My Boys and MTV’s RJ Berger.

I’ve spent a good portion of my time in this business creating schedules for networks.  Now I bring my work home with me.  Many nights, it’s me, not a network programmer in New York or LA or Washington, deciding what I’m going to watch and, most importantly, when I’m going to watch it.   Tuesday becomes Friday.  Monday is a mix of Friday and Sunday.  Prime Time is no longer 8-11pm.  Some nights it can be 7-11pm, some nights 9-Mid, some nights it’s a few hours with an intermission in the middle.  Some nights it’s not even at night.  Could be early morning, late afternoon.  My call, not the network’s.

To be clear, the need for a network program schedule is far from extinct.  Audience flow, lead-in, lead-out, building a night, event scheduling, and every other strategy in a scheduler’s playbook continues to be essential to a network’s success.  My 401K is thankful for that.  But times are changing.  And, like every creative and/or technical change before it, those that embrace it will thrive.

Emmys are now over.  I’m heading over to Youtube to catch tonight’s episode of Big Brother.  Should be posted by now.

USA Network hasn’t acquired a major sitcom in years, mainly because its strategy has been focused on one hour dramas. Then again, it wasn’t until recently when the focus has been on such a strong sitcom in years since the reality craze took over and a good percentage of the primetime programming audience. In walks MODERN FAMILY. A powerhouse comedic series that not only rose to the top of the ratings charts for ABC, but was a critical success as well. MODERN FAMILY hits the ideal Madison Avenue demographics of Adults 18-49 and is fresh off ABC with no other prior exposure. It’s a win-win for USA. Not only does USA acquire the exclusive syndication rights that enable the network to freshen its line-up with a new series they can strip, it also allows them to acquire a series with a built in audience in which they can launch a new half-hour original.

While reality fare is present and brings in big ratings, it lacks an afterlife. Sitcoms are evergreen, especially if they are classics; they can repeat over and over again and still achieve a solid rating. With a sitcom like MODERN FAMILY, not only does it make a statement in primetime, as time wears on the program can easily be used in other time periods for USA to fill programming hours. Another caveat to this deal is that USA takes away a major sitcom from its arch rival TNT/TBS. How grand is that? And just to add the cherry to the cake it absolutely fits in perfectly with USA’s brand of Characters Welcome. This series embodies great writing and an ensemble cast, that is right on target for USA at present. It does come with a hefty price tag, but what doesn’t nowadays? No doubt the series was purchased with initial exclusive rights on USA, but we wouldn’t be surprised if other sister nets like Oxygen, Bravo, etc. sometime down the line, get a crack at it as well. What a bargain!

As for sister network Oxygen, GLEE is the quintessential series for the Live Out Loud network catering to Women 18-34. GLEE makes a perfect platform for pairing up a new companion unscripted series, as well as bringing in its own built in audience. There is a lot of bang for your buck when you acquire such a popular show that has had critical and ratings success. Oxygen is about the here and now, and GLEE is a very relevant choice for the network and its viewers. In today’s marketplace it is rare to find two powerhouse shows under one distributor, and the ability for these two sister networks to make this deal happen in today’s changing marketplace is noteworthy.

Connection to the story: In any TV program, viewers look to somehow weave themselves and their experiences into the story being told on the screen. They look to see how they fit within the story — which character they’re most like and unlike, what they would do or not do in similar situations.

Internationally, soccer is an important part of the traditions of many countries, which makes the viewing audience feel as if they’re a part of the story. A triumph in the World Cup is more than just a win on the soccer field, it’s a happy ending to a long storied history of that particular country. The audience can’t help but feel personally connected to that, but since soccer was never a huge part of American history, there’s no story to tie Americans into the game.

Strong characters: Any TV person will tell you networks of all genres are looking for strong characters.. it’s said so often it’s almost a cliché. Characters who are both over the top and relatable to the audience are what work best on TV. They make even unlikely shows huge hits. This is true in sports as well. Personal rivalries and interesting personalities always bring out the largest crowds and engage the audience beyond the game being played.

When a team has a especially interesting player with a personal life filled with scandal and intrigue people want to see him play. American soccer just doesn’t have many characters with crazy stories off the field. Landon Donovan is not dating Paris Hilton, doesn’t have tattoos, a crazy hairdo or a criminal record and this is true for most of team USA players.

Plot twists and surprises: In an interesting story, there is always an unpredicted plot twist or surprise. The highly successful series 24 was pretty much one big plot twist after another and it kept the audience tuned in and engaged for the entire season.

This happens all the time in sports.. Grand slams, interceptions and slam dunks constantly keep things interesting in American sports. In soccer, although surprises are possible, many times the action never comes. Unlike other sports there are no “small victories”.. no layups, no base hits, no field goals. It makes it is pretty probable that you’ll watch the full 90 minutes and never see anything exciting at all.

A gratifying ending: Good stories need an ending. At the end of every episode there needs to be some sort of conclusion or the audience gets impatient.

Whether it’s a happy or sad ending, through over time or extra innings, major American sports almost always declare a winner. Conversely, in soccer, it’s not uncommon for games to end in ties. The USA and England match last Saturday ended in a 1-1 tie, leaving America’s new soccer fans confused, and maybe a little betrayed. You see, for this game the story had been set; it was a great, longstanding rivalry (on and off the field), the US were the underdogs searching for respect and honor on the international stage. That was enough to make more than 13 million Americans watch! (not counting the Spanish-language broadcast). For a game with this much build-up, a tie is hard to accept and may have discouraged some viewers.

So maybe soccer is a long way from trumping baseball, but it is getting bigger. MLS has been growing in the past few years and adding more star power (or at least some eye candy … hello David Beckham) and the international team is getting better. A tie with England is pretty good! It’s not too late for team USA to start their own story, build characters, add some plot twists and finish with a happy ending this World Cup … and I hope you’ll be watching!

A few weeks ago I was fortunate enough to attend LA Screenings, the major studios showcase for all of their recently picked up pilots for international buyers around the world. What a great event. A chance to screen almost every new fall series, months ahead of the public. In less than a week, we sit and watch more than 50 pilots nonstop, in darkened theatres, with nary a moment in between programs for a bio-break. They hand out pens with a light on the tip so you can write in the dark. Warner Bros screening alone is a 9 hour marathon.

But it was the NBC Universal screening that I found the most interesting. More than anything in recent memory, it reinforced the power of a network brand. No, not NBC’s brand. USA. Yes, USA. The general entertainment cable network, now part of NBC’s stable the last few years, and home of some of the freshest, funnest, and most successful dramas on television.

NBCU screened the full pilot for a half dozen series, two of which were destined for USA. I easily named both series without having to read the literature. COVERT AFFAIRS and FACING KATE. Hard to describe, but easy to see, the network’s tag line “Characters Welcome” just made sense when it came to both series. They felt like USA programs.

Up until a couple years ago my interest in USA was limited to watching US Open tennis every fall. Then along came BURN NOTICE. Loved it immediately. Last summer, ROYAL PAINS entered the picture. Thursdays were still must see television, but now it was a different network. Over the winter WHITE COLLAR debuted. An art thief and an FBI agent? Probably not for me. But if it was on USA it was worth checking out. Glad I did. Great series.

Recently, my mother visited Miami. Driving around the area, she commented that a certain neighborhood looked like the one that Michael’s mom lived in. Michael who? Mom had never been to South Florida. Confused, I asked who Michael was. Her reply? Michael Weston of course, the lead character on BURN NOTICE. (His mother is brilliantly played by Sharon Gless). The next three days, from South Beach to Downtown, from Ocean Drive to Biscayne Bay, her visit was one big studio tour for USA’s biggest series. Probably don’t have say that she’s a big fan of the network as well.

BURN NOTICE and ROYAL PAINS started their new seasons last week. When COVERT AFFAIRS premieres next month and FACING KATE hits later in the year, I’ll be there. How could I not? The network hasn’t let me down yet.

Characters Welcome. More and more, so am I.

It was Turner’s chance to show off all the new stuff they have bought. Conan. NCAA play-offs. THE BIG BANG THEORY. And most of all, dozens of the biggest Hollywood names, from Spielberg to Bochco, Ray Romano to Angie Harmon.

It started with Conan O’Brien and ended with a stage jammed with celebrities including George Lopez, Ice Cube, Kyra Sedgwick, Ray Romano, Andre Braugher, Scott Bakula, Jada Pinkett Smith, Dylan McDermott, Timothy Hutton, Noah Wyle, Jason Lee, Alfre Woodard, Ben McKenzie, Mark-Paul Gosselaar, Breckin Meyer and Angie Harmon. In all, 16 original programs were presented, each charged with star-power and big Hollywood names, which actually overshadowed Turner’s recent record-breaking deals with The NCAA and THE BIG BANG THEORY.

It was a notoriously tough crowd…following his hilarious video, Conan came on stage to loud applause, but not a standing ovation, prompting him to joke, “please sit.”

David Levy (President of Sales, Distribution and Sports, Turner Broadcasting System, Inc.), Linda Yaccarino (EVP-COO of Turner Entertainment Ad Sales, Marketing and Acquisitions) and Steve Koonin (President of Turner Entertainment Networks) came out to present Turner’s positioning, which has been remarkably consistent through the years; TBS and TNT are on par with the broadcast networks. They continue to forge the ever-shrinking broadcast / cable divide. These are “days of big changes” David Levy told us…it doesn’t matter to viewers if they watch content on their televisions, their computers, or their mobile devices. He hit on the driving force of the dynamic when he talked about broadcast going after the dual revenue stream that has funded cable’s growth – money from advertising and money from distribution.

Click here to read the full summary and analysis.