UBS Conference Puts Film, Not "Soft" TV, in the Spotlight

Jeff Bewkes Philippe Dauman Split - H 2014
AP Images/Invision

Jeff Bewkes Philippe Dauman Split - H 2014

Following a report predicting that TV's global share of ad spend will shrink in 2017, the more challenged film units got more love at the confab

This story first appeared in the Jan. 9 issue of The Hollywood Reporter magazine.

The television business might be ruling Hollywood conglomerates these days, but for the 2,000 attendees at the UBS Global Media and Communications Conference, held Dec. 8 to 10 in New York, the more challenged film units still got more love.

Part of the negativity about TV could be traced to a ZenithOptimedia global advertising report released during the conference, predicting that while spending on all advertising will increase 16.5 percent from 2014 to 2017, TV ads would grow just 9.7 percent during that period. Television's global share of ad spend, in fact, will shrink to 37.4 percent in 2017 (from 39.6 percent this year) as digital advertising surges.

IPG strategic global media unit MagnaGlobal, which also released a report timed to the UBS conference, says that digital advertising's market share will grow from 27.7 percent this year to 32.5 percent in 2016.

Read more Is Digital Media Starting to Eat Into TV Advertising Revenue?

Amid the bearish outlook, CBS president and CEO Leslie Moonves was perhaps the most bullish, arguing that while 2014 "was rough in the advertising business," 2015 would be "much better." He insisted that digital outlets might be taking ad spend from "smaller cable networks," but not from the likes of CBS.

Several executives said new industry practices such as dynamic ad insertion and C7 ratings will help TV's cause as they become more widely adopted. The former allows targeted ads to be inserted into VOD programming, while the latter would allow networks to be paid for ads recorded on a DVR as much as seven days before viewing, as opposed to the current three-day standard.

But while the Wall Street analysts in attendance were calling on executives to defend their TV assets, they seemingly gave the movie businesses a pass -- even though TV networks are seen as the biggest drivers of profit and revenue in Hollywood.

"We really like the film business," said 21st Century Fox co-COO James Murdoch, citing the Fox studio's strong year with its X-Men and Planet of the Apes franchises and surprise hit The Fault in Our Stars. "The creative engine is functioning well."

Read more Spending on Digital Ads to Overtake TV in 2017

Viacom CEO Philippe Dauman, meanwhile, touted opportunities in animation, as the conglomerate's Paramount studio has The SpongeBob Movie: Sponge Out of Water set for release Feb. 6 and Monster Trucks with Rob Lowe, Amy Ryan and Danny Glover due later next year. Comcast CFO Michael Angelakis boasted that 2014 will be Universal's most profitable year in its 100-year history. And despite Warner Bros.' rough year at the box office, Time Warner CEO Jeff Bewkes raved about such upcoming films as The Hobbit: The Battle of the Five Armies, which opens Dec. 17, and Batman v. Superman: Dawn of Justice, scheduled for March 2016, while complaining about "soft ratings across the dial" for television. (Time Warner's TV assets include CNN, TNT and TBS, which generate strong profits but have suffered ratings setbacks.)

Though the consensus at the conference was that TV ad sales are light, Moonves pulled out a not-so-secret weapon, reiterating that he expects $2 billion in annual retransmission fees by 2020. Only this time he added: "Even better than that."