15th
Annual Edition 'Buying Power of
Black America' report breaks down billions in expenditures Black
consumers are responding to tighter economic condition by focusing more of
their spending on items and services that improve their homes and
lifestyle. That's one of the trends revealed in the 15th annual report,
"The Buying Power of Black America," published by Target Market News. The
report analyzes spending for black households in 2008 and finds that
African-Americans...
Story continued... _________________
Copyright (c)
2010 by Target Market News Inc. All rights reserved
Business address:
228 S. Wabash Ave.
Suite 210
Chicago, IL 60604
t.
312-408-1881
info@targetmarketnews.com
BET's Chief
Financial Officer tells how the network turns ratings into revenue By
Alix Stuart
CFO Magazine (May 10, 2010) When it comes to financial executives getting
involved in a company's operations, Michael Pickrum has an enviable
task: watching television. As CFO of Black Entertainment Television, a
30-year-old multimedia company owned by Viacom, Pickrum oversees the
costs and revenue associated with programming two cable networks, BET
and Centric, along with the company's forays into online and mobile
entertainment.
Trained as an electrical engineer, Pickrum headed up BET Interactive for
several years before helping to fold it into the cable network operator
and becoming CFO of that larger company in 2007. Since then, the network
has become more "scientific" about how it creates and buys sitcoms,
reality shows, and music programming, says the 40-year-old Pickrum. Part
of many standard cable packages, BET has increased the number of homes
it reaches by 8% since 2006; last year it boosted ratings by 17%. The
network claims many popular African-American actors and musicians among
its performers, including Mo'Nique, who recently won an Oscar for her
role in the 2009 film Precious.
Your programming really covers the waterfront. How do you break it
down? We have three primary genres: original series, specials, and music
programming. For original programs, one of the new ones, The Family
Crews, starring Terry Crews, the dad from Everybody Hates Chris, is
doing well. Then there are our specials, like the "BET Awards," "Rip the
Runway," and "BET Honors." I would argue that no one does awards shows
better in the industry. Our "BET Awards" was the top-rated cable awards
show for 2010. Then we have what we call the juggernaut, 106 & Park, the
number-one daily music show in the cable business. And then there's
Mo'Nique, the talk show. We've done talk shows before, but we really got
it right this time. The show was generating great ratings even before
Mo'Nique's recent ride through Hollywood.
Does "most popular" automatically translate into "most profitable"? No, no, no! That's the goal, but it doesn't always happen that way.
For example, there are some reality shows that are emotional and
physical train wrecks, so you get massive ratings, but advertisers don't
want to be anywhere near them. To be fair, we've had our share, but now
we're really focusing on creating popular shows that are not necessarily
salacious or over the top; [we want to] get great ratings and then
monetize them.
Does Mo'Nique winning an Oscar have a big impact on your business? Everything now gets more expensive for me. No, I'm just joking.
Mo'Nique has a contract with us and she is honoring her contract. When
her contract ends, of course, it will be a negotiation. And we will
definitely try [to charge more for advertising during her show]. Whether
that happens or not is another discussion.
What role does finance play in an entertainment medium that is
largely built around ratings?
At the end of the day, programming a network, there's some aspect of it
being an art. But there are a lot of analytics and research you can do
to inform that decision-making. Several years ago, for example, we took
a very deep dive into research about our audience, to learn things like
which celebrities we should use, and in what kind of format.
One of our successes involves the "BET Awards." Our finance team, our
programming team, and our marketing team looked at the ratings
throughout the show to see how they built. We decoupled all the elements
and delineated what we thought drove the ratings success. Then we
restructured and refocused on what we thought drove ratings for our BET
specials, and it came to fruition this year.
What's your role in acquiring a new program or Web-based series? As the CFO, I'll be the first to say I try not to overpay. You start
from the creative, aesthetic standpoint: Does the program make sense?
Then you determine what rating you think it can generate. Based on that,
you get a sense of how your ad sales team would be able to monetize that
rating and what revenue can be generated. After that, it's just a
question of negotiating the price.
In terms of cost, how do sitcoms compare with reality shows or, say,
a "Webisode"? The short answer is "many millions of dollars." If you think of it
as a continuum, on the right-hand side you put "sitcom" and that's
multiple millions of dollars. I don't want to discuss the details of our
shows, but Star Trek, the Next Generation cost around a million dollars
an episode, and that was years ago. In the middle is reality TV. And
then on the far left would be Webisodes. Depending on how creative you
are and what you're doing, you might spend $100,000 to $200,000 for
several episodes.
Has the election of Barack Obama been good for BET? I think when you look at what we've accomplished it has more to do
with [CEO] Debra Lee's vision and leadership and our approach to how we
manage our business. That being said, I think it's fair to say that
given what President Obama has accomplished, and given how he may have
impacted society's view on African-Americans and our audience, yes, I'm
sure people may pay a little more attention. But the real indicator is,
do people who tune in stay?
What impact has the recession had on BET? Has it been good in the
sense that more people may stay home and watch TV for entertainment? We didn't have to do huge restructuring or, God forbid, go out of
business. If anything, it was, "Let's make sure we're focused on the
right priorities and making bets in the right places." We're in new
media platforms and we're trying to grow our business in other areas,
but the key driver of our business is our network. If we'd had more
resources we might have done some other things. But the reality was that
we needed to, first, make sure the network was succeeding and generating
the right ratings, and then, look at our other opportunities and make
sure we made investments there. For example, we did a rebranding, or a
relaunch, of our secondary network called Centric.
When Nielsen breaks out the top 10 shows among African-American
audiences, the results are usually surprisingly generic — like American
Idol, or sports events — and generally don't include BET shows. Is
cracking that list a goal for you? Our audience is not monolithic; our audience likes the same things
that other Americans like. For us, it's not just shows, it's about
programming an entire network. You can cherry-pick a single show, but
we've been the number-one network among black households for the last 6
to 10 years.
During what percentage of your workday is the TV on?
About 80% of the day, but often in the background. The other 20% is when
I really have to focus on something.
