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Technology Stocks : Gemstar Intl (GMST)

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To: Mike Buckley who wrote (6367)3/14/2004 12:12:00 AM
From: tinkershaw  Read Replies (1) of 6516
 
I'm a Cox subscriber and I've never seen ads on their guide. I should probably look at the TV Guide channel every once in a while to check out their ads, but I never do.

Very odd. Comcast does indeed have 2 ads per page view. Some of the ads are TV Guide Magazine subscription offers, but at least 1/2 are ads to some upcoming television show or some product or service. Most are for things like Eureka vacuum cleaners, the low ball ads, but there are occasionaly a AMEX ad. But mostly they seem like throw aways.

According to management, the problem is that there is no vehicle for distributing it and no mechanism for measuring it. From the earnings conferece call, both have to be built "from scratch."

This is insane. The guide may be the most watched single piece of space in the entire country. Advertisers are willing to pay $30-$60 a month, per ad, on school buses for billboards to the captive audience, but they are not willing to do so for the most watched television program in the country ?(the IPG is seen more often than any other television show I would suspect, by far).

Someone dropped the ball on this one. Perhaps the 85-15 split had something to do with it, as the cable companies had little incentive to invest in the distribution mechanism.

As for vehicle to measure it, what vehicle do they measure billboards with? Bathroom ads? Ads at the ballgame? On the school bus?

It is crazy. But I am no insider when it comes to ad sales on the guides. I suspect GMST knows what they are talking about, but I cannot believe they could not start to sell it, at least experimentally, given the worry of PVRs and ad skipping. These advertisers are experimenting on TiVo. The Guide is another mechanism to avoid ad skipping and make sure your message is seen by the mass market.

Most of the ads I do see on the guide are not very impressive, however. There would appear to be no one who is paying much attention to the details. This product needs to be invested in.

Tinker
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