It was around January that the team at ESPN Software India, led by managing director RC Venkateish, decided to evolve a game plan encompassing marketing, promotion and programming for the biggest spectacle in the world aka the soccer World Cup.Somewhere in the subconscious was also the fact that the Fifa event needed to be put up on a scale in India that would neutralise the lack of Indian cricket (considered the biggest sporting draw in the India sub-continent) on ESPN and Star Sports, which are managed in Asia by a joint venture company ESPN Star Sports.
ESPN Software India MD RC Venkateish
A successfully implemented soccer strategy would not only get in distribution gains, but would also partially offset (notional) revenue losses for lack of Indian cricket for which ESS has made a lunge twice without success till now.
Considering ESPN's parent Disney, according to international media reports, had forked out a whopping $100 million for the English-language rights to broadcast the World Cup across ABC and ESPN, it was worth giving their all, Team Venky probably must have thought.
From here germinated the idea to have an integrated marketing, programming and promotional strategy for the Fifa show that culminated almost four months later into Duniya Goal Hai (loosely meaning the world would be watching soccer) --- the punch line for ESS' football campaign that is now being ramped up big time as D-Day for the opening event of the globe's biggest sporting spectacle draws ever nearer. Of course, there were dollops of creative inputs from JWT, the agency for ESS in India.
"Soccer is getting much bigger in India than it was in 2002, the last World Cup (that was shown on Ten Sports in India). Over 55 million people have watched the European League this season," a bullish Venkateish says.After all, the matches of the Fifa World Cup, holding centre stage from 9 June to 9 July, have convenient timings with some starting at 6:30 pm IST just ahead of prime time viewing and when people would be trooping back from office.
About 75 million Indians sampled the telecast of World Cup 2002 on Ten Sports and DD with a cumulative audience reach of 30.2 million in India. For the last World Cup, which marked the debut of Ten Sports in India, despite its limited spread in terms of distribution, the channel had ratings of over 50 per cent in places like Kolkata for the final.
On the other hand, ESPN, which aired an India-Sri Lanka cricket ODI on the day the final match of 2002 WC was played, could muster ratings of just 14-15 per cent.
The Euro 2004 continued the growth and had a cumulative audience reach of 32.3 million viewers in. This interest in soccer in India now touches even EPL that had a reach of 42.8 million for the season till date, according to ESPN.
"This means that nearly one in every two individuals in cable homes across India has sampled the EPL," Venkateish points out, adding that ESS hopes to further heighten this popularity through Fifa World Cup matches and other related programming.
No wonder, concurring with Venkateish is ESPN India's vice-president (sales and marketing) and distribution head Sricharan Iyengar, "For us the Fifa is the biggest event that any channel could have this year. It's bigger than Indian cricket also."
What has made it challenging for ESS is that Indians don't have any direct stake in the World Cup as India is still far far away from playing in the soccer fiesta. Any strategy for India would have to keep this in mind so as to make available the matches in such a manner that it involves Indians and entertains them too.
Says ESPN India associate director marketing Paras Sharma, "As sports broadcast leaders, the challenge was to present the World Cup to Indians in a different way. The marketing strategy has been built up keeping that in mind."
Broad Tenets of the Indian Strategy
At the base of the strategy is the aim "empowering the Indian audience to have a unique and customized interaction" with the property.
This is being delivered thru the following:
Engagement: making the viewers play before the actual play begins.
Recognition: rewarding the viewers for their passion for the game.
Experiential: physically transporting them into the thick of the action
Entertainment: providing a peep into the fun side of Fifa.
ESPN Software India associate director marketing Paras Sharma
The marketing strategy, therefore, has been to focus at the larger sporting fan base and look at their motivations with respect to this sporting spectacle as this audience is looking for a lot more than just viewing pleasure. The two key drivers for building interaction: entertainment and engagement.Similarly, at a strategic level, the objective is to create 'visible' interest and traction for the event much before it kicks off, thereby extending the Football Fever to deliver on revenue and sponsor interests.
"The challenge therefore was to position the World Cup in India not only as the 'biggest international football event with no Indian stake' but as the `biggest sporting spectacle' that transcends boundaries so as to catch larger audiences and build sustainable traction for the property and the sport," points out Sharma.
Strategic Initiatives
In the month of June and July the campaign will highlight how the entire world becomes eight inches in diameter (referring to television programmes and live telecasts). And that is summed up in the campaign punch line, which says Duniya Goal Hai.
The idea is in Hinglish. Translated in English it means that 'World is round' wherein 'goal' in punned in Hindi to round and the soccer goal. This central thought would be taken forward in all marketing and communication activities.Phase 1: This is the Magnum Opus stage and kicked off in April. Here the aim is to create saliency for the forthcoming event two months prior by building upon the most scalable and media interesting hooks of the property. The campaign highlights the unique facets of the event and, in addition, seeding in similar key points in national and regional vernacular media. Both ESPN and Star Sports have started airing programming related to the Fifa show, pushing the event besides putting out special World Cup stories.
Phase II: The phase of the campaign revolves around creating interest around the history of the event. This will be done by highlighting the unique constituents of the property itself in form of past and current players, milestones etc. Phase III: This offers an Indian take through on-ground activities. The aim is to engage Indian audiences to play the WC.
In this regard, ESS has started an initiative in association with a channel sponsor Coca-Cola called Gyraah Hindustani, which aims to take selected Indians to watch the WC in all its glory, spectacle and grandeur.
The Adidas+ Challenge sees Indian school students competing against each other in football matches for the right to go to Germany. It is being rolled out across major cities.
ESPN Software India marketing director Nirmal Dayani
Explains ESPN marketing director Nirmal Dayani, "A one of its kind unique consumer involvement and activation exercise has been undertaken along with two of the leading the global sponsors of Fifa, Coca Cola and Adidas."
Phase IV: This, Sharma describes, as the In the Middle of Action stage. The aim is to increase new sampling and longer duration relationship with the current audience. ESS will do consumer promotions related to matches, stars, and teams. According to Iyengar, once the World Cup starts, there will be contests in association with one of the channels' sponsors, Airtel.
ESS is also working on a tie-up for those who would be part of the flag bearing team for Fifa through a programme initiative called Learning Ground, which is being attempted to be integrated with Fifa-related initiatives to search for Indian kids who would be flag bearers during the event.
The Programming Line-Up
Any sports broadcast, be it cricket or hockey or football, depends heavily on analysis to hook in viewers. For this purpose, ESS has established an enriched studio panel of presenters for the football World Cup.These commentators will offer different perspectives on the goings on at the World Cup and leading up to the spectacle when it begins in June. Gerry Armstrong, former Irish international and now a soccer expert with ESS, Steve McMahon, former England and Liverpool player and an ESS presenter and Harsha Bhogle will handle the presentation.
For those looking for a desi or local touch, the broadcaster will also have Indian soccer experts like Novy Kapadia, Noel Da Kima Leitao as guests every week during the event. On the ground in Germany, the broadcaster will have two dedicated teams comprising Anand Narsimhan, Dave Roberts and Jason Dasey, who will capture the World Cup craze. Additionally, a special Indian ESS production team will travel across India to catch the enthusiasm.
Of course, the specials have already been flagged off in a bid to build up viewer interest leading up to June. One such initiative last month was Fifa World Cup Stories. Six episodes of half an hour duration provided different angles to chapters of the event.
The show featured stories on the most surprising and shocking results in the World Cups, Golden Boot winners of the previous editions, dramatic penalty shoot outs, young stars of the sport and rise to top of some of the underdogs. Born To Play, airing Mondays to Fridays till early May, was a series on some of the best soccer stars the world has witnessed. The 13-episode series brought alive the magical moments from World Cup performances of Pele, Maradona, Baggio, Platini, Beckenbauer and others.
Fifa Preview, a 16-spisode series running from 3-24 May is another programming initiative.
Running Mondays to Fridays, this previews the 2006 Fifa World Cup Germany through exciting blend of originally shot footage from qualifiers and other innovative feature based content.
The series will bring to life the football-ing passion and current form of all qualified nations. The series will profile stars, coaches and will also analyse each nation's prospects against teams within their groups.
Some other programming line-up include the six-episode Fifa Stories, Fifa Official Films (13 episodes till 19 May) that will ferret out films from the Fifa archive to research fascinating histories of the some of the most successful nations in World Cup football.
Local feed: Another strategy that sports channels are following is having feed in Hindi for special events. ESS is no exception.
To cater to the Hindi speaking markets, ESS will have a special Hindi feed. This will help ESS broad base the appeal of soccer for those who do not understand English and for those who might have difficulty following the accents of ESS' foreign experts. The sponsors on ESPN and Star Sports, including Fifa global associates, include Coca Cola India (presenting sponsor) Bharti 'Airtel' Cellular (joint presenting sponsor), Adidas India (associate sponsor), Mirc Electronics (associate sponsor) and IOC (associate sponsor).
How Different Media Being Used
ESS' strategy hasn't overlooked using other media to further its aim of Duniya Goal Hai in India.
ESPN Software India VP sales & marketing Sricharan Iyengar
As part of this game plan, cable operators and MSOs or trade affiliates are being made aware of the importance of the World Cup.Pointing out that exclusive events are opportunities to monetize them, Iyengar says, "The fundamental reason for doing initiatives with cable operators in various parts of the country is to create awareness in general about football and Fifa in particular. Football in terms of business and viewership is massive in states like West Bengal, Kerala and Goa."
Television:
This will be the primary medium to reach the wide geographical spread of Indian audience. Spots will air on two leading national channels along with a large mix of regional channels. Innovative promotional activities with these channels are being looked at thus increasing the noise and exposure levels manifold.ESS is also negotiating with news channels to offer them footage from the event. Dayani admits that ESS has tied up for the Kolkata region with the newly-launched 24 Ghanta news channel for promotion of WC whereby the news channel will have access to news footage at no extra cost, but will help in ESS' in branding activities.
Radio: FM radio will be the target vehicle. It is learnt that Radio Mirchi will be the preferred partner for the Fifa event. Print: To increase awareness and build on the tactical requirements, regional press has been roped in. Unique means like customised editorials have been started as a build up to the Cup so as to increase audience's knowledge and interest in the event. Cinema Halls: Sharma notes that cinema as a medium occupies a pride of place in urban India and is being used as a hype creation mechanism in addition to its value as a communication vehicle.
Cinema halls across the metros in the country are being painted in Fifa WC colours a month prior to the event by highlighting the most entertaining aspects of the event
Bollywood: Not leaving any stone unturned, ESS would be roping in Bollywood actors to promote the World Cup.
The Likely Gains
At the end of it all, it all boils down to economics and not charity. ESS, too, is looking at all round gains. But most of all in the distribution arena.
A spectacle like World Cup might not have helped Ten Sports in 2002 the way it had been envisaged, but ESS seems to be better placed. The fact that out of the 64 matches, ESS will share with pubcaster Doordarshan only four events --- the semis, final and the inaugural --- gives the sports broadcaster an added advantage.
With an eye on distribution gains, ESS feels that de-activated networks or those that had replaced ESPN and Star Sports with more in-demand channels in the area of their operations due to lack of adequate bandwidth would return within the ESS fold.
"Fifa has given us a chance to get all the de-activated cable networks back on the roster. We expect 7-8 per cent of the networks which had de-activated ESS, will start showing the channels again now that the football fever is spreading," Iyengar said, pointing out that trade activities with distribution affiliates are aimed towards this also.
However, a bigger challenge post the World Cup would be to see how the Fifa show can be leveraged for other football properties that ESS has and whether the Fifa eyeballs could be converted into regular viewership for other programmes.
"That'll be a key challenge. The Fifa fever needs to rub off on events like PPL, Spanish League and other football properties and those we think would drive viewership and our subscription revenue," Iyengar says.An optimistic Venkateish feels that the World Cup will "generate ratings, which are equivalent or higher than India international Test ratings."
And, if that actually happens, it would encourage ESS to weave strategies around non-cricketing properties in India in a big way.
Viewership of Fifa World Cup in Europe beats expectations
Since kicking off last Friday 9 June, the 2006 Fifa World Cup in Germany has received a strong response not just in terms of stadium attendance but also in terms of television viewership in Europe.
Initial viewing figures have been provided by football governing body Fifa’s and Infront’s research agency Sponsorship Intelligence, from the first three days of play.
In Germany, the ZDF coverage of the tournament's opening game featuring the host nation was watched by 20.13 million, a market share of 76 per cent. It was the most viewed Fifa World Cup opening match in history of German television.
England's opening match against Paraguay reached 84 per cent market share in the UK. 12 million people tuning in BBC One’s coverage, which matched the average for England’s group stage games in 2002. This rating does not include the out-of-home viewing television audience, which is expected to be significant due to the air time of this match which was on Saturday 10 June at 2 pm.
Even countries that were not playing in the time period when the ratings were taken have fared well on the television ratings front. A case in point is France. The first three games broadcast on TF1 have shown much improved ratings on average than all the games in 2002 not featuring France (12).
Netherlands's qualification for the 2006 event (the country failed to qualify in 2002) has helped boost the ratings in the country. Around 5.5 million fans watched the team beat Serbia-Montenegro on NL 2. The market share of 89.4 per cent, was well over half more than tuned into the 2002 final.
In Poland, the audience for the game against Ecuador surpassed the 2002 top TVR which involved the final. Poland's opening game got a TVR of 25.7 versus 25.3 for the 2002 Brazil versus Germany final. The match was covered by TVP 1.
In Portugal the team's efforts against Angola drew 2.9 million viewers (a market share of 81 per cent). This was over 30 per cent higher than the top rated audience four years ago. In Norway England's game against Paraguay on TV 2 attracted a market share of 81 per cent .
At the moment, the assessment of the viewing patterns is based on 'overnights' and audiences could be significantly higher once “out of home” viewing is added in to the total. This is likely to run at record levels for this World Cup, given the current public viewing trend and the effect of new media options.
Infront Sports and Media will provide further summary highlights of television audience figures worldwide on a regular basis throughout the course of the tournament.
The company is responsible for the worldwide marketing and sales of the broadcast rights to the 2006 Fifa World Cup. It has made the event more widely available than ever before. There are over 500 broadcasters covering the Fifa World Cup and coverage is being provided in virtually every country of the world.
Thursday, November 30, 2006
Tuesday, November 28, 2006
Lots of jobs - Good or Bad News
Employment blues has always inspired Bollywood. Be it the struggling Shashi Kapoor in Deewar or SRK in Raju ban gaya Gentleman, we have seen it all. These heros toiling through the streets of Mumbai, catching running buses, waiting in long queues for an interview, getting rejected in the absence of the famed shifarish ka khat and the frustration spurring out of each rejection! But I wonder why we don't get to see this drama anymore? Has finding a white collared job become so easy that it is no longer perceived as a struggle by our directors or has the job market undergone a drastic change wherein demand chases supply ferociously, making the employee look like a scheming villain with 3-4 job offers in hand and ready to take the next leap.Welcome to the new genre in the employment industry, where the mammoth BPO and KPO industries offer jobs with the most tempting packages. It's not one or two of them, but a swarm of IT/ITES companies that are currently chasing the skilled Indians. In this scenario a Casanova changes his job more frequently than his girl friend! Parents boast of big brands where their children work for an obnoxiously high sum of money. But only we know the shallowness of these big names and the money they Offer letters are handed out like pamphlets to the fresh graduates. Easily victimised by brand names and salaries, these 21-22 somethings fall prey to a world of monotony, where their ideas and creativity gets brutally stabbed by the robot-like automated way in which these high profile organizations perform.You have people who do the blind cut copy paste work that makes their once sharp mind absolutely blunt. However these people are much better off compared to those poor souls who are victims of overstaffing. I have been on the 'On the Bench' for a period of 6 months. What do these bright brains do, drink coffee, do a great deal of orkutting, forward forwarded emails, listen to music, talk to their heart's full over the phone and allow their brains to get rusted. Where they procrastinate the single unimportant project they have so that every morning when they come to office, they atleast have some work in hand. Then of course you have those prolonged coffee, lunch and snack breaks where you flirt with dames, plan your weekend picnics or movies. Sometimes you wonder why did they employ me and spend so much on my training, if their plan was to make me sit on my desk from 9.00-6.00? Is that the philanthropy of my organization!Well for these IT industries we are not people but 'Headcount'. You are not a Personality but a Resource. The time you have in hand is not Precious Time but Cheap Capacity. They earn billions of dollars through outsourcing contracts and paying a few thousands to their fresh employees does not cost them much. Moreover its so very fashionable for these IT companies to say we are planning to increase our headcount to XYZ this quarter or we shall have a brand new state of art training institute to accommodate our new recruits or else our profit per employee was XYZ. All this news smells growth that can send their scripts soaring northwards on speculation. I am not saying that they do such blind recruiting just for that reason, but such mass recruitment can definitely attract clients who automatically bestow more trust on an organization which has employed the best people in the industry! Does this seem dangerously familiar to you. Believe it or not this exodus represents the increase in the level of employment about which all Indians are very proud.Outsourcing simply means break down all the processes in an industry and create a pool of low complexity work, one of the mid-level complexity and one of high complexity work Ship out the low complexity work to a BPO, the mid-level complexity work to a KPO and retain the high end job yourself. Which means in an outsourcing process, the outsourcor moves up the value chain and the outsourcee becomes the dumping ground. So far I am ok with all of this. But what really annoys me is the absolute mismatch between the outsourced work and the qualification of the person who is made to do the work.Financial KPOs employ CAs and MBAs to do jobs which even a bright B.Com can do reasonably well. Do these MNCs sourcing out work here know what it takes to clear a CA exam or get admitted into a good B-School? While the starters in India rotting in a BPO (alias KPO) know all technicalities of the financial sector, those who are first year analysts in the London and US Investment Banks come from fields as diverse as literature, history or psychology. While we know what an Investment Bank does even before we take our jobs, most of our counterparts abroad come to know about the functionalities of an Investment Bank only when these banks come to recruit them at their campus. And the saddest part of the story is these analyst send work to the over qualified Indians sitting in the BPO/KPOs dungeons. But once they get a place in the front end offices, they have tremendous opportunities that transforms them into the hard core Investment Bankers, while the Indians who started at a much higher footing, qualification wise, due to lack of the right exposure in a KPO, get stagnated and ultimately land up all frustrated.According to me there is no difference between a BPO and a KPO. It is an absolute myth if you say that KPO offers you more challenging work than a BPO. That's because these MNCs for the sake of maintaining quality always employ over qualified people. So while a B.A. or B.Com. finds the work of reconciliation a child's play, a C.A or an MBA finds the work of preparing a comparable company analysis relatively easier.I need not talk about the stress of working in shifts in some BPOs due to the timing difference. A lot has already been said about this. Sometimes you just feel like saying hey why should I sacrifice my night's sleep to serve those North Americans who create so much of an issue to even grant us a simple visa!With situations like this prevailing please don't blame our generation for job hopping. Either make our syllabus and exams easier, so that we don't look over qualified for jobs that we get as freshers or else if you do not have such plans, try alleviating the work quality for the freshers. Astronomical salary figures and a T-shirt or mug with the company's prominent brand cannot allure us long. Frustration will creep in sooner or later and I hope you don't want to see the vibrant youth of India (which is being envied by all developed countries) being reduced to cut, copy and paste robots.
My Life as a Knowledge Worker
The leading management thinker describes seven personal experiences that taught him how to grow, to change, and to age--without becoming a prisoner of the past
I was not yet 18 when, having finished high school, I left my native Vienna and went to Hamburg as a trainee in a cotton-export firm. My father was not very happy. Ours had been a family of civil servants, professors, lawyers, and physicians for a very long time. He therefore wanted me to be a full-time university student, but I was tired of being a schoolboy and wanted to go to work. To appease my father, but without any serious intention, I enrolled at Hamburg University in the law faculty. In those remote days--the year was 1927--one did not have to attend classes to be a perfectly proper university student. All one had to do to obtain a university degree was to pay a small annual fee and show up for an exam at the end of four years.
THE FIRST EXPERIENCE Taught by Verdi
The work at the export firm was terribly boring, and I learned very little. Work began at 7:30 in the morning and was over at 4 in the afternoon on weekdays and at noon on Saturdays. So I had lots of free time. Once a week I went to the opera.
On one of those evenings I went to hear an opera by the great 19th-century Italian composer, Giuseppe Verdi--the last opera he wrote, Falstaff. It has now become one of Verdi's most popular operas, but it was rarely performed then. Both singers and audiences thought it too difficult. I was totally overwhelmed by it. Although I had heard a great many operas, I had never heard anything like that. I have never forgotten the impression that evening made on me.
When I made a study, I found that this opera, with its gaiety, its zest for life, and its incredible vitality, was written by a man of 80! To me 80 was an incredible age. Then I read what Verdi himself had written when he was asked why, at that age, when he was already a famous man and considered one of the foremost opera composers of his century, he had taken on the hard work of writing one more opera, and an exceedingly demanding one. "All my life as a musician," he wrote, "I have striven for perfection. It has always eluded me. I surely had an obligation to make one more try."
I have never forgotten those words--they made an indelible impression on me. When he was 18 Verdi was already a seasoned musician. I had no idea what I would become, except that I knew by that time that I was unlikely to be a success exporting cotton textiles. But I resolved that whatever my life's work would be, Verdi's words would be my lodestar. I resolved that if I ever reached an advanced age, I would not give up but would keep on. In the meantime I would strive for perfection, even though, as I well knew, it would surely always elude me.
THE SECOND EXPERIENCE Taught by Phidias
It was at about this same time, and also in Hamburg during my stay as a trainee, that I read a story that conveyed to me what perfection means. It is a story of the greatest sculptor of ancient Greece, Phidias. He was commissioned around 440 b.c. to make the statues that to this day stand on the roof of the Parthenon, in Athens. They are considered among the greatest sculptures of the Western tradition, but when Phidias submitted his bill, the city accountant of Athens refused to pay it. "These statues," the accountant said, "stand on the roof of the temple, and on the highest hill in Athens. Nobody can see anything but their fronts. Yet you have charged us for sculpting them in the round--that is, for doing their back sides, which nobody can see."
"You are wrong," Phidias retorted. "The gods can see them." I read this, as I remember, shortly after I had listened to Falstaff, and it hit me hard. I have not always lived up to it. I have done many things that I hope the gods will not notice, but I have always known that one has to strive for perfection even if only the gods notice.
THE THIRD EXPERIENCE Taught by Journalism
A few years later I moved to Frankfurt. I worked first as a trainee in a brokerage firm. Then, after the New York stock-market crash, in October 1929, when the brokerage firm went bankrupt, I was hired on my 20th birthday by Frankfurt's largest newspaper as a financial and foreign-affairs writer. I continued to be enrolled as a law student at the university because in those days one could easily transfer from one European university to any other. I still was not interested in the law, but I remembered the lessons of Verdi and of Phidias. A journalist has to write about many subjects, so I decided I had to know something about many subjects to be at least a competent journalist.
The newspaper I worked for came out in the afternoon. We began work at 6 in the morning and finished by a quarter past 2 in the afternoon, when the last edition went to press. So I began to force myself to study afternoons and evenings: international relations and international law; the history of social and legal institutions; finance; and so on. Gradually, I developed a system. I still adhere to it. Every three or four years I pick a new subject. It may be Japanese art; it may be economics. Three years of study are by no means enough to master a subject, but they are enough to understand it. So for more than 60 years I have kept on studying one subject at a time. That not only has given me a substantial fund of knowledge. It has also forced me to be open to new disciplines and new approaches and new methods--for every one of the subjects I have studied makes different assumptions and employs a different methodology.
THE FOURTH EXPERIENCE Taught by an Editor-in-Chief
The next experience to report in this story of keeping myself intellectually alive and growing is something that was taught by an editor-in-chief, one of Europe's leading newspapermen. The editorial staff at the newspaper consisted of very young people. At age 22 I became one of the three assistant managing editors. The reason was not that I was particularly good. In fact, I never became a first-rate daily journalist. But in those years, around 1930, the people who should have held the kind of position I had--people age 35 or so--were not available in Europe. They had been killed in World War I. Even highly responsible positions had to be filled by young people like me.
The editor-in-chief, then around 50, took infinite pains to train and discipline his young crew. He discussed with each of us every week the work we had done. Twice a year, right after New Year's and then again before summer vacations began in June, we would spend a Saturday afternoon and all of Sunday discussing our work over the preceding six months. The editor would always start out with the things we had done well. Then he would proceed to the things we had tried to do well. Next he reviewed the things where we had not tried hard enough. And finally, he would subject us to a scathing critique of the things we had done badly or had failed to do. The last two hours of that session would then serve as a projection of our work for the next six months: What were the things on which we should concentrate? What were the things we should improve? What were the things each of us needed to learn? And a week later each of us was expected to submit to the editor-in-chief our new program of work and learning for the next six months. I tremendously enjoyed the sessions, but I forgot them as soon as I left the paper.
Almost 10 years later, after I had come to the United States, I remembered them. It was in the early 1940s, after I had become a senior professor, started my own consulting practice, and begun to publish major books. Since then I have set aside two weeks every summer in which to review my work during the preceding year, beginning with the things I did well but could or should have done better, down to the things I did poorly and the things I should have done but did not do. I decide what my priorities should be in my consulting work, in my writing, and in my teaching. I have never once truly lived up to the plan I make each August, but it has forced me to live up to Verdi's injunction to strive for perfection, even though "it has always eluded me" and still does.
THE FIFTH EXPERIENCE Taught by a Senior Partner
My next learning experience came a few years after my experience on the newspaper. From Frankfurt I moved to London in 1933, first working as a securities analyst in a large insurance company and then, a year later, moving to a small but fast-growing private bank as an economist and the executive secretary to the three senior partners. One, the founder, was a man in his seventies; the two others were in their midthirties. At first I worked exclusively with the two younger men, but after I had been with the firm some three months or so, the founder called me into his office and said, "I didn't think much of you when you came here and still don't think much of you, but you are even more stupid than I thought you would be, and much more stupid than you have any right to be." Since the two younger partners had been praising me to the skies each day, I was dumbfounded.
And then the old gentlemen said, "I understand you did very good securities analysis at the insurance company. But if we had wanted you to do securities-analysis work, we would have left you where you were. You are now the executive secretary to the partners, yet you continue to do securities analysis. What should you be doing now, to be effective in your new job?" I was furious, but still I realized that the old man was right. I totally changed my behavior and my work. Since then, when I have a new assignment, I ask myself the question, "What do I need to do, now that I have a new assignment, to be effective?" Every time, it is something different. Discovering what it is requires concentration on the things that are crucial to the new challenge, the new job, the new task.
THE SIXTH EXPERIENCE Taught by the Jesuits and the Calvinists
Quite a few years later, around 1945, after I had moved from England to the United States in 1937, I picked for my three-year study subject early modern European history, especially the 15th and 16th centuries. I found that two European institutions had become dominant forces in Europe: the Jesuit Order in the Catholic South and the Calvinist Church in the Protestant North. Both were founded independently in 1536. Both adopted the same learning discipline.
Whenever a Jesuit priest or a Calvinist pastor does anything of significance--making a key decision, for instance--he is expected to write down what results he anticipates. Nine months later he traces back from the actual results to those anticipations. That very soon shows him what he did well and what his strengths are. It also shows him what he has to learn and what habits he has to change. Finally, it shows him what he has no gift for and cannot do well. I have followed that method for myself now for 50 years. It brings out what one's strengths are--and that is the most important thing an individual can know about himself or herself. It brings out areas where improvement is needed and suggests what kind of improvement is needed. Finally, it brings out things an individual cannot do and therefore should not even try to do. To know one's strengths, to know how to improve them, and to know what one cannot do--they are the keys to continuous learning.
THE SEVENTH EXPERIENCE Taught by Schumpeter
One more experience, and then I am through with the story of my personal development. At Christmas 1949, when I had just begun to teach management at New York University, my father, then 73 years old, came to visit us from California. Right after New Year's, on January 3, 1950, he and I went to visit an old friend of his, the famous economist Joseph Schumpeter. My father had already retired, but Schumpeter, then 66 and world famous, was still teaching at Harvard and was very active as the president of the American Economic Association.
In 1902 my father was a very young civil servant in the Austrian Ministry of Finance, but he also did some teaching in economics at the university. Thus he had come to know Schumpeter, who was then, at age 19, the most brilliant of the young students. Two more-different people are hard to imagine: Schumpeter was flamboyant, arrogant, abrasive, and vain; my father was quiet, the soul of courtesy, and modest to the point of being self-effacing. Still, the two became fast friends and remained fast friends.
By 1949 Schumpeter had become a very different person. In his last year of teaching at Harvard, he was at the peak of his fame. The two old men had a wonderful time together, reminiscing about the old days. Suddenly, my father asked with a chuckle, "Joseph, do you still talk about what you want to be remembered for?" Schumpeter broke out in loud laughter. For Schumpeter was notorious for having said, when he was 30 or so and had published the first two of his great economics books, that what he really wanted to be remembered for was having been "Europe's greatest lover of beautiful women and Europe's greatest horseman--and perhaps also the world's greatest economist." Schumpeter said, "Yes, this question is still important to me, but I now answer it differently. I want to be remembered as having been the teacher who converted half a dozen brilliant students into first-rate economists."
He must have seen an amazed look on my father's face, because he continued, "You know, Adolph, I have now reached the age where I know that being remembered for books and theories is not enough. One does not make a difference unless it is a difference in the lives of people." One reason my father had gone to see Schumpeter was that it was known that the economist was very sick and would not live long. Schumpeter died five days after we visited him.
I have never forgotten that conversation. I learned from it three things: First, one has to ask oneself what one wants to be remembered for. Second, that should change. It should change both with one's own maturity and with changes in the world. Finally, one thing worth being remembered for is the difference one makes in the lives of people.
I am telling this long story for a simple reason. All the people I know who have managed to remain effective during a long life have learned pretty much the same things I learned. That applies to effective business executives and to scholars, to top-ranking military people and to first-rate physicians, to teachers and to artists. Whenever I work with a person, I try to find out to what the individual attributes his or her success. I am invariably told stories that are remarkably like mine.
Adapted from Drucker on Asia: The Drucker-Nakauchi Dialogue , by Peter F. Drucker and Isao Nakauchi, copyright (c) 1996. Reprinted with permission of Butterworth Heinemann, a division of Reed Educational and Professional Publishing Ltd. All rights reserved. Peter F. Drucker is Clarke Professor of Social Science and Management at Claremont Graduate School, in California. He can be reached by fax at 909-626-7366.
I was not yet 18 when, having finished high school, I left my native Vienna and went to Hamburg as a trainee in a cotton-export firm. My father was not very happy. Ours had been a family of civil servants, professors, lawyers, and physicians for a very long time. He therefore wanted me to be a full-time university student, but I was tired of being a schoolboy and wanted to go to work. To appease my father, but without any serious intention, I enrolled at Hamburg University in the law faculty. In those remote days--the year was 1927--one did not have to attend classes to be a perfectly proper university student. All one had to do to obtain a university degree was to pay a small annual fee and show up for an exam at the end of four years.
THE FIRST EXPERIENCE Taught by Verdi
The work at the export firm was terribly boring, and I learned very little. Work began at 7:30 in the morning and was over at 4 in the afternoon on weekdays and at noon on Saturdays. So I had lots of free time. Once a week I went to the opera.
On one of those evenings I went to hear an opera by the great 19th-century Italian composer, Giuseppe Verdi--the last opera he wrote, Falstaff. It has now become one of Verdi's most popular operas, but it was rarely performed then. Both singers and audiences thought it too difficult. I was totally overwhelmed by it. Although I had heard a great many operas, I had never heard anything like that. I have never forgotten the impression that evening made on me.
When I made a study, I found that this opera, with its gaiety, its zest for life, and its incredible vitality, was written by a man of 80! To me 80 was an incredible age. Then I read what Verdi himself had written when he was asked why, at that age, when he was already a famous man and considered one of the foremost opera composers of his century, he had taken on the hard work of writing one more opera, and an exceedingly demanding one. "All my life as a musician," he wrote, "I have striven for perfection. It has always eluded me. I surely had an obligation to make one more try."
I have never forgotten those words--they made an indelible impression on me. When he was 18 Verdi was already a seasoned musician. I had no idea what I would become, except that I knew by that time that I was unlikely to be a success exporting cotton textiles. But I resolved that whatever my life's work would be, Verdi's words would be my lodestar. I resolved that if I ever reached an advanced age, I would not give up but would keep on. In the meantime I would strive for perfection, even though, as I well knew, it would surely always elude me.
THE SECOND EXPERIENCE Taught by Phidias
It was at about this same time, and also in Hamburg during my stay as a trainee, that I read a story that conveyed to me what perfection means. It is a story of the greatest sculptor of ancient Greece, Phidias. He was commissioned around 440 b.c. to make the statues that to this day stand on the roof of the Parthenon, in Athens. They are considered among the greatest sculptures of the Western tradition, but when Phidias submitted his bill, the city accountant of Athens refused to pay it. "These statues," the accountant said, "stand on the roof of the temple, and on the highest hill in Athens. Nobody can see anything but their fronts. Yet you have charged us for sculpting them in the round--that is, for doing their back sides, which nobody can see."
"You are wrong," Phidias retorted. "The gods can see them." I read this, as I remember, shortly after I had listened to Falstaff, and it hit me hard. I have not always lived up to it. I have done many things that I hope the gods will not notice, but I have always known that one has to strive for perfection even if only the gods notice.
THE THIRD EXPERIENCE Taught by Journalism
A few years later I moved to Frankfurt. I worked first as a trainee in a brokerage firm. Then, after the New York stock-market crash, in October 1929, when the brokerage firm went bankrupt, I was hired on my 20th birthday by Frankfurt's largest newspaper as a financial and foreign-affairs writer. I continued to be enrolled as a law student at the university because in those days one could easily transfer from one European university to any other. I still was not interested in the law, but I remembered the lessons of Verdi and of Phidias. A journalist has to write about many subjects, so I decided I had to know something about many subjects to be at least a competent journalist.
The newspaper I worked for came out in the afternoon. We began work at 6 in the morning and finished by a quarter past 2 in the afternoon, when the last edition went to press. So I began to force myself to study afternoons and evenings: international relations and international law; the history of social and legal institutions; finance; and so on. Gradually, I developed a system. I still adhere to it. Every three or four years I pick a new subject. It may be Japanese art; it may be economics. Three years of study are by no means enough to master a subject, but they are enough to understand it. So for more than 60 years I have kept on studying one subject at a time. That not only has given me a substantial fund of knowledge. It has also forced me to be open to new disciplines and new approaches and new methods--for every one of the subjects I have studied makes different assumptions and employs a different methodology.
THE FOURTH EXPERIENCE Taught by an Editor-in-Chief
The next experience to report in this story of keeping myself intellectually alive and growing is something that was taught by an editor-in-chief, one of Europe's leading newspapermen. The editorial staff at the newspaper consisted of very young people. At age 22 I became one of the three assistant managing editors. The reason was not that I was particularly good. In fact, I never became a first-rate daily journalist. But in those years, around 1930, the people who should have held the kind of position I had--people age 35 or so--were not available in Europe. They had been killed in World War I. Even highly responsible positions had to be filled by young people like me.
The editor-in-chief, then around 50, took infinite pains to train and discipline his young crew. He discussed with each of us every week the work we had done. Twice a year, right after New Year's and then again before summer vacations began in June, we would spend a Saturday afternoon and all of Sunday discussing our work over the preceding six months. The editor would always start out with the things we had done well. Then he would proceed to the things we had tried to do well. Next he reviewed the things where we had not tried hard enough. And finally, he would subject us to a scathing critique of the things we had done badly or had failed to do. The last two hours of that session would then serve as a projection of our work for the next six months: What were the things on which we should concentrate? What were the things we should improve? What were the things each of us needed to learn? And a week later each of us was expected to submit to the editor-in-chief our new program of work and learning for the next six months. I tremendously enjoyed the sessions, but I forgot them as soon as I left the paper.
Almost 10 years later, after I had come to the United States, I remembered them. It was in the early 1940s, after I had become a senior professor, started my own consulting practice, and begun to publish major books. Since then I have set aside two weeks every summer in which to review my work during the preceding year, beginning with the things I did well but could or should have done better, down to the things I did poorly and the things I should have done but did not do. I decide what my priorities should be in my consulting work, in my writing, and in my teaching. I have never once truly lived up to the plan I make each August, but it has forced me to live up to Verdi's injunction to strive for perfection, even though "it has always eluded me" and still does.
THE FIFTH EXPERIENCE Taught by a Senior Partner
My next learning experience came a few years after my experience on the newspaper. From Frankfurt I moved to London in 1933, first working as a securities analyst in a large insurance company and then, a year later, moving to a small but fast-growing private bank as an economist and the executive secretary to the three senior partners. One, the founder, was a man in his seventies; the two others were in their midthirties. At first I worked exclusively with the two younger men, but after I had been with the firm some three months or so, the founder called me into his office and said, "I didn't think much of you when you came here and still don't think much of you, but you are even more stupid than I thought you would be, and much more stupid than you have any right to be." Since the two younger partners had been praising me to the skies each day, I was dumbfounded.
And then the old gentlemen said, "I understand you did very good securities analysis at the insurance company. But if we had wanted you to do securities-analysis work, we would have left you where you were. You are now the executive secretary to the partners, yet you continue to do securities analysis. What should you be doing now, to be effective in your new job?" I was furious, but still I realized that the old man was right. I totally changed my behavior and my work. Since then, when I have a new assignment, I ask myself the question, "What do I need to do, now that I have a new assignment, to be effective?" Every time, it is something different. Discovering what it is requires concentration on the things that are crucial to the new challenge, the new job, the new task.
THE SIXTH EXPERIENCE Taught by the Jesuits and the Calvinists
Quite a few years later, around 1945, after I had moved from England to the United States in 1937, I picked for my three-year study subject early modern European history, especially the 15th and 16th centuries. I found that two European institutions had become dominant forces in Europe: the Jesuit Order in the Catholic South and the Calvinist Church in the Protestant North. Both were founded independently in 1536. Both adopted the same learning discipline.
Whenever a Jesuit priest or a Calvinist pastor does anything of significance--making a key decision, for instance--he is expected to write down what results he anticipates. Nine months later he traces back from the actual results to those anticipations. That very soon shows him what he did well and what his strengths are. It also shows him what he has to learn and what habits he has to change. Finally, it shows him what he has no gift for and cannot do well. I have followed that method for myself now for 50 years. It brings out what one's strengths are--and that is the most important thing an individual can know about himself or herself. It brings out areas where improvement is needed and suggests what kind of improvement is needed. Finally, it brings out things an individual cannot do and therefore should not even try to do. To know one's strengths, to know how to improve them, and to know what one cannot do--they are the keys to continuous learning.
THE SEVENTH EXPERIENCE Taught by Schumpeter
One more experience, and then I am through with the story of my personal development. At Christmas 1949, when I had just begun to teach management at New York University, my father, then 73 years old, came to visit us from California. Right after New Year's, on January 3, 1950, he and I went to visit an old friend of his, the famous economist Joseph Schumpeter. My father had already retired, but Schumpeter, then 66 and world famous, was still teaching at Harvard and was very active as the president of the American Economic Association.
In 1902 my father was a very young civil servant in the Austrian Ministry of Finance, but he also did some teaching in economics at the university. Thus he had come to know Schumpeter, who was then, at age 19, the most brilliant of the young students. Two more-different people are hard to imagine: Schumpeter was flamboyant, arrogant, abrasive, and vain; my father was quiet, the soul of courtesy, and modest to the point of being self-effacing. Still, the two became fast friends and remained fast friends.
By 1949 Schumpeter had become a very different person. In his last year of teaching at Harvard, he was at the peak of his fame. The two old men had a wonderful time together, reminiscing about the old days. Suddenly, my father asked with a chuckle, "Joseph, do you still talk about what you want to be remembered for?" Schumpeter broke out in loud laughter. For Schumpeter was notorious for having said, when he was 30 or so and had published the first two of his great economics books, that what he really wanted to be remembered for was having been "Europe's greatest lover of beautiful women and Europe's greatest horseman--and perhaps also the world's greatest economist." Schumpeter said, "Yes, this question is still important to me, but I now answer it differently. I want to be remembered as having been the teacher who converted half a dozen brilliant students into first-rate economists."
He must have seen an amazed look on my father's face, because he continued, "You know, Adolph, I have now reached the age where I know that being remembered for books and theories is not enough. One does not make a difference unless it is a difference in the lives of people." One reason my father had gone to see Schumpeter was that it was known that the economist was very sick and would not live long. Schumpeter died five days after we visited him.
I have never forgotten that conversation. I learned from it three things: First, one has to ask oneself what one wants to be remembered for. Second, that should change. It should change both with one's own maturity and with changes in the world. Finally, one thing worth being remembered for is the difference one makes in the lives of people.
I am telling this long story for a simple reason. All the people I know who have managed to remain effective during a long life have learned pretty much the same things I learned. That applies to effective business executives and to scholars, to top-ranking military people and to first-rate physicians, to teachers and to artists. Whenever I work with a person, I try to find out to what the individual attributes his or her success. I am invariably told stories that are remarkably like mine.
Adapted from Drucker on Asia: The Drucker-Nakauchi Dialogue , by Peter F. Drucker and Isao Nakauchi, copyright (c) 1996. Reprinted with permission of Butterworth Heinemann, a division of Reed Educational and Professional Publishing Ltd. All rights reserved. Peter F. Drucker is Clarke Professor of Social Science and Management at Claremont Graduate School, in California. He can be reached by fax at 909-626-7366.
Really good one, enjoy ........
Five cannibals (Man eaters) get appointed as programmers in an IT company.During the welcoming ceremony the boss says: "You're all part of our team now. You can earn good money here, and you can go to the company canteenfor something to eat. So don't trouble the other employees". The cannibalspromise not to trouble the other employees.Four weeks later the boss returns and says: "You're all working very hard, and I'm very satisfied with all of you. One of our developers hasdisappeared however. Do any of you know what happened to her?" Thecannibals disown all knowledge of the missing developer. After the boss has left, the leader of the cannibals says to the others: "Which of youidiots ate the developer?"One of the cannibals raises his hand hesitantly, to which the leader ofthe cannibals says: "You FOOL! For four weeks we've been eating team leaders, managers, and project managers and no-one has noticed anything,and now YOU ate one developer and it got noticed. So hereafter pleasedon't eat a person who is working."
Amortisation policies in major broadcasting companies
Times Warner
For advertising-supported networks, the Company’s general policy is to amortize the programming costs on a straight-line basis (or per basis if greater) over the licensing period. There are, however, exceptions to this general rule. For example, because of the significance of rights fees paid for sports programming licensing arrangements (e.g., NBA and MLB), programming costs are amortized using an income forecast model, in which total revenue generated under the sports programming is estimated and the costs associated with this programming amortized as revenue is earned, based on the relationship that the programming costs bear to total estimated revenues, which approximates pattern with which the network will utilize and benefit from providing the sports programming.
In addition, based on historical advertising sales, the Company believes that, for certain types of programming, the initial airing has more value than subsequent airings. In these circumstances, the Company will use an accelerated method of amortization. Additionally, if the Company is licensing the right to air a movie multiple times over a certain period and the movie is being shown to the public for the first time on a Company network (a “Premiere Movie”), a portion of the licensing cost is amortized on the initial airing of the movie, with the remaining cost amortized on a straight-line basis (or play basis, if greater) over the remaining licensing period. The determination of the amount of amortization to accelerate in the first showing versus subsequent showings has been determined based on a study of historical advertising sales for similar programming.
For a premium cable network that is not advertising supported (e.g., HBO), programming costs are generally amortized on a straight-line basis in the year that the related shows are exhibited. When the company has the right to exhibit feature theatrical programming in multiple windows over a number of years, the Company uses historical audience performance as its basis for determining the amount of a film’s programming amortization attributable to each window. The Company records programming arrangements (e.g., film inventory, sports rights, etc.) at the lower of unamortized cost or estimated net realizable value. For broadcast television networks (e.g., The WB Network) whose primary source of revenue is advertising, the Company estimates the net realizable value of unamortized cost based on the estimated advertising that can be sold during the season in which the package of programming is aired. For cable networks (e.g., TBS, TNT, etc.), that earn both Advertising and Subscription revenues, the Company evaluates the net realizable value of unamortized cost based on the package of programming provided to the subscribers by the network. Specifically, in determining whether the programming arrangements for a particular network are impaired, the Company determines the net realizable value for the entire network’s programming arrangements based on a projection of the network’s estimated combined subscription revenues and advertising revenues. Similarly, given the premise that customers subscribe to a premium service because of the overall quality of its programming, the Company performs its evaluation of the net realizable value of unamortized programming costs based on the package of programming provided to the subscribers by the network. Specifically, the Company determines the net realizable value for all of its premium service programming arrangements based on projections of estimated subscription revenues.
BSKYB
1) Acquired movie rights are amortized on a straight-line basis over the period of the transmission rights.
2) 1) Where contracts for sports rights provide for multiple seasons or competitions, they are amortized on a straight-line basis across the season or competition
3) Programme rights are stated at the lower of cost and net realizable value (‘‘NRV’’), including, here applicable, estimated subscriber escalation payments, and net of the accumulated expense charged to the income statement to date.
4) Payments made upon receipt of commissioned and acquired programming, but in advance of the legal right to broadcast the programmes, are treated as prepayments.
5) Amortisation of an intangible asset begins when the asset is available for use, and is charged to the income statement through operating expenses on a straight-line basis over the intangible assets’ estimated useful life, principally being a period of no more than ten years, unless the asset life is judged to be indefinite. If the useful life is indefinite or the asset is not yet available for use, no amortisation is charged and an impairment test is carried out at least annually. Other intangible assets are tested for impairment in line with accounting policy (k) below.
EITF D-108
In September 2004, the Emerging Issues Task Force (EITF) issued Topic No. D-108 Use of the Residual Method to Value Acquired Assets Other than Goodwill (EITF D-108).
EITF D-108 requires that a direct value method be used to value intangible assets acquired in business combinations completed after September 29, 2004. EITF D-108 also requires the Company to perform an impairment test using a direct value method on all intangible assets that were previously valued using the residual method. Any impairments arising from the initial application of a direct value method are reported as a cumulative effect of accounting change. For radio station acquisitions subsequent to the acquisition of Capital Cities/ABC, Inc. in 1996, the Company applied the residual value method to value the acquired FCC licenses. We adopted EITF D-108 for the fiscal year ended October 1, 2005 and recorded non-cash, $57 million pre-tax charge ($36 million after-tax) as a cumulative effect of accounting change.
EITF 00-21
The Company adopted EITF No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21), effective at the beginning of fiscal 2003.
EITF 00-21
addresses revenue recognition for revenues derived from a single contractual arrangement that contains multiple products or services. The rule provides additional requirements to determine when such revenues may be recorded separately for accounting purposes. Previously, the Company had recognized the NFL broadcast portion of ESPN’s affiliate revenue when the NFL games were aired, as ESPN’s affiliate contracts provided a basis for allocating such revenue between NFL and non-NFL programming. Since the cost of the NFL rights had also been recognized as the games were aired, the Company recognized both the NFL revenues and NFL costs in the quarters the games were aired. Under EITF 00-21’s requirements for separating the revenue elements of a single contract, beginning in fiscal 2003 the Company no longer allocates ESPN’s affiliate revenue between NFL and non-NFL programming for accounting purposes. As a consequence, the Company no longer matches all NFL revenue with NFL costs, as ESPN affiliate revenue (including the NFL portion) is generally recognized ratably throughout the year, while NFL contract costs continue to be recognized in the quarters the games are aired. This accounting change impacts only the timing of revenue recognition and has no impact on cash flow. As a result of this change, the Media Networks segment reports significantly reduced revenue and profitability in the first fiscal quarter when the majority of the NFL games are aired, with commensurately increased revenues and profits in the second and third fiscal quarters.
Disney
1) Carrying amounts of merchandise, materials and supplies inventories are generally determined on a moving average cost basis and are stated at the lower of cost or market.
2) Film and television costs include capitalizable direct negative costs, production overhead, interest, development costs and acquired production costs and are stated at the lower of cost, less accumulated amortization, or fair value.
3) Acquired programming costs for the Company’s television and cable/satellite networks are stated at the lower of cost, less accumulated amortization, or net realizable value.
4) Acquired television broadcast program licenses and rights are recorded when the license period begins and the program is available for use. Marketing, distribution, and general and administrative costs are expensed as incurred.
5) Film and television production and participation costs are expensed based on the ratio of the current period’s gross revenues to estimated remaining total gross revenues from all sources on an individual production basis.
6) Television network series costs and multiyear sports rights are charged to expense based on the ratio of the current period’s gross revenues to estimated remaining total gross revenues from such programs or on a straight-line basis, as appropriate.
7) Estimated remaining gross revenue for film productions includes revenue that will be earned within ten years of the date of the initial theatrical release. For television network series, we include revenues that will be earned within ten years of the delivery of the first episode, or if still in production, five years from the date of delivery of the most recent episode, if later. For acquired film libraries, remaining revenues include amounts to be earned for up to twenty years from the date of acquisition. Television network and station rights for theatrical movies and other long-form programming are charged to expense primarily on an accelerated basis related to the projected usage of the programs.
8) Development costs for projects that have been determined will not go into production or have not been set for production within three years is written off.
9) Estimates of total gross revenues can change significantly due to a variety of factors, including advertising rates and the level of market acceptance of the production. Accordingly, revenue estimates are reviewed periodically and amortization is adjusted, if necessary. Such adjustments could have a material effect on results of operations in future periods. The net realizable value of network television broadcast program licenses and rights is reviewed using a daypart methodology. A daypart is defined as an aggregation of programs broadcast during a particular time of day or programs of a similar type. The Company’s dayparts are early morning, daytime, late night, primetime, news, children and sports (includes network and cable). The net realizable values of other cable programming are reviewed on an aggregated basis for each cable channel
10) The decrease in production cost amortization was driven by lower film cost write-offs. These cost decreases were partially offset by increased production cost amortization and distribution costs at Miramax due to an increased number of releases and higher write-offs. Lower costs in worldwide home entertainment were primarily due to lower distribution costs, production cost amortization and participation costs. Distribution costs and production cost amortization were lower as a result of decreased unit sales. Participation costs were down as the prior year included Finding Nemo and Pirates of the Caribbean, which had higher participation costs due to better performance than current year titles. Pixar receives an equal share of profits (after distribution fees) as co-producer of Finding Nemo and The Incredibles. The adoption of SFAS 123R increased expenses by $41 million in fiscal year 2005.
11) Theatre programming Charged to expense based on the number of times the program is expected to be shown. Estimates of usage of television network and station programming can change based on competition and audience acceptance.
12)
News Corp.
1) Television, Cable Network Programming and Direct Broadcast Satellite—Advertising revenue is recognized as the commercials are aired, net of agency commissions. Subscriber fees received from subscribers, cable systems and DBS operators are recognized as revenue in the period that services are provided, net of amortization of cable distribution investments. The Company defers the cable distribution investments and amortizes the amounts on a straight-line basis over the contract period.
2) Accounting for the production and distribution of motion pictures and television programming is in accordance with SOP 00-2, which requires management’s judgment as it relates to total revenues to be received and costs to be incurred throughout the life of each program or its license period. These judgments are used to determine the amortization of capitalized filmed entertainment and television programming costs, the expensing of participation and residual costs associated with revenues earned and any fair value adjustments.
3) In accordance with SOP 00-2, the Company amortizes filmed entertainment and television programming costs using the individual-film-forecast method. Under the individual-film-forecast method, such programming costs are amortized for each film or television program in the ratio that current period actual revenue for such title bears to management’s estimated remaining unrecognized ultimate revenue as of the beginning of the current fiscal year to be recognized over approximately a six year period or operating profits to be realized from all media and markets for such title. Management regularly reviews, and revises when necessary, its total revenue estimates on a title-by-title basis, which may result in a change in the rate of amortization and/or a write down of the asset to fair value.
4) The costs of national sports contracts at FOX and at the Cable Network Programming segment and for international sports rights agreements are charged to expense based on the ratio of each period’s operating profits to estimated total remaining operating profit of the contract. Estimates of total operating profit can change and accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material.
5) The costs of local and regional sports contracts, which are for a specified number of events, are amortized on an event-by-event basis. Those costs, which are for a specified season, are amortized over the season on a straight-line basis, and if applicable, a portion of the cost is allocated to rebroadcasts. Original cable programming is amortized on an accelerated basis. Management regularly reviews, and revises when necessary, its total revenue estimates on a contract basis, which may result in a change in the rate of amortization and/or a write down of the asset to fair value.
Filmed Entertainment Costs:
6) In accordance with Statement of Position (“SOP”) No. 00-2, “Accounting by Producers or Distributors of Films” (“SOP 00-2”),
Filmed entertainment costs include capitalized production costs, overhead and capitalized interest costs, net of any amounts received from outside investors. These costs, as well as participations and talent residuals, are recognized as operating expenses on an individual film or network series basis in the ratio that the current fiscal year’s gross revenues bear to management’s estimate of total remaining ultimate gross revenues. Estimates for initial domestic syndication and basic cable revenues are not included in the estimated lifetime revenues of network series until such sales are probable. Marketing costs and development costs under term deals are charged as operating expenses as incurred. Development costs for projects not produced are written-off at the earlier of the time the decision is taken not to develop the story or after three years. Filmed entertainment costs are stated at the lower of unamortized cost or estimated fair value on an individual motion picture or television product basis. Revenue forecasts for both motion pictures and television products are continually reviewed by management and revised when warranted by changing conditions. When estimates of total revenues and other events or changes in circumstances indicate that a motion picture or television production has a fair value that is less than its unamortized cost, a loss is recognized currently for the amount by which the unamortized cost exceeds the film or television production’s fair value.
Programming Costs:
7) In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 63, “Financial Reporting by Broadcasters,
”costs incurred in acquiring program rights or producing programs for the Television, Direct Broadcast Satellite Television and Cable Network Programming segments are capitalized and amortized over the license period or projected useful life of the programming.
Program rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing.
a. Television broadcast network and original cable programming are amortized on an accelerated basis. The Company has single and multi-year contracts for broadcast rights of programs and sporting events. At the inception of these contracts and at each subsequent reporting date, the Company evaluates the recoverability of the costs associated therewith, using aggregate estimated advertising revenues directly associated with the program material and related expenses. Where an evaluation indicates that a multi-year contract will result in an ultimate loss, additional amortization is provided to currently recognize that loss.
b. The costs of national sports contracts at the Fox Broadcasting Company (“FOX”) and Cable Network Programming segment and for international sports rights agreements are charged to expense based on the ratio of each period’s operating profits to estimated total remaining operating profit of the contract. Estimates of total operating profit can change and accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material. The costs of local and regional sports contracts, which are for a specified number of events, are amortized on an event-by-event basis. Those costs, which are for a specified season, are amortized over the season on a straight-line basis and if applicable, a portion of the cost is allocated to rebroadcasts.
c. Inventories for other divisions are valued at the lower of cost or net realizable value. Cost is primarily determined by the first in first out, average cost method or by specific identification.
For advertising-supported networks, the Company’s general policy is to amortize the programming costs on a straight-line basis (or per basis if greater) over the licensing period. There are, however, exceptions to this general rule. For example, because of the significance of rights fees paid for sports programming licensing arrangements (e.g., NBA and MLB), programming costs are amortized using an income forecast model, in which total revenue generated under the sports programming is estimated and the costs associated with this programming amortized as revenue is earned, based on the relationship that the programming costs bear to total estimated revenues, which approximates pattern with which the network will utilize and benefit from providing the sports programming.
In addition, based on historical advertising sales, the Company believes that, for certain types of programming, the initial airing has more value than subsequent airings. In these circumstances, the Company will use an accelerated method of amortization. Additionally, if the Company is licensing the right to air a movie multiple times over a certain period and the movie is being shown to the public for the first time on a Company network (a “Premiere Movie”), a portion of the licensing cost is amortized on the initial airing of the movie, with the remaining cost amortized on a straight-line basis (or play basis, if greater) over the remaining licensing period. The determination of the amount of amortization to accelerate in the first showing versus subsequent showings has been determined based on a study of historical advertising sales for similar programming.
For a premium cable network that is not advertising supported (e.g., HBO), programming costs are generally amortized on a straight-line basis in the year that the related shows are exhibited. When the company has the right to exhibit feature theatrical programming in multiple windows over a number of years, the Company uses historical audience performance as its basis for determining the amount of a film’s programming amortization attributable to each window. The Company records programming arrangements (e.g., film inventory, sports rights, etc.) at the lower of unamortized cost or estimated net realizable value. For broadcast television networks (e.g., The WB Network) whose primary source of revenue is advertising, the Company estimates the net realizable value of unamortized cost based on the estimated advertising that can be sold during the season in which the package of programming is aired. For cable networks (e.g., TBS, TNT, etc.), that earn both Advertising and Subscription revenues, the Company evaluates the net realizable value of unamortized cost based on the package of programming provided to the subscribers by the network. Specifically, in determining whether the programming arrangements for a particular network are impaired, the Company determines the net realizable value for the entire network’s programming arrangements based on a projection of the network’s estimated combined subscription revenues and advertising revenues. Similarly, given the premise that customers subscribe to a premium service because of the overall quality of its programming, the Company performs its evaluation of the net realizable value of unamortized programming costs based on the package of programming provided to the subscribers by the network. Specifically, the Company determines the net realizable value for all of its premium service programming arrangements based on projections of estimated subscription revenues.
BSKYB
1) Acquired movie rights are amortized on a straight-line basis over the period of the transmission rights.
2) 1) Where contracts for sports rights provide for multiple seasons or competitions, they are amortized on a straight-line basis across the season or competition
3) Programme rights are stated at the lower of cost and net realizable value (‘‘NRV’’), including, here applicable, estimated subscriber escalation payments, and net of the accumulated expense charged to the income statement to date.
4) Payments made upon receipt of commissioned and acquired programming, but in advance of the legal right to broadcast the programmes, are treated as prepayments.
5) Amortisation of an intangible asset begins when the asset is available for use, and is charged to the income statement through operating expenses on a straight-line basis over the intangible assets’ estimated useful life, principally being a period of no more than ten years, unless the asset life is judged to be indefinite. If the useful life is indefinite or the asset is not yet available for use, no amortisation is charged and an impairment test is carried out at least annually. Other intangible assets are tested for impairment in line with accounting policy (k) below.
EITF D-108
In September 2004, the Emerging Issues Task Force (EITF) issued Topic No. D-108 Use of the Residual Method to Value Acquired Assets Other than Goodwill (EITF D-108).
EITF D-108 requires that a direct value method be used to value intangible assets acquired in business combinations completed after September 29, 2004. EITF D-108 also requires the Company to perform an impairment test using a direct value method on all intangible assets that were previously valued using the residual method. Any impairments arising from the initial application of a direct value method are reported as a cumulative effect of accounting change. For radio station acquisitions subsequent to the acquisition of Capital Cities/ABC, Inc. in 1996, the Company applied the residual value method to value the acquired FCC licenses. We adopted EITF D-108 for the fiscal year ended October 1, 2005 and recorded non-cash, $57 million pre-tax charge ($36 million after-tax) as a cumulative effect of accounting change.
EITF 00-21
The Company adopted EITF No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21), effective at the beginning of fiscal 2003.
EITF 00-21
addresses revenue recognition for revenues derived from a single contractual arrangement that contains multiple products or services. The rule provides additional requirements to determine when such revenues may be recorded separately for accounting purposes. Previously, the Company had recognized the NFL broadcast portion of ESPN’s affiliate revenue when the NFL games were aired, as ESPN’s affiliate contracts provided a basis for allocating such revenue between NFL and non-NFL programming. Since the cost of the NFL rights had also been recognized as the games were aired, the Company recognized both the NFL revenues and NFL costs in the quarters the games were aired. Under EITF 00-21’s requirements for separating the revenue elements of a single contract, beginning in fiscal 2003 the Company no longer allocates ESPN’s affiliate revenue between NFL and non-NFL programming for accounting purposes. As a consequence, the Company no longer matches all NFL revenue with NFL costs, as ESPN affiliate revenue (including the NFL portion) is generally recognized ratably throughout the year, while NFL contract costs continue to be recognized in the quarters the games are aired. This accounting change impacts only the timing of revenue recognition and has no impact on cash flow. As a result of this change, the Media Networks segment reports significantly reduced revenue and profitability in the first fiscal quarter when the majority of the NFL games are aired, with commensurately increased revenues and profits in the second and third fiscal quarters.
Disney
1) Carrying amounts of merchandise, materials and supplies inventories are generally determined on a moving average cost basis and are stated at the lower of cost or market.
2) Film and television costs include capitalizable direct negative costs, production overhead, interest, development costs and acquired production costs and are stated at the lower of cost, less accumulated amortization, or fair value.
3) Acquired programming costs for the Company’s television and cable/satellite networks are stated at the lower of cost, less accumulated amortization, or net realizable value.
4) Acquired television broadcast program licenses and rights are recorded when the license period begins and the program is available for use. Marketing, distribution, and general and administrative costs are expensed as incurred.
5) Film and television production and participation costs are expensed based on the ratio of the current period’s gross revenues to estimated remaining total gross revenues from all sources on an individual production basis.
6) Television network series costs and multiyear sports rights are charged to expense based on the ratio of the current period’s gross revenues to estimated remaining total gross revenues from such programs or on a straight-line basis, as appropriate.
7) Estimated remaining gross revenue for film productions includes revenue that will be earned within ten years of the date of the initial theatrical release. For television network series, we include revenues that will be earned within ten years of the delivery of the first episode, or if still in production, five years from the date of delivery of the most recent episode, if later. For acquired film libraries, remaining revenues include amounts to be earned for up to twenty years from the date of acquisition. Television network and station rights for theatrical movies and other long-form programming are charged to expense primarily on an accelerated basis related to the projected usage of the programs.
8) Development costs for projects that have been determined will not go into production or have not been set for production within three years is written off.
9) Estimates of total gross revenues can change significantly due to a variety of factors, including advertising rates and the level of market acceptance of the production. Accordingly, revenue estimates are reviewed periodically and amortization is adjusted, if necessary. Such adjustments could have a material effect on results of operations in future periods. The net realizable value of network television broadcast program licenses and rights is reviewed using a daypart methodology. A daypart is defined as an aggregation of programs broadcast during a particular time of day or programs of a similar type. The Company’s dayparts are early morning, daytime, late night, primetime, news, children and sports (includes network and cable). The net realizable values of other cable programming are reviewed on an aggregated basis for each cable channel
10) The decrease in production cost amortization was driven by lower film cost write-offs. These cost decreases were partially offset by increased production cost amortization and distribution costs at Miramax due to an increased number of releases and higher write-offs. Lower costs in worldwide home entertainment were primarily due to lower distribution costs, production cost amortization and participation costs. Distribution costs and production cost amortization were lower as a result of decreased unit sales. Participation costs were down as the prior year included Finding Nemo and Pirates of the Caribbean, which had higher participation costs due to better performance than current year titles. Pixar receives an equal share of profits (after distribution fees) as co-producer of Finding Nemo and The Incredibles. The adoption of SFAS 123R increased expenses by $41 million in fiscal year 2005.
11) Theatre programming Charged to expense based on the number of times the program is expected to be shown. Estimates of usage of television network and station programming can change based on competition and audience acceptance.
12)
News Corp.
1) Television, Cable Network Programming and Direct Broadcast Satellite—Advertising revenue is recognized as the commercials are aired, net of agency commissions. Subscriber fees received from subscribers, cable systems and DBS operators are recognized as revenue in the period that services are provided, net of amortization of cable distribution investments. The Company defers the cable distribution investments and amortizes the amounts on a straight-line basis over the contract period.
2) Accounting for the production and distribution of motion pictures and television programming is in accordance with SOP 00-2, which requires management’s judgment as it relates to total revenues to be received and costs to be incurred throughout the life of each program or its license period. These judgments are used to determine the amortization of capitalized filmed entertainment and television programming costs, the expensing of participation and residual costs associated with revenues earned and any fair value adjustments.
3) In accordance with SOP 00-2, the Company amortizes filmed entertainment and television programming costs using the individual-film-forecast method. Under the individual-film-forecast method, such programming costs are amortized for each film or television program in the ratio that current period actual revenue for such title bears to management’s estimated remaining unrecognized ultimate revenue as of the beginning of the current fiscal year to be recognized over approximately a six year period or operating profits to be realized from all media and markets for such title. Management regularly reviews, and revises when necessary, its total revenue estimates on a title-by-title basis, which may result in a change in the rate of amortization and/or a write down of the asset to fair value.
4) The costs of national sports contracts at FOX and at the Cable Network Programming segment and for international sports rights agreements are charged to expense based on the ratio of each period’s operating profits to estimated total remaining operating profit of the contract. Estimates of total operating profit can change and accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material.
5) The costs of local and regional sports contracts, which are for a specified number of events, are amortized on an event-by-event basis. Those costs, which are for a specified season, are amortized over the season on a straight-line basis, and if applicable, a portion of the cost is allocated to rebroadcasts. Original cable programming is amortized on an accelerated basis. Management regularly reviews, and revises when necessary, its total revenue estimates on a contract basis, which may result in a change in the rate of amortization and/or a write down of the asset to fair value.
Filmed Entertainment Costs:
6) In accordance with Statement of Position (“SOP”) No. 00-2, “Accounting by Producers or Distributors of Films” (“SOP 00-2”),
Filmed entertainment costs include capitalized production costs, overhead and capitalized interest costs, net of any amounts received from outside investors. These costs, as well as participations and talent residuals, are recognized as operating expenses on an individual film or network series basis in the ratio that the current fiscal year’s gross revenues bear to management’s estimate of total remaining ultimate gross revenues. Estimates for initial domestic syndication and basic cable revenues are not included in the estimated lifetime revenues of network series until such sales are probable. Marketing costs and development costs under term deals are charged as operating expenses as incurred. Development costs for projects not produced are written-off at the earlier of the time the decision is taken not to develop the story or after three years. Filmed entertainment costs are stated at the lower of unamortized cost or estimated fair value on an individual motion picture or television product basis. Revenue forecasts for both motion pictures and television products are continually reviewed by management and revised when warranted by changing conditions. When estimates of total revenues and other events or changes in circumstances indicate that a motion picture or television production has a fair value that is less than its unamortized cost, a loss is recognized currently for the amount by which the unamortized cost exceeds the film or television production’s fair value.
Programming Costs:
7) In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 63, “Financial Reporting by Broadcasters,
”costs incurred in acquiring program rights or producing programs for the Television, Direct Broadcast Satellite Television and Cable Network Programming segments are capitalized and amortized over the license period or projected useful life of the programming.
Program rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing.
a. Television broadcast network and original cable programming are amortized on an accelerated basis. The Company has single and multi-year contracts for broadcast rights of programs and sporting events. At the inception of these contracts and at each subsequent reporting date, the Company evaluates the recoverability of the costs associated therewith, using aggregate estimated advertising revenues directly associated with the program material and related expenses. Where an evaluation indicates that a multi-year contract will result in an ultimate loss, additional amortization is provided to currently recognize that loss.
b. The costs of national sports contracts at the Fox Broadcasting Company (“FOX”) and Cable Network Programming segment and for international sports rights agreements are charged to expense based on the ratio of each period’s operating profits to estimated total remaining operating profit of the contract. Estimates of total operating profit can change and accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material. The costs of local and regional sports contracts, which are for a specified number of events, are amortized on an event-by-event basis. Those costs, which are for a specified season, are amortized over the season on a straight-line basis and if applicable, a portion of the cost is allocated to rebroadcasts.
c. Inventories for other divisions are valued at the lower of cost or net realizable value. Cost is primarily determined by the first in first out, average cost method or by specific identification.
Monday, November 27, 2006
Hero Honda Indian Televison Academy Awards 2006
Best Serial Drama (Jury)
Kasamh Se
Zee TV
Best Serial Drama (Popular)
Saat Phere Saloni Ka Safar
Zee TV
Best Movie Channel
Zee CinemaBest Actor Male (Jury)
Ram Kapoor - Kasamh Se
Zee TV
Best Actress (Popular)
Rajshree Thakur - Saat Phere Saloni Ka Safar
Zee TV
Best Reality Show
Shabhash India
Zee TV
Best Title Track
Shabhash India
Zee TV
Indian Telly Awards 2006
Best Daily
Kasamh Se
Zee TV
Best Movie Channel
Zee CinemaBest Anchor
Shaan - Sa Re Ga Ma Pa
Zee TV
Best Actor Negative (Female)
Ashwini Kalsekar - Kasamh Se
Zee TV
Couple of the year
Jai Walia & Bani - Kasamh Se
Zee TV
Best Fresh Face of the year (Female)
Prachi Desai (Kasamh Se) & Rajshree Thakur (Saat Phere Saloni Ka Safar)
Zee TV
Best Actor (Male)
Ram Kapoor - Kasamh Se
Zee TV
Kasamh Se
Zee TV
Best Serial Drama (Popular)
Saat Phere Saloni Ka Safar
Zee TV
Best Movie Channel
Zee CinemaBest Actor Male (Jury)
Ram Kapoor - Kasamh Se
Zee TV
Best Actress (Popular)
Rajshree Thakur - Saat Phere Saloni Ka Safar
Zee TV
Best Reality Show
Shabhash India
Zee TV
Best Title Track
Shabhash India
Zee TV
Indian Telly Awards 2006
Best Daily
Kasamh Se
Zee TV
Best Movie Channel
Zee CinemaBest Anchor
Shaan - Sa Re Ga Ma Pa
Zee TV
Best Actor Negative (Female)
Ashwini Kalsekar - Kasamh Se
Zee TV
Couple of the year
Jai Walia & Bani - Kasamh Se
Zee TV
Best Fresh Face of the year (Female)
Prachi Desai (Kasamh Se) & Rajshree Thakur (Saat Phere Saloni Ka Safar)
Zee TV
Best Actor (Male)
Ram Kapoor - Kasamh Se
Zee TV
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