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TelevisionWeek is teaming up with TV industry veteran Marianne Paskowski. The blog will give Marianne a forum to convey her deep knowledge of the industry and pass along some of the juicy morsels she's hearing on the grapevine. Marianne has covered the TV industry from the inside out and top to bottom, and TVWeek's readers are bound to benefit from her sharp eyes, ears and wit. TVWeek.com invites readers to jump online, chime in and pick Marianne's brain on the latest industry news.

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Marianne Paskowski



Real Estate Meltdown

August 25, 2006 5:29 PM

Well now we know. The so-called “soft landing” for ebbing residential real estate transactions is not soft at all. It’s in major free fall. And that economic indicator has major ramifications for every sector of the country’s economy, including the selling and buying of TV ad time.

Why? Home sales have been the chief catalyst of economic growth in this country for the past three years. When people don’t buy homes, they don’t buy a lot of consumer goods either. And they don’t go out. I’m starting to read and hear a lot about the country maybe already being in a recession.

Oddly enough, sometimes a recession is a good time for the TV biz. That’s because families tighten the belt and cut a lot of discretionary spending. They are eating at home a lot more and not going out to the movies. That’s good and bad for TV, especially cable. Logic argues that nobody is gonna shut off the cable. They’re stuck at home. And history shows they don’t, in fact, cut off cable service.

But ad sales? That's another story. Ad sales could be affected as studios and fast food companies know it’s going to become more difficult to lure people out of their homes. Sounds like the country is on its way to another cocoon period. So how do we grapple with this? Your thoughts?

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Comments (10)

Todd:

There is an ever growing thought that the Fed may have to start cutting rates in 07. This should keep the mortgage rates calm and prevent a crash.

Joan Fried:

It was bound to happen. Wasn't it?

Marianne Paskowski:

Fred,
Hope you're right. The Fed didn't up the prime two weeks ago, as it steadily had. And gas prices are going down, however,because therre are so real yardsticks on real estate transactions, they come six months after the fact, this bears close scrutiny. Thanks for writing.

Marianne Paskowski:

Hiya Joan,
So what's next? Do you think Todd is right ? That the Fed will finally start cutting the rates in 07? And why wait until then, when the market is in meltdown? You know more about this than I do, and I think our readers would like your tohear from you. Real estate transactions have vast repercussions on the entire economy. You are the pro, so spill.

Hope Jake is well,
Marianne

Joan:

I am no pro in economics. What I did see was prices being driven up incredibly high by lack of inventory. Low interest rates helped fuel it but so did a lot of "creative" financing which put people into artificially low payments. These will come due and I find it hard to imagine that interest rates can be lowered to the point that these people will be able to pay for their loans. So their homes will come back on the market creating too much supply. That sounds like a recipe for a crash to me. Someday it will come back up. But I would not bet on next year.
Best to Bob and the boys!
Joan

Marianne Paskowski:

Hi Joan,
Thanks for your words of wisdom about the real estate market, which is the single largest engine driving the economy. That has major ramifications for TV. Don't be surprisd to see some serious churn on HBO and Showtime subs.Given what you you just posted.

Meanwhile, I invite you, Joan, and others to share your thoughts here. You, Joan, know far more about human behavior than any TV exec knows.

Marrianne

Patty Greco:

Dear Marianne...I really tried to make it a straight TV w/commercials weekend. After cleaning up the debris from hurricane Ernesto…I settled down to watch “Arthur” on AMC. Well…with all the commercials…it ruined the film. Ok…I got through that and went on to “The Closer” (watching it for the first time). Oh…my god…if all the lights in the room were out…Kyra Sedgwick’s red lips would still be glowing! The accent…that look!!!! I like Kyra…hope she’s making lots of $$$. I have a 6-degree of Kevin Bacon…less than 6. Anyway…TV with commercials suck! TV People/Advertisers: please take note: You need help!!! Make TV fun to watch…not a need to watch. Everybody: How about we all turn off our TV’s for a week and maybe read a book instead.

Marianne Paskowski:

Hi Patty,
Well, I'm not turning off my set tonight, I am watching Katie Couric's much written about new gig as sole female anchor at CBS News. I have not watched a single broadcast network news program in years. Glued to the cable net news ops. For several reasons.

First, I do want to see if she's keeping up with her Botox treatments. They only last so long. Second, I want to see who the advertisers are. Preparation H? I would hope not. Sometimes I actually like the commercials more than the programs.

How bad was Ernesto in New York? Hope you didn't lose power again. I don't know if you're following this story, but the head of MTV Networks and Viacom is out for all the wrong reasons. Tom Fresotn is 60. His boss Sumner Redstone is 83 and he won. Oy.

Patty Greco:

Hi Marianne..yes...I heard today on the news "Tomkat" is not "S. Redstone"s" only causality. He's serious...or is it his wife's influence??? You know...it's all about the money. Katie looked serious and rigid....not at all comfortable...time will only tell. Lots of fillers to support her. Got to wait for the real action. Take care....

Marianne Paskowski:

I was really unawed with Katie's debut on CBS. Every story she reported, I already read in the wee hours of the morning. I am not an autority on Sumner Redstone's maraiage, so I demure comment. But back to Katie's debut. Same old geriatric commercials. I liked her hype better than I liked the show.

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