MediaFile

Television totally rules!

June 10, 2008
ABC | cbs | Fox | NBC

dollars.jpgWhat’s all this talk about the struggles of the TV industry?

Sure, ratings were down again last season. Screenwriters walked off the job, and while they eventually settled, the actors may be next to strike. No new shows really caught fire, and that Web thing sure does seem to be stealing advertising dollars. Then there’s $4/gallon gasoline, a housing slump, job losses — which all adds up to a generally lousy economy.

And yet… the upfront market looked pretty strong. Last week, NBC gave an early indication that the market was healthy and moving more quickly than expected as reports surfaced that it had booked deals worth about $1.9 billion, with prices up by mid-single digits to high-single digits on a percentage basis.

Yesterday, word spread that ABC’s prices were up about 9 percent and CBS landed gains of 7 percent to 9 percent. Fox is believed to have done even better.

So what happened? The general consensus is that advertisers are worried about the economy and thus have turned to what they know best — the good old TV.

“In tough times, I think advertisers gravitate to what they know,” Andy Donchin, director of national broadcast for Carat North America, the ad-buying arm for media firm Aegis, told the New York Post

Or as one ad buyer told ADWEEK: “When national advertisers looked at their media plans to determine what worked most effectively, the bottom line was that it is television, particularly broadcast television.”

AdAge also points out that advertisers wanted to lock in prices out of fear that rates could be higher in the spot  — or scatter — market come fall.

What’s more, the TV networks “would rather have the money upfront, and they’ll play the scatter game later,” said Ed Atorino, a media analyst with The Benchmark Co., told AdAge.  ”What advertisers are doing is locking in, [but] by taking it out of scatter, they’re leaving a potential hole in the market.”

Keep an eye on:

  • A joint venture made up of six of the leading cable companies is expected to announce that it has completed its long search for a chief executive officer, naming former Aegis Group executive David Verklin to the post. (WSJ.com)
  •  Screen Actors’ Guild leaders declared war on another actors’ union, increasing the odds of new labor trouble in the entertainment industry. (NY Times)
  • Paltalk is releasing a version of its multi-person video chat service on the Web in beta. It is called Paltalk Express and will allow thousands of people to participate in a video chat session at the same time. (TechCrunch)

(Photo: Reuters)

Comments
2 comments so far | RSS Comments RSS

I read that web advertising revenues are down so its too soon to write off television. What the TV companies need to do is dump the media graduates and find some new talent – and I don’t mean more Simon Cowell talent contests which only find the mad, sad, bad and delusional.

It’s like putting Roman circuses on TV.

 

Well, one bright spot in a cavalcade of bad news for broadcasters over the past few months is something broadcasters needed to keep from slashing their wrists.

Saying they “totally rule” is a bit much, especially since these purchases were made to stave off the pricier spending advertisers may have made later in the year. It was like the Costco/Sam’s Club purchase by advertisers now to avoid the Macy’s/Nordstrom’s prices of tomorrow. Maybe “Pull a Rabbit Out of a Hat” would be more appropriate – albeit not as sensationalistic.

This event, along with the 2008 election year revenue, will make the broadcasters flush with money and many will don rose-colored spectacles looking forward, but it will be temporary.

With the coming targeted cable advertising by Canoe Ventures, LLC and the steady maturity of online content and its eventual bridge to the living room, the future of broadcast, appointment television and the 30-second spot is pretty bleak indeed.

Best regards,

Sean T.

 

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