Fox’s 1st-Quarter Lineup Puts Net in Position of Strength

Dec 16, 2007  •  Post A Comment

The writers strike and the decline of broadcast television ratings have got plenty of network executives down. Not Peter Chernin.
The News Corp. president is one media company executive who has reason to smile. With Fox readying its singing-contest juggernaut “American Idol” for January and the Super Bowl airing in February, the network is in the strongest position going into 2008.
With double-digit cost-per-thousand price increases for scatter, Super Bowl prices at an all-time high—$2.7 million to $3 million for a 30-second spot—and marketers eager for TiVo-proof TV, Fox looks set to have a very fine first quarter.
The writers strike threatens to continue into 2008, thwarting networks’ chances of keeping their best ratings grabbers—scripted dramas and comedies—on the air. In fact, the strike is working in favor of “Idol,” which started to show some wear last season, as advertisers focus their attention on the few programs sure to draw viewers.
“There were worries at the end of last season that ‘Idol’ was losing its appeal,” said Michael Nathanson, an analyst at Sanford C. Bernstein. “However, when you get into the first quarter and everyone is simply repeating old shows or experimenting with new reality shows, this show just increases its potential to really take share.”
Audience levels for network TV have been eroding for years, and the strike could accelerate that trend. Consumers are already growing more resistant to traditional advertising, and the strike threatens to add a healthy portion of viewer disillusionment to the mix.
So the attraction of the big gridiron classic and “Idol” makes sense: A prolonged strike means there will be fewer properties people want to watch in prime time, and many will opt instead to watch hours or days later online or on a DVR. Viewers are more likely to tune in for live events when the networks air them.
No surprise, then, that Fox’s programming is pricey. A few Super Bowl berths have commanded unprecedented rates of up to $3 million, and with few spots left, Fox is looking to peddle the last ones for even more than that. Media buyers have said the cost of a 30-second ad in “Idol” ranges from $500,000 to more than $700,000, depending on when in the program’s seasonal arc it runs (the last few episodes are must-see events).
Fox still has limited ad inventory to sell, media buyers said, but it likely will come at a premium. “There will be less proven programming to put up against it,” said Stacey Shepatin, senior VP-director of national broadcast at Hill Holliday.
Regardless of its rocky season, broadcast TV remains the best way for marketers to blast branding and sales messages to the greatest number of consumers in a single swoop.
Coca-Cola’s ad strategy—which includes ads and integration with “Idol” and Super Bowl advertising—is emblematic of what other marketers might seek as the TV environment worsens.
Coke looks for alliances with TV properties that are hard to miss, including NCAA basketball and NASCAR, said Dan Donnelly, senior VP-group director at MediaVest, who supervises media spending for Coca-Cola. “With all the talk of a strike, we’re pretty comfortable with what we have,” he said.
Because “Idol” will stand out more during a prolonged strike, media buyers are asking whether Fox would consider adding another half-hour or even another night of the program to its schedule. So far, Fox is telling everyone no, media buyers report.
“They don’t want to kill the golden goose,” one media buyer said. “I wouldn’t be surprised if [adding ‘Idol’ programming] is what they ended up doing, but I’m sure they won’t look to flood the market,” Mr. Donnelly said.
A Fox spokesman declined to comment.

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