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Calm And Chaos: Syndie Upfront Ad Market May Offer Safe Harbor

Apr 27, 2008  •  Post A Comment

In today’s topsy-turvy media world, syndication sales execs are hoping steadiness will be an asset going into the upfront.
With its new shows usually announced a year in advance, syndication offers little of the hoopla that accompanies the unveiling of the broadcast networks’ new season schedules or the buzz of digital video.
“It’s one of those tried-and-true, packaged-goods kinds of media properties that has been around for a long time. There’s no blaring horns,” said Ray Dundas, senior VP and group director at Initiative. “It’s constant. You know what you’re going to get.”
This year’s upfront market will be affected by a stumbling economy and the effects of the Writers Guild of America strike, which has affected the development and production of new shows for broadcast and cable.
“While some may consider consistency blasé, I think in this time of uncertainty and the fickle consumers, suddenly consistency looks very appealing,” said Michael Teicher, executive VP at Warner Bros. Media Sales.
The new shows coming into the syndication market, including “Deal or No Deal,” “The Doctors,” “Bonnie Hunt” and “Wizard’s First Rule,” also could generate some interest, syndication executives said.
The strike helped accelerate the erosion of ratings on the broadcast networks, making syndicated programming a more appealing alternative than reruns.
“I kind of love syndication because you can get the same average ratings cheaper than you can get prime time,” said Larry Novenstern, head of broadcast and executive VP/joint managing director of Optimedia’s integrated buying and planning unit.
So why does syndication seem like an afterthought during the upfronts? “All I can say is: ‘Shhh, don’t tell anybody,’” Mr. Novenstern said.
Mostly because of the volatile economy, buyers and sellers were reluctant to estimate whether the market would be up or down from last year, when syndicators took in about $2 billion, up 3% from the year before. The broadcast upfront totaled $9 billion, up 5%, and cable was $7 billion, up 6%.
The bulk of the syndication upfront generally gets done while cable networks are also negotiating, after the broadcasters finish. Syndicators generally sell more inventory than the 80% the broadcasters commit in the upfront, but with the recent strength in the scatter market, some syndicators have been holding more inventory back.
Cooling Economy
“The economy will determine our clients’ spending, and that determines who does well this year. I’m not sure there’s a clear picture one way or the other,” Mr. Dundas said.
“A few months ago, it looked like the upfront would be strong,” said Dave Barrington, executive VP and managing director of video investment at MPG. “”It doesn’t appear to be setting up that way any longer.”
At this point, sales execs said, the economic concerns haven’t affected the scatter market, which has cooled in the second quarter after being red-hot.
“We haven’t seen at this point any impact of the recent stock market woes on our business,” Mr. Teicher said. “Having said that, it’s naive to not believe that at some point there may be some issues.”
Despite the economy, sales executives see factors that could translate into upfront gains. They point to high commercial retention, which translates into better ratings using the new C3 ratings that measure commercial viewing during live broadcasts and three days of playback using digital video recorders.
“We found that those numbers have been very good for us,” said Howard Levy, executive VP at Disney-ABC Domestic Television.
Bob Cesa, executive VP for advertising sales at Twentieth Television, said there were signs the market is still healthy. Relatively few advertisers have taken their options to give back ads they agreed to buy in last year’s upfront.
“Options are going to be in line with what I would expect to be normal for the third quarter,” Mr. Cesa said. “There are fewer ratings points in the market because of the erosion. When you add all those things together, and the economy’s still pretty strong, we should do well.”
Syndication has not been immune to erosion, with some court shows, entertainment magazines and off-net sitcoms showing significant drops, Mr. Barrington said. But a number of shows are bucking the trend, including “Inside Edition,” “Jeopardy!,” “Judge Judy,” “Rachael Ray” and “Sex in the City.”
Last year’s new off-net comedy “Two and a Half Men” “has had a great run,” and “TMZ” is “moving in the right direction,” he said.
Of the new shows, Mr. Dundas noted that Warner Bros.’ talk show “Bonnie Hunt” could serve as an effective companion to “Ellen.”
“In the six years I’ve been here, we haven’t had this type of momentum behind a new show launch,” Mr. Teicher said.
He expects Ms. Hunt’s show to be open to product integration, as are the syndicator’s other shows, “Ellen” and “Tyra Banks.”
At Disney, Mr. Levy is excited about the new weekend hour “Wizard’s First Rule.”
“We harken it back to the days when syndication had huge successes on the weekend with new programming,” he said. “There was ‘Star Trek,’ there was ‘Xena,’ there was ‘Hercules.’”
Period Piece
Since it’s a period piece, it will be difficult to integrate products into the show, Mr. Levy said. “There are ways we can do some tie-ins.”
At Twentieth, adding “Tyler Perry’s House of Payne” to its roster means “we’re stronger now in the African American market,” Mr. Cesa said.
The syndicator also picked up ad sales for “South Park,” giving it a number of shows that skew young and male, including “Family Guy” and “House of Payne.”
The excitement at NBC is over the new half-hour version of “Deal or No Deal.”
With host Howie Mandel, the banker, the models and the money, “‘Deal’ is an exciting opportunity for our stations and our clients,” said Donna Kerin, VP of advertiser and media sales at NBC Universal Domestic TV Distribution.
Ms. Kerin said product integration is an important part of NBC’s pitch for the syndicated show.
NBC Universal’s broadcast network unveiled its prime-time schedule last month, so during upfront week the company will instead be putting on a show designed to highlight all of its divisions for ad buyers. “It’s great for us. We’re going to have a presence there with Nancy O’Dell [host of ‘Access Hollywood’], and ‘Deal or No Deal’ will obviously be a highlight for us,” Ms. Kerin said.

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