TV networks blissfully ignore TiVo problem
The big broadcasters buzzed about their cool digital plans, but there was nary a peep about how DVRs are hurting them .
NEW YORK (CNNMoney.com) - The major TV networks trotted out their biggest stars and presented their fall schedules to advertisers this week during lavish presentations in New York City known as the upfronts.
Media buyers were entertained, wined and dined at famous locales like Radio City Music Hall, Lincoln Center and Tavern on the Green. And they endured buzzwords like "content," "platforms" and "upscale audience" more times than they can possibly count.
But now that the partying and spin-doctoring from network executives is over, it's time to get down to business: negotiating ad rates and commitments for the upcoming 2006-2007 television season.
After all, that's what the upfronts are really about...getting big corporations to open up their purse strings. Chris Rock, the comedian and co-creator of "Everybody Hates Chris," summed it up best at the CW presentation Thursday.
"You better spend some motherf****** money!" he shouted to the audience.
DVRs: The elephant in the TV room
Heading into this week's upfronts, many industry insiders were predicting that the top networks would fall short of the $9.1 billion in commercial time that they sold during the 2005 upfront.
And now that the networks have all shown their hands, there is still a sense that they may all have an uphill battle on their hands. That's because technology is wreaking havoc on the very existence of network television.
Sure, all the networks went out of their way to stress to advertisers how tech-savvy they were and how they could help advertisers "extend their message" through things like broadband video streams of hit shows, online social networking tie-ins and "mobisodes" for cell phones.
But the one piece of technology that has altered the TV landscape more than any other was not mentioned by any executive at any of the upfronts: the digital video recorder or DVR. More and more couch potatoes are using TiVo (Research) or cable boxes with DVRs built in to watch shows when they want and fast forward through the commercials.
And even though TV ratings tracker Nielsen Media Research now has separate rankings for so-called "time-shifted" viewing of shows, advertisers appear to be wary of these figures because they know that many DVR viewers probably skip ads.
"Nobody wanted to bring up the DVR because none of the networks are sure on the issue. You cannot enter into an agreement where you tell your advertiser to pay for DVR eyeballs without accounting for people that are fast forwarding through commercials," said one media buyer who asked not to be named.
The media buyer added that despite the buzz about how marketers can reach more viewers through new technology, he thinks the networks are still experimenting and that advertisers will be cautious as a result.
"After going to the upfronts, I'm completely sickened by technology. The networks are being totally reckless and are all trying to do much to grab land. They are literally throwing spaghetti on the wall to see what sticks," the buyer said.
CBS and Fox tout stability, ABC and NBC in flux
Aside from technology, the other topic that dominated the discussions during the upfront was the looming showdown on Thursday nights. NBC scheduled its highly anticipated new show from West Wing creator Aaron Sorkin, "Studio 60 on the Sunset Strip," on Thursday nights at 9 p.m.
That already would have been a tough spot since CBS' hit show "CSI: Crime Scene Investigation" has dominated that time slot for the past few years. But the competition got even tougher after ABC announced Tuesday that it was moving one if its biggest hits "Grey's Anatomy" to Thursdays at 9 p.m. as well.
Several media buyers and industry analysts said they felt that NBC would have no choice but to move "Studio 60" before it premieres in the fall. Spokespeople for NBC Universal, a subsidiary of General Electric (Research), was not immediately available for comment.
But regardless of what happens with "Studio 60," there was optimism about NBC's fall lineup, especially since football will be returning to the network on Sunday nights. It's hard to imagine that being a ratings flop and the hope is that football will help NBC promote its current hits and six other new shows for the upcoming season.
Deanna Myers, a senior analyst with Kagan Research, which focuses on the media industry, added that another noteworthy trend is how many of the networks are aggressively going after viewers on Fridays. This is a night that networks used to care little about since the thought was that people advertisers were targeting were probably not watching TV. That has changed.
NBC is moving its "Law & Order: Criminal Intent" show to Fridays from Sundays and also will air an episode of its popular "Deal or no Deal" game show that night. ABC is adding two new shows to that night: "Betty the Ugly" and "Men in Trees," which stars Anne Heche. Meanwhile, CBS is keeping its lineup of three popular dramas, "Ghost Whisperer," "Close to Home" and "Numb3rs" intact while the CW is sticking with "WWE Smackdown" the wrestling show which used to air on UPN.
"Two years ago Friday night was nothing so it's interesting that the networks are now all trying to program it," said Myers.
Looking at the other networks, analysts and buyers said CBS (Research) and Fox, owned by News Corp (Research), should probably ring up healthy upfront ad commitments since each network didn't have that many holes to fill. Both have several solid hits already and new shows such as CBS sitcom "The Class" and Fox drama "Vanished" received some favorable buzz.
For ABC, the situation is a bit trickier. The network has several monster hits, including "Grey's," "Lost," "Desperate Housewives" and "Dancing with the Stars." But beyond that, ABC's schedule for 2005-2006 was not that stellar, which is why the Walt Disney (Research)-owned network wound up unveiling a whopping 12 new shows for next season.
There's also the fact that ABC already wound up generating a sizable increase in upfront ad sales last year, leading some to wonder if advertisers would be willing to pony up significantly higher rates yet again.
That just leaves the two "new" youth-oriented networks, the CW (which was formed by the merger of CBS' UPN and Time Warner's WB) and MyNetworkTV, another News Corp. network that will show only dramas in a serialized five-night a week format like Spanish language telenovelas. Time Warner (Research) also owns CNNMoney.com.
Buyers were skeptical of whether the MyNetworkTV format would work for English-language audiences, particularly because of all the competition for younger viewers from other networks, not to mention alternative forms of entertainment like the Internet.
But several buyers thought the CW had a good chance of becoming more attractive to advertisers since it is taking the best shows from the old UPN and WB.
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