Lingering Strike Threatens $9 Billion Upfront Market

If Walk-Out Continues Through January, Nets Could Be Short on Shows

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NEW YORK (AdAge.com) -- If the writers strike continues until January, it will endanger the $9 billion TV upfront market.

Marketers and agencies have tried for years to change the way TV time is bought and sold, arguing that committing such a large portion of their budgets ahead of the start of the fall season no longer makes sense. And it's looking increasingly like the Writers Guild of America strike could be the catalyst for retooling the annual May upfront process.
"If we don't have any [next-season pilots] developed and we are at the end of the first quarter, I have to believe that's when everyone is starting to think that the upfront may be in jeopardy," said Ed Gentner, senior VP-group client director at MediaVest USA. "Once you get beyond January, the traditional network development presentation that is generally in March is probably going to be off."

Less shrimp come May
Networks typically spend millions of dollars to hype their fall schedules, wooing advertisers during upfront week in May with song-and-dance numbers and huge bowls of shrimp. Those celebrity-studded confabs could be delayed or even canceled next year due to the strike, but some deals still would get done. Without a robust slate of original dramas and sitcoms, however, there won't be so many.

"If you can't line up your marketing needs with program availability, you can't do a deal. It's irresponsible," said Jason Kanefsky, senior VP-group account director at MPG.

This is "the quiet before the storm," said an auto-company marketing executive who requested anonymity. "The longer the strike goes on, the broader the impact." Already the pipeline is far from brimming. "This time of year, there are usually 70-plus pilots and shows that are in production. They don't have that bulk of work," said one executive producer.

Carol Barbee, executive producer of cult favorite "Jericho" on CBS, said while her show would only benefit (a full season is already in the can), the damage could wreak havoc beyond the upfront. "If this goes past January, [the networks] have lost the entire development season, which means that they've lost all the new shows and the midseason replacements."

Network executives, cognizant of continuing negotiations, were not available for comment. But instead of bringing marketer and agency executives together in May for a presentation, networks most likely will opt for a series of private meetings to lay out plans for the summer and beyond. Many advertisers' budgets are locked in for the rest of 2007, and networks have largely been able to keep original programming on the air. Reality shows and replacement programs are due in 2008. Some of them are of high quality, such as Fox's "American Idol" and Showtime dramas that could land on CBS. Marketers can judge in early to mid-January, when options open to move around previous ad commitments or even ask for cash back.

Getting ahead
The upfront has shown signs of erosion for the past two years. Johnson & Johnson gained notice by not taking part in the May brouhaha so it could deploy marketing dollars closer to the timing of its business planning. A goal of NBC Universal ad-sales chief Mike Pilot is to get advertisers to discuss ways to tie promo messages to various shows earlier in the cycle.

If the networks manage to do deals in a series of individual meetings, freed from the pressure of getting all of the deals done following group presentations, marketers and agencies may decide they like that way of doing business better.

The strike could accelerate recognition that consumers don't "revolve around prime time and the networks' new seasons anymore," said Rino Scanzoni, chief investment officer for WPP Group's Group M media-buying consortium. With people using DVRs and watching programming online, a better system of buying and selling needs to be put in place. If the strike were to help people see that, he said, "that might actually be a silver lining."

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Contributing: Claude Brodesser-Akner
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