Since broadcast networks are slated to replace a considerable portion of their scripted programming with reality-based shows such as "Survivor: The Australian Outback" and reruns of existing shows, the argument is that broadcast programming schedules would be similar to those offered by cable and syndication outlets. Since cable and syndication offerings are priced 15% to 20% cheaper, national advertisers might shift network money to cable and syndication.
After last year's upfront was completed, according to industry estimates, cable networks pulled in about $4.3 billion; syndication grabbed $2.5 billion. Broadcast garnered $7.9 billion.
"There's a silver lining for cable in the strike," asserts Gig Barton, exec VP-advertising sales at Court TV. Liz Janneman, exec VP-Turner Entertainment Sales, who sells for TNT and TBS agreed: "We have an opportunity if the strikes happen."
Network and ad agency executives, however, don't believe the cable and syndication argument holds up well.
"That is what blows my mind," said Jon Nesvig, president-advertising sales for Fox Broadcasting Co. "[For years] advertisers were concerned about repeats on network television, and now the solution is to buy repeats on cable? Give me a break."
Gary Carr, senior VP-associate director of national broadcast for Interpublic Group of Cos.' Initiative Media North America, New York, said, "Even reruns on networks are higher-rated [than on cable or syndication] and they cover the whole country. What are they now saying? That when they run originals, I shouldn't be buying you?"
Still, there's little doubt some incremental money will move to cable and syndication. Initiative's Mr. Carr noted, "I'm sure some of the money will move, at least in the fourth quarter." Bob Igiel, president-broadcast division for WPP Group's The Media Edge, New York, agreed. "Cable [and] syndication can solve some problems."
The first potential strike could come from the Writers Guild of America, whose contract expires May 1. The Screen Actors Guild contract expires June 30. Upfront negotiations are expected to start mid-May.
Some syndication ad executives began to push this approach even before the strike threat. "What I've been telling advertisers is that networks have cut back on scripted programming," said Bob Cesa, exec VP-advertising and cable sales for Twentieth Television, which sells syndicated off-network reruns in "The X-Files" and "NYPD Blue." "One of those places you can go to get high ratings and get network-like coverage is syndication."
A SCRIPTLESS SEASON?
Last week, representatives of all broadcast networks met with ad executives to offer a preview of next season's shows, including strike plans. Many proposed schedules included new reality series, such as the Fox network's "Boot Camp," ABC's "The Runner" and "The Mole 2," UPN's "Chains of Love," and NBC's new game show, "The Weakest Link." Additionally, news shows such as NBC's "Dateline" could replace many scripted programs. The real danger, according to ad executives, is broadcast networks may suffer irreparable harm if they lose viewers to other venues. "There are series on cable that people don't know about and could discover," said Steve Sternberg, senior VP-broadcast research director, True North Communications' TN Media, New York. "[From the networks' point of view] it's not always easy to get viewers back. You could see audience skews of entire networks changing."
One media executive who targets young demographics for a well-known soft drink said money could shift from Fox and the WB. "There's a concern there, and that may take some dollars away from those guys and put more on MTV. We don't know yet."
From the network sales prospective, executives are counting on contingency plans which could, in some cases, offer advertisers a strike and a non-strike media plan. Other possibilities could allow advertisers to take some or all of their money back.
"What if I do an upfront and buy a few `Friends', a few `ERs', a few `West Wings,' and all of sudden those shows aren't on the air and you've got more `Datelines,' more reality, maybe some sports? That's not really what I paid for," one ad agency executive said.
Fox's Mr. Nesvig said in that case, "If you get a program pre-emption because of the strike, you'd have to negotiate something new. Ultimately it will come down to individual clients' needs."