Commercial-free TV: cost $400 mil

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The TV industry last week lost nearly $400 million of ad revenue in the first four days of the tragedy as many TV outlets went commercial-free to cover the devastating news.

Resetting priorities in the wake of the tragedy, the top three broadcast networks pushed the launch of their fall seasons back one week to next week. But News Corp.'s Fox as of Sept. 14 said it was proceeding with the planned launch of its season this week.

Starting the morning of Sept. 11, networks made a quick decision to air continuous news coverage and pull all regularly scheduled programming as well as advertising. This is the longest period the major networks have been on air commercial-free since the emergence of television.

"What they are doing is absolutely the right thing," said Mel Berning, exec VP of national broadcast for Bcom3 Group's MediaVest Worldwide, New York. "The coverage is too sensitive; the emotions are too raw to be commercialized."

From a purely financial point, the lost revenue is one more challenge in an already depressed year for TV advertising. TV outlets will be hard-pressed to recover most of the ad money that they didn't collect last week.

Still, networks may see some inadvertent financial benefit in the weeks ahead: With advertising so weak, the lost commercial inventory has tightened inventories and stablized some pricing of commercial time.

"There will be a tremendous amount of makegoods, which will have an interesting impact," said Bill Koenigsberg, president-CEO of Horizon Media, New York, "because we don't know how many are going to cancel completely vs. how many will ask to have it moved and rebooked." A makegood is a spot that runs in the future to make up for undelivered promised ratings.

The terrorism came as networks were preparing to launch the new TV season tonight. But in realizing the seriousness of the situation, major networks moved quickly to delay the start.

Walt Disney Co.'s ABC, Viacom's CBS and General Electric Co.'s NBC moved their season start to Sept. 24.

The attack came amid networks' final promotions for the new seasons. As of late last week, many networks were still in limbo with their new season promotion plans.

"We are on hold, and taking it day by day," said George Schweitzer, CBS exec VP-marketing and communications. "Nothing is typical anymore."

NBC has changed much of its on-air promo creative, which, depending on news events, could air this week. Against a soft visual, backstage scene, an announcer says, "NBC premiere week has been postponed for one week. On September 24, we hope you'll be with us."

PROMO SCENES ALTERED

"There is no need to say anything else," said Vince Manze, co-president of the NBC Agency, NBC's in-house shop. "There is a thin line between being respectful, getting on with our life, being patronizing, or taking advantage of emotions."

Additionally, NBC altered some show promos. For NBC's new "Law & Order: Criminal Intent," promo scenes with the World Trade Center in the background have been removed.

The terrorism attack also led to cancellations of sporting events. CBS, ABC, Fox and Disney's ESPN lost weekend NFL programming-the second week of games for the new football season-when the National Football League commissioner dropped the games. This resulted in the loss of an additional $60 million to $70 million in TV ad revenue, according to estimates.

Cable news networks, meanwhile, witnessed a natural big rise in viewership, with advertising-free news programming.

AOL Time Warner's CNN posted a Nielsen Media Research 5.5 rating or 4.6 million households from 10:30 a.m. Sept. 11 to 2 a.m. Sept. 12. This was way up from August's total day rating of a 0.4 and 200,000 homes. Sept. 11 marked CNN's highest ratings since the Gulf War.

Estimates are that CNN lost about $1.5 million in ad revenue each day it went without ads. However, CNN's solid news delivery also gave the network's flagging image a strong boost. A CNN spokesman said: "CNN finds it inappropriate to discuss advertising revenue at this time."

News Corp.'s Fox News Channel was up as well in ratings, posting a Nielsen 2.9 rating or 2.1 million households; Microsoft Corp.'s and General Electric's MSNBC earned a 2.1 rating or 1.4 million homes.

Cable networks that last week resumed running TV advertising are still sensitive to viewers' emotions toward the tragedy-something that will spread to the broadcast networks as they start taking regular TV commercials. For instance, AOL Time Warner's TBS and TNT are not running any financial service company commercials or airline spots. The World Trade Center was home to many brokerage and financial service companies. Typically after any plane accident, airlines pull TV commercials.

"Clients that had airline tie-in promotions have been canceled," said Horizon's Mr. Koenigsberg. "Marriott has a frequent flyer program tied into mileage points and it wanted to cancel everything. And a Citibank Advantage tie-in with American Airlines-that is supposed to happen at the end of the month-we don't know what is happening with that."

Even when the constant news coverage pulls back and broadcast networks begin to air their new season's programming-with advertising-the news events of the tragedy will continue to have an effect. The broadcast networks planned to resume entertainment programming-and commercials- Sept. 15.

"At some point the coverage is going to talk about what the real impact of this thing is," said MediaVest's Mr. Berning, "in terms of fatalities. And that is a real sensitivity. This is tough stuff."

Contributing: Richard Linnett

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