The cable network claims it has already sold 85% of the inventory in the June show to 10 sponsors. But it could have trouble unloading the remaining inventory given the 11th-hour difficulties Viacom's CBS and Walt Disney Co.'s ABC had selling out their Super Bowl and Academy Awards broadcasts, respectively.
Viacom's MTV has just started its sales effort aimed at movie studios, key advertisers for the network said. The earlier deals were sold to advertisers in other categories during last year's upfront market, in a more favorable advertising climate.
MTV is pricing its package for studios at $1.5 million, up 5% over last year. The deal forces advertisers to buy not just a spot in the movie awards show, but in a number of reruns of that program, as well as a large supply of gross ratings points (the sum of ratings for certain shows) for a slew of shows that air through the third quarter.
But some studios are balking at the extent of the commitment they're being asked to make.
"This almost amounts to a mini-upfront," said one movie advertising executive. "They asked you to buy in the upfront, and then they want you to buy this." Typically, movie companies spend anywhere from $3 million to $6 million in upfront deals with MTV.
But MTV said the package is a fair value. "When you look at the relative pricing of this vs. other premier events, I would say this is very reasonably priced," said Harvey Ganot, president of MTV Network Advertising Sales Worldwide. An average spot in this year's Academy Awards cost $1.4 million.
For years, MTV Networks has had leverage over movie studios because of the network's popularity among 12- to 24-year olds, a coveted moviegoing audience. As a result, MTV has cut strict deals with studios during the upfront that give them few or no cancellation options.
"Their feeling is, `You need us, so we are going to bleed you,"' said another media executive. "It's going to come to bite them down the line-especially if AOL launches a [competing] music channel." Reports say AOL Time Warner will compete with MTV, launching a cable network under its AOL music division.
Mr. Ganot wouldn't comment on why the network treats movie studios differently from other advertisers. But the MTV Movie Awards are pretty much a must-buy for studios because they run in June, the start of the lucrative summer movie season.
MTV is asking movie advertisers to step up to the plate at a difficult time because of the soft ad market. Additionally, studios may be redirecting ad dollars after coming under pressure from the government for marketing violent films to younger teens.