Q&A

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Next week, the ad-sales presidents of the broadcast networks kick off the upfront amidst a blizzard of programming presentations, deal memos and shrimp cocktail. The name of the game: securing the biggest possible portion of the approximately $18 billion in marketers' annual TV commitments. Here, the chief negotiators talked to Advertising Age's Claire Atkinson about establishing digital beachheads, how the digital-video-recorder debate will shake out and whether they agree with Starcom CEO John Muszynski, who said that the TV upfront is evolving to a video marketplace.

Mike Shaw

President-sales and marketing, ABC

Do you think we should be writing about a video upfront rather than a TV upfront?

We sell 52 weeks a year. What [Starcom CEO John Muszynski] was trying to say when he said the upfront should be the video upfront is that you're not going to have an upfront for new media.

How much money will we see move to digital media? One estimate pegs it at $500 million in the next 12 months.

We do not have a good read as to the total amount that will be spent, but we know advertisers are interested in these opportunities. ABC is being very proactive in finding new ways for advertisers to reach their customers, and we have the content everyone wants. ABC is in a very good position to build out these new digital platforms and bring them to market.

How did last year's upfront take compare to how you did overall for the full year?

ABC's scatter pricing was much higher than the upfront's. I only care about that 52-week number. If you're buying a ton of cable, I'm not sure you need the upfront. For others, they need some of the higher-rated shows, certain weeks, periods of time where it's absolutely critical when you have a new launch schedule, a promotion you have to have the weight. The upfront still offers a lot of options.

How will the DVR debate be resolved?

People need to do business with each other. We'll do something that's fair for both. Cable shows are not what people are taping for watching later; their numbers don't really change.

Do you have a DVR?

Yes.

Do you ad skip?

Sometimes. Generally I don't, because I'm in the business of watching ads.

Jo Ann Ross

President-network sales, CBS

Could the upfront lose its importance as digital media grows, as Starcom CEO John Muszynski suggested?

The upfront is not the entire ballgame-it is an important piece, and we are in sales 24/7, we are constantly out there. It gives clients flexibility and gives them a leg up on sponsorship opportunities. John also said we are no longer a TV upfront, but a video upfront. I would take the position that the essence of what goes on in the digital platform comes from broadcast programming.

Is it a frustration that everyone wants to talk digital and it's still such a small piece of revenue?

I don't find it frustrating. It's interesting. We've talked about what they can do in that space. A lot of times clients don't know precisely what their brands want or need at this time.

Is it scalable?

It will be eventually. You have to try different things and different avenues. It has to make sense for the clients' corporate message. It is time well spent.

How are you positioned this year?

People believe in our network and [CBS Chairman] Leslie Moonves. We hear that everyplace we go. We have less holes to fill, there's more upside on programming on our network. It's not long in the tooth. We have loyal viewers, the two best reality shows, "Amazing Race" and "Survivor," and we provide a tremendous amount of value. On Friday nights, we created something people want to buy; other people said it's a throwaway night.

How will the DVR debate be resolved?

Everybody wants to write business and negotiate toward a resolution.

Do you have a DVR?

I don't. I'm planning on getting one.

Jon Nesvig

President-sales, Fox Broadcasting

What does the upfront look like this year?

It's the same prediction as last year, half to up 1%. We'd like to see the upfront grow but a 1% [growth] upfront total doesn't bother me. With the cable diversion of money, a lot of major [cable] brands have reached saturation. They're just building frequency, reach still remains the province of broadcast.

Who or what is your biggest competitor for dollars?

Non-measured media continue to get the lion's share of marketing dollars

What economic factors have the greatest effect on the upfront?

Overall economic growth, corporate profits and competitiveness within key categories are going to have the greatest impact on upfront dollars this year.

What's the most common negotiating tactic you hear from buyers?

Buyers don't seem to be as focused on price as they are on ideas and engagement

What's unique about your offering?

The success and diversity of our schedule. If you look at "House," it continues to do amazing numbers-and "American Idol" and "Prison Break" and "Bones" and "The O.C." and the Sunday night comedies.

Are cross-platform sales coming back into fashion?

It all goes back to the advertisers' need to get the right package done. This is taking an idea that is content-generated and spreading it across other platforms. As much as people are talking about looking elsewhere [to digital media], we'll be there.

Will digital dollars move out of the TV pot?

Emerging media have been funded out of newspaper classifieds. The Internet [players] with big-reach vehicles seem to be a compelling combination and how much that helps or hurts, it's hard to know. Broadcast combined with emerging-media platforms will be the way to go.

How will the DVR debate be resolved?

As for the DVR debate, I'm more interested in the rate of exchange than the currency.

Do you ad skip?

Personally, I love the commercials.

Keith Turner

President-sales and marketing, NBC Universal

Tell us about Jeff Zucker's "TV 360" sell this year. Will it apply to every property and will you be selling iVillage in this year's upfront?

We are trying to develop online extensions for all products: the network, cable, Telemundo, news, any NBC product. ... IVillage, it looks like the close won't happen until this month. It's too early to tell.

Does the upfront matter?

It really is about the whole year. The upfront is what it is and then you move on and you have a fair amount to sell and resell.

Who or what is your biggest competition for dollars?

Anyone that can connect an ad with a consumer, not just another network or cable-anybody with an idea.

You've got the National Football League back on Sundays this fall.

We're thrilled to be back in football. Chairman of NBC Universal Sports, Dick Ebersol, and his team are the best at it. He's got some ideas in terms of how we'll telecast, it's a work in progress. ... The response has been great, we're just getting into it.

How will the DVR debate be resolved?

We're all thirsting for information and research on that. All [networks] are looking to be recognized for live plus seven.

Do you have a DVR?

Yes, I do.

Do you ad skip?

No, but I floss after every meal.

Will you roll back rates?

None of your f****ing business.

Bill Morningstar

Exec VP-media sales, CW

The CW is new, resulting from a merger of the WB and UPN. What are your bases going to be?

We'll figure out a fair value with each advertiser. ... I'll ask, "What's your demo, flighting; what do you want to buy?" We'll figure it out.

What makes your offering unique?

It's the best of both worlds; the quality, the programming, the reach, that is important. Many of the shows are No. 1 or 2 in their demographic.

How did last year's upfront take compare to how you did overall?

It's a 52-week business. There are a lot of positives to the upfront. It's a free market and people continue to use it in their plans, and that says there are more benefits than get reported. We all treat this as a year-round business.

What economic factors have the greatest effect on upfront dollars?

The consumer is the key to the economy and if they're buying groceries, houses and cars, the economy will continue to stay strong.

Who or what is your biggest competition for dollars?

Everybody is a competitor. It's competitive as hell out there. Is it other media? Absolutely. My Network TV? We're in a different business.

What's the most common negotiating tactic you hear from buyers?

No way. There is no upside in answering this question.

Is cross-platform selling back in fashion with the arrival of digital?

Digital is a great opportunity for the networks, because if you believe content is the engine, no one creates more original content than the network. Some assume it's coming out of TV. I haven't seen that, but it's our job to extend this relationship.

Do you have a DVR?

I do not. I'm afraid if I have it, I will not play with my kids. I like my TV just the way it is. Some people don't want another box in their room. Some people don't want to pay more money.

Bob Cesa

Exec VP ad sales, My Network TV

Why should anyone buy My Network TV this year with so many other choices around?

We're going to be run exactly like the Fox network. That's allayed some fears about logistics. We've met with as many people as we possibly can. No one wants to go back to the five networks. They like the additional opportunities.

What makes My Network TV unique?

We're running 52 weeks of original programming. We have a clear brand. We know what we are. We run short dramatic series. We know the audience, and the stories we've decided to purchase are blockbusters from around the world. Good storytelling is key to attracting an audience.

Do the buyers consider you a network?

They absolutely do. ... We are in 121 markets, 71% of the country and that will grow to 90% of the country by September. If programming fails we don't have to go out like a syndicator and say, "Will you give us a time period again?" We replace with it with another show.

What's the most common negotiating tactic you hear among buyers?

That their budgets are down, my client can't raise prices and I have to find a more efficient way of doing things. Or, "I don't like you, Bob Cesa." It's friendly fighting. ... Everyone does their homework and they are very good at what they do.

What are you offering as an online tie-in? Are you planning anything with MySpace.com?

We'll have a Web site with exclusive footage that we hope will drive viewers from linear programs to work with our advertisers online. We haven't come up with the exact name yet. Everyone's spending 95% of their time on new media, but clients can't spend 5% of the money there. It's going to grow and it will become another area for viewers to become more engaged or it will become a way of siphoning away from the TV screen-no one's talking about that. Everyone's talking about the positive.

Do you have a DVR?

Yes.

Do you skip the ads?

There are times when I do skip ads, but what's interesting is that as I'm fast-forwarding I am still seeing the ad, and if it's a product I'm interested in I stop and watch.
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