BROADCAST NETS FACE OLD VICE

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At the start of a new fall season, TV network owners have defied the doomsayers for another year. Having resisted battering by rivals and critics, they now risk succumbing to a vice from the good old days of fat times and little competition: arrogance.

Who can blame the broadcast networks for counting their successes? Advertisers lined up and signed up and paid out more than ever in this spring's upfront ad buying season -- despite steady shrinkage in overall broadcast network viewing.

The solid economy rolls along, helping to maintain those robust advertiser spending plans, and 2000 promises an Olympics and a Presidential election to help the order books stay full. Add to the network calculations this additional element: new revenue streams -- from ownership interests in network programs to cost-sharing plans with affiliates -- that are beginning to kick in. For broadcast network managers, presiding over a medium that has been steadily losing its dominance with the public, it's been a bruising time. But they still ring up the ad sales.

Advertisers, however, seem in many ways as frustrated with the networks as ever. Witness the beehive of concern -- if not resentment -- over a report that Walt Disney Co., where profits have been lagging, had directed its ABC network to trim time from its programs to create more ad inventory. "Suicidal" said one top agency media buyer. A threat to the "very existence of ad-supported, mass reach broadcast TV," said another.

The rhetoric may seem overheated, but it is a mistake to dismiss the concern behind it. It's 1999, not 1969. Last week, Procter & Gamble Co. joined the list of big advertisers embracing "media-neutral" performance-based agency compensation plans. Those many advertisers that have loyally stuck with the networks even as cable TV has changed American TV viewing habits are not so likely to put up with policies that shore up network financials but undermine the effectiveness of every ad dollar spent on network TV. While business is good for the broadcast networks, the wise seller never takes the customer for

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