Creates a Stronger Network but Reduces Integration Opportunities

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LOS ANGELES -- Could the CW be branded entertainment’s new best friend?

That’s the question marketers and their Hollywood reps are asking themselves in the wake of
The new CW Television Network that was formed by combining the WB and UPN will significantly impact the branded entertainment business.

yesterday's announcement by CBS Corp. and Warner Bros. Entertainment and Tribune Co. that they were merging the UPN and WB networks to launch the CW Television Network in September.

Surprise for marketers

The move is a surprising one for marketers, their media buyers and product placement brokers because it not only eliminates a major broadcast network, it takes away one of two channels whose programming proved a big draw for 18- to 34-year-olds -- a demographic that has long been attractive to advertisers.

In making the announcement, executives said there just wasn’t enough ratings or ad dollars to warrant six broadcast networks with similar audiences -- young women and urban viewers.

Both networks were brand friendly, and getting even more so over the years, with shows like “What I Like About You,” “Gilmore Girls,” “One Tree Hill,” “Smallville,” “America’s Next Top Model,” “Eve” and “The Road to Stardom with Missy Elliott” integrating a slew of marketers into the programs and creating promotional partnerships with brands.

The WB’s sitcom “What I Like About You” alone featured 2,544 brand occurrences in the first nine months of 2005, according to Nielsen Media Research’s Place Views measurement service, coming in just behind reality fare like “The Contender” and “American Idol.” The show integrated Procter & Gamble products such as Clairol Herbal Essence, Swiffer dusters and Pringles chips.

P&G's Cover girl

On UPN, P&G’s Cover Girl was the prime sponsor of the most recent season of UPN’s “America’s Next Top Model,” replacing Revlon, which sponsored the reality contest’s first season. In the past, the WB also brokered deals with companies such as Verizon Wireless and Cingular Wireless to back shows such as “Smallville” and “One Tree Hill,” and the Campbell Soup Co. for the family drama “7th Heaven,” among others, and together with Pepsi-Cola North America, launched the summer series “Play for a Billion” and “Pepsi Smash.”

The CW plans to air a six-night 13-hour prime-time lineup covering Monday through Friday and Sunday nights, as well as a Monday through Friday afternoon block, and a five-hour Saturday morning animation block. A schedule will be ready for the May upfront talks.

It is still unclear which shows will make the cut for the CW when it bows later this year, but the company said it will aggressively try to become a powerhouse for younger audiences and make available a “lineup of some of the most popular programming that appeals to young adults in the media business.” The network (named after the initials of its new owners) will likely unite the more successful shows, like UPN’s “Everybody Hates Chris” and “Veronica Mars” and the WB’s “Gilmore Girls” and “Smallville.” The network’s final name could still change before the September launch.

Top show nightly in 18-34 demo

Either way, UPN’s current president, Dawn Ostroff, who will take the reins of the new venture, said the merged schedules will enable the new network to have a top show each night in the 18-to-34 demo. “I think what people are going to find is all the programming appealing to this one demo is now going to be under one roof,” Ms. Ostroff said. “It’s going to be one-stop shopping.”

But the new network will still have to generate the ratings and prove itself to advertisers. Lately the WB had been lagging behind UPN on the ratings front. Much of that has been because of audience fragmentation and a lack of a clear brand image at both networks, media mavens say.

Targeting a specific audience will “help clarify what the network is all about,” said Jak Severson, CEO of Madison Road Entertainment, which has brokered promotional partnerships for brands and is in the midst of producing its own TV programming. “That will be beneficial overall. It’s been unclear who’s supposed to watch UPN or the WB.

“The key is, will they be able to grab an audience?” Mr. Severson added. “At the end of the day, marketers want to be in a network that can deliver volume. As a buyer and seller you want to have lots of outlets, but scale matters and advertisers are spending money on networks that can deliver scale. Nobody’s sure what the outcome will be yet.”

What CW means for marketers

Given all this, here’s what the launch of CW might mean for marketers:

> The merger will mean fewer shows that marketers can attach themselves to and integrate into.

> The combination of UPN and the WB could create a stronger network, with a clear brand image, that lures even more of those lucrative 18- to 34-year-old viewers, thus giving promotional partners a larger audience for their marketing messages and wares.

> When dealing with the CW, advertisers could initially have all the leverage: The network will have to spend millions to promote itself, considering that audiences won’t be familiar with it, thus giving marketers willing to put promotional muscle behind its shows considerable clout.

> At the same time, however, a stronger network could mean higher integration fees and more expensive promotional deals for marketers, which could force advertisers to eventually make the move to considerably cheaper cable channels even more so than they have in the past.

CBS to guide marketing, research, business affairs

With the executive shuffle underway, CBS will guide the new network when it comes to marketing, research and business affairs, giving marketers with relationships with CBS a potential leg up when it comes to negotiating integrations and tie-ins. The same is true for brand reps with connections at Warner Bros. Television or CBS Paramount Television, which will become co-producers of any show on the CW. WB sales president Bill Morningstar will take on sales duties at the CW.

And layoffs will occur at both networks, which means talent will be soon be available to marketers looking to recruit executives with experience in targeting young consumers. WB Chairman Garth Ancier and WB Entertainment President David Janollari will not be part of the CW, with Mr. Ancier saying he is interested in pursuing his interests in the new media sector.

If anything is certain, it’s that the CW will be advertiser friendly.

“The CW is going to be a real competitor -- a destination for young audiences and diverse audiences and a real favorite among advertisers,” said CBS CEO Leslie Moonves, while announcing the merger with Warner Entertainment Chairman-CEO Barry Meyer and Tribune Co. CEO Dennis FitzSimons.
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