|New CW President Dawn Ostroff: “When it launches it’s going to be considered a formidable opponent instead of being lumped into this two-network category of netlets.”
UPN AND WB TO MERGE INTO FIFTH BROADCAST NETWORK
Time Warner/CBS Joint Venture, CW Television Network, to Launch in Fall
NEW CW NETWORK COULD LEAVE NEWS CORP. SCRAMBLING
WB, UPN Merger Leaves Fox Affiliates in Top Three Markets Orphaned
CBS Corp. and Time Warner decision to merge their netlets into a fifth broadcast network, the CW, will eliminate UPN and the WB from the broadcast lineup starting in September.
Targeting same demo
Collective broadcast ratings points could go down with one fewer network, but combining the forces of two 18-to-34-targeted nets will also provide advertisers looking to reach that demo a more efficient buy.
“Everybody looked at the two separate networks and thought together they would be so much more successful,” said Dawn Ostroff, UPN's president, who will become president of entertainment at CW. “Financially, it made a lot of sense.”
While Ms. Ostroff will become president of CW, John Maatta, formerly the WB’s chief operating officer, assumes the same position at the new network. Bill Morningstar, who formerly headed sales at WB, will take over as sales chief at the joint venture.
“You’ve got a lot of people who were watching two networks now under one roof,” Ms. Ostroff said. “When it launches it’s going to be considered a formidable opponent instead of being lumped into this two-network category of netlets.”
Both networks have typically reached younger viewers; UPN has been known to draw an ethnically diverse audience and WB has been a place to reach young women. A look at recent history shows why Ms. Ostroff was tapped to lead the entertainment side of the new network. While UPN’s ratings have remained steady in the younger demos, WB is down in all demos and has come under criticism for straying from its core mission and trying to expand its audience across a larger age range.
For advertisers, of course, combining the two means fewer choices in the broadcast TV network marketplace. Even if the joint venture increases its ratings 75% over what the two networks formerly did separately, it’ll result in fewer collective broadcast ratings points. And who would reap the benefits? The most likely candidates are cable, which has already seen a shift in TV ratings points and ad dollars, and new media companies that are investing in entertainment programming, such as Yahoo or AOL.
“Part of the reason for the reconfiguration obviously was how well other programming and brands have done in that space, which is predominantly and led exclusively by cable brands -- whether its 18-34 or in diverse markets,” said Sean Cunningham, CEO of the Cabletelevision Advertising Bureau. “In the short term there was an obvious need to reinvent based on how well the rest of the market was doing -- the rest of the market is cable.”
A challenge to Fox
“From a buyers’ perspective it’s a wait and see,” said Kal Liebowitz, chairman of KSL Media. “If they do what they think they can do, you have a pretty good network there that could contend with Fox ... now you’ve got to expect a response from Mr. Murdoch,” he added, referring to Rupert Murdoch, chairman of Fox parent News Corp.
He said if CW’s numbers could go to a four or five share, it could absorb the money that was previously spread between the two. But “for anyone who’s been buying UPN for an African-American audience, that money will be re-expressed, some will go back to CW, some will got to Fox, some will go to cable networks.”
The CW, named for the first initials of both parent companies, will launch in fall 2006 as a joint venture between Warner Bros. Entertainment and CBS Corp., with each company owning a 50% stake. The network’s affiliation agreements are with Tribune Broadcasting and CBS stations, covering 48% of the country, the top 13 markets and 20 of the top 25. It expects its full distribution to exceed 95% of the country.
The CW will follow WB’s scheduling model: 13 hours of programming spread over six nights a week, 10 hours of Monday through Friday afternoon programming and a five-hour Saturday morning kids’ block.
According to most media watchers, the WB story is a cautionary tale about not sticking to a core brand identity. Two WB network executives, Chairman Garth Ancier -- who last week reiterated at the Television Critics Association that the network wasn’t going anywhere -- and President of Entertainment David Janollari, are expected to leave once the new network is up and running. Ms. Ostroff said the joint venture opens up “an opportunity to create a new brand for this network.”
Station group fallout
Of course, there will be major fallout from the deal for station groups with a WB or UPN affiliate in markets where a Tribune station or CBS station have already secured their own affiliation agreements. Sinclair Broadcasting, whose stations overlap in markets such as Tampa, Fla., and Pittsburgh, saw its stock price go down 15.7% yesterday thanks to the news. Additionally, Fox stations in several markets, including New York, will be affected, although they are such a small share of News Corp.’s overall revenue the change is expected to be minimal. Major markets where Fox has a UPN station that will be overrided by a CBS and/or Tribune station: Baltimore, Chicago, Houston, Los Angeles, Minneapolis, New York, Orlando, Phoenix and Washington.
At NATPE, content creators bemoaned there would now be one fewer broadcast network to buy shows, but syndicators were expecting bigger distribution business from current WB and UPN affiliates that would not be part of the CW.