Cable nets turn live-ratings war into sales tactic

Hallmark, Discovery in discussions with buyers

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Cable's trump card? Live ratings.

In an upfront where the fight for dollars is expected to be fierce, every network has to fend for itself. And that means some cable networks may break TV-seller ranks and agree to negotiate on live-viewing data only.

While most broadcasters-particularly ABC and NBC-are insisting they get paid something for time-shifted viewers as well as live viewers, a handful of cable networks are talking to buyers about doing deals based exclusively on live viewers. Hallmark Channel and The Weather Channel have discussed a live-only scenario. Discovery Networks is also seriously considering negotiating based on live-only ratings, according to executives on both sides of the table.

Time-shifted viewing is expected to be a major sticking point this year in the upfront as it will be the first year Nielsen has reported time-shifted ratings. The issue is whether audience-delivery guarantees will be based on people who watch a given show in real time, the "live" viewers; or those who watch it "same day" (up to 3 a.m. the next day); or "live plus" (within a week of the initial broadcast).

"We will look at live-only. It would be bad business to try to negotiate otherwise. ... [But] as a stand-alone network it would be foolish for us to make a statement that says we're only doing business a certain way," said Bill Abbott, exec VP-national ad sales for Hallmark Channel.

little to lose

"In the marketplace if these guys come out and say we're talking just live, clients could very well say, 'that's where our heads are at, let's talk,"' said one media-buying executive. "Will it make the broadcast nets budge? I don't think so. This is an issue that will drag out the broadcast market where there's much more at stake."

The smaller cable networks have little to lose at this point. DVR penetration is about 10% and in Nielsen's 10,000-home national TV sample, there are only 366 DVR homes. And since cable network ratings are a fraction of broadcast network ratings, time-shifted viewing doesn't affect cable's world to nearly the extent it does broadcast's.

The last week in February, live-plus-seven ratings resulted in a lift for more than 60 broadcast programs, one, ABC's "Lost", as high as a 0.4 ratings point, according to Nielsen Media Research. During the same week, live-plus-seven affected only one prime-time cable program-USA's "Monk" was lifted by one-tenth of a household ratings point.

And while going live-only could help cable in its efforts to steal share from broadcast, it could prove especially beneficial for cable networks whose ratings are particularly small.

At a potential disadvantage would be cable networks with strong corporate ties to a broadcast network. Walt Disney Co.-owned cablers, for example, may be forced to adopt a harder line than their rivals since their sales chief has pushed compensation for time-shifted viewing. And last week NBC said that it would negotiate using time-shifted ratings. Clearly, within cable, there are likely to be many variations on the live vs. time-shifted ratings debate.
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