Reality shows pitched separately in upfront

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In advance of the upfront market, the four major broadcast networks are for the first time making separate reality-programming presentations to ad agencies that are wary of some of the steamier shows.

Estimates are that 30% to 40% of the schedules for ABC, NBC, CBS and Fox may be reality-based next season, despite concerns from many major advertisers that prefer less scandalous scripted fare.

"It's causing a lot of consternation among many advertisers," said Doug Seay, senior VP-director of national programming, Publicis Groupe's Publicis & Hal Riney.

General Electronic Co.'s NBC went so far in its presentation as to distinguish between "safe" reality and "problem" reality, a strategy that might work for some shops. Donna Wolfe, director-broadcasting negotiations at Interpublic Group of Cos.' Universal McCann, at the Association of National Advertisers' TV Forum last week, said, "There are shows that are perfectly acceptable and in demand and there are those that are in less demand. To put them all in one bucket is to do us a disservice."

A spokeswoman for Walt Disney Co.'s ABC confirmed separate presentations were made. An NBC spokeswoman had no comment, while executives from Viacom's CBS and News Corp.'s Fox were unavailable at press time.

The move comes amid the backdrop of a TV advertising marketplace that has seen scatter prices for individual network TV shows climb 30% to 40% in the first and second quarters. Analysts predict a 10% growth in overall upfront revenue to a record $9 billion.

"The networks are saying, `Don't think you can buy upfront without looking at reality,"' said one media buying executive. "So if network programs rates go up 10% overall next year, they could go up to 30% if you only want to buy scripted shows."

shift to cable

Reality shows are already affecting the marketplace, causing some advertisers to shift TV dollars to cable in recent months.

In fact, media buyers report a rare occurrence-a number of cable networks are currently sold out. A variety of big and small cable networks, including Cablevision Systems' WE: Women's Entertainment, don't have any prime-time inventory to sell in either the first or second quarters.

"There has been a spillover from network with scatter prices at 30% to 40% premiums," said Marc Goldstein, president-CEO of WPP Group's MindShare North America, New York.

One reason for the high scatter prices is that advertisers have held onto virtually all their first- and second-quarter inventory, rather than make cancellations. Typically, cancellations occur at a rate of 12% to 15% within a specific quarter. But networks and ad executives report rates at historic lows, in the 2% to 4% range.

Whether cable benefits from this environment in the upfront remains to be seen. Joe Abruzzese, president-advertising sales at Discovery Communications, who recently moved from CBS, said, "If it's a flowing process and broadcast grabs plus 20% [price increases], more money flows to cable, we can raise our prices and they lower their prices." However, he said "Unfortunately, the decisions have already been made, planning groups have decided how much money will go in to cable, broadcast and syndication." He said the upfront only covers about 55% of Discovery's business.

Some buyers, however, don't agree this year will see a tight upfront.

"We have the same conversation every year," said David Verklin, CEO of Aegis Group's Carat North America. "So let's get into it. Prices will not rise 20%, that's a ridiculous figure. ... Television ratings are going down."

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