Upfront 2010

Will Cable's Conan Cost as Much as NBC's Conan Did?

Buyers Rebuff Turner's Aggressive Price Demands, but This Ploy Could Pay Dividends

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NEW YORK (AdAge.com) -- Is Conan O' Brien worth as much to advertisers on cable as he was on broadcast? That's what Time Warner's Turner cable division is trying to argue.

Turner is trying to sell commercial time in Mr. O' Brien's new late-night show, set to debut on TBS in November, at rates some 20% above the rates that Mr. O' Brien's "Tonight" got on NBC, according to media buyers.

Advertisers are rejecting those demands, reported previously by the New York Post, outright. But putting the price increases in play may be an attempt to ensure the new late-night show stays close to "Tonight" standards. Mr. O' Brien's show on TBS "is probably worth more of an increase than some of the other stuff" on the network, said one media buyer, "but it's not worth these kinds of numbers."

"I think it has yet to be proven what he can really do," the buyer added.

TBS said Thursday that advertisers have shown strong interest in the show. "We are having very active conversations and a number of advertisers have already agreed to be partners with us come this fall," the company said in a statement. "TBS attracts a young audience and will be a great home for Conan."

Turner's move is likely a negotiating tactic aimed at securing prices for Mr. O' Brien's new show that it would not get if ad-sales executives just stuck to normal wheeling and dealing, according to media buyers. But it calls attention to the composition of O' Brien's audience, a legitimate selling point for advertisers.

Young audience
Mr. O' Brien's young fans are attractive to marketers, and while the crowd "may not be equivalent [to broadcast] on a ratings basis, from a qualitative audience basis, there's something to be said for what they are hoping to get," said one ad-buying executive.

Advertisers are increasingly placing less emphasis on the size of a show's audience and instead seeking programs that draw unusually interested and invested viewers. Walt Disney's ABC and News Corp.'s Fox were able to secure higher-than-normal prices for ads that ran in the finales of "Lost" and "24," respectively -- even though ratings for both shows were on the wane.

And Nielsen recently found that nearly 90% of the national advertisements aired during the "Lost" series finale on ABC generated higher brand recall than the same ads averaged across broadcast and big cable networks over the prior week. Ads in the finale averaged 51% higher brand recall and 92% higher message recall among viewers, and were liked 66% more, compared with other airings in the prior week, Nielsen said.

Of course, Turner will have to persuade advertisers to ignore a pretty significant element: The network is asking advertisers to pay ad rates greater than NBC got even though the new show will have decidedly smaller ratings . Even with increasing interest in audience engagement, scale can still command a premium.

Late-night numbers
In Jay Leno's last season of "Tonight" before he moved to host his short-lived 10 p.m. show on NBC, the program drew an average of 5.1 million viewers, according to Nielsen. Mr. O' Brien's tenure on "Tonight" brought in an average of 2.9 million viewers.

Late-night hosts on cable don't do nearly that well. From September to mid-February, Comedy Central satirists Jon Stewart and Stephen Colbert nabbed an average of about 1.4 million and 1.1 million viewers, respectively. Cartoon Network's Adult Swim won about 1.9 million. Chelsea Handler's female-focused humor lured an average of 818,000 on Comcast's E!. And TBS rookie George Lopez won an average following of about 1.2 million for "Lopez Tonight."

Turner has been aggressive in the past, trying to convince ad buyers they could use cable networks such as TNT and TBS to get broadcast's reach; the trick is to buy ads in original series that air several times over the course of a week, accumulating scale as they go. During upfront negotiations in 2008, Turner touted shows such as its popular drama "The Closer" as a "broadcast replacement" and sought similarly high-price increases. That plan had some difficulties gaining traction in the market.

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