NBC Ad Price Cuts Stung Industry, Says TV Chief
- by July 16, 2001
That's according to Turner Broadcasting CEO Jamie Kellner, who said NBC's decision last month to break the stalemate between the broadcast networks and advertisers by discounting its prices for the upcoming season may have cost its rivals millions of dollars.
That includes the WB network, one of the outlets in the Turner family, which still managed to extract small CPM (cost per thousand) increases from advertisers, despite the weak marketplace.
"Our CPMs would have been even higher if NBC would not have dropped as steeply as they did," Kellner said. "NBC drove a lot of money out of the TV marketplace this year. "
Kellner made the charge during the WB's portion of the Television Critics Assn. tour on Sunday. He shared the stage with Jordan Levin, who marked his first press conference as the WB's solo entertainment president.
After a slow start, the upfront market finally got under way in late June when NBC started slashing prices. NBC execs said the strategy was necessary in order to hold onto the network's position as market leader.
Kellner doesn't fault NBC's decision to lower prices, noting that the network "probably got themselves an extra $50 million to $100 million by going in so quickly."
But NBC forced rivals such as ABC to follow suit and slash CPMs. When all was settled, the broadcast networks took in a whopping $1 billion less than last year.
"At the end of the day, (NBC) drove the market down," Kellner said. "These discounts for some of the networks were higher than they're admitting."
Kellner said the WB is still on the road to profitability this year, although the network had hoped to sell its ad inventory at a higher premium.
Meanwhile, Kellner said Turner has purchased a window for "Charmed" (likely for TNT) but that no final decision has been made on when and how it will run. Still, "We like to air shows we purchase," he said.
Multiplexing WB series on Turner cabler channels is one of Kellner's stated goals -- but even in his new position, making his wish a reality hasn't been a simple process. Convincing the rights owners to shows (Spelling Television, for example, in the case of "Charmed") takes some work, he said.
The new WB drama "Smallville" would seem a perfect candidate for airing on a Turner network, particularly since the show is produced by sister studio Warner Bros. Television. Kellner, however, said it's unlikely the series will pop up on one of his cablers next season.
"We haven't had a chance to work that out," he said. "If Turner were producing shows, (such deals would be simpler). It's a bigger issue when you've got other parts of the company involved."
Addressing concerns over whether reality programming has gone too far, Levin said he was bothered by the recent turn of events on CBS' "Big Brother 2." The producers of "BB2" threw a participant off the show last week after he jokingly held a knife to another contestant's throat.
"I think that's very disturbing, what happened on 'Big Brother,' on a lot of levels," Levin said. "When we went into reality, we said there aren't a lot of fun reality shows out there. We went counterintuitive (with fall entries 'Lost in the USA,' 'ElimiDate Deluxe' and 'Popstars 2').
"There's an ugliness out there that we don't feel belongs on our network."
While the WB is launching perhaps its most ambitious new schedule ever this fall, Kellner and Levin believe the task of rolling out eight new shows will be made easier by the WB's membership in the AOL Time Warner fold.
"The company is organized now so that it can now focus on the (promotional) needs of individual companies when they need it," Kellner said. "The launch of the WB's fall is going to be a major priority."
Day and date promos will be airing on Turner cablers, as opposed to more traditional generic image spots, Kellner said. And with Cartoon Network airing "Superman" toons and TNT running "Lois & Clark: The New Adventures of Superman," there'll be a natural base to promote the Frog's new young Superman drama "Smallville."
As for the aftermath of the "Buffy the Vampire Slayer" defection to UPN, Levin said there's no hard feelings between the Frog and "Buffy" creator Joss Whedon.
Whedon, who also produces the "Buffy" spinoff "Angel," which remains on the WB, had criticized network execs for downplaying the show's importance.
"We're treating him as respectfully as we always have and think he's still an incredible producer," Levin said.
Levin quashed the possibility of any future crossover between "Buffy" and "Angel," however.
"I think it's important, if 'Angel' is going to work long-term, that it establishes itself independently from 'Buffy,"' Levin said.
When asked the perennial question about whether the WB will expand to a seventh and final night anytime soon, Levin and Kellner said that move was probably still a year away.
But Kellner said the WB could easily create a movie night, thanks to Turner's movie library. The network has aired its first movie franchise, "Flix From the Frog," this summer by utilizing Turner titles.
Movies "do seem like the most cost-effective way for a seventh night," Kellner said.
WB execs haven't yet ruled out developing for other dayparts either, including latenight and afternoon. But getting affiliates on board would be a major requirement before any expansion into new dayparts takes place, Kellner said.
"We have to get a long-term plan in place and figure out how to roll it out," he said.
- Reuters/Variety
