Madison Avenue Meets Washington During Upfronts



It will be interesting how many ABC upfront deals resemble what the network pitched heavily Tuesday in its upfront presentation. ABC sales chief Geri Wang sought to portray the network as a pioneer in cross-platform ad buys.

Smartly, she acknowledged that the network is prepared to find sturdy measurement that combines viewing across TV, tablets, etc. to grease more multi-platform purchasing.

“Our goal is complete cross-screen measurement – validation for your investment,” she told advertisers.

ABC said in March it would offer guarantees for viewing across TV and some online platforms. So, presumably it has been spending much of the past few months putting together upfront packages for advertisers that include multiple distribution avenues.

But the upfront usually moves quickly with such a heavy focus on securing valuable TV time, it remains a question how much room there is to consider multi-platform packages during such a frenzied period. Still, buyers might expect proposals to have a theme stamped on a folder reading: “the best of broadcast with the dynamic of digital.” It was cited multiple times at the ABC upfront.

Speaking of guarantees, Disney executive Anne Sweeney offered an interesting nugget in her opening act: ABC was the first network to offer guarantees.

A lot has changed since then, obviously. And ABC’s presentation from the start offered a decent primer into the rapid pace of change in the TV ecosystem. Besides cross-platform buying and an emphasis on ROI, there was a mention about ABC’s new program allowing local stations to stream live online and Wang cited efforts with dynamic ad insertion.

While ABC and sister network ESPN gave presentations Tuesday, there was some interest in both of their businesses – ESPN directly -- on Capitol Hill as a Senate subcommittee tackled the video landscape Tuesday.

None of the turf covered was new for anyone in the industry. But it’s Congress, so playing catch-up is not a surprise.

Perhaps sparking the hearing is a bill from Sen. John McCain, who wants to among other things usher in a la carte selling of TV channels. The poster child there is clearly ESPN.

McCain and others feel ESPN costs cable and other operators so much to carry that it is causing customer bills to rise – including customers who don’t care about sports at all.

“I’m a sports fanatic and I love ESPN … I’d never go without ESPN,” McCain testified. “The fact is that the majority of TV consumers have no interest in sports programming and shouldn’t be forced to purchase it. Many of these Americans are beginning to realize that included in their cable bill is a charge of about $10 a month just to carry sports programming like ESPN which costs nearly $5 a month.”

Cablevision executives had to applaud another McCain statement as he effectively endorsed its position in a suit where it is charging Viacom with bundling channels and forcing it to buy low-rated ones in order to gain access to top-tier networks.

“Companies like Viacom don’t sell channels like MTV and VH1 individually, but rather bundle them together -- which then leaves pay TV companies with little choice, but to do the same thing to consumers,” McCain said.

Michael Powell, who heads the cable industry’s trade group, offered a standard case at the hearing why a la carte wouldn’t necessarily save a non-ESPN viewer money. If an ESPN or similarly highly viewed network loses ad dollars with lower circulation, it would likely seek to make up for it by charging higher affiliate fees, he indicated.

“It’s not a good deal for consumers if you pay $10 for 10 channels and you were paying $10 for a 100,” Powell said.

He added: “In a country committed to diversity of content there would be a whole host of content that we would say collectively we value that probably would not survive being sold a la carte.”

ESPN chief John Skipper told the Los Angeles Times, he doesn’t believe the McCain bill will go anywhere. He’s probably right.

As for issues more pertinent to ABC, both the future of retransmission consent payments and the impact of the AutoHop found their way into testimony.

Dish Network general counsel Stanton Dodge argued that negotiations over retrans hurt consumers because local stations have leverage since they can make a station go dark. He argued for the right to import signals from distant markets if a blackout occurs to keep network programming available. So, when the ABC station in Richmond goes off the air, Dish could air the Rochester station in its stead as negotiations continue.

Time Warner Cable did that last summer, notably with NBC stations, by bringing Nexstar affiliates into markets where Hearst had blacked out stations. Nexstar sued.

Gordon Smith, head of the National Association of Broadcasters, argued in favor of retrans payments saying stations need two revenue streams – advertising and retrans – to keep providing critical local news and other programming.

“If they bring in a distant signal from L.A. into Fort Smith, it’s not going to mean a lot to them when a hurricane is bearing down or a tornado,” he said. “These things cost money and we have only two ways to pay for it -- advertising and retrans -- and they want to eliminate our advertising model. It doesn’t add up.”

He was referring to Dish, which has AutoHop technology that can allow the automatic removal of commercials in Big Four network shows.

That includes the types of new shows ABC introduced Tuesday. ABC has sued Dish charging AutoHop is illegal.

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