• by Wayne Friedman , David Goetzl  @dgoetzl, June 2, 2006

One of the most contentious issues in the upfront appears to be moving to a conclusion, with networks expected to yield to buyers' demands that deals be based only on "live" ratings, according to a number of media buying executives.

This means advertisers might not have to pay for additional ratings generated by time-shifted viewing via DVRs--this year.

Several reasons for the anticipated "live only" result: A largely unified "live only" stance across the large media agencies; a belief that minute-by-minute ratings will eventually be employed in future deal-making, lessening the importance of the DVR ratings; and a somewhat lackluster market.

Separately, at least one network is looking for an alternative scenario to help lessen the current upfront standoff. Two buying executives said ABC offered up a last-minute decision to possibly use minute-by-minute ratings--sometimes known as "commercial ratings"--in this current upfront market.

"ABC was talking about it," said one veteran media executive. "Some people think it may be too soon to do this year. Nielsen and Donovan systems aren't ready yet. It would be fairly cumbersome--but we could do it. There is some merit and sincerity that ABC is looking for a solution."

Separately, Fox appears poised to begin the deal-making process, as the network is believed to be conducting more serious discussions with buyers than its Big 4 counterparts, according to media buying executives.

Representatives for Fox, NBC, CBS, and ABC all declined comment.

A move by the networks to commercial ratings as the basis for their audience guarantees would represent a change in their recent thinking. They have been somewhat resistant, since results have shown viewership virtually always drops when a commercial follows a program.

ABC, most prominently, has indicated for months that it would push to be compensated for ratings increases generated from DVR viewing, which are reflected in Nielsen's two new data streams: "live plus same day" and "live plus seven day."

Buyers, however, have rejected the notion that any ratings from DVR viewing--even if they are generated on the same day--have value, since research shows DVR users are rabid commercial skippers. Networks appear to be moving toward that position, possibly in exchange for some concessions on other fronts from buyers.

Another reason that deals may be made on "live" ratings is a belief that the DVR ratings may soon become superfluous if the industry adopts minute-by-minute or the so-called "commercial ratings" as its standard currency--perhaps as soon as the 2007 upfront.

Like the DVR issue, this is a hot button. But buyers have indicated they will press to pay for just the ratings during commercials, and not a program's average.

Ratings guarantees have historically been based on average program ratings, but since Nielsen started making minute-by-minute data available in more user-friendly form, it is now easier to determine the rating a commercial generates--compared to the ratings during the programming.

A third reason that networks appear poised to agree to make deals based on "live" ratings is a somewhat sluggish market. With options such as the Internet and other new media to shift dollars toward, buyers feel they can stand firm on their call for "live only." If the market were fast-moving and exceedingly robust, networks may have the leverage to demand payment for DVR viewing.

The networks have pressed to be compensated for time-shifted ratings generated by DVR viewing because some top shows post increases of 10 percent or more when DVR ratings are added--that could mean millions of dollars in additional revenue.

For example, for the week of May 8-14, ABC's "Lost" showed an 11 percent jump in "live plus seven day" in the adult 18-to-49 demo compared to the show's "live" rating. NBC's "My Name is Earl" increased 10 percent, while "24" on Fox jumped 9 percent.

The increases with the "live plus same day" category compared to "live" are less dramatic, although still significant. During that same week in the 18-to-49 demo, "American Idol" on Fox, "Survivor" on CBS, "Lost," and "Earl" all showed a 5 percent jump in "live plus same day" compared to "live."