Can MyNetworkTV Survive Poor Ratings, Credibility Gap?

Back in February, News Corp. executives cited a successful track record in launching new networks, and promised that the company's latest venture would follow suit. MyNetworkTV didn't follow orders. Instead, the network delivered lifeless ratings, straining its credibility with buyers and endangering future upfront sales.

Its first telenovelas--"Desire" and "Fashion House"--finished their 13-week runs Dec. 5 with weeknight 18-to-49 ratings of .3 and .4, respectively. The network had hoped to draw in the 1.5 range in its target demo, a source said.

Other warning signs: After Morgan Fairchild joined "Fashion House" in October, setting up a cat-fight story line with Bo Derek's character, ratings initially rose, then dropped. And that show's finale--telenovelas are supposed to build to a gripping crescendo--posted the same rating as the season average. ("Desire" did see a .1 uptick.)

Plus, weeknight ratings are stagnant for MNTV's two new telenovelas that launched Dec. 6--both "Wicked Wicked Games" and "Watch Over Me" delivering a .3, on par with cable channels such as Court TV. The network is reaching about the same number of 18- to-49-year-olds as there are TV homes in Green Bay.

"I thought the thing had a shot--I'm surprised it really hasn't gotten out of the starting gate," says Ira Berger, director of national broadcast at the Richards Group in Dallas. He considered buying time on the network, but took a pass.

With ambitions of drawing a 1.5, MNTV is undoubtedly giving advertisers considerable make-goods, meaning that current inventory could be close to full. In fact, two buyers at top agencies say the network hasn't called over at all recently. "Usually that means they don't have a lot to sell," one buyer says.

An MNTV rep declined comment on ratings guarantees, inventory levels or whether the network is happy with its ratings over its first three-plus months. "We're working to grow the ratings, and we're having meetings on growing the numbers and the network," he says.

"Their biggest challenge is going to be the next upfront presentation," says Bill Carroll, vice president/director of programming at Katz Television Group. "The biggest question, both from their affiliate base and advertisers, is going to be: 'Where do we go from here?' "

"The reality is that credibility is important from upfront to upfront. Buyers and planners have really good memories," says John Moore, director of ideas and innovation at MediaHub, the buying unit of Mullen. "We all know when ABC promises a lot and they don't deliver they get hammered; NBC the same thing. [MNTV] is going to have to totally reinvent who they are."

Still, Moore said to maintain the credibility with the buying community, MNTV will probably say it still believes in telenovelas, but admit its mistakes and offer a solution. The situation, he says, will likely expand the network's programming into other genres.

MNTV officials have always maintained that they are committed to the telenovela format, which offers original programming five nights a week and has been successful in Latin America. Now, they seem less committed.

While two more telenovelas are in production and scheduled to run through the 2007 upfront, none are yet scheduled for the summer. (MNTV, part of the Fox group at News Corp., has promised originals 52 weeks a year.) "It's the nature of this business to constantly evaluate what you have on the air and what you have coming down the pipe," the MNTV rep says.

In launching Fox, FX and the Fox News Channel, News Corp. has shown a willingness to adapt in search of success. MNTV could take on a traditional network format with different shows each night. In February, the company said it had shows in development, such as "Celebrity Love Island," where stars and pedestrians are marooned on a fantasy island with the potential for love connections.

News Corp. also could continue with a telenovela for one hour a night, and run other programming in the second hour.

"We know Fox has a willingness to try new formats and new ideas to find a winner," Vincent Young, the chairman of an affiliate group (Young Broadcasting) that runs the MNTV station (KRON) in San Francisco, said last month.

Katz's Carroll said affiliates have confidence that News Corp. CEO Rupert Murdoch will focus on a turnaround, since the company owns 10 large-market MNTV stations. "They have as much of an investment as the affiliates do, and they're not going to allow this to languish," he predicts. "They're going to address the situation in a reasonably aggressive way."

"The Fox folks are not happy with the ratings yet, and that bodes well for the future," says Mark Antonitis, president/general manager at San Francisco's KRON. Antonitis says KRON is profiting under the MNTV affiliation, because the station doesn't have to pay for programming. (MNTV requires no reverse compensation). It can typically sell prime spots at higher CPMs than it did before as an independent. "When you pay zero for programming, the net is generally good," he says, adding that even with the low ratings, "we're extremely profitable."

San Francisco aside, some affiliates are disappointed in the network's performance--even though it made a bid to attract them with the promise of nine minutes an hour to sell locally--perhaps three times what other networks offer--and the lack of reverse compensation.

"We expect the MyNetworkTV stations to continue to trail our expectations, as ad buyers become comfortable with the new network's program genre," David Amy, CFO of Sinclair Broadcast Group, which runs 17 MNTV stations, said earlier this fall.

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