"It was inevitable. We've just accelerated the process" a top network executive requesting anonymity tells The Riff, adding, "If you follow the trend line of increasing commercialization, the rise in other forms of non-programming clutter, and the surge in branded entertainment and product placement, we originally expected this to occur sometime around the fall of 2012, but after reviewing Nielsen's new commercial minute ratings data, we decided to begin phasing the FDPs in with the start of the 2007-08 season."
Not surprisingly, the first shows scheduled to be replaced by FDPs include many of the same programs Nielsen found to have higher commercial ratings than program ratings, including NBC's "The Office," Fox's "Family Guy," ABC's "Grey's Anatomy," and CBS' "NUMB3RS."
In a related move, the major television networks simultaneously announced that their heads of advertising sales -- Fox's Jon Nesvig, NBC's Mike Pilot, ABC's Mike Shaw, and CBS' Jo Ann Ross -- were also put in charge of their respective entertainment divisions. News and sports, however, will continue to report to the former entertainment chiefs.
The decision is sending shockwaves throughout Madison Avenue, and a special joint committee of the Association of National Advertisers and the American Association of Advertising Agencies has been organized to address the development. Among the issues being raised by the move are:
This last point is particularly vexing for Madison Avenue, but was actually a key factor in the Big 3 broadcast networks' decision to adopt FDPs. While Fox historically has not charged advertisers fees for integrating their commercials into its programming, ABC, CBS and NBC rake in millions in profits each year by tacking the extraneous costs on to each commercial they air.
"This was a no-brainer for us," conceded a Big 3 network executive. "Not only do we get to boost our supply of salable inventory, but we also increase the number of integration fees we can charge to upwards of 120 per hour. Do the math. It's a win-win-win for us."
Actually, there is a fourth win, according to another network insider: "If this all goes according to plan, we will eventually be able to reduce our programming costs from billions of dollars annually to zero -- and I mean zip."
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