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Nets blink first

Tube's digital ratings row settled ... for now

TV advertisers scored a win Monday, as ABC dropped its demand that ad agencies pay for viewers who record shows like “Lost” and “Grey’s Anatomy” on TiVo-like devices.

ABC’s concession ended the standoff between the networks and advertisers that began after the upfront presentations to advertisers two weeks ago. It now sets the stage for advertisers to place an estimated $9 billion in bets on network shows in the coming season.

“The ABC Television Network will offer ‘live’ guarantees as one of the options advertisers may consider during this year’s upfront,” the net said in a statement.

But at the same time, the net indicated the issue isn’t going away.

“The ABC Television Network continues to believe strongly in the worth of the ‘live plus’ viewer, and will continue its efforts to include this audience,” the web said.

As the strongest player going into the upfronts, ABC network sales prexy Mike Shaw attempted to use his network’s leverage to get agencies to recognize — and pay for — viewers who time-shift shows on digital video recorders.

The broadcast nets estimate 4% of their viewing is occurring after a show airs, and those ratings are most concentrated for hit shows, which get premium ad rates.

But after two weeks of a standoff, CBS and Fox sent signals they were willing to start dealing on live-only ratings, forcing Shaw to choose between dropping the principle or face losing ABC its leadership position in the marketplace.

“The agencies moved in unison, but the networks did not,” said one advertising exec who asked not to be named, due to the sensitive nature of the talks ahead.

By coming to the table, ABC assures it will be first to strike deals with the agencies.

“There was a chance they could have lost volume to the other guys,” said a buyer at another agency.

The network upfront talks are akin to a union negotiation, where the five major networks and six agencies agree on a ratings currency before negotiations move forward.

The agencies typically deal with one network at a time, and the network that goes first has the opportunity to take market share from the others, especially in a market where viewership is flat and dollars are expected to be down slightly.

Because it has hit shows and is growing in the coveted 18-49 demographic, ABC is in the lead position for the second year in a row, but its position was growing precarious.

CBS and Fox also were in positions to lead the market if either had come forward with attractive terms for the agencies. “They might have stolen ABC’s thunder,” one buyer said.

That didn’t happen last week, but CBS had indicated it was ready to do deals on live viewing only, which forced ABC’s hand.

But the issue of “live plus” ratings promises to get more rancorous as DVRs explode in the marketplace. About 12% of U.S. homes have such a device today; by the end of the year, it is expected to be closer to 20%, making those viewers even more difficult to ignore.

Now that the ratings issue has been decided, buyers and sellers expect the market to unfold over the coming weeks.

ABC will negotiate first and set the ceiling on CPM rate increase — the rate advertisers pay to reach a thousand viewers.

Observers expect dealmaking to take some additional time this year due to the complexity of pacts being sought by advertisers, which include online components, brand extensions and marketing tie-ins.

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