Nets trade ad time for cash payments

Warner Bros. Domestic Cable may have come up with a novel way to reinvigorate the sluggish cable marketplace for early-window theatrical movies: Scare up more buyers for the titles by substituting advertising time for cash payments.

Last June, Warners sold 22 theatricals to AMC for a total price of about $80 million. Though undisclosed at the time, the cabler was putting up only a portion of the $80 million in cash, mainly because it couldn’t afford to pay such a steep price – AMC had never bought so many recent titles in one deal before.

So Warners broke precedent by allowing the net to set aside bundles of 30-second spots in each run of the studio’s titles. Warners now sells those spots in pics already running on AMC, like “Two Weeks Notice,” “Murder by Numbers” and “Insomnia,” to advertisers on the open market.

AMC and Warners declined to talk about the complicated deal because the profit participants in the movies will have to be carefully schooled in such arcane topics as how advertising time on a movie-saturated network gets priced and sold, and how the ad revenues get allocated among the various interested parties.

One complication arises from the fact that AMC and Warners are selling spots in the same movie on the same network. Smart media buyers, once they get over the confusion, could play off Warners against AMC, driving prices down to the detriment of both parties.

Howard Nass, co-head of the media-buying firm Nass Hitzig cq, said one way Warners and AMC could keep the prices up is for the cabler to package the “Insomnia” spots with 30s from a number of other network dayparts. By contrast, Warners would sell spots only in the individual studio movies.

If the deal works for both sides, it could become a model for at least some future movie deals. Nets that hesitate to lay out big bucks for early-window theatricals – Oxygen, ABC Family, Spike, Hallmark, Comedy Central and WE: Women’s Entertainment among them – could enter the game and even create movie-package auctions that would keep cable dollars flowing into studio coffers, even when the marketplace is less than robust.

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