Only two new shows expected to generate buzz

“This is a story that will shock you. It’s a tale of a reversal of fortune for a sector that once lived the high life in front of large, adoring audiences while everyone around them raked in big bucks. But today — oh, how the mighty have fallen.”

If the problems plaguing the daytime television business were the topic of an episode of, say, “Dr. Phil” or “Maury Povich,” the host’s introductory remarks would be something akin to the statement above. Slightly exaggerated, for sure, but the words ring true for anyone involved in daytime TV programming for local broadcast TV stations.

The fortunes of the 9 a.m.-3 p.m. traditional daytime TV frame have been hammered during the past decade by everything from a generational shift to the post-boomer era to the audience fragmentation spurred by the rise of so many niche cable outlets. From food to gardening to environmentalism to extreme sports, there are themed channels to serve every interest and aspiration.

The advertising downturn of the past two years has hit local television particularly hard. Even as major networks begin to see signs of a recovery on the national front, local stations are still trying to climb out of a much deeper trench. With many daytime shows delivering miniscule ratings, stations are fighting an uphill battle to make money in the daypart. Syndicators are increasingly dependent on branded integration deals to help offset declines in revenue from ad sales and cash license fees. Even long-established daytime sudsers are falling victim to a fast-changing marketplace: CBS pulled the plug on “Guiding Light” last September and will draw the curtain on “As the World Turns” this fall.

All of this adds up to a gloomy short-term forecast for the first-run syndication biz as station managers and syndie execs prep for the trek to Las Vegas for the annual National Assn. of Television Program Executives confab Jan. 25-27.

The most telling sign of a moribund market is the dearth of new product from the majors up for sale at the confab. CBS Television Distribution is fielding a half-hour court show strip, “Swift Justice,” fronted by Headline News anchor Nancy Grace, while Sony Pictures TV has been testing the waters for a talker hosted by Oprah Winfrey’s design guru, Nate Berkus.

And that’s it.

In better times, the news late last year that Winfrey plans to pack up her couch at the end of the 2010-11 season would have spurred a free-for-all among syndicators vying to field “the next Oprah” and move into the lucrative 3 p.m. and 4 p.m. time­slots Winfrey has dominated for two decades.

However, because the economic climate in local media is so grim, stations are focused on survival, not bidding wars for new and existing syndie shows. Ellen DeGeneres’ daytime talk-variety hour is seen as the best-positioned to eventually soak up some of the viewers and advertising dollars that now flock to “The Oprah Winfrey Show.”

Winfrey’s departure will free up an estimated $100 million a year in national ad dollars that will be up for grabs. The same is true for her audience, which averages about 7 million a week this season. Her closest yak-show competitor, “The Ellen DeGeneres Show,” pulls in about 3 million viewers a week.

Hopes are high among distribs that the ad market will be more robust by the time Winfrey signs off in mid-2011, so shows that may get a viewership bounce from the Oprah void will be able to capitalize on higher ratings. But none of the major syndie distribs have any illusions of coming close to generating “Oprah”-level money.

Truth be told, “Oprah Winfrey” has been a loss leader or break-even prospect for many stations for a few years. The show has commanded such high license fees (low six figures a week in big markets) for so long that stations can no longer generate enough advertising revenue from her show to offset the cost.

Granted, “Oprah Winfrey’s” large aud pays other dividends, like delivering a strong lead-in to local newscasts, which are by far most stations’ biggest moneymaking properties. But given the sharp decline in daytime advertising dollars, even the invincible “Oprah Winfrey” would have faced steep license fee cuts, of as much as 30% or more, if Winfrey had decided to continue the show beyond her existing contract.

For the past few years, station buyers have been extremely reluctant to pick up new shows with any cash license fees attached. Most deals are being done on an all-barter basis, in which a station gives the distributor as much as half of the ad time in every episode as compensation for the program. Distributors then bundle those spots for sale to national advertisers. But the spike in barter deals has had the effect of flooding the national market for syndie ads with inventory, which has depressed prices for all but the highest-rated shows.

“You’re in the male-enhancement pill business in a lot of these shows, and that’s not a business,” laments one syndie vet.

CBS Television Distribution initially planned to sell “Swift Justice” on a cash and barter basis, but response from station buyers made it clear to execs that they’d be better off going with an all-barter offering. As the only new strip of note in the marketplace for fall 2010, CBS had no shortage of offers, which allowed it to be highly selective concerning stations and time periods in an effort to make the most of the barter inventory. And the show has a “premium sponsorship” spot that runs within the program time for stations to pitch to local advertisers.

“We know it’s a tough market right now, but we knew we had something pretty special with Nancy,” says CBS Television Distribution prexy John Nogawski. “We figured out a way to pull it off economically enough to make it work for us.”

Two industrywide factors are generating hope that 2010 will be a brighter year than 2009 and that 2011 will be better still. One is a short-term boost of political advertising money this year in states where there are hotly contested gubernatorial and congressional races. A flood of money chasing spots in the fall would help the 2010-11 syndie season get off to a strong start, as is usually the case in election years.

Over the long term, station owners are hopeful they’ll finally see some real coin from cable retransmission consent deals now that Fox has blazed a trail with its hard-fought four-year pact with Time Warner Cable that promises to yield hundreds of millions of dollars a year for the Fox O&O group. Not every station will have the same negotiating clout as the Fox group, but now that the benchmark is set, local stations will surely see some found money on the ledgers from cable operators.

Despite the long odds, the current season’s firstrun frosh crop has yielded two shows that will make it to a second season: yakkers “Dr. Oz” and “The Wendy Williams Show.” Both shows have the benefit of being carried in major markets on Fox-owned stations. The Fox O&Os are fortified enough by being part of the News Corp. conglom that they’re able to still invest in marketing and promotion for daytime skeins.

“Dr. Oz,” hosted by Dr. Mehmet Oz, is the latest Winfrey protege to take root in daytime, following in the footsteps of “Dr. Phil” and “Rachael Ray.” The hourlong show, from Winfrey’s Harpo Prods. and Sony Pictures TV, has delivered respectable ratings by contempo standards, and it has cemented Winfrey’s reputation for having the Midas touch as a daytime TV talent scout. (Sony and Harpo are certainly hammering that point in the pitch to station buyers for the prospective show from Berkus, who is known for his appearances on “Oprah Winfrey.”)

With its focus on health and wellness issues, “Dr. Oz” easily lends itself to branded integration deals. The show provides stations with separate segments that can be used in local newscasts with sponsorship attached. That advertiser-friendly approach has helped Sony encourage stations to devote precious promo time to “Dr. Oz.”

“Wendy Williams,” from indie Debmar-Mercury, seems to be filling the void for the younger-skewing, slightly sensational yakker (think “Ricki Lake”), though the show is more focused on celebs and fashion trends than on who’s-your-baby-daddy issues.

It’s those kinds of deals that allow a new show to survive, according to Debmar-Mercury toppers Mort Marcus and Ira Bernstein. “Wendy Williams,” which has managed to secure cash license fees in most markets, is at the break-even mark so far and poised to make money by the end of the season if its ratings continue to inch up. As an indie outfit, Debmar-Mercury wouldn’t be in the daytime strip business if it had to absorb big losses, the toppers assure.

But with a thinning herd of shows, advertisers need somewhere to place their dollars. “Wendy Williams” in recent weeks has recruited McDonalds and Walmart as advertisers, which bodes well for the second half of the season.

“We think there’s a lot of upside for us and our stations with this show as it keeps growing,” says Bernstein.

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