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Cable getting kicked in ads

Networks pulling back on program development, consultant sez

NEW YORK — Cable networks, clobbered by the worst advertising marketplace in a decade, are beginning to feel the squeeze on their programming budgets.

“The discounting that cable networks are being forced to give to some advertisers, often going as high as the mid-20% range, is some of the worst I’ve ever seen,” said Jerry Solomon, an advertising consultant and former president of SFM Media. “The result is that the networks are pulling back on program development.”

There are a number of signs that cable networks’ programming divisions are getting less money to play around with.

Some major general-entertainment networks such as TNT, Lifetime and USA have not given the go-ahead to any new scripted series for weekly scheduling, at least during the next six months.

Because hourlong drama series can cost $1 million or more an episode, cable networks are moving more cautiously in developing new shows than they were two years ago, when the economy was so buoyant that advertisers were pouring money into cable.

The belt-tightening goes beyond original series. Expensive off-network series such as Warner Bros.’ “Third Watch,” Buena Vista’s “Felicity” and Columbia TriStar’s “Dawson’s Creek” have not landed cable-network buyers up to now despite many weeks of sales-pitch meetings and discussions.

Changing atmosphere

The atmosphere was vastly different in the spring. Before the cable upfront smashed against the wall six weeks ago, King World sold reruns of “CSI: Crime Scene Investigation” to TNN for a record $1.6 million per episode, Warner Bros. induced Bravo to pay $1.3 million an hour for “The West Wing,” and Studios USA fetched $1.2 million from USA Network for repeats of “Law & Order: Special Victims Unit.”

Theatrical-movie buys are also suffering. USA Network purchased the exclusive network-window rights to Universal’s “The Fast & the Furious” for a license fee approaching $22 million. Within 10 days of the deal, USA had backed off on its “Furious” exclusivity, agreeing to let ABC buy the first three runs in the network window. Instead of getting “Furious” in February 2004, USA will have to wait until the summer of 2005, but ABC will pick up more than half of USA’s original license fee.

Comedy Central ended up canceling “That’s My Bush,” the latest comedy series from Trey Parker and Matt Stone (creators of “South Park”), mainly because its $1-million-an-episode cost couldn’t justify the decent but unspectacular rating the series was delivering. A much cheaper original series, Martin Short’s “Primetime Glick,” got a 13-episode pickup from Comedy Central even though its ratings were lower, on average, than those of “Bush.”

It’s not just entertainment networks that are feeling the pinch: All-news networks are not immune to the decline in advertising dollars. CNN has stepped up talks with both ABC and CBS to form news alliances that would give CNN access to big-name broadcast-news personalities whose appearance might pump up CNN’s ratings, allowing the network to hike its advertising rates. In exchange, ABC and/or CBS would be able to draw on CNN’s foreign bureaus for some of their news coverage.

Originals power

As cable networks search for cost savings in programming, Bob Flood, senior VP and director of national TV for Optimedia Intl., urges them not to become too parsimonious. “Original series give cable networks a cachet in the minds of advertisers,” Flood said.

Citing original series and movies, and specials ranging from the “MTV Music Video Awards” to Discovery Channel’s “Shark Week,” he concluded that “cable networks will live and die on original programming — they can’t walk away from it.”

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