NBC Gives Money Back to Advertisers

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Source: The Wall St. Journal

Unusual Move Shows Network's Vulnerability To the Writers' Strike
By STEPHANIE KANG and REBECCA DANA
December 12, 2007; Page B5

NBC Universal is taking the unusual step of giving advertisers cash back for primetime ratings shortfalls from last season. The move is a departure for NBC, which like other broadcast networks typically gives advertisers additional TV spots, called make goods, when ratings fall short of expectations.

The unusual move shows the network's particular vulnerability both to the Hollywood writers' strike and to a new commercial ratings system being used this year for the first time. The fourth-place network is in a steeper ratings depression than its peers, with no standout new shows in the fall season, say media buyers. That makes it harder for NBC to make up ratings shortfalls by giving away additional commercial air time. The reimbursements were reported by Mediaweek this week.


Advertisers generally buy commercial time during the spring and early summer, well before the fall season begins, in what are known as the upfronts. NBC sold an unusually high percentage of its advertising time upfront this year and then sold much of what it had left earlier this quarter, media buyers say. Media buyers said it made more financial sense for NBC to pay the cash back now than carry that liability forward because if ratings continue to fall, the network will have a harder time catching up.



Read more: http://online.wsj.com/article/SB119742320500222409.html (subscription)

[onehandle]

1. Good. Make the entertainmentconglomos hurt. nt