Newspaper article International New York Times

U.S. Television Networks Seek More Pay for Delayed Viewing ; Advertisers Should Cover 7 Days on All Kinds of Devices, Executives Argue

Newspaper article International New York Times

U.S. Television Networks Seek More Pay for Delayed Viewing ; Advertisers Should Cover 7 Days on All Kinds of Devices, Executives Argue

Article excerpt

Networks want advertisers to pay for seven days of commercial viewing and to cover computer screens and tablets, as well as TV sets.

CORRECTION APPENDED

In 2007, faced with the growing popularity of digital video recorders, advertisers agreed to pay television networks for commercials viewed within three days of a show's first broadcast.

But with the pace of delayed viewing increasing ever more rapidly, a chorus of network executives is pushing for a change -- payment for seven days of commercial viewing on everything, including computer screens, tablets and TV sets.

David F. Poltrack, who has headed CBS's research for more than 30 years, said it would be hard to understate the influence of the digital video recorder on the economic model of commercial television. "The difference between this season and two seasons ago is more dramatic than the difference between two seasons ago and 20 seasons ago," he said.

The single biggest factor in that upheaval: delayed -- and sometimes never counted -- viewing of television shows. Under the agreement negotiated five years ago, known in the industry as C3, networks do not get paid for any viewing that takes place starting on the fourth day after a show's first run, even though more and more viewing is falling into that category.

Viewing in the period four to seven days after the first run is up about 17 percent this season, Mr. Poltrack said. That can mean millions of viewers. The new Fox and NBC hits "Sleepy Hollow" and "The Blacklist" have both been adding more than a million viewers in those extra days, and about half a rating point in the category many advertisers pay a premium for -- viewers between the ages of 18 and 49.

"These are our viewers," said Kevin Reilly, chairman of entertainment for the Fox Broadcasting Company. "It's not as though they are lesser viewers or negligible viewers."

Indeed, they are valuable viewers. Brad Adgate, the senior vice president for research at Horizon Media, said the 18-49 rating for programs in playback mode is better than first-run numbers for almost every network program this season. The median age for viewers watching recorded shows is 45.1 -- younger than any of the four big networks (CBS, 58.3; ABC, 54.2; Fox, 51.1; NBC, 50.7).

Leslie Moonves, the CBS president, noted that viewers who play back shows demonstrated "a definite desire to watch those shows," which goes to the increasingly important advertising area called engagement.

The counterargument, of course, to the building desire to receive seven days' pay from ad buyers is that delayed viewers are often commercial-skippers. But Nielsen has steadily shown -- in the face of consistent skepticism from those who skip ads -- that about half the commercials are viewed days later.

Pat McDonough, the senior vice president for analysis at Nielsen, said, "You just watch them; you forget you're watching a commercial." She said that no matter what the program or time frame, "it never gets below 40 percent" viewing for commercials.

Mr. Moonves, who in his long tenure at CBS has been aggressive in pursuing value for every aspect of network television, said confidently that by next May, when networks make ad deals for the next season, "the new currency will be live plus seven days" -- or C7.

Linda Yaccarino, the top sales executive for NBC Universal, said she had already seen more flexibility among advertisers. "It's top of mind in meetings with customers," she said.

Paul Lee, ABC's top entertainment executive, said, "We've done some C7 deals already." He said ABC might be in a special position because of all the serialized shows it broadcasts. "We're getting more value for shows like 'Scandal,"' he said.

Still, the collective view of the ad community remains: We'll see. …

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