Syndication: The Value Proposition
With NATPE approaching, media buyers size up the market
By Wayne Friedman -- Broadcasting & Cable, 1/7/2007 7:00:00 PM
As the National Association of Television Program Executives preps for its Jan. 15-18 convention in Las Vegas, five of the nation's top ad buyers talked to Broadcasting & Cable about syndication's challenges­—and surprising strengths.
Although syndication is often defined by its failures, Entertainment Tonight is a quarter century old. Seinfeld, airing exclusively in syndication since '98, is stronger than most first-run comedies. And the Law & Order and CSI franchises give muscle to cable networks.
“Some of the higher-rated syndication properties do as well as network television,” says Andy Donchin, executive VP/director of national broadcast for Carat USA. “Even lower-rated syndicated shows do as well as or better than a lot of programs on cable networks.”
B&C also heard from Bill Cella, chairman/CEO of Magna Global; Tim Spengler, chief activation officer of Initiative Media North America; Shari Cohen, co-president of national broadcast for Mindshare USA; and Ed Gentner, senior VP, group director of video investment and activation, for Mediavest USA. Their assessment: Syndication's $3.8 billion in annual ad revenue proves it has legs. But it needs to find its place on the multi-platform of media choices.
With all the new places television seems to be moving, what is TV syndication's role in the digital age for advertisers?
Cella: There are about 300 syndicated shows out there, I believe. There are probably only about eight or 10 that deliver at least a 3 or 4 rating. Pretty much everything else is around a 1 rating. There is a lot of stuff that doesn't get picked up because it can't get a number.
But [in the digital world] it's not so much about the rating; it's about garnering content. There is probably a lot of content that can't find a home [in traditional syndication] that can find one on digital platforms.
Spengler: We think about it two ways. The first-run product will satisfy audiences on all the relevant platforms that consumers want to be consuming their content on.
For the after-market product [such as off-network sitcoms and dramas], the jury is out.
The younger-targeted content will probably thrive—even in the after-market in the digital age, such as Family Guy or The Simpsons. But the older-skewing content will not.
Donchin: For syndication, it's the same role as network and cable—to sell product and build brands, to be used as a portal to move people over to the digital world.
What has happened in the 500-channel universe is that reruns are less effective than they once were.
Obviously, networks are trying to avoid them and scheduling multiple shows in the same time slot [at different times throughout the year].
That could hurt syndication to a degree, because of lot of what they do comes from off-network shows. But then, a show like Seinfeld is something different. That is probably going to work forever.
Cohen: The challenge they first have is to come up with programming that people are going to watch—and then follow to other platforms. The programming in syndication hasn't set the world on fire.
In the case of Rachael Ray, we looked to embrace it early on and then figure how it could live beyond TV—online, on a phone.
Gentner: As long as there is compelling content, there is a place for syndication in the digital world. Now, how that comes out in the digital world, people are still trying to figure that out. But I just don't think repurposing syndication programming alone in the digital world will make it.
Syndicators say they have an advantage because syndication has shorter commercial pods than cable or network. They say there is less DVR recording for syndication shows. What benefits or negatives does syndication have vis-à-vis commercial ratings and DVR rating measurement?
Donchin: What we like in syndication is that we can run in the front of the pod; the national commercials are usually in the “A” or “B” position. I don't think syndication is in any worse shape than network or cable.
Look how much people record network daytime. Sometimes the contribution of VCR taping is 15%-20% of the rating. Oprah has a very loyal audience, and people don't want to miss that show.
Cella: Syndication is the least affected [of all TV] with DVR playback. That's a positive. But we as yet haven't figured this all out.
We have many brands and categories that need immediate attention [and need “live-only” ratings]. There's retail and movies, and automotive, which does a lot of weekend advertising.
Spengler: [Concerning DVR ratings] I could see arguing both ways. In regards to the passion viewers feel toward a show, that might make them record a syndicated show like Oprah a lot. Then again—because many syndicated shows are stripped every day of the week—they could come back and say it's so much appointment viewing, you don't have to record it.
Gentner: It's a little misleading. On the better shows in syndication, you are seeing [DVR] numbers approaching network numbers. They get more recorded. Original syndication programming is recorded more than the reruns.
Cohen: Any situation for a commercial to be set up to succeed is a good thing. But if people aren't watching a show, what good are the commercial ratings? That's the bigger issue.
Still others say syndication has become the hamburger helper for TV advertisers, the national TV media of last or limited resort. Is syndication still relevant now versus cable and network?
Donchin: I'm not one to believe the talk that syndication is third behind network and cable. I don't think it's—to use your words—hamburger helper. It's important to our overall spending and our overall broadcast strategy. You are talking to someone who thinks syndication is more relevant than other people.
Our agency has always been a big supporter of syndication because there are many times you are running shows that are original or have a greater reach potential than other vehicles.
Spengler: I agree. The relevance is going to depend on the demo skew, the environment and the absolute ratings.
Syndication is just as relevant today for the major ad categories that use it vis-à-vis the other national television outlets. However, all national outlets, and traditional media as a whole, are less relevant to clients than they used to be.
Cohen: I wouldn't diss it. Syndication plays a role. There is still a reason from a price-value point to embrace syndication. Still, syndication's distinction and perception has changed—and not for the better.
Eight or nine years ago, syndication used to lead the upfront market. They went in advance of cable and network. Overall, there was a pecking order. It was network, syndication and cable. Cable has displaced syndication as an alternate platform. Syndication hasn't kept itself relevant in competing for eyeballs.
Gentner: Syndication programming is so broad with its offering—especially those with original content. A lot of these shows are reaching a mass number of people that can't be ignored. Look at the Oprahs of the world. It's still a great environment for women[-targeted] advertisers.
There is a big difference in ratings between the lowest-performing and the highest-performing.
Cella: There is still a real need for strip programming, which has consistent ratings in specific time periods. When you think about [the ratings of] Wheel of Fortune and Jeopardy!, which have been on for 20 years, it's amazing. Syndication is a very important media. There are a lot of clients who buy syndication and don't buy primetime. They want the primetime exposure but don't want to spend more money.
But there seem to be some formidable obstacles to syndication.
Spengler: Syndication has fewer available windows than network or cable, and that makes it more challenging to come up with the next available hit.
Concerning off-net product, you have fewer network hits that you can relaunch in syndication. There is that trickle-down effect. With fewer and fewer successful comedies, it's even harder to make any money in the off-net–comedy business.
Cohen: Rachael Ray did really well the first week; she had a star-studded cast. Then they went to lesser guests. Rachael Ray has been a moderate success. Ellen is great, but she still delivers relatively small numbers.
You have to hook viewers very quickly; otherwise, viewers are not going to stay with it. Because there are so many options out there, the public is very impatient. The economics don't lend themselves to patience. There is a lot of mediocrity out there.
Donchin: Their record isn't any worse than network or cable. If anything, I would give them credit; syndicated shows have been on the air for many years.
When you buy a schedule on syndication, a bigger percentage of that schedule is going to be on the air a year from now than it will be on the networks. Look at 3 lbs. It aired three times, I don't want to pick on CBS. All the networks have this problem.
Cella: In syndication, it is probably a worse percentage rate of success than in [broadcast] primetime. It's getting tougher because of all the choices out there.
Syndication is still a very viable alternative for clients, and you can do a lot more. For example, [an ad buyer] can do a promotion deal with a big station group, such as with Fox, which has 39 stations—a huge footprint. You can make some interesting stuff happen.
Gentner: You are talking mostly talk shows. In looking at these shows, you have to know what advertising demand is against it. These are pretty buzz-worthy shows with strong woman compositions.
So even though something is not doing blockbuster ratings, there could be good demand against it.
Is the NATPE convention still important to media-agency and advertising executives? It seems fewer so than in years past.
Cohen: It's not about going there and getting a deal at the best price. It's about creating strategic partnerships.
But I don't know if, in January [when the NATPE convention is held], syndicators are ready to figure this all out. It's premature to get the right answers, because usually a producer isn't in place for a show by NATPE.
Spengler: The new reality is that new content opportunities become available weekly.
They don't wait for a given point in time, for a convention—or even necessarily the upfront. It is not like someone says, “Here's a new product. Let's talk to a distributor or a producer.” That's not the only point in time to have that discussion.
Cella: I'm going. It's important to see the programming out there. You should at least spend a day there to see what's going on. It's important to see what is going on internationally. They have done a good job at reinvigorating it—though I'm not sure how much actual selling goes on.
Gentner: I have not gone in several years. It used to be Groundhog Day: You used to hear the same exact pitches from syndicators.
But I am going this year. I'm really going for a different purpose then in the past. NATPE is now more global, and it does seem like more clients are going.
There are also the evolving technologies, new distribution platforms. There are a lot of panels that have a lot of relevant topics. For example, there's one on behavioral targeting, another on user-generated content.
Donchin: I was a big fan of the SNTA [Syndicated National Television Association] meeting that was held in New York City. The best thing was that, instead of one or two or three people going to NATPE, I could bring 20 or 30 people to these things.
Now that SNTA Day has stopped, we started it at Carat. Syndicators come in, and we give them an hour to show what they have to the buyers and planners. As a buyer, NATPE is not a bad thing, but it's not a must thing. I usually decide the last minute.
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