Syndication Upfront Jumps 10% to $2.4 Billion

Studios sell more advance inventory, trying to keep scatter high sans Oprah

By Paige Albiniak -- Broadcasting & Cable, 6/20/2011 12:01:00 AM

Like the rest of the upfront market, syndication sales were fast and furious, and were completed alongside of network and cable. By several accounts, a 10% increase over last year to a $2.4 billion overall take is a conservative estimate.

“This year was fast and right on time,” says a syndication advertising executive. “It was great that syndication was negotiated along with network and cable. That shows that more people are recognizing that we offer a true alternative.”

“We had one of the best upfronts that we’ve ever had,” says another syndicator.

Syndication is sold in tiers, and each tier of programming was up by a different amount. Top-tier shows earned increases in the low double-digits; mid-tier shows improved by high single digits; and third-tier shows increased by approximately 5%, said several executives. “Syndication really runs daytime, especially now with ABC canceling the soap operas. We have truly big brands in daytime—Ellen is a brand, Live With Regis and Kelly is a brand, Dr. Oz is a brand. Who would want to give that up?” says another syndication advertising exec.

Syndicators sold a much greater proportion of their available inventory in this year’s upfront—up to 85%, according to several execs—because a softer scatter market is expected after last year’s exceeded pricing expectations.

“Typically if there was a strong scatter market, which there was this year, the next year isn’t as strong,” says an advertising salesperson. “Clients decide they don’t want to pay increases in scatter, so they put more of their money into the upfront.”

Another reason that syndicators are holding less back for scatter is because they expect ratings to be down next year, with Oprah out of the marketplace and with two new shows on ABC’s daytime lineup. Syndicators hope that by selling most of their inventory in the upfront they will keep scatter prices high.

“A slight decrease in rating means there’s less overall inventory. That drives up prices,” says Ira Bernstein, copresident of Debmar-Mercury.

Replacing the ‘Oprah’ Money

What happened to the so-called “Oprah money” was a big question posed in this upfront, but most executives thought those dollars, as much as $70 million, were dispersed throughout the market.

“The Oprah money went everywhere,” says an ad executive. “Do I think that other syndicated shows like Ellen, Live With Regis and Kelly, Dr. Oz and Anderson got some? Absolutely. Do I think some of it went to cable? Sure, why not? Do I think some of it went away? Yes. I think it went everywhere, but I would also guess that a lot of it stayed in television.”

“Daytime was very strong in this upfront,” says Bernstein. “Just because Oprah left daytime doesn’t mean that brands don’t need to advertise in daytime anymore. We probably had some increase in the daytime spend just because it remains a strong and efficient daypart for advertisers.”

Syndication’s continued advantage in the ad market is its reliability and consistency, say several executives.

“What used to be considered unsexy in a very unsettled media landscape has become sexy,” says one exec. “The networks launch programs all the time, but they are often not there for the balance of the year. Clients find value in the reliability and consistency of syndication.”

One show that performed better than usual was Debmar- Mercury’s Family Feud. Feud, which is moving production to Atlanta from Orlando next year, saw its ratings improve this season by as much as 80% in some markets. That improvement is largely credited to the performance of the show’s new host, Steve Harvey. (Nielsen’s change to its measuring system, by which the research company now counts all of a show’s runs in its ratings average, also gave Feud a boost.)

Those improved ratings mean improved revenue, which was one of the goals of switching to Harvey from John O’Hurley, who hosted the show from 2006-2010. Another result of the improved ratings is upgrades for the show to access in several markets.

Advertisers also were interested in the new shows coming to market. Advertisers like the ratings potential and safe environment of Warner Bros.’ off-net comedy The Big Bang Theory, which enters syndication this fall along with NBCU’s runs of 30 Rock and Twentieth’s It’s Always Sunny in Philadelphia and Futurama.

Advertisers also were attracted to Warner Bros.’ new talker, Anderson, whose host, Anderson Cooper, has a lot of credibility, and Debmar-Mercury’s Jeremy Kyle, which is going after the same advertisers as daytime’s other conflict talkers, such as NBCU’s Maury, Jerry Springer and Steve Wilkos.

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