Trickle Down Aids Syndication

Look for double-digit advertising rate hikes for syndication in the second quarter. With network scatter going through the roof, media executives say syndication will benefit from the trickle-down effect.

"The best is yet to come for the sell side for second quarter," says Optimedia CEO Mike Drexler. "Networks are sold out. Nobody's taking options. The next place to go is syndication, and they're going to benefit."

Indeed, Viacom President Mel Karmazin noted last week that advertisers exercising options to get out of second-quarter spending commitments are negligible. That, along with strong advertiser demand, has boosted network scatter prices to 50% over last year's upfront rates.

Meanwhile, some insiders predict a 15%-20% gain for syndication ad rates in this year's upfront market.

But buyers note that syndication isn't the only option outside of network. "Cable continues to be a valuable option in daytime," says Tim Spengler, executive vice president, national broadcast, Initiative Media. That gives buyers leverage, "making it harder and harder for syndication to succeed. Talk shows, in particular, aren't seen as viable."

Says Dick Robertson, president, Warner Bros. Domestic Television, "The cable daytime viewer is generally richer, younger, more educated." That's why, he adds, Warner Bros. created upscale talk shows The Ellen DeGeneres Show and The Sharon Osbourne Show to lure better audiences back.

Some buyers wonder about the continuing viability of reality on syndication. But SNTA President Gene DeWitt notes that Elimidate ratings are up 10% in this season.