Fox Getting Big Bucks For 'Empire' Season Finale

Buyers say there is strong demand for limited commercial inventory in the highly rated series

Why This Matters

WHY THIS MATTERS
Big ratings eventually pay off when a network finds a hit.

Fox is cashing in on its new hit series Empire by getting between $500,000-$600,000 per 30-second commercial in the show’s finale, according to media buyers.

The amount is several times what the show sold for in the upfront—between $120,000- $150,000. But that was before the show debuted and its ratings began a historic week-after-week climb to become the highest-rated drama on broadcast television.

“They’re getting Walking Dead money,” said one media buyer, noting how unusual it is that the highest-rated show on television—and the one most valued by advertisers—appears on cable. “It’s a hit show. There will be a lot of interest in the finale. It’s going to do a great number, so I would think they’re getting upwards of $500,000 a unit.”

Fox decided to launch a new series with limited commercial interruptions. Before last year’s upfronts, it chose Empire because it had high hopes for the show and wanted to turn it into a TV event.

Limiting the number of commercials is a tactic that is attractive both to viewers and advertisers, who prefer a more uncluttered environment for their commercial messages.

Sources close to the network say limiting the commercials has been a factor in the show’s popularity. And with fewer spots, Fox pushed for a premium price for the commercials that did air in the show. (A few years ago, Fox cut the number of commercials in Fringe as part of an effort it called Remote Free TV. But Fox couldn’t raise ad rates enough to offset the reduction in inventory and the network punched the off button on the idea.)

0303_Currency_chart.jpgMedia buyers said the decision to reduce commercial clutter in Empire didn’t mean that Fox left a lot of money on the table as the show grew into a huge hit.

“These things are so hard to see in advance,” one buyer said. “I think they did as good a job as they could, given what the prospects of the show were. It’s not really that strong a marketplace now anyway, so there’s only so much you can push price. I don’t think they’re looking in the rearview mirror and thinking they could have done a heckuva lot better.”

The March 18 finale is a different story, however. “You’re dealing with a handful of units and you’re going to try to get as much as you can,” the buyer said. “They’ll probably get a movie studio or someone else to pay that price.”

While networks often air the premiere of a series with limited commercial interruptions, Fox has continued to keep the number of spots down throughout Empire’s run. The show this season has averaged about 12.4 commercial minutes per hours, compared to 16 minutes per hour on other Fox shows.

The biggest advertisers on Empire have been Warner Bros., Verizon, AT&T, Ford’s Lincoln division and the Amazon Kindle, according to iSpot.tv. (The total also includes a substantial amount of promos for Fox.)

The popularity of Empire is also driving video-on-demand ad sales for Fox as viewers who haven’t been watching check out what their friends are talking about and try to catch up. Generally, when networks sell ads in on-demand programming, they sell a package of shows on the schedule, not just an individual show. But buyers note that because VOD viewers will order up only the shows they want to see most, on-demand usually provides a mix of what advertisers consider high-quality programming, including Empire.

All in all, the show should be a boon for Fox, whose ad revenue was down 6% to $947 million, according to MoffettNathanson Research.

Whether or not Fox decides to continue to present the show with limited commercial interruptions, any short-term sacrifice will pay off for the network because a hit show is an important building block in the upfront, and beyond.

“It’s one of those classic cases of a show just striking a chord at the right time. There’s nothing else like it on TV,” said the buyer. “It’s very well produced, with great talent in front of the camera and behind the camera. All of those things sort of came together at once and I’m sure it’s gratifying for them that when you can put all those pieces together, a broadcast network can still get a hit.”