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Big Bucks for Cable Yuks

Buyers steamed about USA Network's pricing for 'Modern Family' 5/13/2013 11:20:49 AM Eastern

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Memo
From the Ultimate Upfront Market-Watcher

Kimmel:
The Joke's on the Buyers

Modern
Family
is
coming to cable, but it isn't funny to some media buyers how much NBCUniversal
is looking to charge to advertise for reruns of the sitcom.

"If you take a look at what they're trying to get for Modern Family,
holy cow, I'm better off buying Modern Family on ABC," said one
senior media executive.

The executive said NBCU is asking for 85% increases above USA's current
primetime prices for Modern Family spots.

USA, whose presentation on May 16 evening closes out Upfront Week, was the
most-watched cable network in primetime last year. NBCU CEO Steve Burke has
told analysts his goal is to raise USA's advertising rates. But the network's
ratings are down 13% in the 18-49 demo this season, and according to SNL Kagan,
ad revenue was down 3%, to $998 million.

The move also comes as cable networks are looking to close the price gap
between how much advertisers pay for spots on top broadcast shows and how much
they pay for the growing number of hit cable originals. Cable networks pitch
their originals as "broadcast replacement."

"When you tell NBCU we're not going to be able to pay this to be on USA,
that it's just not going to happen, the response is, ‘Well, take [dollars] from
[broadcast] primetime," the agency executive said. "Well, why? So I
can get reruns of a primetime show?"

Another senior buyer addressed the situation via social media. Last week, Jason
Kanefsky, executive VP, strategic investments at Havas Media, tweeted: "I
applaud USA's commitment to secure highquality original content &
acquisition. Price check needed."

In an interview, Kanefsky added, "You can debate the cost of Modern
Family
. But there are hundreds of other properties that advertisers appear
to be overpaying for. Some will see the value and be willing to pay for
it."

Linda Yaccarino, NBCU president of ad sales, calls Modern Family
"the best of the best" and expects it to be in demand by advertisers
on USA. "When you dig deep into the power of Modern Family, it's
actually quite a unique program," she said. "It's very upscale. It is
a show where the viewers are so intent and so involved with the characters that
brand recognition for commercials that air in Modern Family out-delivers
just about every show on television."

Before joining NBCU, Yaccarino helped launch The Big Bang Theory on TBS,
where it drew top ratings and ad rates. She'll push for the same for Modern
Family
. "There's been a marketplace that's been established for
top-tier off-net sitcoms, and I think Modern Family will find a very happy
place in that price point that has already been established," she said.

While USA can't offer product integration into the Modern Family
episodes it airs, the network is putting together the kinds of special
sponsorship packages attractive to advertisers looking for more than 30-second
spots.

USA is dividing up this year's fourth quarter into two halves; the first will
be the launch period and the second is the holiday period. The network is
courting only four sponsors for each period.

"We don't want to create a cluttered environment. For us, this is making
sure that we have big launch partnerships that can have impact and not create a
scattershot marketplace," said Alexandra Shapiro, head of marketing at
USA.

Among the ideas USA is pitching to potential sponsors is creating a content
package for the ultimate Modern Family fan; a mobile tour featuring a Modern
Family
Mobile Portrait Truck that will allow families to take portraits and
holiday cards and be featured in an interactive gallery online; and a Modern
Family
Week that would involve multiple NBCU units and tackle the issues
faced by modern families.

For film studio clients, USA is teaming up with NBCU's Fandango movie site to
create custom Modern Family Weekend Ticket content to air within
episodes and online at Fandango.

USA also plans to have a second- screen experience for every episode of the
series, and there will be ways for sponsors to align with that, Shapiro added.

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