Big Bucks for Cable Yuks - Broadcasting & Cable

Big Bucks for Cable Yuks

Buyers steamed about USA Network’s pricing for Modern Family
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Corrected May 13 at 3 p.m. ET to reflect ratings in 2012 and this season.

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. The network's ratings were down 13% in the 18-49 demo in 2012, and have been flat this season. According to SNL Kagan, ad revenue was down 3%, to $998 million.  USA says ad revenues for 2012 were flat, exceeding $1 billion.

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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