NATPE: 2011 or Bust

Syndicators will look for the battered first-run market to bounce back. But it won't be this year
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At NATPE 2010, all eyes will be on 2011. That's when syndicators expect the market for first-run television shows to return. Or at least they hope so. The Oprah Winfrey Show will complete its storied 25-year run, leaving stations with an hour of high-revenue programming to fill. And stations are hoping that after a year of mid-term elections, rebounding advertising markets and flowing retransmission-consent cash, they will be back in the black next year.

“The TV station community is lagging behind the network and syndication advertising market by a few months,” says John Nogawski, president of CBS Television Distribution. “They will start seeing that same increase in revenue that we've been experiencing over the past couple of months in our barter sales. Then political advertising will kick in and national business will get tightened up. That should all trickle down to stations and give them some security and confidence.”

Heading into this week's National Association of Television Program Executives (NATPE) conference in Las Vegas, the syndication market remains in the doldrums. At presstime, only one new first-run show from a major studio has been cleared for fall, CBS Television Distribution's Swift Justice With Nancy Grace. Stations' lack of cash forced CBS to sell that show on an all-barter basis, marking the first time a major syndicator has sold a first-run show without cash in the mix.

“We had massive reception because we had a deal that people liked,” Nogawski says. “People had it in their minds that this was the type of deal they were looking to do—no cash, all-barter. All-barter shows like this are a trend only because people had such a miserable year in 2009 that they just couldn't justify paying cash at this point. This should be the only year we see these sorts of deals.”

The market is so tough that Warner Bros. was unable to clear its first-run program, MomLogic, even though it, too, was offering the show on a barter-only basis.

Sony remains in the market with its Harpo-produced program starring Oprah fave Nate Berkus, but questions abound about whether Sony can find a cash-paying client to launch that long-anticipated show this fall. Only NBC is in the market for new daytime programming for fall, and NBC “hasn't shown a proclivity to pay cash,” says one syndicator.

TOUGH TALK

Talk shows in general are a tough sell in this market. “Talk is expensive and its failure rate is high,” says Dave Morgan, president of Litton Entertainment. “That's difficult in this economy for syndicators.”

“Everyone is going back and reexamining their talk-show strategy,” says one syndication executive. “The talent has to be an existing brand that really represents what the show is about. There's no substitute for being on Oprah for several years, or for Nancy Gracebeing on Headline News building her following.”

Instead of acquiring new talk shows, stations are canceling ones that underperform, such as Warner Bros.' Bonnie Hunt and Tyra Banks; renewing out their existing shows, such as NBC Universal's Maury, Jerry Springer and Steve Wilkos, and CTD's Dr. Phil and Rachael Ray; and expanding their court blocks, which can be done much more inexpensively than talk.

That's why shows like Nancy Grace can go for all-barter, and why Litton has successfully resurrected Judge Karen's Court after its former distributor, Sony, exited the court business last year. Two other court shows remain in the mix, Trifecta's Judge Heck and Entertainment Studios' America's Court With Judge Ross; the latter will also will air on ES' broadband network, which is distributed on Verizon's FiOS systems.

“Court works; it makes money, it's stable and it's not expensive to produce, so you get a lot of originals, which is more important today than ever,” says Litton's Morgan.

The third and last show to get a firm go for fall is NBC Universal's off-Bravo Real Housewives franchise, which is cleared in more than 85% of the country. In light of that move, other distributors thought off-cable reality strips made sense, but stations have declined to load up on that genre.

“That's not really a place where we wanted to be,” says one station executive. “To me, those shows represent someone else's brand. And not one of those shows has ever come off cable and worked on broadcast.”

For those reasons, Twentieth pulled its off-NatGeo Dog Whisperer off the market, while Debmar-Mercury and MGM still are offering E! True Hollywood Stories and Cash Cab, either as strips or for the weekend. All the off-cable shows are offered for barter only.

In the end, there are time periods available this fall, even if stations refuse to cough up cash to fill them. “Look how fast Nancy Grace happened,” says John Bryan, MGM's executive VP of broadcast strategy. “Something could happen like that again, but I don't sense it in the marketplace right now. Still, there's always more room than you think.”

CHASING OPRAH

Meanwhile, syndicators are gearing up for Oprah's end, with several distributors mentioning that they plan to test new shows this summer. Almost everything is in play right now when it comes to the Oprah time slots, which are comprised mostly of late-afternoon news lead-ins on top stations.

The ABC-owned stations have long said they would expand their local newscasts should Oprah conclude its run. One rumor has ABC moving The View to 3 p.m., either as a network show or in syndication, although nothing has been confirmed. Should that happen, look for ABC-owned stations and affiliates to put local news at 4 p.m., according to Bill Carroll, VP of programming at Katz Television Group Programming.

“Fox can then run Dr. Oz at 4 p.m., while CBS runs Dr. Phil or Judge Judy and NBC can run Ellen,” Carroll says. “With all of those shows at 4 p.m., why wouldn't you do news? It's counterprogramming.” Another advantage with news is that stations also keep more advertising inventory in news than they do in syndication programming.

Still, that doesn't mean syndicators won't take a shot at winning those slots, with vets such as Warner Bros.' Ellen and Sony's Dr. Oz hoping to move over to those big time periods. Luckily for stations and syndicators, the departure of the high-rated but expensive Oprah should coincide with the return of cash to syndication. What remains to be seen is what stations decide to do with that cash.

Says Litton's Morgan: “That Oprah time period alone could make the difference to the station mentality finally changing back to cash.”

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