TV: Chicken Little Was Right!

Posted on November 25th, 2008 by Joel Kirstein

Chicken Little was right! The Sky is falling if you see what is happening behind the TV screen. There is a great article in Variety that was posted on TalentZoo.com that shows how deep the economic meltdown really goes. When the broadcast networks are considering some of the most drastic measures I have seen in their industry as a result of the current unstable circumstances.http://www.variety.com/artic/VR1117996347.html?categoryid=1019&cs=1

The major broadcast networks are seriously considering making more blocks of broadcast time, weekday evenings and Saturday mornings available to their local network affiliates because of the lack of ability to sell programming that sponsors are willing to buy.

As the oxygen line for the broadcast industry, selling ad time is now bordering on the absurd. Ad time is vastly over-valued and perversely over-priced and now coupled with mega-advertisers like the auto industry, the airlines, banking and retailers in deep financial crisis, what we see happening can only be described as the perfect storm!

It’s not likely that the industry benchmark of Super Bowl ad time escalating year after year is going to continue in 2009. Networks like NBC, ABC, FOX have a bit of an advantage because they are part of a larger conglomerate. Expect to see a time very soon when ads for GE light bulbs and appliances, Universal Studios Theme Parks and commercials for any other NBC sister-company airing exclusively on NBC. ABC has the Disney Theme Parks, entertainment, and consumer products to their broadcast minutes populated by their family of Disney-owned entities. FOX has the benefit of Rupert Murdoch’s very deep and diverse global pockets. The real question is do we really need 5 broadcast networks with so many available, pay-as-you-go cable options?

PBS has never had to solely rely on ad revenues to keep afloat. They just have to weather the storm if things get worse and charity donations plummet. I’d hate to see Sesame Street disappear as a result. CBS, owned by Viacom might be most adversely affected by this, because unlike the 2 other members of the Original 3, CBS’ parent corporation Viacom’s portfolio of companies are essentially all broadcast networks like BET, MTV and Nickelodeon, to name a few. How many commercials can CBS and all their cousins run on their networks for all their other networks? Let’s see how Sumner Redstone tackles this challenge?

The broadcast industry has the misfortune of pricing themselves out of reality at the worse possible time. With television being under siege by the Internet, gaming and everything else you can make a case for, the biggest assault on television is the industry itself. Besides insane ad rates for shrinking audiences, shitty-quality content and a total lack of foresight when it comes to non-traditional competition.

I cringed when I read the words “Network Bailouts?” Of all the things I can do without, broadcast TV is at the top of my list! I’m against the government bailing out industries that have been the antithesis of “best practices.” If the networks have the temerity to go to Washington, with hat in hand, on bended knee asking for a hand out, they should be drop kicked down the US Capitol steps!

When incompetent financial leadership and corporate greed punishes autoworkers on the line in Detroit threatening their jobs and people’s 401K Plans are emptied because the stock market on Wall Street has been resembling a roller coaster ride careening out of control thanks to criminal speculators and financial interlopers, it’s a crime! But these industries are a “must have” when it comes to getting the economy back on track. I just can’t stand the idea of taxpayers having to pick up the tab for irresponsible fat cats like Citigroup, Ford and GM. Broadcast networks are not a “must have” industry.

CBS (or any other network) can’t be added to that list just because the number 1 rated network can’t survive a severe ad revenue decline. The government doesn’t bailout newspapers that go under, why should it save CBS on the taxpayer’s nickel? Kind of hypocritical televising a show on your network called “SURVIVOR” when that same network lacks a similar sense of true resiliency and endurance!

The auto is definitely a tent pole of the the US economy, like the housing industry. The television industry is not! Television has become so fragmented and categorized by specific interest and topic, who needs outdated business models, badly run, inefficient financial monoliths that seem to think they have an emotional entitlement to taxpayer money because they were there when television started!

JOEL KIRSTEIN is a Creative Director who has been in the Ad Agency trenches for 25 and he thinks that buying “air” is the biggest scam next to buying bottled water!

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