Soft Market, New Tech Could Narrow Cable Ad Gap Cable TV shows earn less from advertising than their broadcast brethren, even if the shows have the same ratings. But the gap may be slowly shrinking, and cable providers are looking to the weakening ad market — and new technologies — to make it happen even faster.
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Soft Market, New Tech Could Narrow Cable Ad Gap

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Soft Market, New Tech Could Narrow Cable Ad Gap

Soft Market, New Tech Could Narrow Cable Ad Gap

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From NPR News, It's ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Michele Norris. We're all familiar with the trouble in the American car industry: A single, important market is dominated by a few huge businesses for decades. The world changes around them. New competitors bring fresh ideas, but the behemoths cling to their outdated ways. Then, the recession comes along and magnifies the problems they've had all along.

SIEGEL: Well, the same thing is going on in broadcast television. Those older networks - think NBC or CBS - are seeing their ad revenues evaporate. We've been reporting on how the recession has affected advertising and NPR's Neda Ulaby reports that cable TV sees an opportunity.

(Soundbite of TV show "Seinfeld")

Mr. JERRY SEINFELD (Actor): (as Jerry) Helloooooooo!

NEDA ULABY: Back in the days of blockbuster shows like "Seinfeld," broadcast television could easily justify exorbitant prices for primetime TV ads. Television then was the big four: NBC, ABC, CBS and FOX. But those slowly crumbling monoliths have not yet adjusted to the new realities of television.

Mr. DAVID LEVY (Sales, Turner Broadcasting): Consumers don't really the know the difference between broadcast and cable anymore. They know television.

ULABY: David Levy runs sales for the cable company Turner Broadcasting. One of its biggest hits is TNT's police procedural "The Closer," starring Kyra Sedgwick.

(Soundbite of TV show "The Closer")

Ms. KYRA SEDGWICK (Actor): (as Deputy Chief Brenda Johnson): All right. So there's one bullet for the security camera. And one bullet for the manager. One for the young lady, but I count four casings.

ULABY: "The Closer" averages about seven million viewers. Even though it's one of cable's biggest scripted hits, the amount Turner can charge for an ad during "The Closer" is less than half than what NBC can get for even one of its weaker shows. People like David Levy are hoping the recession could help level the playing field.

Mr. LEVY: Broadcast networks have been rewarded really for past performance in shows that appeared on the networks, five, 10 and almost 15 years ago.

ULABY: Less than half of TV viewers watch traditional broadcasting during primetime. Yet, the big four takes most of the ad dollars, says Derek Baine(ph). He analyzes the TV industry and he says people not only don't care what channel shows are on, they don't even care when they're on.

Mr. DEREK BAINE (TV Analyst): They watch them online. They record them on their DVR, and to a lot of people, when a program airs is becoming less and less important. And so, that's really a challenge for the broadcast networks.

ULABY: Let's take an example: Thursday night has for years been the golden goose of scripted television.

(Soundbite of TV show "Seinfeld")

Mr. JASON ALEXANDER (Actor): (As George) What is Holland?

ULABY: For decades, the big four duked it out every Thursday: the night of "Cosby," "ER," "Seinfeld."

(Soundbite of TV show "Seinfeld")

Mr. SEINFELD: (as Jerry): It's a country right next to Belgium.

Mr. ALEXANDER: (as George): No, that's the Netherlands.

Mr. SEINFELD: (as Jerry): Holland is the Netherlands.

Mr. ALEXANDER: (as George): Then who are the Dutch?

ULABY: It turns out that movie studios wanted to pay top dollar for Thursday's giant audiences.

Mr. BAINE: Most people make their decisions for the weekend, what movies they're going to see, pretty much the last minute.

ULABY: So this weekend it's "Angels and Demons."

(Soundbite of TV ad for "Angels and Demons")

Unidentified Man #1: He exposed one of the greatest cover-ups in human history.

ULABY: Columbia Pictures wants you to see this trailer for "Angels and Demons" now, not when you get around to watching Thursday night's shows this weekend. Audiences are not only watching when they want, they're spreading themselves around through hundreds of channels. "Seinfeld's" mass audiences are gone. The big four are also failing to capture niche audiences, like kids. They're all watching Nickelodeon.

(Soundbite of TV show "iCarly")

Ms. MIRANDA COSGROVE (Actor): (as Carly) Okay, next on iCarly, Sam and I were going to shave some stuffed animals.

Ms. JENNETTE MCCURDY (Actor): (as Sam) Which is always a good time.

ULABY: At a moment when old school broadcasters like CBS and ABC are posting millions in ad revenue loss, a consortium of cable networks is developing new ways to target consumers just like you. David Verklin is in charge Canoe Ventures, a group including such heavy hitters as Comcast and Time Warner.

Mr. DAVID VERKLIN (Canoe Ventures): Our research shows that about a third of all the ads you're seeing today are ads that you probably shouldn't be seeing in the first place.

ULABY: New technology will, within the next year, says Verklin, customize TV ads in millions of homes.

(Soundbite of TV show "It's Me Or The Dog")

Unidentified Man #2: On this episode of "It's Me Or The Dog"...

Mr. VERKLIN: Think about addressable advertising coming to TV. This is the vision and promise of dog food commercials only happening and occurring in houses that own a dog.

(Soundbite of TV ad for Purina)

Unidentified Man #3: A groundbreaking 14-year study by Purina proves that Puppy Chow...

ULABY: David Verklin sees the economic downturn as a chance for cable advertising to establish more equality with broadcast. Some analysts predict broadcast ad sales could fall as much as 20 percent in the next year. Derek Baine.

Mr. BAINE: A lot of the national networks have been very stubborn and held pricing firm or only dropped it a little bit.

ULABY: At least, he says, broadcast television is not asking for a government bailout. Not yet. Neda Ulaby, NPR News.

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