Networks Set to Make Pitches for Big Prime-Time Ad Dollars

It’s a truism of television: eight out of 10 shows fail.

Big stars don’t guarantee big ratings. Neither do producers with a pedigree or writers on a hot streak. Even a superb time slot doesn’t mean that viewers will watch a show.

“It’s a business of failure,” NBC Entertainment President Kevin Reilly said. “But when the elements come together, it can be magic.”

Beginning today, thousands of advertisers will gather in mid-town Manhattan to try to capture some of that elusive magic. It’s the kickoff of the biggest event of the year in the television business, the spring advertising drive known as the upfronts. Network chiefs will unveil their new season schedules and try to persuade advertisers to part with billions of dollars for prime-time commercial spots.

They will make their pitches in such venues as Carnegie Hall, Radio City Music Hall and Madison Square Garden. But they might as well be in a Las Vegas casino because everyone knows that when it comes to picking winners, there’s no sure bet.

Last year, for example, advertisers lined up to put their money on NBC’s “Joey,” a spinoff of the perennial hit “Friends,” which had finished its long run. The new sitcom had a likable star in Matt LeBlanc, two writers from “Friends” and one of the best time slots in all of television: 8 p.m. Thursday. After predicting the show would be “the next big comedy,” NBC executives were raking in about $350,000 for each 30-second commercial spot. But “Joey” veered from NBC’s script for success. It would get solidly beat in its time slot.

Meanwhile, advertisers were dubious about a new ABC show about a group of air crash survivors on a tropical island. At the time, ABC was on the ropes, its top two executives had just been sacked and the two-hour pilot for “Lost” cost a record $16 million. Some advertisers thought the show was too violent to air at 8, when kids would be watching. They scoffed at the size of the castaway cast -- 14 actors -- fearing it would make the plot unwieldy. Commercial spots sold for just $133,000.

“The whole industry thought it was terrible,” recalled Stacey Lynn Koerner, an executive vice president for ad buying firm Initiative. “Advertisers were wondering whether this was going to be like “Gilligan’s Island.” Won’t people get tired of watching these same idiots being lost every week?”

But “Lost” was found by some 18.7 million viewers, crashing its way into the top 10.

“It was a real deal for advertisers who saw it coming,” Koerner said. And those who didn’t? These days, they are paying more than $400,000 for 30-second commercials during “Lost.”

Advertisers aren’t the only ones throwing the dice this week. The major networks themselves -- Viacom Inc.’s CBS and UPN, Walt Disney Co.’s ABC, General Electric Co.’s NBC, News Corp.’s Fox, and WB, owned by Time Warner Inc. and Tribune Co., owner of The Times -- must choose which pilots they’ll pitch to advertisers. In recent days, top TV executives have been in screening rooms in Los Angeles and New York, trying to winnow their potential new offerings.

Only a fraction of the shows under consideration make the cut. Even then, the executives don’t really have a clue how big a hit -- or bomb -- they may have on their hands.

Consider television’s two biggest hits today.

Three years ago, Fox began airing its new show, “American Idol,” during the summer, a season once considered an afterthought in TV scheduling. Same with “CSI: Crime Scene Investigation,” which CBS initially relegated to a Friday night with little promotion. Both shows, which have been shifted to more prominent positions, now are advertising juggernauts.

Network executives say the upfront process -- during which more than 75% of prime-time commercial spots are sold -- is not truly a gamble for advertisers. There is, of course, a huge upside should advertisers buy relatively inexpensive advertising time on a show that vastly exceeds expectations. But should they pay top dollar for commercials on programs the network has pushed and that end up with soft ratings, the advertisers are compensated with additional commercial time.

“If advertisers bet right, they get into a show that’s blazing hot and at a price that they won’t be able to get later on,” said Garth Ancier, chairman of the WB network. “And if they overpaid, then they are compensated.”

NBC found itself in the unfamiliar position of falling short of its ratings expectations this year -- especially when it came to its once-invincible prime-time line-up on Thursdays, the most lucrative night of the week, as advertisers try to influence viewers’ weekend spending.

During his sales pitch at Radio City Music Hall last spring, NBC Universal Television Group President Jeff Zucker told advertisers they could bank on this: His network would dominate Thursday night for the 21st consecutive year. “I’m so confident,” he said, “that I’m willing to predict that our ratings next year on Thursday will be even higher.”

Advertisers opened their wallets wide, betting $2.9 billion on NBC’s prime-time shows -- $500 million more than for the runner-up, CBS.

But Zucker predicted wrong. With “Friends” no longer in the Thursday night mix, NBC’s fortunes faltered. “Joey” has failed to muster even half the viewers who stuck with “Friends,” dragging down the other Thursday programs that followed.

As a result, the network had to compensate advertisers with additional commercial time. The longtime No. 1 broadcaster now is resigned to finishing the season in fourth place. “It’s been a really tough season,” NBC programming chief Reilly said.

Still, advertisers have taken NBC’s stumble in stride.

“They’ve taken care of us, they compensated for the shortfalls they’ve had,” said Andrew Donchin, director of national broadcast for Carat USA, which buys media time for Adidas and Alberto Culver. “They’ve moved advertisers into other shows.”

In contrast to Zucker’s bravado a year ago, ABC adopted an understated approach in its upfront presentation at the New Amsterdam Theatre.

The network had a lousy track record with advertisers after three season’s of dismal ratings. As ABC sales President Mike Shaw recalled: “We had a very angry bunch of customers.”

Steve McPherson, ABC’s prime-time entertainment president, had been in the job just 29 days when he took to the stage. “Listen, in my position talk is cheap right now,” a nervous McPherson told the crowd. “At the end of the day, it’s all going to be about the shows

Among the new dramas he pitched that day was one called “Desperate Housewives,” a racy prime-time soap. Some advertisers thought it might play well among women, but they didn’t think men would settle into an hourlong show about unhappy homemakers. With spots selling at bargain-basement prices -- $125,000 for 30 seconds -- a number of advertisers threw the dice. They hit the jackpot. “Desperate Housewives” quickly emerged as the season’s sensation.

Advertisers who didn’t lock in at the upfront prices are shelling out more than $350,000 for a 30-second spot.

And so it begins again, the annual tango between advertisers and networks. There’ll be snazzy presentations this week and glitzy parties. Ad buyers will have their pictures snapped with TV stars who are required to make an appearance.

But none of this can mask the real reason everyone will be mingling in some of Manhattan’s finest haunts: potentially more than $9 billion in ad dollars.

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Times staff writer Maria Elena Fernandez contributed to this report.