ABC attempts to change the network TV model -- one 30-second commercial at a time
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
The economic relationship between the major TV networks and their affiliates was established more than half a century ago when the networks decreed that they would control the bulk of the commercial time during the prime viewing hours of 8 to 11 p.m. That dictum has remained largely unchanged, with the networks -- which supply the programming -- keeping 10 to 12 minutes for national advertisers and giving local TV stations a mere two to three minutes.
On Wednesday, ABC unveiled a ‘groundbreaking’ plan that it said would alter that decades-old system. It shouldn’t lead to more commercials being squeezed into prime time, but it is likely to change the mix of commercials viewers will see. This fall, that probably means fewers ads from financial firms and cellphone providers and more -- gasp! -- political ads. Yes, that means more commercials featuring Meg Whitman, Jerry Brown and probably a lot of smoke over California’s marijuana initiative.
In late October, the Walt Disney Co.-owned network plans to roll out its newly unveiled Inventory Exchange System. Billed as a way to make more money through ad sales, the exchange was designed to allow the network and stations to swap advertising time during periods of high demand.
For example, with the November elections looming, available commercial time on local stations is becoming scarce. So ABC plans to let stations buy additional commercial time -- inventory that had been set aside for the network’s national advertisers -- that the stations can use to sell to candidates as well as their usual complement of car dealerships and fast-food restaurants.
The new system ‘addresses the basic tenet of supply-and-demand by taking advantage of pricing differentials and marketplace dynamics among various regions, markets and stations,’ ABC said in a statement. ‘With IES, the network creates the opportunity to move additional ad inventory into the local markets at periods of high demand, including holiday shopping, end-of-month car sales, elections, etc.’
Bill Hoffman, general manager of WSB in Atlanta, said in a statement distributed by ABC that the inventory swap ‘looks to be a real winner for both sides.’
ABC has applied for a patent for its ad system, which the network said was designed by a computer program that ‘models monetization of inventory beyond the traditional value that either the network or stations might have obtained.’
-- Meg James