Upfronts 2014: Networks push to be paid for longer viewing window

Call it the C-7 smack-down.

Broadcasters have been lobbying hard to be paid for viewers who watch a show within a week after its network airing.

Advertisers have largely resisted the move because it would mean having to fork over payments for an audience that advertisers now get for free.

But delayed viewing has become increasingly prevalent now that digital video recorders are deployed in about half the homes in the country. The devices allow people to record and watch a show hours, days or weeks after its air date.

A few years ago, advertisers grudgingly agreed to compensate the TV networks for the viewers who record and then watch a show episode within three days of its broadcast. That industry standard is known as C-3, which is short for commercial ratings within three days.

But broadcasters want more.

They are lobbying to be paid for viewership within seven days of the network broadcast, a window known as C-7.

This week in New York, network advertising executives have expressed confidence that they will be able to wrangle the longer payment window from advertisers this year.

Some major advertising buyers say they will continue to resist the move. The issue is expected become a point of contention during the annual sales auction, known as the upfront market, which is expected to begin around Memorial Day.

CBS Corp. Chief Executive Leslie Moonves predicted a gradual shift.

A few deals for the current season are structured around the longer payment window, Moonves and other networks executives said.

“This is a time of phenomenal change in our business,” Moonves said Wednesday during his annual press breakfast to unveil CBS’ new fall schedule. “The number of people being counted after the live [broadcast] is growing. There are going to be a lot more deals that are made under C-7.”

It only makes sense, Moonves said.

“When you see numbers like on ‘Elementary,’ whose audience grows by over 4 1/2 million people after the initial airing -- that’s a significant amount of people,” he said. “Viewers are now being counted after the fact.”

A senior advertising executive at another company said that networks would push for a seven-day payment window, or C-7, for advertisers whose spots are not particularly time sensitive.

Some advertisers, such as movie studios, pay a premium to make sure their commercials run on precise days and times. Studios don’t want to run the risk of a trailer landing a few days after a major movie theater release.

Many retail outlets also buy specific time to coincide with a major sale.

But for other advertisers, such as restaurants, consumer product makers, cellphone providers and pharmaceutical companies, the timing of their commercials is less critical. And those are the advertisers who will be asked to pay for viewership in the longer seven-day window, this executive said.