Skip to main content

Syndication's Challenge To Fit In

Not that it's ever easy, but syndication faces a particularly tough upfront market this year. An uncertain economy and ever increasing competition for ad dollars from media old and new have created an environment where syndicators are reevaluating how they do business and manage to not only survive but thrive.

B&C's P.J. Bednarski sat down with sales executives for three of the major syndication companies to get their view on where the business is heading. Sitting in at B&C's New York offices were Howard Levy, executive VP for Buena Vista Television Ad Sales; Bo Argentino, senior VP, advertising and marketing, NBC Universal Television Distribution; and David Barrington, senior VP/general manager, Twentieth Television. All are members of the Syndicated Network Television Association (SNTA), the trade organization that represents the top syndicators.

The whole television market has changed so dramatically in the last year and a half. I wonder at all these platforms that are coming out, how that actually plays out for syndication. It seems that you now compete with people who have DVRs or are able to go online and watch something a day later. Is that a danger for syndication?

BO ARGENTINO: I don't see it necessarily as a problem for syndication any more than any other platform. In the case of off-nets and certain genres of programming, people know that they're tuning into a repeat and they've continued to anyway because they're going back to their best-loved episodes. And in the case of first-run, again, you have genres of programming that are unique to syndication and really don't exist elsewhere else.

So in a couple of cases, whether it's newsmagazines or talk shows, they're very unique to syndication. So I don't think that it'll necessarily impact in the short term. Long term, it's harder to say.

DAVID BARRINGTON: And [the proliferation of new-media distribution systems] is not, by any stretch of the imagination, going to be a light-switch–on, light-switch–off type of thing. It will gradually transform the shape of not only the business but the viewers.

As our children grow up, they will watch TV a lot differently than we did as kids. They have a lot more options; they are much more adept with using the technology; they're able to multitask a little bit better than we can—or at least a little bit better than I can—so it will change.

But in the short term, in the next three years, five years or so, there's still going to be a cable marketplace, there's still going to be a syndication marketplace, there will still be a national broadcast, prime time marketplace. Not a lot will change.

HOWARD LEVY: I agree with both David and Bo. Things are changing, but as new opportunities arise, it doesn't mean the syndication companies can't participate in the new opportunities. There are no rules that we're barred from the arena. You're going to see all of our companies do exciting things across every part of the companies.

But your jobs will basically change as you sell and compete against other program platforms and also sell those platforms.

BARRINGTON: Exactly. We'll grow as content finds different ways to the consumers.

This year, there are four new talk shows. Do you see a danger of oversaturation?

HOWARD LEVY: I don't think the market has been oversold in talk shows. I think that you had a series of talk shows that just haven't quite clicked in the past. I think a lot of times when those time periods go away, you get a repeat or somebody is putting in a second run of a talk show. So I don't know if there are fewer talk shows on the air than there were. I think that some of them now have more double runs.

Syndicators seemed pleased at the NATPE convention in January that, for a change, virtually every major show launched last year is coming back. Does that reflect well on you, when you are going to advertisers, that you have returning hits that seem to show some stability in the syndication market?

BARRINGTON: Sure. You see that there are fewer shows being introduced year in and year out. Even though there's a few more this year, it's because there's been so many shows on the air for 15 or 20-plus years.

The time periods just aren't available because a station is not going to take off ET or Oprah or Regis or shows of this ilk to launch something brand new. They're going to do maybe another double run of a very successful program.

That in and of itself is the best story we can put out there. Some of the longest programming, the most successful programming comes out of the syndication marketplace. So you don't need to introduce 10 new shows a year because you've got 15 shows on that are working fabulously well.

LEVY: An advertiser would always, if they had their druthers, prefer to buy something with a track record. However, they also know that, once a track record has been established and it's a good one, they're going to pay a higher rate going in than if they had supported the show in the beginning. So that's one of the Catch-22s that you see. Everybody wants a track record, but the best deals are the ones where people go in on a show at the ground floor.

This year, looking at the up front market, it seems to me the economy is still sort of wobbly and the idea of where advertisers and agencies are going to put their money seems to be even a little more uncertain than usual.

ARGENTINO: I agree. But when you think about the national advertising clients and taking money out of national broadcast and putting it into these new technologies, you don't need that much money, nor are there that many places that people know exactly what to expect, how to measure, how to quantify. And so I don't think you're going to see too much money coming out of those national platforms because they are still the best place to get a broad message out.

There are other things that are uncertain. Agencies are still set up to buy national media. I'm not sure that they all know exactly how to evaluate and whether they want to recommend to their clients that they drop something that's been working for years and years, especially in daytime, where it's really a predominant part of our business because the networks have programmed less and less. That's going to continue to be an important daypart. It's efficient, and it's a good place—a good, safe place. I think that they'll continue to experiment, but they need to keep the national platforms.

LEVY: What we've done is try to set ourselves up so that we have a stake in really wherever the advertiser wants to put their money. So I'm in charge, my group is in charge, of selling all the national commercial time. We're also now, for the first time, going to be selling the inventory on the Web sites, so we'll sell the Regis and Kelly Web site and Who Wants To Be a Millionaire Web site and whatever sites are going to come under my domain, as well as all the brand integrations under my domain.

If advertisers have monies and different options, then at least we're coming to them with multiple solutions. We can work with you on the Web site, we can work with you on promotions, we can work with you on national media, we can do everything.

BARRINGTON: I think that advertisers are trying to learn as much as we're trying to learn at this point in time because it's not necessarily about today. Because the fact of the matter is that network prime time and syndication ratings are still doing incredibly well. There's still a tremendous mass-reach medium that we have available to ourselves day in and day out. Is that the way it's going to be 10 years from now? [Alternative delivery sources now] are not a billion-dollar-plus marketplace by any stretch of the imagination. It's not going to really affect us all that much right now. But advertisers are looking around at different options.

LEVY: They're looking for solutions to their marketing needs. If you can go to somebody and work up some kind of plan for them, like if we go to Live With Regis and Kelly, for example, we have guests every week, and normally three or four of them are going to be in a movie at some point that week.

So if we can have that movie's description on the Web site and then have a link to a movie preview or a 30-second spot, that gets the message out; it's not just wallpaper. I think they're looking for marketing solutions rather than just wallpaper.

BARRINGTON: If you can provide unique content from a different distribution platform, if there's some way to get involved in that, it's driving our viewers and their consumers to someplace different because it's the only place you can get it.

But from what you can tell, do enough visitors use those alternatives to make it worth the money?

ARGENTINO: I think it's pretty early to tell, although it's just that much more targeted than anything else that's out there. So they're balancing a national campaign with something very targeted. And they are experimenting a little bit. I mean, I think it depends on what they're doing and how measurable it is. If it's on the Web site, you can tell because of hits. And if it's contest-driven or sweepstakes-driven and it's a mobile execution and it's driving people into a fast-food restaurant or a quick-serve restaurant, they can measure that.

I think a lot of this also comes from consolidation on both sides of the business. You know, at first it was a lot of consolidation on the studio or content-provider side. Then there was a tremendous amount of consolidation on the agency side, and now the marrying of both. And they are looking to accomplish as much of this from the multiplatform, multitechnology executions where they are because, otherwise, they can't service their clients in these new areas.

BARRINGTON: We're setting ourselves up for the future. I've got to make sure I know what I'm doing going forward to move my business forward for both ourselves and for the consumers and the marketers. That's the most important thing that's going on right now.

It seems to me it will be a fairly careful upfront because of the economy, the war, gas prices.

LEVY: It's too early to predict these things. We don't know if there's going to be a huge advertiser coming in that could change the mix and promote the upfront, or somebody pulling out of the upfront.

I think the economy is rolling along, I don't think it's soft, by any means. There are some portions of it that are soft, and there are some portions of it that are very robust. I think you don't have an economy anymore; you have a lot of mini-economies.

BARRINGTON: We have no idea what the upfront's going to be. But at the end of the day, it's been a very good scatter marketplace, particularly for some of the upper-echelon product. Very, very good scatter market.

There are major problems, it seems to me, in the auto, pharmaceutical and food businesses. Do those three categories scare you some this year?

ARGENTINO: I think, with pharmaceuticals, it can be a little bit touchy because you don't know when they're coming in. But they generally are in at some point. It can be that they're not ready because of a product not being ready or approved, or they don't have the right creative, you know, to include all the disclaimers. But we've seen them be steady [advertisers] throughout the upfront and scatter [market]. The financial category has been pretty consistent.

There's also been a lot of experimentation by the autos. And I think they're willing to look at things that have been around forever and maybe try these places because they seem to be more willing to try different strategies in a pretty challenging marketplace for their business.

BARRINGTON: Keep in mind that none of this is unique to our marketplace, either. We're just one component of the national broadcast marketplace.

It seems there are so many easier, more focused places to sell than syndication.

ARGENTINO: I think that the single most difficult thing is to get advertisers and clients to understand our business better. And once they do, they generally find an opportunity to include us on some level. And then you hope that they build on it because, when you think about a business where it's important to evaluate the ROI [return on investment] for what you're spending, our programs are evaluated individually. And I don't think you can do that almost anywhere else. So no matter what you're buying from us, you get to determine whether that particular program is being priced effectively and efficiently.

LEVY: Our biggest advantage to the advertiser is that we're going in program-specific on their account. Name me a cable network that goes in and targets really every single half-hour that they have on their schedule. They don't; they sell rotators. The networks sell as prime time blocks, as daytime blocks. We sell as individual programs.

It's weird. In one way, there's a reputation that nothing “sticks” on syndication. But then there's Entertainment Tonight and Wheel of Fortune and Seinfeld. There's a lot of stability. Do you sense that disconnect?

LEVY: It can be a frustration because you know you have something terrific. In fact, the ending line in our presentation is that the newest thing or the best thing is right in front of your face.

BARRINGTON: One of our greatest benefits is what we just spoke of, which is that we're talking about programming. There's no Buena Vista, there's no Columbia/Sony, there's no 20th Television. You're buying a show. But because of that, on the flip side, when something is cancelled or doesn't perform as well, people are focusing on that one show. Well, talk about the other seven shows on my roster which are doing fabulously well; talk about the two that are over-delivering this year. We're held to a very different standard, at least as far as I'm concerned.

LEVY: Well, [our slogan] this year is “Sometimes the next best thing is the thing you know best.” That's how the quote goes.

ARGENTINO: That's a good one.

BARRINGTON: That's creative. Is that yours?

LEVY: Yeah. [laughter]

At NATPE this year, all of you must have been flipped out by the announcement of The CW. Did you come out of there thinking that there is going to be a new market of indies coming up?

ARGENTINO: I was optimistic, and I don't think it's turning out to be quite as wonderful as I had thought. I thought it might open up some time periods for our shows, and it still may because there are still some unaffiliated stations. But I don't think it was quite as dramatic as I would have liked or hoped.

LEVY: It blindsided everybody. It just kind of took over a lot of conversations.

For us, I'm not sure exactly what shows we had that would've necessarily gone in there in prime time, so we're kind of questioning that, too. Dave, I'm sure, has a whole different perspective.

BARRINGTON: I've got an entirely different perspective. [laughter]

LEVY: I'm interested more in his perspective than my perspective.

BARRINGTON: Well, believe it or not, even in our suite, there were not a lot of rumblings about this is what is going to happen, this is what's going down. I mean, the fact of the matter is that we spent—myself and Bob Cesa [executive VP of ad sales for Twentieth Television.] and all the executives of News Corp., weeks running numbers and trying to figure out exactly what we wanted to do [after the announcement].

So starting My Network TV was not all a fait acomplis by any stretch of the imagination. Fox didn't have another network. They looked at a tremendous amount of options, and, obviously, a lot of that was borne by network TV, which we're selling as well.

Did any of you get any bump in business because of The CW and My Network TV situation?

LEVY: This book isn't written yet. Everybody is kind of looking to see where this is all going.

BARRINGTON: I tend to doubt that you're going to see too many stations decide they're going to go independent at this point in time. We will have, as far as clearances [for The CW and My Network TV] are concerned, exactly what the other two networks currently provide.

Is product placement really a looming opportunity for you? Is that sort of a big uptick for any, all of you?

ARGENTINO: I think it's an opportunity that a lot of people want to explore, but that may be a misnomer. And I've heard it called so many different things. The advertisers and the marketers really want it to be brand immersion and product integration and branded television. But it's not so much product placement.

That's still an old business with the studios and the producers working up deals. But I do think that more and more advertisers want to dip their toes in or go a little bit further and do something that's different. Those that were doing it 10 years ago or five years ago are looking to do something new and different, and that's where they're exploring the new technologies.

LEVY: The term “product placement” again implies wallpaper. I think what they're looking for is kind of brand solutions and a way to integrate their ideas and their message into shows that are appropriate.

We've done, I think, some really good ones, and one that comes to mind is in Millionaire, where we extended the ask-the-audience category out with America Online, so when we ask the audience, at the same time, we send out an instant message to hundreds of thousands of people that have signed up for the program on their desktop in real time: “Bo Argentino needs your help right now.” And what happens is, on the screen, you see the studio-audience measurement and the AOL-audience measurement. So you get two different things.

For Tony Danza, Olive Garden sponsored the cooking segment. We had their chef on four times a year, and the chef would come on and cook a meal, a dish that was going to be featured at the Olive Garden for that month. So there were real tie-ins. And Chef Paolo Lafata—there was a real tie with Tony. He really liked the guy. Tony actually went down to Florida to meet him to make sure that the chemistry was there. And those are the things that people want. I don't think they're looking to see a Coke can on the table.

ARGENTINO: Right. They want to see that there is active use or engagement.

LEVY: How do you measure these things? Is it the time that the Olive Garden chef is on the air with Tony, do you measure [product placement] that way? Or when he comes out and he leaves, Tony gives him a big hug and kiss? I mean, that's time.

ARGENTINO: That's double. A hug and kiss. [laughter]

In your business, then, you'd be selling six products or so at the same time. You can do the Internet a bit, you can do advertising in the show itself, and you can do product integration just for starters. You really have to package now more than you did before, I think.

BARRINGTON: The days of spots and dots are over. You figure out what the marketing campaign is, you figure out what your goals and objectives are. You walk into a meeting and say these are all the touch points that I have available, let's sit down and figure out the best ways to integrate your message into our product to reach your consumer, the best way possible to drive sales. We've morphed into marketing people. You really have to; you have to be able to speak to the marketing angle as opposed to just going on and saying I've got 30s and 15s [commercial positions to sell]. Those days are over.

ARGENTINO: And because, remember, these monies come from different places. So you are looking to access as much of it as you can, obviously, but in the old days, there was the national media budget, there was the spot budget, there was the promotional budget, very often at different agencies, different holding companies.

How do you go about proving ROI?

LEVY: It's difficult. You show them what you've done, and at some point, they'll come up with some kind of measurement. If there's a sweepstakes, as Bo said before, and they're looking for a certain amount of response, you can do it on that basis. But it's a difficult thing to quantify. And that's not a syndication issue.

BARRINGTON: In our presentation, what we've done is opposed to just selling our product to the ROI and what's measurable, what isn't measurable. What we're trying to say is, you're spending a lot of money in national broadcast, all of the other stuff is here, the marketing elements are fabulous, but at the end of the day, you're still spending billions and billions of dollars for 30-second units and 15-second units.

So are you getting what you pay for as far as the syndicated product and, specifically, Twentieth? We spent a lot of time building up on [SNTA President Mitch Burg's] ROI presentation online and what he's presented to a large number of our clients and buyers. What he's told them is that, with us and our sitcoms, our high-rated sitcoms, two of the three positions that you buy are “A” positions.

Commercial retention—we're looking at minute-to-minute ratings. It's available to all the advertisers they are looking for. We have short breaks. We're much less cluttered as far as non-program time in networks and cable. So, again, let's look at what you can see, which is quantifiable data.

Syndication is less cluttered?

BARRINGTON: I'll speak for my own programming—I don't want to speak for everybody else in the room or somebody who's not in the room—but relative to non-program time? Half-hour to half-hour, hour to hour? Absolutely. You just pull it right out of the books. But if you're looking for a return or to make sure that your commercial is heard and to make sure that your commercial is seen, we in this room have some of the best environments you could possibly have in the national broadcast marketplace.

LEVY: And our commercialization is consistent year after year after year. The networks are adding time, the cable networks are adding time. I guess I never heard of them taking away time. But if you take a look, our programs are cut and sold to the stations under contracts.

So it will say that you have in this show two or three national 30s, and there are six local 30s and one 10-second fee spot. I mean, that's it. You can't go back and say, oh by the way, we're adding another two 30s because the market is tight or we were under budget.

ARGENTINO: Or because we have a hit.