NBC Ad Sales Refunds - More Dinosaur Media Woes

Warner Todd Huston
December 11th, 2007 3:04 AM
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The world of entertainment is in a world of hurt. With the massive diversification of entertainment offerings these days, older forms of media -- like movies, TV and newspapers -- are finding a dwindling number of customers as NBC is finding out this month. NBC has found itself in the lamentable position of giving their advertisers refunds because of poor performance in its ratings. The promised number of eyes that NBC promised that advertisers would reach didn't materialize, so NBC has to refund their advertisers for the over estimate of viewers that might see the ads placed on their airwaves. Of course, NBC is trying to keep a lid on this damaging story, but the Genie is out of that bottle. We can surely say that the network's News arms ain't helpin' sales a whole lot, in any case!

Adweek gives us the story:

NBC has quietly begun reimbursing advertisers for fourth-quarter prime-time ratings shortfalls, averaging about $500,000 per advertiser, according to media buyers, marking the first time in years a network has taken such a step to compensate marketers for ratings deficiencies.

It was also reported in Adweek that new network CW has had a loss of ratings and an over estimate of ad revenue, as well. So has CBS, ABC, and Fox, all of whom are giving advertisers "make goods" wherein the networks give ad time in compensation for having overcharged the advertisers.

And what is the culprit?

The nets have blamed ratings softness on the conversion of the upfront sales metric this season from live program ratings to commercial ratings plus three-day DVR viewing (C3). But media agencies contend broadcast prime-time ratings are down significantly even when DVR viewing is added in.

We just might be living at the end of the era of dominance of entertainment by the networks and big entertainment empires. It will be very interesting to see where it all goes from here on out but several hurdles remain to be jumped before the new era of entertainment takes hold. Many questions remain.

  • Will the Internet shape up as a reliable device of delivery for entertainment? (It sure as heck isn't a stable delivery system currently)
  • Will digital storage devices in the amounts of the mega terrabytes range that we all will need to store massive amounts of entertainment soon be cheaply available?
  • Will a new system of storage be developed to solve that problem, perhaps?
  • Will a loss of the big money behind the entertainment giants affect the quality of our entertainment?

Man's ingenuity is a never emptying well, of course, so let's not be too pessimistic. But, we might find more problems than we expect when the big media moguls collapse or scale downward in the near future.

One thing is sure, though. We have an opportunity to break the stranglehold the fringe left has on our forms of entertainment here. Let's hope we can take advantage of this new era.