Networks Lose Millions on Attack Coverage
Thursday September 13, 7:13 pm Eastern Time
By Derek Caney
NEW YORK (Reuters) - U.S. television networks stand to lose hundreds of millions of dollars from their decision to broadcast commercial-free news coverage of the attacks on the World Trade Center and the Pentagon, advertising executives said on Thursday.
Although the networks say they have no regrets about their decision, citing their responsibility to keep the public informed, the moves could exacerbate a slumping advertising market that has already taken a toll on most media companies.
Jack Myers, chief economist for research firm Myers Reports, estimates that the six broadcast networks -- CBS, NBC, ABC, Fox, WB and UPN -- as well as the cable news channels CNN, MSNBC, CNBC, MSNBC, stand to lose a combined $40 million a day by dropping their ads.
``The loss of advertising revenue is astronomical,'' he said. ''In the worst advertising slump in our history, this really compounds revenue issues for all media companies. It's a devastating blow to the media economy.''
For the time being, the four major networks plan to continue to broadcast news coverage around the clock for the third straight day.
ABC plans to continue its commercial-free coverage into Friday night, while NBC is tentatively planning a return to prime time programming on Friday, although it said that could change depending on events. Fox and CBS have not yet decided what Friday's schedule will be.
CNN, CNBC, Fox News and MSNBC all plan to continue 24-hour commercial-free coverage indefinitely.
Officials for the four broadcast networks declined to discuss the financial impact of around-the-clock, commercial-free news coverage.
``I don't think anyone's thinking in terms of that,'' ABC spokesman Kevin Brockman said. ``This is our responsibility to American viewers.''
One network official said privately that advertisers who had already paid for airtime might even forego asking to be compensated, as is customary, with free ``give-back'' ads for future programming.
In any case, the official said, the financial burden of the TV networks ``pales in comparison to what it is costing the nation.''
The networks will also be cautious about when they switch back to regular programming, according to Donna Salvatore, chief executive of Bcom3 unit MediaVest USA.
``One of the reasons networks have sustained programming is so the advertisers don't look like sponsors of the crisis,'' she said. ``But on the other hand, for viewers, a return to entertainment programming could be perceived as returning to business as usual. Sometimes it feels like when you're watching continuous news reports, you forget to breathe.''
The attacks came one week before the broadcast networks were scheduled to debut their fall seasons, when some of the world's largest companies roll out new product lines. Many of those campaigns are likely to be put on hold.
NBC, which is owned by General Electric Co. (NYSE:GE - news), and Viacom Inc.'s (NYSE:VIAb - news) CBS said they would push back their premieres by at least a week, while Walt Disney Co.'s (NYSE:DIS - news) ABC is considering a similar move.
Fox, which is owned by News Corp. (NYSE:NWS - news; Australia:NCP.AX - news; NYSE:FOX - news) is less affected because its premiere schedule is staggered over several weeks.
Advertisers must be cautious about the campaigns they launch and the context of those campaigns, analysts said.
``Visual images of the horror juxtaposed with advertising images are just not appropriate,'' said Tyler Schaeffer, director of brand media planning for ad firm Foote, Cone & Belding, part of the Interpublic Group of Cos. (NYSE:IPG - news).
Much of the media industry is already reeling from the worst advertising slump in years, as companies cut back spending against the backdrop of a slowing economy. How advertisers react when networks return to regular programming remains to be seen.
``The potential for the slump to accelerate is there,'' Schaeffer said. ``Advertisers become more leery if the economy stays in its slump. On the other hand, advertisers do need to keep their name out there.''
MediaVest's Salvatore is also divided on the issue.
``On one hand, I have to think that companies are going to be worried about what happens to the U.S. economy in general and therefore you could look at that as potentially negatively affecting the amount of advertising they may be willing to invest in,'' Salvatore said.
``On the other hand, it's fascinating how patriotic people have become. Some people may want to signal to the world that America hasn't been beaten. Which way the advertisers will go depends on each one's situation.'' |
