Variety Magazine: Huh!? The CW Fleeced You, Too?

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June 8th, 2008

The CWWe wonder what kind of lap dance the CW must've treated Variety's Cynthia Littleton (or her editors) to. She wrote an article entitled CW Scores Cash in a Changing Market; Advertising Sales Boost Network. According to Ms. Littleton, the CW is the biggest beneficiary of better than expected upfronts.

She then goes on to say that the CW took in about $350 million-$370 million, well off the $600 million-$620million that it rang up last year.

She notes that the CW has 30% less inventory than last year because it gave up 5 hours a week to Media Rights Capital for Sunday nights. While the CW did program the network from 5pm-10pm on Sunday nights, the 5pm-7pm block was typically encore programming of Mon-Fri shows, which could not have commanded what primetime advertising does.

It is seemingly really only giving up 3 hours (7p-10p) and the 30% is also wrong unless you calculate it based on the 10 hours a week CW has left remaining after giving up Sunday nights. Otherwise if you calculate it as a reduction based on the original 13 hours, it's more like a 23% reduction. Update: Media Rights Capital which will program Sunday nights now will actually be programming from 6:30pm-10p (3.5 hours, not 5).

So how it seems is that ACTUAL REVENUES FROM THE UPFRONTS are down around FORTY PERCENT while available inventory (that mattered to anyone) is down less than 25%. Ms. Littleton notes that the CW commanded an 8% rate increase for its Monday through Friday primetime spots, but what good is commanding 8% higher rates if it yields 23% less revenue, and that's based on normalizing for less inventory -- I reduced last year's estimated take by 23% and compared it to this year's estimated take and even then it was still down 23%.

So even when normalized for the reduced inventory it's very hard for me to see the CW as one of the bigger beneficiaries. But the CW just has that good Gossip Girl halo effect, where none of the actual numbers (including $$$$) seem to matter. Freaking wacky.

Am I wrong to expect more from the mainstream media? Is it simply that the likes of Variety doesn't pay its writers and editors enough money to do better analysis and reporting? And it's by no means just Variety. MediaWeek ran a story headlined: ABC's Celtics vs Lakers Draws 9.5 Million Viewers (for Thursday's game). The last sentence of the article reads:

The entire game telecast, which lasted beyond prime time, ending at 11:59 p.m., average(d) 13.4 million viewers.

MediaWeek is owned by Nielsen. Sigh.

Update: MediaWeek is also reporting the 5 hour number and also reports that $385 million was what the CW took in for its Mon-Fri portion last year. We have no way to verify this, but if true it would mean roughly 1/3rd of the upfront revenue collected last year came from Sunday nights. We doubt this, but we don't doubt that the biggest windfall the CW experienced this year was not a result of the upfronts themselves, but from selling the bandwidth to MRC for Sunday nights.

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