Viewership drops, and networks aren't able to deliver on advertisers' expectations. But will the strike be settled soon?
With the Hollywood writers' strike at the three-months mark, TV networks are scrambling to fill the void of new programming, primarily with new game and reality shows. But even those moves appear to be coming up short: Ratings at the five major broadcast networks dropped a collective 17 percent from the same week a year ago in the networks' most prized demographic, viewers between the ages of 18 and 49, according to new Nielsen Media Research.
Viewer defection is bad enough, but this is a pocketbook issue for the networks, which will have to reimburse advertisers for the ads they purchased on the basis of higher estimated audience size.
"Even with a strike audience, the networks will still draw huge numbers, so you won't see a mass advertiser defection," says John Consoli, senior editor of Media Week magazine. "But the networks will fall short. They'll have to give 'make goods,' or free ads back to the advertisers, which is inventory they can't sell."
But networks are running out of "make goods," forcing them to pay out of their own pockets. In December, NBC started to reimburse advertisers for the drop in its fourth-quarter ratings, an average of $500,000 per company, according to a recent Media Week article by Mr. Consoli.
Late last week, however, hopes rose that the strike could be resolved soon: Negotiations between the striking writers and studios had made notable progress, and a tentative deal could be reached this week, according to wire-service reports, citing unnamed sources.