Broadcasters are impressed by Warner Bros.’ pioneering offer of online rights for Two and a Half Men, but say they are no substitute for broadcast-only window.
While broadcasters applaud Warner Bros. for offering them a concurrent Web run of Two and a Half Men when it launches in syndication in 2007, they still say what they really want is to have the show all to themselves—that is, no cable—for at least three years.
“I think it’s a great move and an innovative piece of marketing,” says Greg Armstrong, general manager of Denver independent KUPN, and a fan of the show. “Yes, it’s trying to get the show’s price up, but I can’t blame them for that. I’d pay more for exclusivity than for the digital rights, but there’s value to the digital rights as well.”
Warner Bros. has been having trouble selling the show, even though it is the top-rated sitcom in prime right now. The Fox stations are much more focused on providing news and information, and thus aren’t as interested in off-net sitcoms as they once were. Meanwhile, Tribune, the only other major buyer of off-net sitcoms, is biding its time.
If it can’t get its price from broadcasters, Warner Bros. may feel it has to offer the show early to cable and give broadcasters less than three years of exclusivity. That’s something Warner Bros. and broadcasters say they want to avoid.
Menis a far bigger hit than Buena Vista’s off-beat Scrubs, but when Fox and Tribune passed on that show, Buena Vista ended up offering it to stations on an all-barter basis with a concurrent cable window on Comedy Central. Buena Vista fared better with According to Jim, which includes a three-year exclusive window for the stations.
To sweeten the broadcasting deal for Men, Warner Bros. now says that stations may stream episodes of the sitcom online one week after broadcasting them. Viewers will be able to watch the stream, reversing and fast forwarding at their whim, but they won’t be able to download and keep episodes. All episodes will include advertising, the revenue from which Warner Bros. will evenly split with the stations.
“For the first time, syndicators are realizing that broadcasters need some of the same opportunities that other outlets are getting every day,” says Neal Sabin, executive vice president of Weigel Broadcasting, owner of Chicago independent WCIU. “But the most important thing is where else is the show going to be exposed. On how many other outlets are you going to be able to see Two and a Half Men?”
It remains to be seen, but the digital kicker may not be enough to close the broadcasters at Warner Bros.’ price. Many stations say they are having a hard time making their money back on off-net sitcoms, which is driving them toward first-run programs. A few years ago, stations locked themselves into expensive second- and third-cycle contracts with syndicators for off-net sitcoms such as Seinfeld and Everybody Loves Raymond. Then, Nielsen’s People Meters came along and suddenly stations saw their ratings drop significantly. While stations argue that People Meter data is often wrong, that makes no difference to advertisers, who refuse to pay more to advertise in a show than its ratings dictate.
“We all have shows that are hitting our books that were bought for much bigger numbers than we can now afford,” says one station executive.
And Warner Bros.’ offer may simply be ahead of its time. “I haven’t even considered Web streaming and that certainly wouldn’t make me pay more for any show,” says Caroline Chang, vice president of programming at Cox-owned Fox affiliate KTVU in San Francisco. “We’re trying to monetize our Web site, but making shows available online hasn’t been a high priority yet.”
The offer may be ahead of its time, but not by much. Many affiliates have let the networks know that they are interesting in marketing network shows over their own Web sites either as streams or as VOD downloads. It makes sense to offer syndicated shows, too.
“This will probably be the way future deals are done,” says Chuck Larsen, a syndication consultant who runs October Moon Strategies in Los Angeles. “People use the word sea change. I’m not sure it’s quite at that level, but it’s one of those things that in five years will be in every deal.”