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[tr height="20"][td style="padding-top: 8px;"][span class="articleHeadline"]ABC Looks Beyond Upfront To DVR, Commercial Ratings Issues[/span][/td][/tr] [tr height="25"][td style="padding-bottom: 14px;"][span class="articleText" style="font-size: 11px; font-weight: bold;"]by David Goetzl and Wayne Friedman, Thursday, Jul 6, 2006 8:45 AM ET[/span][/td][/tr] [tr] [td] [span class="articleText"][span style="font-weight: bold; background-color: rgb(255, 255, 0);"]ABC HAS HELD DISCUSSIONS ON [/span][span style="background-color: rgb(255, 255, 0);"]the use of technology that would disable the fast-forward button on DVRs, [/span]according to ABC President of Advertising Sales Mike Shaw, with the primary goal to allow TV commercials to run as intended. [p class="articleText"] "I would love it if the MSOs, during the deployment of the new DVRs they're putting out there, would disable the fast-forward [button]," Shaw said. [/p][p class="articleText"] While MSOs risk losing some of their DVR customers if fast-forwarding were blocked, Shaw said the cable operators--who are beefing up their own local ad sales operations--"are in the same business we're in." "They've got to sell ads too," he said. "So if everybody's skipping everybody's ads, that's not a long-term business model for them either." [/p][p class="articleText"] Shaw also threw cold water on the idea that neutering the fast-forward option would result in a consumer backlash. He suggested that consumers prefer DVRs for their ability to facilitate on-demand viewing and not ad-zapping--and consumers might warm to the idea that anytime viewing brings with it a tradeoff in the form of unavoidable commercial viewing. [/p][p class="articleText"] "I'm not so sure that the whole issue really is one of commercial avoidance," Shaw said. "It really is a matter of convenience--so you don't miss your favorite show. And quite frankly, we're just training a new generation of viewers to skip commercials because they can. I'm not sure that the driving reason to get a DVR in the first place is just to skip commercials. I don't fundamentally believe that.
People can understand in order to have convenience and on-demand (options), that you can't skip commercials." [/p][p class="articleText"] Shaw said it's crucial for ABC and networks to hold these discussions with MSOs while DVR penetration is still in its early stages. DVRs are at around 10 percent of U.S. TV households. "It's in our interest and the MSOs' interest to figure out something that works for the two of us," he said. [/p][p class="articleText"] The frequently outspoken Shaw made his comments Wednesday in a post-upfront interview where he offered up another round of no-nonsense commentary. [/p][p class="articleText"] Looking back on the protracted upfront, Shaw said he was surprised that competitors at CBS and Fox were so quick to fold the tent and accept buyers' refusals to pay for increased ratings generated from DVR viewing. Shaw had argued earlier in the spring that the ratings jumps--which have reached double-digit percentages for top shows--had value, and he intended to charge for them. He continued that position early in the upfront until it became clear the two other networks weren't willing to hold the line, and had agreed to negotiate on "live" ratings only. [/p][p class="articleText"] "I'm sure they told their upper management in their two companies why it wasn't a good idea for them to do so," Shaw said. "They and their management must have decided that the same thing we thought was important wasn't important." [/p][p class="articleText"] Shaw said if he knew he'd be the lone proponent for negotiating on time-shifted ratings, he might have changed course. "Obviously, going back to last February, if I knew nobody else on the entire sell-side of the equation was going to open their mouths besides us, I don't know if we would have gone down the same track," he said. [/p][p class="articleText"] Some research executives--even at networks with sales departments that acted differently--had argued before the upfront that ads viewed in fast-forward mode generated value for advertisers, since consumers were at least partly exposed to their messages. But Shaw said ABC was only interested in finding a way to receive compensation for un-skipped ads. [/p][p class="articleText"] ABC's upscale audience, coupled with a strong performance in "A" counties and in leading markets, made his network a must-buy. "If you were looking for those attributes, with the programming on ABC that we deliver, are you going to move those dollars to CBS?" he said. "It doesn't make sense." [/p][p class="articleText"] No shrinking violet, Shaw is the only sales chief at a major network to speak to the media as part of an upfront postmortem. [/p][p class="articleText"] As questions fade about whether to negotiate solely on DVR ratings, Shaw said ABC will move aggressively to make deals based on Nielsen's new "commercial ratings," set to be unveiled at the start of the new season. He said ABC was interested in possibly using them as a currency in this upfront, but buyers felt implementing the logistics in such an abbreviated time period wasn't feasible. "We were too late in bringing that to the market for practical reasons," Shaw said. But, he added, "it's going to transform how people buy and plan television." [/p][p class="articleText"] But Shaw said ABC executives will be fanning out to agencies and advertisers over the next two weeks to present an analysis of commercial ratings data from the last six months, which presents ABC in a favorable light. He added that some scatter business may be written based on the new ratings. [/p][/span][/td][/tr][/tbody][/table]
