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Category: CW

CW switches to next-day streams for episodes of prime-time series

Joseph Morgan in a scene from the CW hit
After studying the viewing behavior of its young audience, the CW television network has switched strategies and is no longer delaying the online release of such popular shows as "Gossip Girl" and "The Vampire Diaries."

CW -- a joint venture of CBS Corp. and Warner Bros. -- said Thursday that it would begin making episodes of its prime-time series available several hours after their initial television broadcast. The move is significant because it illustrates how television companies are moving quickly to adapt to rapid changes in technology in an effort to protect important revenue streams.

"Consumers have been telling us that they want the ability to watch their shows whenever and where ever they are," said Rick Haskins, CW executive vice president of marketing and digital programs. "If we don't listen to them, we will be missing an opportunity."

In recent years the CW has made dramatic changes in its online strategy as the network has figured out how to better monetize digital views of its programs.

Early on, the network hesitated to put its shows on the Web at all. But since September 2010 the CW has been delaying the online release of its episodes until three days after airing.

The three-day blackout was designed to boost the TV ratings, and thus protect the important TV advertising revenue. Advertisers pay premiums to reach viewers who watch shows on TV or within three days of their original airing, if the program has been digitally recorded.

CW executives were betting that viewers would be so eager to watch fresh episodes of their most popular shows, including "The Vampire Diaries," "One Tree Hill," and "90210," that they would watch them on TV rather than wait to see them on their laptops.

Viewers were eager to see the latest episode, all right. Research by the Warner Bros. anti-piracy group discovered that nearly a third of online viewers of CW's most popular shows were so motivated that they watched them on a pirate website.

"And 50% of that consumption was done during the first three days after the television run," Haskins said. "That's a lot of money out of our pockets."

By releasing its shows just a few hours after their TV broadcast (at 3 a.m. Pacific time), the CW hopes to reach viewers who otherwise would have pirated them. New technologies also allow the CW to measure the number of online viewers and determine whether they watch the commercials, providing another source of reliable audience data to share with advertisers.

The CW also has been at the forefront of advocating heavier "commercial loads," so the online streams contain as many ads as would be seen in a TV broadcast.

That is a departure from conventional wisdom among most online video distributors. Many believed that online viewers would lack the patience to sit through too many commercials. Sites such as Hulu offer episodes with about half the number of ads that would run on TV.

"We have found that viewers were indeed willing to watch a full commercial load," Haskins said.

CW also announced Thursday that it was introducing its first mobile application for iPad, iPhone and Android platforms. The app enables full-episode streaming of the network's prime-time series and provides a feature for fans to alert their friends on Facebook and Twitter that they are watching a particular episode.

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-- Meg James

Photo: Joseph Morgan in a scene from the CW hit "The Vampire Diaries." Credit:  Quantrell Colbert /  CW

CW network to offer new TV episodes on Hulu

CW's Hart of Dixie

Continuing the evolution of its digital strategy, the CW television network said Friday it would offer online streams of new episodes through Hulu and the Hulu Plus subscription service.

The five-year deal with Hulu comes just two weeks after the CW, a joint venture between CBS Corp. and Warner Bros. Entertainment, announced a similar partnership with Netflix. Netflix will make available episodes of past seasons of CW shows, including "Gossip Girl" and "Vampire Diaries," to its subscribers.

The Hulu deal is different because the service, owned by media giants News Corp., NBCUniversal and the Walt Disney Co., will have the exclusive right to stream episodes of such new CW shows as "Ringer" and "Hart of Dixie" as well as returning series. Financial terms were not disclosed.

The two deals mark a major switch in strategy for the small broadcast network, which until now had tightly held the digital rights to its shows. In a bid to protect its TV ratings, the network delayed the online availability of its episodes and steered viewers to its own advertising-supported CW website.

But by striking deals with such major players as Netflix and Hulu, CW is carving out a new revenue stream, which should eventually allow the network -- launched in 2006 -- to finally become profitable.  Episodes will continue to be available on the CW's ad-supported website.

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In deal coverage, the devil is in the details

Last year, the Washington Redskins stunned their fans and the rest of the National Football League when they signed quarterback Donovan McNabb to a new deal at a time when he and the team were struggling. Headlines blared on sports pages across the nation that McNabb had signed a five-year, $78.5-million contract extension with $40 million guaranteed and would retire a Redskin.

Of course, within a few days it became clear that those figures, while not bogus, were highly unlikely to ever be paid out. In the end, McNabb pocketed a couple of million dollars and is now on a different team.

Big money grabs big headlines, but be careful to check the fine print. On Thursday, CBS Corp. and Time Warner Inc.'s Warner Bros. announced a deal to sell programming from its co-owned CW Network to Netflix. The news release had been out for only a few minutes when the whispers started that the deal was worth close to $1 billion. Within the hour, Wall Street analysts were touting that figure as well.

While CBS, Warner Bros. and Netflix declined to comment on the terms of the agreement, two of those three parties weren't going out of their way to downplay the billion-dollar figure. The New York Times even wrote that "the Warner Brothers Television Group of Time Warner and the CBS Corporation announced a $1 billion deal" with Netflix.

CBS and Warner Bros. could indeed end up getting in the neighborhood of $1 billion for their programming, but like McNabb's contract extension with the Redskins, a lot has to go right for them for that to happen.

Netflix is basically buying the rerun rights to CW shows such as "Gossip Girl" and "The Vampire Diaries." One reason why CBS and Warner Bros. were motivated to enter the agreement was because serialized dramas, which are what the CW specializes in, typically do not sell well in the rerun market.

The agreement will definitely pump lots of money -- hundreds of millions of dollars perhaps -- into the wallets of CW owners CBS and Warner Bros. However, how much cash won't be known for years. That's because this is not a one-price-fits-all deal. Some shows, such as "Gossip Girl," will go for a lot, perhaps mid-six figures per episode. Other shows that are less popular won't be sold for anywhere near that. How many episodes a show is on for will also determine how much Netflix pays.

None of this is meant to imply that this agreement is not very significant for CW and its parent companies. CBS CEO Leslie Moonves said the money Netflix will be spending on CW products will make the venture profitable and is a big deal.

The problem is that the media and analysts are doing a disservice to readers and shareholders by implying that Netflix wrote a billion-dollar check to CBS and Warner Bros. and not at least noting there are a lot of intangibles in these deals and it will be years before the final value can be determined. The Times noted the billion-dollar figure being touted but added that the final worth of the contract "could end up being far less."

It's not as sexy, but it is more accurate.

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-- Joe Flint

Netflix deal makes CW pay off for CBS and Warner Bros.

The CW's "Vampire Diaries," one of the shows that will be available on Netflix
Netflix has just made the CW network's future very secure.

A new deal that makes Netflix the second home for CW programs will put the venture into the black, said Leslie Moonves, chief executive of CBS Corp., which co-owns the network with Time Warner's Warner Bros. unit.

Although terms of the agreement were not disclosed, Wells Fargo Securities analyst Marci Ryvicker said it could be worth close to $1 billion by the time it expires.

"It essentially makes the CW a profitable enterprise," Moonves said. That means that CBS and Warner Bros. will make money off the shows they produce for the CW, even if the network itself does not cover programming costs with advertising revenue. Warner Bros. Television Group President Bruce Rosenblum echoed Moonves' sentiment, saying the joint venture "just became more valuable."

People familiar with the deal agreed Netflix could ultimately end up paying close to $1 billion. However, the final worth of the contract won't be known for years and could be much less as it will be determined by how well the CW's programming performs. Netflix is buying rights to repeats of current and future series on the network, and the longer the shows stay on the air and performs well, the more the subscription video company will pay for streaming rights.

For example, Netflix is paying in the neighborhood of $600,000 an episode for "Gossip Girl," an established show, but will initially pay much less for newer or lower-rated CW programs, people familiar with the pact said. The window between when a new episode of a CW show appears on the network and then ends up on Netflix could be as long as a year.

Launched in 2006 as a result of a merger between the struggling UPN and WB networks, the CW relies primarily on serialized hourlong dramas that appeal to teens and young adults, such as "The Vampire Diaries" and "Gossip Girl." Its shows have a loyal following among young viewers, but serialized programs don't typically generate the strong rerun revenue of situation comedies and procedural dramas such as"NCIS" or "Law & Order," which is key to producers recouping their investments.

"Serialized dramas do not have the same value" in reruns, Moonves said.

But fans of such shows do flock to services such as Netflix, where they can watch multiple episodes on their own schedule rather than having to wait days or weeks between episodes.

"This deal validates the programming strategy of the network," Rosenblum said.

Netflix has exclusive online subscription rerun rights to all episodes of all CW shows. However, CBS and Warner Bros. can still sell reruns to other outlets, including local television stations and cable networks.

The CW agreement accelerates a trend that has seen Netflix transform from a service focused primarily on movies to a home for television repeats. The company has said that more than 60% of the video streamed by its users is now television programs.

At the same time, Netflix has been losing movie rights. Pay channel Starz recently said it would not renew a deal to provide movies from Sony Pictures and Walt Disney Pictures; that deal expires in February.

Many other Hollywood studios have said they only want to provide Netflix with older titles, as they believe that offering recently released pictures harms more-profitable DVD sales and video-on-demand rentals. When Starz announced it would not renew its agreement, Netflix said it would spend the money it expected to spend on those movies on other content. The CW appears to be a key part of that replacement strategy.

-- Joe Flint and Ben Fritz

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Photo: A scene from CW's "The Vampire Diaries." Credit: Quantrell Colbert / CW.

ABC wraps up advanced advertising sales, generating more than $2.2 billion in prime-time

Walt Disney Co.'s ABC network on Thursday wrapped up its advance advertising sales, generating rate increases of 11% to 12% over last year's prices.

ABC, which finished the 2010-2011 season in third place in prime-time, is hoping to deliver a stronger season of scripted shows to help support its juggernaut hit "Dancing with the Stars" and augment its popular comedies "Modern Family" and "The Middle."  In recent years, the network has experienced audience declines as its soapy dramas "Desperate Housewives" and "Grey's Anatomy" have gotten older and lost viewers.

The network took in advertising commitments that exceeded its total last year of $2.2 billion in commercial sales for prime-time shows, according to a person familiar with the negotiations.     

"Buoyed by a strong response from advertisers to a schedule that was equal parts stability and ambition ... ABC has concluded its upfront negotiations, achieving significant increases in pricing," ABC said in a statement announcing the end of its upfront sales. "This positive response helped drive great volume across the board, and across all dayparts, and reinforced the confidence that national advertisers have in the power of ABC.”

Fox and the CW have already wrapped up their advertising sales, and CBS and NBC are winding down their negotiations and should conclude by week's end.  The so-called upfront advertising market is the period in June when the networks sell more than three-quarters of their commercial inventory for the upcoming television season. 

However, despite fetching double-digit rate increases, the networks have not garnered a commensurate boost in total ad dollars. That is because their programs have been delivering lower ratings in the key demographic of 18- to 49-year-old viewers, and the price that advertisers pay for the commercial time correlates to the ratings generated by the programs.

-- Meg James

CW network said to land at least $400 million in upfront advertising sales

RingerSarahGellar
 
The youngest broadcast network, the CW, managed to score at the prom. 

The network -- a joint venture between CBS Corp. and Warner Bros. Entertainment -- on Tuesday completed its sales of commercial time during the TV industry's annual dance with advertisers known as the spring "upfront" sales bazaar. 

The network sold more than 75% of its commercial inventory for the upcoming TV season, garnering $400 million to $420 million in advertiser commitments, according to a person with knowledge of the negotiations. 

The network's haul was roughly 10% more than a year ago -- a boon for the 5-year-old venture that has yet to turn a profit. Still, the CW consistently has been able to capitalize on advertisers' optimism about its new fall lineup and its youthful audience. The network negotiated rate increases of about 11% over 2010 prices, the knowledgeable person said.

Despite its more narrow reach, advertisers buy time on the CW because its viewers are primarily adults aged 18 to 34 and considered to be trendsetters and heavy moviegoers. Advertisers also have experimented by inserting their messages in CW's online platforms to get a better understanding of what sells with Generation X and millennials.

For example, the CW increased the number of commercials that run during online streams of episodes to equal the number of ads that appear on TV. Instead of seeing a drop-off in online viewing, network executives have told advertisers that the number of unique visitors who watch full episodes online increased 55% during the last season over the 2009-10 season.

The CW is launching four shows this fall, including "Ringer," featuring Sarah Michelle Gellar of "Buffy" fame in a mysterious life-swapping plot involving twin sisters. There is "Hart of Dixie," starring Rachel Bilson of "The O.C." as a snotty New York medical intern who takes over a private practice in small-town Alabama, and an unscripted show, "H8R," which allows everyday people to confront celebrities they dislike such as Nicole "Snooki" Polizzi from MTV's "Jersey Shore."

The CW programs 10 hours a week in prime time.

Last week, Fox set the tone for the broadcast ad market by negotiating rate increases of about 10%. Fox, which sold nearly $2 billion in commercial time, accepted lower rate hikes than its rivals had hoped for -- undercutting their negotiations.

ABC has been steadily selling its inventory, fetching rate increases of 10% to 11%, and should complete its sales by the end of the week, according to a person familiar with ABC's sales.  Fourth-place NBC is midway through its sales, fetching 9% hikes over last year's prices. The most watched network, CBS -- which had hoped for 18% increases -- also is moving inventory.

-- Meg James

Photo: Sarah Michelle Gellar stars in "Ringer." Credit: The CW

CW names Thom Sherman top creative executive

As part of its continued restructuring of its executive ranks, the CW Network named Thom Sherman executive vice president of development.

In that role, he will oversee the creative efforts of the network and report to Mark Pedowitz, the new president of the CW.

Sherman and Pedowtiz have long ties. The two worked together at ABC. Sherman also oversaw development for J.J. Abrams' Bad Robot Productions, where he was involved in the development and launch of "Lost."

Pedowitz was named president of the CW last week. He is replacing Dawn Ostroff, who is leaving the network to relocate from Los Angeles to New York for personal reasons.

The CW is a joint venture between CBS Corp. and Time Warner Inc.

-- Joe Flint

Related Post:

CW names former ABC big shot Pedowitz president

 

CW names former ABC big shot Pedowitz president

The CW Network has tapped a former senior ABC executive as its new president.

Mark Pedowitz, who spent five years as president of ABC Studios before becoming an independent producer, is joining the CW -- a joint venture between Time Warner Inc.'s Warner Bros. and CBS Corp. -- just weeks before it announces a new fall schedule to advertisers. Dawn Ostroff, who has served as president of entertainment for the broadcast network since it launched in 2006, is resigning next month to relocate from Los Angeles to New York.

PEDOWITZ The CW, which was born out of the merger of CBS' UPN and Time Warner's WB networks, targets its programs primarily toward the 18-34 demographic, with a particular focus on women. Its most popular shows include "Gossip Girl," about rich kids in New York City, and "The Vampire Diaries." The network often gets heat from media watchdogs for its racy content and portrayal of sexually active teens.

Compared with other broadcast networks, the CW has a relatively small audience. This season, it is averaging about 2 million viewers in prime time, which is flat with last season. Among adults 18-34, its prime audience has fallen 11% this season to 675,000. The CW only programs 10 hours a week and does not offer any shows on the weekend.

The CW often counters that its ratings don't take into account the amount of viewing done online. The network is very aggressive when it comes to putting its content on digital platforms.

One of the concerns its corporate bosses have had is not so much with the network's target audience as much as worries that there is a certain sameness to many of its shows, which rely heavily on unusually attractive casts leading particularly glamorous lives.

In an interview, Pedowitz said he did not plan to radically overhaul the CW's programming strategy. He hinted that he might try to broaden its appeal slightly within its core demographic.

"I’m not going to upset the apple cart," he said.

Even though Pedowitz is joining the CW after it has ordered pilots for next season, he said he will be involved in the schedule process and in the presentation of the new lineup to advertisers in New York in mid-May. Ostroff will handle much of the heavy lifting for the next few weeks.

Known primarily as a business executive and a lawyer by training, Pedowitz was something of a surprise choice. However, the parent companies indicated that they wanted more of a deal-maker in their next president, people familiar with the network's operations said.

Although the there has been speculation about the long-term commitment of CBS and Time Warner to the CW, Pedowitz said he would not have taken the job if he did not think the partners were in it for the long term.

Pedowitz is succeeding Ostroff, but he will also have broader responsibilities in the CW's business operations than she did. Ostroff oversaw entertainment operations while John Maatta, the network's chief operating officer, handled business affairs, and both reported to a board composed of CBS and Warner Bros. executives. Now Maatta will report to Pedowitz.

It is also expected that Thom Sherman, who oversees the CW's drama programs, will get a broader title down the road.

-- Joe Flint

Photo: Mark Pedowitz. Credit: Cliff Lipson/CBS.

TV veteran Mark Pedowitz in talks for top post at CW Network

Former Disney and ABC television executive Mark Pedowitz is a leading candidate for the top job at the CW Network, according to people familiar with the situation.

Pedowitz would succeed CW President Dawn Ostroff, who has indicated she plans to leave the network later this spring, most likely after the network presents its fall schedule to advertisers in New York this May. Ostroff is leaving for personal reasons as she plans to relocate from Los Angeles to New York, where her husband resides. The two have had a bi-coastal marriage.

Since exiting Disney last year, Pedowitz has headed his own production company, Pine Street Entertainment, which is based at Warner Bros. Pedowitz did not respond to an email request for comment. A CW spokesperson declined to comment.

Known more for his business acumen than his programming eye, Pedowitz held several senior positions at ABC and Disney for years. He headed business affairs for the network and then was president of ABC Studios, the network's production unit. However, after repeated clashes with Steve McPherson, the former president of ABC Entertainment, Pedowitz was moved to an advisory position reporting to Anne Sweeney, Disney's co-chairman of media networks.

At the CW, Pedowitz would be reunited with Thom Sherman, a former programming executive at ABC who is now executive vice president of drama for the CW. Sherman may also be in line for a new title in the executive restructuring that would include broader programming responsibilities for the network

The CW, a joint venture between Warner Bros. and CBS Corp., has been talking to potential candidates for several months. One of the challenges has been finding an executive that both corporate parents agree on.

The CW caters primarily to young women with dramas such as "Gossip Girl" and "The Vampire Diaries." It has gotten completely out of the comedy business. While the network itself is not profitable, some of its shows have made money for the studios that made them.

-- Joe Flint

The CW heads into fifth season with some attitude

CW,jpg

Give us a C! Give us a W! 

The CW's latest teen-angst drama, "Hellcats," about a bunch of cheerleaders with bad attitudes, gave the executives at the network and its parent companies CBS and Warner Bros. something to cheer about. The show drew 3 million viewers and performed well in the key female demos the network targets.

Although one solid debut (it built on its lead-in "America's Next Top Model") does not a season make, it's good news for the CW, which this week launches its fifth season. There were plenty of doubters that the network, which was born out of the merger of the WB and UPN networks, would last this long. While it still hasn't made a profit, its shows have become successes for its two parent companies. For now that may be enough.

"It is the assets that really make the money," said CW President Dawn Ostroff in an interview. "When you look at what we make for our parent companies, it certainly is big in the plus column."

This season, the CW will carry 10 hours a week of original prime-time programming, including the much-anticipated remake "Nikita," starring Maggie Q as a lethal spy. The network is also getting aggressive in putting its shows online with full commercial loads. While that may be a turnoff to some viewers, Ostroff recognizes that if networks are going to embrace all platforms, they have to do it without completely compromising their traditional advertising revenue streams.

For more from Ostroff on what's in store for the CW this season, read our interview in the Los Angeles Times.

-- Meg James

Photo: CW President Dawn Ostroff surrounded by "Nikita" stars Maggie Q and Shane West. Credit: Kevin Winter/Getty Images.

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