TV Upfronts: 4 Major Questions Facing the Networks for 2014-15

Illustration by: John Ueland
From left: NBC's Robert Greenblatt, CBS' Nina Tassler, CW's Mark Pedowitz, ABC's Paul Lee and Fox's Kevin Reilly

Can "American Idol" be saved? Will NBC repeat its "Sound of Music" success? THR probes the make-or-break issues of the fall season.

A version of this story first appeared in the May 23 issue of The Hollywood Reporter magazine.

Several questions loom as the broadcast networks unroll lavish pitch presentations for buyers May 12 in New York.

1. Can American Idol be saved?

Fox's profits on the show have tumbled as the show's juggernaut status has dissipated. But the network still makes $250 million-$300 million each year on the show, well-placed sources tell THR. That's significant in an era of declining revenues overall. And advertisers still point to Idol as among a minority of shows that have the broad audience profile that advertisers are looking for.

"Those kind of shows that reach everyone — kids and teens and their families — are so rare," notes Magna Global's Todd Gordon. "You can look back at where Idol was and compare it to where it is now. But it's not like there are any other shows out there that are doing that. The Voice is the closest thing but it's certainly not what Idol was at its peak."

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But the current unit cost — just north of $300,000 per spot — is based on last season's ratings. And buyers note that those rates will have to be reduced for cycle 14 given the show's performance this year — down 27 percent in the 18-49 demographic, Idol's steepest year-over-year decline yet.

"It's still a viable part of the schedule," adds Gordon. "It's just not the No. 1 show on TV. I think you'll see the unit cost come down to reflect the audience. It's not the same type of super-premium show that it once was."

2. Sound of Music Live! sequels?

NBC proved that live content does not necessarily need to include a scoreboard and ball. The network's $9 million The Sound of Music Live! starring Carrie Underwood as the indomitable Maria, exceeded ratings expectations — wildly so in targeted female demographics. The spectacle pulled in almost 19 million viewers on its first airing Dec. 5. The network sold Sound of Music on a 2.7 rating among women 25-54, according to buyers, but it ended up pulling a 7 rating in that demo. Similarly, among viewers 18-49, the gap was about three times what NBC ended up pulling in, leaving a lot of money on the table.

NBC last January announced that it would mount a live production of Peter Pan Dec. 4, "in the great hope that lightning strikes twice," noted NBC Entertainment chairman Robert Greenblatt. NBC sources report strong interest from buyers for Peter Pan, though the production has yet to set a cast. And next year Fox will mount a live production of Grease. But while buyers welcome the networks' efforts to experiment with more live programming genres, they say the live musical is not yet a sure ratings thing.

STORY: 'Peter Pan' Set as NBC's Live 'Sound of Music' Follow-Up

"It's unproven," notes Horizon Media's Dave Campanelli. "If there's some consistency to those types of shows and you can rely on that big rating event after event, then they will make their $9 million back because they'll be selling $500,000 unit costs."

Buyers are also hoping that lightning strikes twice. "I think it's a great trend," adds Campanelli. "Advertisers love it because we want immediate reach."

3. Will CBS' Thursday NFL score?

When it comes to live programming nothing is more of a sure thing than the NFL. It's why NBC's Sunday Night Football commands $570,000 per unit and Fox's late national NFC games rake in an eye-popping $595,000 per 30-second spot. And it's why CBS Sports shelled out close to $300 million plus production costs on eight early-season Thursday night games that will still be simulcast on the NFL Network. Buyers don't expect the games to rival NBC's Sunday Night Football, but sources tell THR that CBS is asking for pricing commensurate to that of SNF: a combined household rating between 12 and 12.5.

"It will be a little bit of a tough push for advertisers," notes Campanelli, adding that the games "are an upgrade over what NFL Network had, but they're not Sunday night quality. So that puts them a little bit behind where NBC is."

STORY: How CBS Blitzed NBC and Fox for Thursday Night Football

They do expect them to do better on CBS than they did on the NFL Network, where last season's regular schedule averaged 7.1 million viewers, the smallest audience — by a lot — among the league's TV partners. At 71 million subscribers, the NFL Network is not a fully distributed channel. Still, Thursday night is a big night for retail and movie studio advertising. "Buyers want to be there. That's why these games are on Thursday night and that's why CBS went and got them," adds Campanelli. "There's definitely going to be demand for it."

4. Is live-plus-7 dead?

Network heads have noticeably dialed back the live-plus-7 rhetoric. But that doesn't mean they won't continue to quietly push to monetize the increasing ratings points that are filtering in over seven days of VOD and DVR playback. (Currently the industry standard is commercial ratings with three days of delayed viewing.) For buyers, the fundamental issue is that advertising loses its value over time.

"The bottom line is that for a lot of advertisers, if the spot runs five or six or seven days after they intended, it just doesn't have the same value and in some cases it has very little value," says Gordon.

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Retail and movie studios spots designed to get consumers to the mall and multiplex over the weekend are especially timely. And besides, many buyers are getting those residual eyeballs for free now. That's not to say there are not deals written on seven days of delayed viewing, but the pricing is extremely advantageous (read: cheap).

True monetization of delayed viewing will only come when technology — specifically dynamic insertion, where relevant spots can be inserted into programs viewers watch on VOD platforms — catches up with viewer behavior. As viewers continue to move away from the DVR and toward VOD, it stands to reason that dynamic insertion will become more widespread. "Obviously the networks want to monetize every eyeball they can," adds Gordon. "The technology to insert ads dynamically is here, it's just a matter of how quickly it rolls out."