TV Upfronts: A+E Execs Jab Broadcast Networks' 'Failure Tax'

Abbe Raven - P 2012
Stephen Lovekin/Getty Images

Abbe Raven - P 2012

"We make decisions based on the creative process -- not what Wall Street analysts think we should be doing," said AEN CEO Abbe Raven.

NEW YORK -- Leave it to A+E Networks executives to fire the first public salvos at the broadcast networks, which at this moment are furiously preparing for the annual upfront sales bazaar kicking off Monday, May 13, with presentations from NBC and Fox. In speech after speech at their own upfront Wednesday night, AEN executives including president and CEO Abbe Raven highlighted their networks' successes and took pointed jabs at the competition.

Ad sales president Mel Berning opened the festivities by challenging buyers gathered at the Tent at Lincoln Center (where CBS will have its post-upfront bash May 15) to put more of their media budgets into the AEN portfolio, which includes top-rated History and A&E as well as Lifetime, which arguably still is in rebuilding mode.

“Next week you’ll hear our broadcast ancestors make the argument for why less costs more. And no doubt you’ve already heard from at least one of our big cable competitors who has been busy reworking and re-pricing the plan you bought from them last year so they can charge you more for it this year,” said Berning, referring to ratings declines this season at the broadcast networks and cable competitor Discovery Communications, respectively.

“The math says that broadcast erosion is throwing over $1 billion up for grabs in this year’s upfront,” he added. “If you’re tired of paying a failure tax, we have lots of successful programs for you to invest in.”

Cable has outstripped broadcast in upfront commitments since 2011; last year, the five English-language broadcast networks took in $9.25 billion in upfront primetime commitments while cable booked $9.8 billion. Analysts predict that cable will post healthier gains again this upfront season, and some analysts even predict a downturn in the broadcasters' haul.

A&E’s Duck Dynasty is the No. 1 unscripted series on cable, pulling in 9.6 million viewers for its April 24 third-season finale with a 4.3 rating in the 18-to-49 demographic coveted by advertisers. Duck Dynasty bested an installment of Fox’s American Idol in the latter measurement. But scripted programming is where the more lucrative CPM (cost per thousand viewers) rates lie. And on that front, History can boast a successful entree into the genre over the past year; Hatfields & McCoys became the network's most-watched program with about 14 million viewers an episode over three nights in May 2012; The Bible miniseries grew to 14.3 million viewers in its final night in March; and inaugural scripted drama Vikings is the top new cable series of the year (and naturally earned a second season). And AETN is in production on a four-hour Bonnie & Clyde miniseries starring Emile Hirsch and Holliday Grainger that will be simulcast on A&E, History and Lifetime.  

Raven alluded to the moribund culture of some other publicly traded media companies that, she asserted, prize stock price over content innovation.

“We believe that our growth is driven from the success of our content and the creativity of our employees,” she said. “We’re not focused on stock prices like some of our competitors; we’re focused on creating the next innovative programming event for our advertising partners and viewers. We make decisions based on the creative process -- not what Wall Street analysts think we should be doing. That is why we are a successful global content company."

The glitzy affair was headlined by the band fun. and attended by the boldface names attached to the company’s unscripted and scripted efforts, including Devious Maids executive producer Eva Longoria, Witches of East End stars Julia Ormond and Madchen Amick, Pawn StarsRick Harrison and Storage WarsBarry Weiss.

And entertainment and media president Nancy Dubuc, a longtime mentee of Raven’s who will step into the CEO role in June, outlined forward-looking goals, notably the growth of spinoff channels Bio, H2 and Lifetime Movie Network.

“My pledge to you is to lead A+E Networks into the next era of our business and capitalize on what we do better than anyone: build unforgettable brands and evolve them, innovate through the way we talk to viewers and always, always put creative first,” said Dubuc.