NEW YORK (Media Week) - Fourth-ranked broadcaster NBC has quietly begun reimbursing advertisers an average of $500,000 each for failing to reach guaranteed ratings levels, the first time a network has taken such a step in years, media buyers said.
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Networks usually offer make-goods -- free advertising slots -- in the event of such shortfalls. But NBC has none to give. In fact, no broadcast network has much ad inventory left between now and year's end -- except for, perhaps, a handful of units the week between Christmas and New Year's, and that doesn't do much for advertisers chasing holiday shoppers.
CBS, ABC and Fox also are doling out make-goods, primarily for the first quarter. They have blamed softness on a new ratings formula, but media agencies disagree. None of the networks would comment.
While there are certainly rational economic actor arguments for why companies oppose any labor concessions, I'm increasingly convinced they (and the "they" are not abstract profit maximizing entities, but people who run them) frequently do so simply because they're assholes, and they're competitive assholes, and they see it as a competition they need to win no matter what the cost.