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Fear of a possible writers’ strike is rapidly spreading from Hollywood to Madison Avenue.
A walkout by TV and film writers after their contract expires at midnight on Halloween would be bad news not only for the networks and studios but also for advertisers.
A protracted strike would force the major networks to air reruns and reality shows after burning through their stockpile of episodes for scripted programs.
The big concern for advertisers is that the broadcast networks – ABC, CBS, NBC, Fox and the CW – will lose even more of their already-shrinking audience.
“If ratings fall by 15, 20 or even 30 percent because we’re getting reruns or shows less appealing to viewers, that’s a big problem,” said one ad buyer. “There are advertisers who are depending on a certain level of ratings points a week.”
The networks are having a hard enough time delivering the viewers they promised advertisers.
They are still doling out millions in so-called “make-goods” – additional ad spots – to compensate advertisers for last year’s ratings shortfall.
Moreover, viewership is down for a lot of returning shows this season, and most new shows have debuted to lackluster ratings and little buzz.
The TV industry just adopted a new tracking system, which has resulted in lower ratings across the board. The new commercial ratings count how many people stay tuned to the actual ads as opposed to the program.
The backlog of make-goods coupled with falling ratings has eaten into the supply of TV spots, driving up prices for advertisers and creating a tight marketplace.
Ad buyers said a strike would be another hit to ratings and could lead the networks to renegotiate ad rates and offer even more make-goods.
The Writers Guild of America has been negotiating with the Alliance of Motion Picture and Television Producers, but so far there have been few signs of progress.
The members of the writers’ union ended voting yesterday on whether to authorize a strike and are widely expected to approve it.
A work stoppage could prove more damaging to the TV networks – both in terms of ratings and ad revenue – than the infamous strike in 1988, when writers walked off the job for five months. The networks saw their share of the TV audience drop four percentage points, to 66 percent.
That was then, when “The Cosby Show” ruled the airwaves and three networks delivered the majority of the TV audience. The business has changed a lot since then, with the impact of DVDs, the Internet and competition from cable.
The bottom line is that it’s harder to attract and keep an audience, even for popular shows such as “Heroes” and “Grey’s Anatomy.”
“The fear is that it could really strip the momentum of scripted programs,” said one network executive.