Networks Cling To Old Models, Money

Who says the heyday of the network TV business is over? The Big Three are still clutching at least one vestige of their glorious past: the so-called “integration fees” they charge advertisers  — for buying an ad.

Those fees, established in the 1950s, have long stuck in advertisers’ collective craw. They’re supposed to cover the cost of taking a videotape (or in the really old days, some film) getting it onto network airwaves. But they’re obviously not necessary, since advertisers only pay them to the original big three networks: If you buy an ad on Fox, or the CW, or a cable, or syndicated TV, or local TV, the fees don’t apply. And in a digital age, they’re even more archaic.

 

Now, B&C reports that two of the biggest advertising trade group are asking the networks to do away with the fees. What’s at stake? Today, the fees average $470 per spot for primetime and evening news and $230 per unit during daytime and late-night, totalling $125 million a year. It’s a pittance in the grand scheme, but don’t expect the networks to give it up easily: The more uncertain their future looks, the less likely they are to give up guaranteed dollars.

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