RBR-TVBR spoke with ABC affiliate board chairman and WSB-TV Atlanta VP/GM Bill Hoffman about the board’s new Reverse Spot Exchange initiative, which was recently detailed to stations in a letter to the affiliates. This, nearly two months after ABC announced its Inventory Exchange System, which designates chunks of network spots that are available by the affiliates to purchase. Now, the affiliates are now making their own spots available for purchase by the network as a win-win.
First of all, from what we’ve heard from ABC, Reverse Spot Exchange was something that was in the works all along. Off the record, we were told this was always intended to go both ways: “It was part of its genius—it was flexible and it dealt with the marketplace.”
Hoffman tells RBR-TVBR as far as the Inventory Exchange System goes, they wanted to make sure they perfected it on the front end first. “It was the first exercise that we did and it met with very good results. We heard from a majority of the stations that they thought that that relationship for those two transactions was a positive one. Now we’re entering into the flip side of the coin, and hoping that we’re going to have the same kind of participation and acceptance that we did with the first exchange. It would be wonderful from the network and affiliates’ standpoint that we could get into a new model where we could share inventory and help each other create a new financial revenue stream. So we’re learning as we go.”
ABC put extra spots up for sale during the election season and the winter holiday shopping season. “We did one in October and one in November,” Hoffman explained. “Maybe it did well in October because it helped create more avails when you had busy political activity. It might have worked in November just because your market continues to be hot and there’s a lot of activity, and you can use the added avails to help during this heavy retail time of the year. So it has a different answer and different margin of victory at every station, depending if you want to have a 30% margin on this, or 40%, or even 10%. Every company and every station has a different definition of where success lies in that area.”
He adds, “We have heard from a resounding amount of our affiliate body that they want to keep conversations going to explore additional opportunities.”
Hoffman also confirmed affiliates will offer the network 16 units, with the majority in primetime. The first week includes two Good Morning America spots, and in primetime, The Bachelor, No Ordinary Family and The Middle. The second week also involves primetime shows, GMA and daytime soap operas.
ABC will determine a price for the spots to the 200+ affiliate body on 11/29. They have to decide whether they want to accept by 12/1; and on 12/3, affiliates will be informed if enough took up the offers to move the exchange process forward.
Hoffman said in the letter they are hopeful affiliates will look at this reverse exchange “as a very welcome source of new revenue.”