Carat Programming says once again, there’s an industry call-to-arms to get rid of the “annoyance that network TV buyers know as integration charges—nuisance fees that ABC, CBS and NBC have been charging advertisers for decades.”
At the dawn of network television through the 1960s, most programs were fully sponsored by one or two advertisers for an entire season. The programs were supplied to each network by the producer or advertiser with the commercials performed live or already integrated into the film or tape, so all the union technician had to do was push a button and let the show run.
As full and partial sponsorships waned, the networks increasingly accepted single 60 or 30 second “participations” which had to be manually integrated into a program. This was a special circumstance where a nominal charge seemed to be warranted (that charge today is around 550 dollars per commercial in prime time, and half that in most other dayparts).
Now, however, virtually all television commercials are bought and sold on a single participation basis, yet the three oldline networks still charge these special fees which cost advertisers over 100 million dollars a year, reported Carat Programming. “Therein is the reason the networks won’t give them up. Even though integration charges add under one percent to the network coffers on top of traditional time charges, this is serious money and virtually free revenue. Fox, now the top rated network in primetime, has never charged for integration.”
The old UPN and the current CW, corporate brethren integration-charging CBS wouldn’t dare make advertisers cough up such fees. Cable networks don’t charge them. Neither do Syndicators, who in older days might’ve had a reason to charge them because they had to integrate spots into already-taped shows before they were shipped around the country. Unwired networks, where one national “spot” might actually consist of over 200 local market commercial integrations, don’t charge them.
There are limited instances where the networks waive the fees. Audience deficiency announcements to make up ratings shortfall are exempt (which counters a network excuse that integration charges are union imposed). There are occasional “special circumstance” buys where the fees are buried in the commercial time charges or waived outright, but for the most part the industry has been unable to remove these charges. Within the print industry, we have had some luck in eliminating the integration-like “bleed” charges across some magazine groups.
This year the 4As and the ANA have written formal letters to the networks requesting their justification for integration charges.
“Our guess is that the networks will revert back to the same defense that always works for them…say and do nothing. By ducking the issue, the networks will rely on the strong demand for their diminishing product to once again force these charges upon us,” said the report.