The long-term effect of the ongoing strike by members of the Writers Guild of America, says OMD Canada managing director Sherry O’Neil, is sure to be continued erosion of conventional television’s audience share.

Do you believe the writers’ strike is threatening the fall TV season?

‘Yes. That’s where we’ll see this winter’s folly by the US networks fully manifest itself. At present, there appear to be fewer than a dozen new shows purchased by the US networks for this September, well below typical levels. We would normally be seeing double or triple this number. With little new product in the pipeline, the result will be the renewal of mediocre properties, such as Men in Trees, which would not have been renewed in a normal year.’

What’s likely to happen to the traditional upfront process?

‘Unless a miracle occurs in the next month, this will signal the end of the annual US upfront buying scrum. It’s only speculation at this time, but the end of the upfront has potential to affect a number of constituents, including agencies, broadcasters and, most importantly, advertisers.

‘The broadcasters have benefited over the years from the ‘starting gun’ approach to buying for the fall, which creates an artificially high demand for inventory and allows the broadcasters to increase demand rate cards quickly, at the advertiser’s expense. However, a delayed start or even a staggered start – both of which remain distinct possibilities – could result in better costs, and the possibility of negotiating opportunistically, for agencies and clients alike.’

Which faction is likely to lose the most?

‘Conventional broadcasters. The strike is sure to accelerate the dollar migration to other media, and not exclusively to the broadcasters’ online sites. The perceived weakening of conventional television will give greater impetus to the move elsewhere, hastening the restructuring of an already challenging business model for broadcast media. And regarding the loss of audience for conventional television, I don’t think those people are going to be very easy to get back, which does not bode well for conventional television.’

What impact has the strike had so far?

‘The cancellation of the Golden Globe Awards was the first significant sign to the lay person in English Canada that the writers’ strike in the US was going to affect viewing habits. With the exception of the initial late-night absence of Letterman, Leno et al, there has been negligible impact to the viewing consumer to date.

‘An analysis of weekly viewing for the fall 2007 season shows a downward trend in English conventional tuning that began long before the strike. Among the Adult 18-49 demographic, however, the trends are consistent across multiple demos. Prime-time viewing prior to the strike was down approximately 7%, versus the same period one year earlier. When looking at the entire fall versus fall 2006, prime-time was down 7%, late night was down 8% and daytime was flat. All major conventional broadcasters lost audience, with one exception. CBC experienced an uptick in December, owing in large part to its Christmas specials and other initiatives such as The Tudors.

‘The lacklustre performance of conventional TV this fall can be attributed to the aging of current television shows and the lack of real buzz around any of the new shows. Hardest hit is the top 20, particularly prior to the strike. Aggregated ratings for the top 20 are down by 25% in Toronto and 20% in Vancouver. The winter/spring 2008 ratings are likely to follow the same pattern as the fall, with flat to single-digit declines versus same week last year for most of the conventional stations. There will be far more reality programming than is typical for this period, and many of the event properties, such as the Academy Awards broadcast, are at risk of cancellation.

‘We have not observed any significant gains by the specialty broadcasters this fall at the expense of conventional, with the exception of an 8% rise in prime-time female audiences. Adults saw a slight increase (2%) in prime-time tuning and a late-night decline of 4%. As the real impact of repeat programming and the dearth of appealing prime-time hits conventional broadcasters, we expect to see growth to specialty channels in the winter/spring season.’

What’s your position regarding compensation for lost inventory opps?

‘OMD’s position with broadcasters has been clear from the outset of the strike: requesting pre-compensation in anticipation of a shortfall. We have maintained this stand with broadcasters regarding our upcoming spring buys.’

What’s the probable long-term outcome of the strike?

‘The strike could not come at a worse time for the medium, and is sure to hasten the move to diversifying media mix for many clients. A settlement is in the best interests of all parties, but most of all the broadcasters. Canadian networks are fighting for properties like Dexter (secured by CTV), which is migrating from cable in the US to network television. But there are not enough quality properties available to stop the erosion from conventional broadcasters.

‘The Academy Awards is really a symbolic place marker. If that broadcast is lost, I think the reality of not having top events because of the writers’ strike is not the death knell of conventional television, but definitely a watershed marker of what will happen moving forward.’

Sherry O’Neil’s comments were partially adapted from a report she recently prepared for OMD clients.