March 2010 – Channel Crossing: DRTV

DRTV: Down, But Not Out

Some television networks, and even some agencies, are questioning whether DRTV has a future. A panel at ERA’s Great Ideas Summit even asks the question: Will DRTV go the way of the newspaper industry? It is easy in difficult times to see nothing but gloom and doom. And there is no denying the fact that these are difficult times for media and marketers of all stripes.

But let’s step back, take a deep breath and exhale slowly. DRTV isn’t going anywhere.

THE DRIVING FACTORS
Networks and stations are concerned about DRTV media rates that have been on a steady decline for several years. A time period that might have sold for $5,000 five years ago might be sold for less than half that rate today. There are various reasons for this decline including: the dilution of the audience through the increase of new networks and expansion of digital cable; increased daily Internet usage (Twitter, Facebook and YouTube); the opening up of more paid programming time to DRTV advertisers as traditional ad spending continues to decline; and, of course, we can’t overlook the poor overall economy.

As a result of all this, we hear rumblings from networks that they will have to insert station programming back into what is now being sold as paid. But, the reality is that the networks will not generate any more revenue from regular programming–and, in fact, probably will generate less–than they do from DRTV. Ultimately, station programming would still be competing for the same viewership as paid programming, and subject to the same degree of audience segmentation.

At the end of the day, networks know that DRTV provides a steady revenue stream, even if it is smaller than it once was. This would explain why networks are actually increasing–not reducing–their paid programming inventory. With ministerial and humanitarian programs also being hit hard by the poor economy, these organizations are not paying large premiums to the networks for long-term commitments as they did in the past, which is also creating a greater network need for DR dollars.

From the client perspective, there remains plenty of interest in getting DRTV schedules on the air. The clients still count on the media, as long as the rates are in line with response. Smart marketers will continue to produce hit shows that can spend $1 million a week on television. In other words, there is an ample supply of DRTV product/content and money ready to be spent. And there’s still a very healthy market for a hit DR show.

Peggy Gobel is vice president, director of cable media at Cannella Response Television. She can be reached at (262) 763-4810, ext. 31, or via e-mail at pgobel@drtv.com.