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Show STCmE Continued from Page ; ' i 1 which account for half the profits. Although all three networks have the same amount of air time to sell in that period six minutes ,in hour, except for movies where seven minutes are the rates are governed by the size and allowed demographic composition of the audience, in short, by the ratings for the programs. THE NETWORKS costs for weekly series do not ary greatly, but the prices they receive for d commercial spots run a wide range. In a show in this seasons economy a spot might show, the go for $45,000. In a high-rate- d rate could be $100,000. All but a few of the prime-tim- e series are produced in Hollywood by the major film companies or independent producers. When a network buys a series it actually licenses it for two runs an original at a price that usually falls run and a rerun somewhat below the production cost. Producers are expected to recover the remainder of their investments and make their profits from overseas sates and the subsequent syndication of the series to the local stations in the United States. If a series fails in its first or second season on a network, there is rarely an opportunity for subsequent syndication. r series are licensed to the Typically, networks for $140,000 to $180,000 an episode, the range r for shows is usually $350,000 to $400,000. The difference often depends on how much location shooting is involved and whether foreign locales are 10 j T-- l ni i , low-rate- half-hou- one-hou- used , j 1 J I ;1 ' , 1 j i l i IN TELEVISION economics the source of great expense to the network is program failure, but paradoxically in these bullish times even the flops make money. The networks are heading for a record m program cancellations. ABC, CBS and NBC together have already canceled more than a score of series, although none of the departed shows was, in practical terms, in the red. One of ABCs biggest flops was a one-hoMonday night entry called The San Pedro Beach Bums, but with the advertisers surging demand for air time, the program was able to charge $50,000 a half minute, so, the show cleared close to $100,000 for ABC each ev ening it played. But as an official of the network remarked: "Think what we could have made if we had a hit in that hour. If a network cancels a series before it has completed its run, it must usually pay for episodes it PRICES EFFECTIVE MARCH 6TH to MARCH 11 th will never broadcast. Often, as in the case of "Young Danl Boone," which CBS dropped after three episodes last fall, this can be moie than $2 million worth of wasted programs. Nevertheless, networks will cancel modestly profitable programs IF YOU DONT make the change, you go down like a stone, explained David C. Adams, vice chairman of NBC. You make your competitors stronger because the audience simply goes over to them. You hurt the programs that follow the failures in the schedule. And you stand in danger of destroying the whole evening. Replacements for failed programs must be sold to advertisers, affiliated stations and the viewers, and this fresh round of advertising and promotion also drives up the costs. Keeping a program that clearly isnt making the grade may also tempt affiliated stations to substitute something more potent locally or a movie or syndicated show, thereby reducing the network audience. It is the audience, and not programs or air time, that the networks really sell. The key for advertisers is delivered. Some advertisers, having no age or sex requirements, buy an undifferentiated audience, but a majority of those who buy network perhaps three-fourtwill pay a premium to reach a target television audience of customers most likely to buy their products. COMPANIES THAT make cosmetics or other products marketed to women have paid as much as $8 a thousand this season to reach 18- - to women. These rates contrast with the basic rates for households (undifferentiated audience), which have ranged from $3 to $4.20 a thousand, depending on the network and the time of year. In earlier days of commercial television, advertisers sponsored whole programs and even assumed production responsibilities. This carried high risks an unsuccessful program was inevitably a poor investment and often resulted in market-shar- e losses for the product being advertised. SINCE THE however, the advertiser has been on much safer ground. Few sponsor programs, instead they have been dealing on or participations spots spread over a wide number of programs, often on more than one network. Not only does this minimize the gamble; it also assures reach and frequency. Network advertising is purchased in two modes: upfront, or six to nine months in advance, often for a full years worth of spots, and or scatter, short-terarrangements that might be made on a dayss notice. The advertisers that buy upfront have the advantage of staking out specific programs and time periods at an assured price, even if subsequent advertiser demand should drive rates higher. The scatter buyers tend to play the market, and they frequently come away with bargains, although they risk being shut out of network television when the demand intensifies, as it has the last two years. NETWORK PROFITS in 1977 would have been even higher had program costs not risen as much as 40 percent, largely as a result of a quick program turnover and the competitive programming tactics of the networks known as stunting. This involves the displacement of regular progintended to rams with speicals, movies or mini-seriblunt a rival networks success. It also includes the r expansion of ordinary series into special presentations and such surprise maneuvers as ABCs scheduling of Washington: Behind Closed Doors, based on John D. Ehrlich-man- s the political mini-serinovel, The Company, two weeks before the official season opening. NBCs troubles in running third were exagerated the highest of the three by its program cuts s networks because of its concentration on and specials. THE SOBERING conclusion reached by all the networks from this seasons experience is that regular weekly series make more economic sense event progthan do bombardments of ramming. In addition to costing less and providing a network schedule with stability and an intensely loyal following, the weekly series has an extremely valuable byproduct: the rerun. The cost of a rerun airing in the same television episode is approximately 20 year as the first-ru- n percent of the original licensing fee. 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