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Barter

B

bpatrick

I have a question that I hope some business-oriented contributors
can answer:

You've all heard of barter--the practice of giving a syndicated show
to a station free of charge; a national advertiser buys a certain number
of minutes (say, 4 out of 12 on an hour show) and the station gets the
show free and the remaining minutes to sell, with the revenue going into
the station's coffers.

My question is this: why would a cash-strapped station like Atlanta's
Channel 11 repeatedly turn down barter shows back in the '70s; "Hee Haw"
and Lawrence Welk are two which come to mind, as both aired on WSB/2.
(J.B. Williams Co. bought four minutes on both shows.) OTOH, WXIA would
carry stripped syndicated game shows that they had to pay for ("Concentration,"
"To Tell The Truth," "Joker's Wild," "Tic Tac Dough"). And they even had that
expensive flop "Space: 1999." So again, why refuse the barter shows?
 
When the station runs a paid-for show, they get to sell all the commercial minutes. With the bartered show, they have to give up some of those minutes to the national ads. So the station needs to sell those extra minutes for more than the show costs to come out ahead buying programs. Maybe the Atlanta station was successful in selling the programs and wanted to keep all the spot breaks for themselves.

Years ago, it was fairly common for stations to pre-empt network prime time movies for a local movie. This allowed the station many more minutes of spots to sell. Of course, they had to buy the rights to the locally-shown movies. But if they got the movies cheap and sold a lot of spots, the station came out ahead.
 
Some shows like Wheel of Fortune & Jeopardy are almost a loss for stations. They are very expensive for stations to run. I know in a medium size market they can be as much as $5,000 an episode. With the barter spots included they have limited space to run their own spots to make back the money. Sometimes its a break even deal but they do get the ratings, so they can charge top dollar in the local breaks.
That's one of the reasons why many stations have expanded their news in local time. The personal is already on the payroll, the studio lights are lit, and the content belongs to them. All the commercial time is theirs to sell. The ratings may not be as high but they can make a quick buck.
 
Regarding "Wheel" & "Jepoardy", I heard from a gent at a station that ran those programs they did indeed lose money airing the shows. The logic was that they would lose even more money if the shows went to another station in market because the spots they did air would have wound up on the other station. Sidebar: Some radio stations have been known to sign up for joke/feature services and not run them in order to keep them off the competition. (But you knew that, didn't you?)
 
I have a question, the original poster says:
You've all heard of barter--the practice of giving a syndicated show
to a station free of charge; a national advertiser buys a certain number
of minutes (say, 4 out of 12 on an hour show) and the station gets the
show free and the remaining minutes to sell, with the revenue going into
the station's coffers.
Click to expand...

Then therealjm12 says:

Some shows like Wheel of Fortune & Jeopardy are almost a loss for stations. They are very expensive for stations to run. I know in a medium size market they can be as much as $5,000 an episode.
Click to expand...

I don't know how this works, but in this case then, WoF and Jeopardy are only partly bartered shows? The OP seems to be saying you get a barter show for free, while therealjim12 is saying it also costs money.

My question is, so barter can mean totally free or the station would have to pay but only get some spots? I'm confused.
 
Shows will fall into three categories:

Pure barter -- stations give up advertising time, but pay no cash for the program. Examples would include syndicated reruns suchas "Law & Order: SVU", plus some older shows such as "Star Trek: TNG", "Cosby" and "Bewitched". Weekend hours such as the "Grey's Anatomy" reurns tend to also fall into this category. When childrens' shows ran on broadcast stations, the majority were offered as pure barter. Advertising splits are typically close to even (ie, the station and the syndicator each get roughly the same amount of time to sell).

Cash plus barter -- stations pay cash, but also give up some advertising time. Stations will typically give up less advertising time than in a pure barter deal -- commonly, the syndicator will take 1 1/2 minutes within a half hour show, with the station keeping the other 5 1/2 minutes. Examples of cash plus barter deals include almost every major syndicated show -- aside from "Wheel of Fortune" and "Jeopardy", all the celebrity gossip magazine shows, and the majority of "A-list" sitcom reruns such as "2 1/2 Men", "Family Guy", "Friends", and many, many others.

Cash -- station pays cash, keeps all the advertising time to sell itself. A lot of older shows fall in this category -- programs such as "The Twilight Zone", "Perry Mason", "I Love Lucy", and "Andy Griffith" are all sold on a cash basis. Of the newer sitcoms, the only one that is pure cash that I'm aware of is "The Simsons".
 
TexasTom said:
Pure barter -- stations give up advertising time, but pay no cash for the program. Examples would include syndicated reruns suchas "Law & Order: SVU", plus some older shows such as "Star Trek: TNG", "Cosby" and "Bewitched". Weekend hours such as the "Grey's Anatomy" reurns tend to also fall into this category. When childrens' shows ran on broadcast stations, the majority were offered as pure barter. Advertising splits are typically close to even (ie, the station and the syndicator each get roughly the same amount of time to sell).
Click to expand...

And among these types of shows, The Program Exchange is the most notable of the companies that distribute barter programs, mainly repeats of older programs and movies. Many of television's popular shows, such as The Partridge Family, The Flintstones, the animated Dennis the Menace, and Abbott & Costello were distributed by The Program Exchange, usually after spending many years as a cash or cash plus barter program.
 
The other programs that lose money for stations are the mandatory "E/I" shows that air three hours a week. Most (if not all) E/I shows are barter, but since they don't attract many (if not any) viewers for the stations, the stations fill the remainder of the advertising time with public service announcements and station promos.


anotherguy said:
Does this system work the same way for cable networks?
Click to expand...

I've seen some syndicator barter spots in TBS' airings of "Family Guy," so I think it applies to them in some cases too.
 
I remember when the access rule first went into effect, "Hee Haw,"
Welk, "Wild Kingdom," and "Lassie" were the main shows distributed on
the barter system (Mutual of Omaha with "Wild Kingdom," Campbell Soup
with "Lassie"). In Atlanta, all but "Lassie" aired on WSB; "Lassie" was on
then-WTCG. (WQXI--now WXIA--ran Welk and "Lassie" for about a year,
then dropped them both).

So how would a station determine if barter/cash-plus barter be a feasible
way to go, as opposed to cash only, as so many of Ch. 11's programs seemed
to be?

I guess my ultimate question is why Ch. 11 would drop Welk, a show it had
carried from its beginnings on ABC in 1955?
 
I was surprised when you said "Lawrence Welk" was barter, given its good ratings in syndication (1971-1982). I'd believe that Teleklew Productions, Welk's production company, and the syndicators would have done a straight cash deal to stations. Perhaps the involvement of JB Williams' Pharmaseuticals Company as sponsor ("Geritol" and "Serutan" manufacturers) required the barter deals.
 
The King Bee said:
I was surprised when you said "Lawrence Welk" was barter, given its good ratings in syndication (1971-1982). I'd believe that Teleklew Productions, Welk's production company, and the syndicators would have done a straight cash deal to stations. Perhaps the involvement of JB Williams' Pharmaseuticals Company as sponsor ("Geritol" and "Serutan" manufacturers) required the barter deals.
Click to expand...

I believe that the show was always sold in barter -- all the episodes I've seen included Welk introducing commercial breaks for Geritol and other Williams products (did they also make "Lectric Shave" and "Aqua Velva"?).

Also, wasn't Don Fedderson involved in the syndication of the show?
 
Yes to both; J.B. Williams made Lectric Shave and Aqua Velva
(maybe you saw their commercials on "Ted Mack's Amateur Hour"
as well, since J.B. Williams sponsored that show).

And Don Fedderson did handle the syndication of Welk's show.
Welk liked to claim that he invented barter; back in the '20s, when
he was getting started, he had a noontime radio show on WNAX
Yankton, SD, sponsored by a local flour mill. Welk once said that the
show became so popular that other stations around the state wanted
to air it, so he (and I think, more accurately, it was the management
at WNAX) offered the show free. There were three minutes of commercials;
the flour mill got one or two (I forget which) and the individual stations got
the rest. (BTW, Myron Floren used to say that he got interested in the
accordion because he and his family listened to Welk's show every day.)
 
The King Bee said:
I was surprised when you said "Lawrence Welk" was barter, given its good ratings in syndication (1971-1982). I'd believe that Teleklew Productions, Welk's production company, and the syndicators would have done a straight cash deal to stations. Perhaps the involvement of JB Williams' Pharmaseuticals Company as sponsor ("Geritol" and "Serutan" manufacturers) required the barter deals.
Click to expand...

Pure barter deals weren't limited to just low rated shows -- consider that "Star Trek: The Next Generation" was pure barter, and had some very impressive ratings. In recent years, I've noticed that weekly shows tend to be more likely to be pure barter than strips are...but I don't know if that particular trend is recent, or if it would have been applicable back when "Lawrence Welk" was in commercial syndication.
 
TexasTom said:
Pure barter deals weren't limited to just low rated shows -- consider that "Star Trek: The Next Generation" was pure barter, and had some very impressive ratings. In recent years, I've noticed that weekly shows tend to be more likely to be pure barter than strips are...but I don't know if that particular trend is recent, or if it would have been applicable back when "Lawrence Welk" was in commercial syndication.
Click to expand...

A number of popular weeklies over the years were barter programs (Soul Train and It's Showtime at the Apollo come to mind).

Also, didn't Judge Judy start out as a barter show until it found its audience and went to Cash Plus, or was it always Cash+?
 
Some talk/reality shows were barter as well, I remember the short-lived Life Moments show (2002-2003) was barter at times.

-crainbebo
 
It was short-lived, only lasted one season. Paramount distributed the show. I believe my local CBS affiliate KIRO 7 aired the show.

-crainbebo
 
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