You are Terry Schiller, Syndicated Sales Representative for HOLLYVILLE, Inc., international multimedia corporation that specializes in producing television shows and motion pictures. You represent the company in negotiating the sale of syndicated programs to local television stations. Syndicated programs most commonly are sold to independent local stations after running as a regular show on one of the major networks.
As one of the top seven producers in the industry, HOLLYVILLE is a major supplier to the television networks, but this business taken alone results in a loss to the company. First-run network television programs typically incur a 20% loss. It is in the syndication market that this loss can be turned into a sizable profit, transactions at which HOLLYVILLE usually excels. However, this market is very risky--only about 15% of the network programs from given season make it to syndication. Over the past decade, the increase in programming outlets has increased the demand for syndicated programs and consequently has put producers in a more favorable bargaining position. Unfortunately, due to an unusually bad year, HOLLYVILLE has not realized the benefits from this increased negotiating strength. Two shows that were a "sure bet" for syndication never sold. As a result, your division’s sales are significantly below projections. With the fiscal year ending next month, this is of particular concern to you as your performance evaluation is based on year-end booked sales.
To improve its financial position, HOLLYVILLE decided to syndicate one of its top ten network hits, Soap.com, a year earlier than anticipated. The story line focuses on three women who are trying to balance their lives as dot. com executives and mothers of teenage children. This show generally achieved a 20 rating and 30 share in prime time.' The show's audience is dominated by 25-54-year-old women, which is the demographic group that commands the highest advertising rates. In addition, these demographics make it ideal for the 6:00 p.m. time slot, which attracts a large viewing audience, especially for independent stations.
In preparation for the potential syndication sale of Soap. com, you have researched the Chicago market. The three million television households in this market are served by three networks and four independent television stations. Your attempt to sell the program to the network stations was unsuccessful; syndicated programs are generally incompatible with other network programs, failing to achieve audience flow from one program to the next. You have therefore turned your efforts to the four independent television stations: WXYZ, WILL, WWIN and WCHI. You do not believe that WXYZ, the smallest station in the market, is interested in purchasing the program due to pricing. WILL has had an excellent year and could afford the show; unfortunately, your research revealed that Soap.com would not fit its audience profile, which is trending toward men. WWIN is currently the highest rated independent station in the market. Although it already has a successful program in the 6:00 time slot, the station is aware that the purchase of Soap.com by a competitor could seriously impact its leadership. Consequently, WWIN is very interested in purchasing the program and has already contacted you to begin negotiations. However, of all the stations in the Chicago market, you believe that WCHI needs Soap. com the most. Due to an unsuccessful buying strategy in the past, its parent company, MULTIMED Inc., placed severe buying restrictions on the station during the last three years.
While these restrictions stabilized WCHI's financial position, in the process, the station lost its independent audience leadership to WWIN and is now a poor second with weak demographics. WCHI desperately needs strong new programs for the upcoming season. You think that Soap.com is just the show it...