New Orleans-During an advertising panel session at last week's National Show here, three agency media buyers downplayed the importance of the digital audience, except for local buys.
SFM Media LLC president of national broadcast Jerry Solomon estimated that an analog network needs about 35 million subscribers to turn a profit, versus perhaps 4 million for a digital service reliant on programming "recycled" from parent networks.
Discovery Networks U.S. executive vice president Bill McGowan said his company's digital services already offer a "significant" 20 percent original fare.
From the networks' viewpoint, MTV Networks president of worldwide ad sales Harvey Ganot and McGowan saw their digital services as important to building their major cable brands, targeting audiences and, as Ganot noted, giving "more shelf space to operators."
McGowan projected that Nielsen Media Research would not start measuring digital networks until they reach the 15 million-home plateau, "in two or three years." McCann-Erickson WorldGroup executive vice president and director of broadcast and programming Bill Cella said having Nielsen data would "make it easier for us to justify spending."
The 20 million-subscriber mark is the point at which national advertisers get interested in analog networks. "There's no reason why it should be any different for digital, said Solomon. "But that's a niche network."
Cella added, "Digital to me means local."
For digital today, "the focus has to be local," agreed Optimum Media managing director Dan Rank, because most mass-market national clients would not be interested. Optimum did buy MTVS, MTVN's Hispanic-oriented digital channel, to promote a new Ricky Martin album, but Rank said clients like The Coca-Cola Co. would not be interested in targeting 10,000 or 25,000 people.
McGowan said some airlines and others have expressed interest in sponsoring programs or nights on Discovery Wings, and Cella said some of his clients might consider a health channel. But Ganot said MTVN does not yet sell its digi-nets because "we want to make the product right first."
McGowan wondered if advertisers in home improvement or financial services might start their own digital networks.
But Solomon doubted that, saying the financial risks are too great. Even accounts like Procter & Gamble Co. have cut back on producing their own daytime soap operas because "we've got our hands full making boxes of soap," Rank said.