The Sponsor Moves In

In 1948 the men at Texaco (who famously toiled from Maine to Mexico) decided to take the variety program they sponsored on radio and transfer it to network television, which was then in its infancy. With Milton Berle as host, Texaco Star Theater has been credited with inspiring millions of Americans to purchase their first television set. Now, as network TV seems to be in its dotage, executives at ABC are hoping that a new corporate sponsorship scheme will come to the rescue again.

Beleaguered by management problems and several flopped prime-time seasons, the network was looking for another source of financing for a scripted series. Enter MindShare, a media buyer that wanted to move its advertising clients inside the creative process by producing and underwriting the costs of a new show. It seemed a match made in media heaven. But there were concerns: What if ABC wanted to cancel the show? And how much commercial airtime could the network retain to sell to other advertisers during the program? Network executives also worried that audiences would be turned off if the show seemed to be too commercial. But Mark Pedowitz, executive vice president of ABC Entertainment Television Group, saw a chance to help revive his troubled network. "You never know where a hit show will come from," he says.

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He may have a hit yet. For each of the past four weeks, The Days — the product of those talks — finished first in its Sunday night time slot among the coveted 12-to 17-year-old demographic, the best teen ratings the network has seen in more than four years. The Days, about the midlife angst of a dual-income couple raising three kids, is a "win-win-win situation," says Peter Tortorici, president of MindShare and former president of CBS Entertainment. "It enables programmers to have an additional tool to accomplish their larger goal — more programming for the viewer."

The TV industry sure needs a winning strategy. With cable encroaching, the broadcast networks have seen their viewership decline from 56% of households with TV sets in 1980 to 22% last year, according to Nielsen Media Research. "We have had a tremendous crash in terms of audience," says Tom Wolzien, senior media analyst for Sanford C. Bernstein & Co. At the same time, production costs have skyrocketed, from $1 million per one-hour episode in 1990 to about $2 million today.

That's a far cry from the cost of Texaco Star Theater, which, like other Golden Age advertiser-owned TV shows such as the Kraft Television Theatre and The Colgate Comedy Hour, eventually disappeared as networks became more independent, and the lines between advertising and content were clearly drawn. But as the business grew more competitive — and less profitable — advertisers have demanded more of a presence in programs through product placement and sometimes even ownership. "It's the Wild West out there," says Frances Page, head of Magna Global Entertainment, which develops sponsor-supplied programming. "Each network and advertiser has to figure out what works for them."