ABC Sets New Network, Affiliate Practice

In a historic move that could change the network-affiliate TV business model, ABC announced late Wednesday (Sept. 29) a new practice that could put more inventory back in the hands of its 200 affiliate stations. Through the Inventory Exchange System, affiliates have the option to purchase from the network additional inventory packages to sell locally at a profit.

The IES breaks a decades-long network convention that designated only a fixed amount of inventory for affiliates to sell locally. ABC’s new model is designed to adjust to changing marketplace dynamics, such as during the holiday shopping crush, when demand for TV inventory might be higher at the local level.

The IES will be put into practice in late October when local TV station inventory is all but sold out due to the unusually high demand from political advertising.

“IES is the result of some great creative thinking between the ABC network and ABC Board of Governors, and a collaborative back-and-forth process that forged an initiative that looks to be a real winner for both sides,” said Bill Hoffman, vp and general manager of WSB, Cox’s ABC affiliate in Atlanta and ABC affiliate board chairman.

To figure out when to offer the inventory packages to affiliates, ABC is using a complex computer program that models inventory sales. ABC has a patent pending on the new model.