In an increasingly cooperative effort to create financial opportunities in the network/affiliate relationship, ABC Television Network and its Affiliate Board of Governors, which represents more than 200 affiliates, today announced the Inventory Exchange System (IES), a strategic and systematic way of exchanging ad inventory that creates shared revenue opportunities. For the first time in the history of the network, ABC, through the launch of IES, will create the opportunity to strategically offer ABC affiliates the option to purchase additional network ad inventory packages to sell locally at a profit.
Breaking a decades-long industry paradigm that generally allowed affiliates only a fixed amount of inventory, ABC’s IES addresses the basic tenet of supply and demand by taking advantage of pricing differentials and marketplace dynamics among various regions, markets and stations. With IES, the network creates the opportunity to move additional ad inventory into the local markets at periods of high demand, including holiday shopping, end-of-month car sales, elections, etc.
The first of these packages will run in late October and was strategically timed as a key opportunity to increase local ad inventory during the heavy election campaigning period.
“With this groundbreaking announcement, we’re creating a new industry paradigm, one that benefits both the network and our affiliates,” commented Anne Sweeney, co-chairman, Disney Media Networks and president, Disney/ABC Television Group. “With a relationship built on trust and cooperation, we’ll continue to work with our affiliates to challenge the status quo and identify more opportunities that leverage our unique national and local strengths.”
Chairman of the ABC Affiliate Board Bill Hoffman, VP /General Manager, WSB Atlanta, added, “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. Our relationship is such that we make time to collaborate and discover entrepreneurial ways to help each other succeed.”
The inventory exchange is designed with a complex computer program that models monetization of inventory beyond the traditional value that either the network or stations might have obtained. In fact, the IES is so groundbreaking in its structure and execution that it currently has a patent pending in the United States Patent and Trademark Office.