The networks came into the upfront ad market armed with some freshmen hits, stabilized auds and reasonable price demands — and Madison Avenue responded in kind.
The network upfronts moved with surprising speed last week, with ABC, CBS and Fox wrapping up all their upfront sales, and UPN and the WB well on their way.
Latest predictions: The upfront market for the six broadcast nets’ primetime skeds will close this week up from last year’s $9.1 billion, which was 2.4% off from 2003.
“Our thought going in was that the broadcast networks would be down slightly and the cable networks would be up, but given the price structure, some dollars shifted back out of cable into broadcast,” says Steve Grubbs, prexy of media buying firm PHD USA.
A slight uptick in overall network sales could mean a reprieve for NBC, which sat on the sidelines for most of the week in an attempt to salvage as much as possible in the face of a 17% ratings decline.
ABC and CBS claimed to be winning a good chunk of NBC’s business.
“We are getting share-shift from NBC; we were able to come in with ABC and get out before NBC came in,” says CBS Network sales prexy Jo Ann Ross.
Ross saw weakness in pharmaceuticals and film studio advertising but growth in telecommunications and financial services.
ABC set the tone early by coming to market with price increases that were within the expectations of ad buyers and their clients, but nonetheless healthy. The Alphabet leveraged its strong hand of hit shows like “Desperate Housewives” and “Lost” to win 4% to 6% increases, bringing its take to $2.1 billion, a 31% increase from last year’s $1.6 billion.
The net sold out 78% to 83% of its inventory — holding back spots for last-minute buys, which it expects will fetch a premium in what’s known as the “scatter” market later this year.
“We controlled inventory going out the door,” says ABC ad sales prexy Mike Shaw. “We have a lot of good shows left to sell in scatter.”
Once ABC set the 4% to 6% going rate the other nets fell in line. Though CBS has the strongest schedule, it had to settle for CPM increases in the same range, as did Fox, which also concluded its upfront business by the end of the week.
Nevertheless, CBS saw a healthy gain, bringing in $2.6 billion, up from $2.4 billion last year. Fox’s sales rang in at $1.6 billion, the same amount it took in last year.
“The real situation is what NBC is going to do,” says advertising analyst Jack Myers. “I thought they would come out at plus 2% to 3%, but they could end up flat to down. The question is how far down.”
At the end of the week, NBC had just begun its dealmaking, but analysts expect it to come in close to $2.3 billion this year, about $600 million short of its $2.9 billion take last year.
Another factor in the nets favor: the broadcast upfront market has never declined or stayed flat for more than two consecutive years, Myers says.
“In past years, the market has outpaced inflation by two or three times; now it’s increasing about at the rate of the consumer price index,” says John Rash, director of broadcast negotiations at Campbell-Mithun. “Soft would be rollbacks.”
The upfronts, to some extent, are a gamble on the upcoming season. Buyers place their bets on shows that look promising, looking to land the next “Desperate Housewives” while avoiding the next “Arrested Development,” a show that won critical acclaim but turned in disappointing ratings.
The trick is not just to identify the likeable shows — but the ones that have all the requisites for catching on with viewers.
The consensus choice for best new show wasn’t even on a major network.
Ad buyers were excited about UPN’s “Everybody Hates Chris,” which many viewed as both the best new comedy and best new show overall.
“It’s broad, accessible and has a distinctive, Brooklyn-based point-of-view,” Rash says.
But the show may struggle in a tough Thursday-night timeslot opposite Fox’s “The OC,” CBS’ “Survivor” and ABC’s “Alias.”
Madison Avenue also liked Fox’s “Prison Break,” but thought it too could have trouble establishing an audience against “Monday Night Football” in the fall.